Bill Text: IA HF599 | 2013-2014 | 85th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: A bill for an act relating to beginning farmers by modifying the agricultural assets transfer tax credit, providing a custom farming contract tax credit, and terminating the agricultural loan assistance program, and including effective date and retroactive applicability provisions. (Formerly HSB 69) (Formerly HF 252) Effective 7-1-13, with exception of Division I, effective 6-17-13 and all of Division II except for section 25, s.s. 2, effective 12-31-17.

Spectrum: Committee Bill

Status: (Passed) 2013-12-31 - END OF 2013 ACTIONS [HF599 Detail]

Download: Iowa-2013-HF599-Introduced.html

---

House File 599 - Introduced
HOUSE FILE 599
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 252)
(SUCCESSOR TO HSB 69)
A BILL FOR
An Act relating to beginning farmers by modifying the
agricultural assets transfer tax credit, providing a
custom farming contract tax credit, and terminating
the agricultural loan assistance program, and including
effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 1450HZ (2) 85
da/sc

H.F. 599
Section 1. Section 2.48, subsection 3, paragraph e,
subparagraph (1), Code 2013, is amended to read as follows:
(1) The agricultural assets transfer tax credit under
section 175.37 and the custom farming contract tax credit as
provided in section 175.38 .
Sec. 2. Section 175.2, subsection 1, Code 2013, is amended
by adding the following new paragraphs:
NEW PARAGRAPH . 0h. “Beginning farmer tax credit program”
means all of the following:
(1) The agricultural assets transfer tax credit as provided
in section 175.37.
(2) The custom farming contract tax credit as provided in
section 175.38.
NEW PARAGRAPH . 0t. “Production item” includes tools,
machinery, or equipment principally used to produce crops or
livestock.
NEW PARAGRAPH . 00t. “Qualified beginning farmer” means a
beginning farmer who meets the requirements to participate in
a beginning farmer tax credit program as provided in section
175.36A.
NEW PARAGRAPH . v. “Veteran” means the same as defined in
section 35.1.
Sec. 3. Section 175.4, subsection 18, Code 2013, is amended
by striking the subsection.
Sec. 4. Section 175.8, subsection 2, Code 2013, is amended
to read as follows:
2. a. The annual report shall identify performance include
all of the following:
(1) Performance goals of the authority , and . The report
shall clearly indicate the extent of progress during the
reporting period , in attaining the goals.
(2) An evaluation of the success of its programs, with
a special emphasis on the beginning farmer loan program as
provided in section 175.12, and the beginning farmer tax credit
program.
-1-
LSB 1450HZ (2) 85
da/sc 1/ 16

H.F. 599
b. Where possible, the findings and results of its
performance goals and evaluation shall be expressed in terms of
number of loans , tax credits, participating qualified beginning
farmers, and acres of agricultural land , including by county .
Sec. 5. NEW SECTION . 175.36A Criteria for beginning farmers
qualifying to participate in the beginning farmer tax credit
program.
A beginning farmer qualifies to participate in the beginning
farmer tax credit program, by meeting all of the following
criteria:
1. Is a resident of the state. If the beginning farmer is a
partnership, all partners must be residents of the state. If a
beginning farmer is a family farm corporation, all shareholders
must be residents of the state. If the beginning farmer is
a family farm limited liability company, all members must be
residents of the state.
2. Has sufficient education, training, or experience in
farming. If the beginning farmer is a partnership, each
partner who is not a minor must have sufficient education,
training, or experience in farming. If the beginning farmer
is a family farm corporation, each shareholder who is not a
minor must have sufficient education, training, or experience
farming. If the beginning farmer is a family farm limited
liability company, each member who is not a minor must have
sufficient education, training, or experience in farming.
3. Has access to adequate working capital and production
items.
4. Will materially and substantially participate in
farming. If the beginning farmer is a partnership, family
farm corporation, or family farm limited liability company,
each partner, shareholder, or member who is not a minor must
materially and substantially participate in farming.
5. Is not responsible for managing or maintaining
agricultural land and other agricultural assets that are
greater than necessary to adequately support a beginning farmer
-2-
LSB 1450HZ (2) 85
da/sc 2/ 16

H.F. 599
as determined by the authority according to rules which shall
be adopted by the authority.
Sec. 6. NEW SECTION . 175.36B Administration of beginning
farmer tax credit program.
1. To every extent practicable, the authority shall
administer tax credits under the beginning farmer tax credit
program in a uniform manner that encourages participation by
qualified beginning farmers. The authority shall determine a
qualified beginning farmer’s low or moderate net worth by using
a single method applicable to all its programs, including the
beginning farmer tax credit program.
2. The authority shall establish a due date to receive
applications to participate in the beginning farmer tax credit
program. The authority may establish different due dates for
applications to qualify for each beginning farmer tax credit.
3. The department of revenue shall cooperate with the
authority in administering the beginning farmer tax credit
program.
Sec. 7. Section 175.37, subsection 1, Code 2013, is amended
to read as follows:
1. An agricultural assets transfer tax credit is allowed
under this section . The tax credit is allowed against the
taxes imposed in chapter 422, division II , as provided in
section 422.11M , and in chapter 422, division III , as provided
in section 422.33 , to facilitate the transfer of agricultural
assets from a taxpayer to a qualified beginning farmer.
Sec. 8. Section 175.37, subsection 2, paragraph b, Code
2013, is amended to read as follows:
b. Execute an agricultural assets transfer agreement with a
qualified beginning farmer as provided in this section .
Sec. 9. Section 175.37, subsection 4, Code 2013, is amended
to read as follows:
4. The tax credit is allowed only for agricultural assets
that are subject to an agricultural assets transfer agreement.
The agreement shall provide for the lease of agricultural land
-3-
LSB 1450HZ (2) 85
da/sc 3/ 16

H.F. 599
located in this state, including any improvements and may
provide for the rental of agricultural equipment as defined in
section 322F.1 .
a. The agreement may be shall include a lease made on a cash
basis or on a commodity share basis which includes a share of
the crops or livestock produced on the agricultural land. The
agreement must be in writing.
b. The agreement shall be for at least two years, but
not more than five years. The agreement or that part of
the agreement providing for the lease may be renewed by the
qualified beginning farmer for a term of at least two years,
but not more than five years. An agreement does not include a
lease or the rental of equipment intended as a security.
c. The agricultural transfer agreement cannot be assigned
and the land subject to the agreement cannot be subleased.
Sec. 10. Section 175.37, subsection 5, Code 2013, is amended
to read as follows:
5. The tax credit shall be calculated based on the gross
amount paid to the taxpayer under the agricultural assets
transfer agreement. The agreement shall be based on a cash
basis or a commodity share basis or both.
a. Except as provided in paragraph “b” , For an agreement
that includes a lease on a cash basis, the tax credit shall
equal five be computed as follows:
(1) If the qualified beginning farmer is not a veteran, the
taxpayer may claim a tax credit equal to seven percent of the
gross amount paid to the taxpayer under the agreement for each
tax year that the tax credit is allowed .
(2) If the qualified beginning farmer is a veteran, the
taxpayer may claim eight percent of the gross amount paid to
the taxpayer under the agreement for the first year that the
tax credit is allowed and seven percent of the gross amount
paid to the taxpayer for each subsequent tax year that the
tax credit is allowed. However, the taxpayer may only claim
seven percent of the gross amount paid to the taxpayer under
-4-
LSB 1450HZ (2) 85
da/sc 4/ 16

H.F. 599
a renewed agreement or a new agreement executed by the same
parties.
b. The For an agreement that includes a lease on a commodity
share basis, the tax credit shall equal fifteen be computed as
follows:
(1) (a) If the qualified beginning farmer is not a veteran,
the taxpayer may claim a tax credit equal to seventeen percent
of the amount paid to the taxpayer from crops or animals sold
under an the agreement in which the payment is exclusively made
from the sale of crops or animals.
(b) If the qualified beginning farmer is a veteran, the
taxpayer may claim a tax credit equal to eighteen percent of
the amount paid to the taxpayer from crops or animals sold
under the agreement for the first tax year that the taxpayer
is allowed the tax credit and seventeen percent of the amount
paid to the taxpayer for each subsequent tax year that the
taxpayer is allowed the tax credit. However, the taxpayer may
only claim seventeen percent of the amount paid to the taxpayer
from crops or animals sold for any tax year under a renewed
agreement or a new agreement executed by the same parties.
(2) Notwithstanding subparagraph (1), the authority may
elect an alternative method to compute a tax credit for a lease
based on a crop share basis. The alternative method shall
utilize a formula which uses data compiled by the United States
department of agriculture. The formula shall calculate the
amount of the tax credit by multiplying the average per bushel
yield for the same type of grain as produced under the lease
in the same county where the leased land is located by a per
bushel state price established for such type of grain harvested
the previous fall.
Sec. 11. Section 175.37, subsection 6, Code 2013, is amended
by striking the subsection.
Sec. 12. Section 175.37, subsection 8, unnumbered paragraph
1, Code 2013, is amended to read as follows:
A taxpayer shall not claim a tax credit under this section
-5-
LSB 1450HZ (2) 85
da/sc 5/ 16

H.F. 599
unless a tax credit certificate issued by the authority is
attached to the taxpayer’s tax return for the tax year for
which the tax credit is claimed. The authority must review
and approve an application for a tax credit as provided by
rules adopted by the authority. The application must include
a copy of the agricultural assets transfer agreement. The
authority may approve an application and issue a tax credit
certificate to a taxpayer who has previously been allowed a
tax credit under this section . The authority may require
that the parties to an agricultural assets transfer agreement
provide additional information as determined relevant by the
authority. The authority shall review an application for
a tax credit which includes the renewal of an agricultural
assets transfer agreement to determine that the parties to the
renewed agreement meet the same qualifications as required for
an original application. However, The authority shall not
approve an application or issue a tax credit certificate to a
taxpayer for an amount in excess of fifty thousand dollars.
In addition, the authority shall not approve an application
or issue a certificate to a taxpayer if any of the following
applies:
Sec. 13. Section 175.37, subsection 8, paragraph c, Code
2013, is amended by striking the paragraph.
Sec. 14. Section 175.37, subsection 9, unnumbered paragraph
1, Code 2013, is amended to read as follows:
A taxpayer or the qualified beginning farmer may terminate
an agricultural assets transfer agreement as provided in the
agreement or by law. The taxpayer must immediately notify the
authority of the termination.
Sec. 15. Section 175.37, subsection 9, paragraph b, Code
2013, is amended to read as follows:
b. If the authority determines that the taxpayer is at fault
for the termination, any prior tax credit allowed under this
section is disallowed. The tax credit shall be recaptured
and the amount of the tax credit shall be immediately due and
-6-
LSB 1450HZ (2) 85
da/sc 6/ 16

H.F. 599
payable to the department of revenue. If a taxpayer does
not immediately notify the authority of the termination,
the taxpayer shall be conclusively deemed at fault for the
termination.
Sec. 16. Section 175.37, subsection 10, Code 2013, is
amended by striking the subsection.
Sec. 17. NEW SECTION . 175.38 Custom farming contract tax
credit.
1. A custom farming contract tax credit is allowed under
this section. The tax credit is allowed against the taxes
imposed in chapter 422, division II, as provided in section
422.11M, and in chapter 422, division III, as provided in
section 422.33, to encourage taxpayers who are considering
custom farming agricultural land located in this state to
negotiate with qualified beginning farmers.
2. In order to be eligible to claim a custom farming
contract tax credit, the taxpayer must meet qualifications
established by rules adopted by the authority. At a minimum,
the taxpayer must be a person who may acquire or otherwise
obtain or lease agricultural land in the same manner as
provided for a taxpayer claiming an agricultural assets
transfer tax credit under section 175.37.
3. An individual may claim a custom farming contract
tax credit of a partnership, limited liability company,
S corporation, estate, or trust electing to have income
taxed directly to the individual. The amount claimed by the
individual shall be based upon the pro rata share of the
individual’s earnings from the partnership, limited liability
company, S corporation, estate, or trust.
4. A custom farming contract tax credit is allowed only for
the amount paid by the taxpayer to a qualified beginning farmer
under a custom farming contract as provided in rules adopted by
the department. The contract must provide for the production
of crops located on agricultural land or the production of
livestock principally located on agricultural land. The
-7-
LSB 1450HZ (2) 85
da/sc 7/ 16

H.F. 599
agricultural land must be real estate and any improvements used
for farming in which the taxpayer holds a legal or equitable
interest.
5. The custom farming contract must provide that the
taxpayer pay the qualified beginning farmer on a cash basis.
The contract must be in writing for a term of not more than
twelve months. The total cash payment must equal at least one
thousand dollars.
6. The taxpayer must make all management decisions
substantially contributing to or affecting the production
of crops located on the agricultural land or the production
of livestock principally located on the agricultural land.
However, nothing in this paragraph prohibits a qualified
beginning farmer from regularly or frequently taking part in
making day-to-day operational decisions affecting production.
The qualified beginning farmer must provide for all of the
following:
a. Production items principally used to produce crops
located on the agricultural land or to produce livestock
principally located on the agricultural land.
b. Labor principally used to produce crops located on the
agricultural land or to produce livestock principally located
on the agricultural land. The qualified beginning farmer must
personally provide such labor on a regular, continuous, and
substantial basis.
7. A custom farming contract tax credit is not allowed if
the taxpayer and qualified beginning farmer are related as any
of the following:
a. Persons who hold a legal or equitable interest in the
same agricultural land, including as individuals or as general
partners, limited partners, shareholders, or members in the
same business entity as defined in section 501A.102.
b. Family members related as spouse, child, stepchild,
brother, or sister.
c. Partners in the same partnership which holds agricultural
-8-
LSB 1450HZ (2) 85
da/sc 8/ 16

H.F. 599
land, or shareholders in the same family farm corporation or
members in the same family farm limited liability company and
defined in section 9H.1.
8. A custom farming contract tax credit shall be calculated
based on the gross amount paid to the qualified beginning
farmer under the custom farming contract.
a. If the qualified beginning farmer is not a veteran, the
taxpayer may claim a tax credit equal to seven percent of the
gross amount paid to the qualified beginning farmer under the
contract for each tax year that the tax credit is allowed.
b. If the qualified beginning farmer is a veteran, the
taxpayer may claim a tax credit equal to eight percent of the
gross amount paid to the qualified beginning farmer under the
contract for the first year that the tax credit is allowed
and seven percent of the gross amount paid to the qualified
beginning farmer under the contract for each subsequent tax
year that the tax credit is allowed. However, the taxpayer
may only claim seven percent of the gross amount paid to the
qualified beginning farmer under a renewed contract or a new
contract executed by the same parties.
9. A custom farming contract tax credit in excess of the
taxpayer’s liability for the tax year may be credited to the
tax liability for the following five years or until depleted,
whichever is earlier. A tax credit shall not be carried back
to a tax year prior to the tax year in which the taxpayer
redeems the tax credit. A tax credit shall not be transferable
to any other person other than the taxpayer’s estate or trust
upon the taxpayer’s death.
10. A taxpayer shall not claim a custom farming contract
tax credit unless a tax credit certificate issued by the
agricultural development authority under this section is
attached to the taxpayer’s tax return for the tax year for
which the tax credit is claimed. The authority must review and
approve an application for a tax credit certificate as provided
by rules adopted by the authority. The application must
-9-
LSB 1450HZ (2) 85
da/sc 9/ 16

H.F. 599
include a copy of the custom farming contract. The authority
may approve an application and issue a tax credit certificate
to a taxpayer who has previously been allowed a tax credit
under this section. The authority may require that the parties
to the contract provide additional information as determined
relevant by the authority. The authority shall review an
application for a tax credit certificate which includes the
renewal of a contract to determine that the parties to the
renewed contract meet the same qualifications as required for
an original application. The authority shall not approve an
application or issue a tax credit certificate to a taxpayer for
an amount in excess of fifty thousand dollars. In addition,
the authority shall not approve an application or issue a
tax credit certificate to a taxpayer if any of the following
applies:
a. The taxpayer is at fault for terminating another custom
farming contract, as determined by the authority.
b. The taxpayer is party to a pending administrative or
judicial action, or classified as a habitual violator in the
same manner as provided in section 175.37.
c. The contract amount is substantially higher or lower
than the market rate for a similar custom farming contract, as
determined by the authority.
11. A taxpayer or the qualified beginning farmer may
terminate a custom farming contract as provided in the contract
or by law. The taxpayer must immediately notify the authority
of the termination.
a. If the authority determines that the taxpayer is not
at fault for the termination, the authority shall not issue a
tax credit certificate to the taxpayer for a subsequent tax
year based on the approved application. Any prior tax credit
is allowed as provided in this section until its expiration.
The taxpayer may apply for and be issued another tax credit
certificate for the same agricultural land under a custom
farming contract with another qualified beginning farmer.
-10-
LSB 1450HZ (2) 85
da/sc 10/ 16

H.F. 599
b. If the authority determines that the taxpayer is at fault
for the termination, any prior tax credit allowed under this
section is disallowed, and the amount of the tax credit shall
be immediately due and payable to the department of revenue.
If a taxpayer does not immediately notify the authority of the
termination, the taxpayer shall be conclusively deemed at fault
for the termination.
Sec. 18. NEW SECTION . 175.39 Tax credit certificates ——
availability.
1. The amount of tax credits that may be issued to support
the beginning farmer tax credit program shall not in the
aggregate exceed twelve million dollars in any year. Of the
aggregate amount, eight million dollars is allocated to support
the agricultural assets transfer tax credit as provided in
section 175.37 and four million dollars is allocated to support
the custom farming contract tax credit as provided in section
175.38. However, the authority’s board of directors may at
any time during the year adjust the allocation by adopting a
resolution.
2. The authority shall issue tax certificates to support
a beginning farmer tax credit on a first-come, first-served
basis.
Sec. 19. Section 422.11M, Code 2013, is amended to read as
follows:
422.11M Agricultural assets transferred to beginning
Beginning farmers —— agricultural assets transfer tax credit and
custom farming contract tax credit .
The taxes imposed under this division , less the credits
allowed under section 422.12 , shall be reduced by an the
following:
1. An agricultural assets transfer tax credit as allowed
under section 175.37 .
2. A custom farming contract tax credit as allowed under
section 175.38.
Sec. 20. Section 422.33, subsection 21, Code 2013, is
-11-
LSB 1450HZ (2) 85
da/sc 11/ 16

H.F. 599
amended to read as follows:
21. The taxes imposed under this division shall be reduced
by an the following:
a. An agricultural assets transfer tax credit as allowed
under section 175.37 .
b. A custom farming contract tax credit as allowed under
section 175.38.
Sec. 21. REPEAL. Section 175.35, Code 2013, is repealed.
Sec. 22. EFFECTIVE UPON ENACTMENT. This Act, being deemed
of immediate importance, takes effect upon enactment.
Sec. 23. RETROACTIVE APPLICABILITY. This Act applies
retroactively to January 1, 2013, for tax years beginning on
or after that date.
EXPLANATION
BACKGROUND —— AGRICULTURAL ASSETS TRANSFER TAX CREDIT.
In 2006, the general assembly enacted SF 2268 (2006 Iowa
Acts, chapter 1161) that provides a tax credit for owners
of agricultural assets (agricultural land, depreciable
agricultural property, crops, or livestock) who help beginning
farmers acquire those agricultural assets by lease or rental
arrangements. The program is administered by the agricultural
development authority (authority) established within the
department of agriculture and land stewardship. A beginning
farmer is an individual, partnership, family farm corporation,
or family farm limited liability company as provided under
Code chapter 9H (Iowa’s corporate farming law), with a low or
moderate net worth, and who engages in farming or wishes to
engage in farming. The owner who executes an agricultural
assets transfer agreement approved by the authority may
claim a tax credit against individual or corporate income
tax liability after receiving a certificate issued by the
authority. Generally, the lessor must be a person who may
acquire or otherwise obtain or lease agricultural land under
Code chapter 9H or 9I (restricting corporate and foreign
ownership of agricultural land). The bill provides a number
-12-
LSB 1450HZ (2) 85
da/sc 12/ 16

H.F. 599
of restrictions upon the authority in approving applications
and issuing certificates. The owner cannot be at fault for
terminating a prior agreement, be involved in legal proceedings
regarding environmental violations, or agree to provide more
agricultural assets than the beginning farmer can be expected
to adequately manage. The agricultural assets cannot be leased
or rented at a rate substantially different from similar market
arrangements. The agreement may be terminated, but if the
termination is the fault of the owner, any tax credits must be
repaid and no further tax credit certificates can be issued to
the taxpayer.
The tax credit equals 5 percent of the amount paid to the
taxpayer under the agreement, except in the case of a landlord
who shares in the costs associated with production. In that
case, the tax credit equals 15 percent of the amount paid to
the taxpayer from crops or animals sold.
In 2009, the general assembly enacted SF 483 (2009 Iowa Acts,
chapter 135), which capped the amount of tax credits to be an
amount not to exceed $6 million per year with the requirement
that the certificates must be issued on a first-come,
first-served basis.
BILL —— BEGINNING FARMER TAX CREDIT PROGRAM. This bill
amends the agricultural assets transfer tax credit and creates
a new custom farming contract tax credit to encourage taxpayers
who hold agricultural land, in the same manner as required
under the agricultural assets transfer tax credit, to enter
into custom farming contracts with beginning farmers. The bill
provides common criteria for beginning farmers who qualify as
beginning farmers to participate in the program. A qualified
beginning farmer must be a resident of this state; have
sufficient education, training, or experience in farming; have
access to adequate working capital and production equipment,
will materially and substantially participate in farming, and
is not responsible for managing or maintaining agricultural
land and other agricultural assets that are greater than
-13-
LSB 1450HZ (2) 85
da/sc 13/ 16

H.F. 599
necessary to adequately support a beginning farmer. The
bill requires the authority to administer the tax credits
in a uniform manner, and establish a due date to receive
applications to participate in the program. The bill makes
net worth requirements for beginning farmers uniform among
all programs administered by the authority ($691,172). The
authority must submit an annual report to the governor and
general assembly regarding the program.
BILL —— AGRICULTURAL ASSETS TRANSFER TAX CREDIT. The bill
amends the agricultural assets transfer tax credit. The
bill provides that an agricultural transfer agreement cannot
be assigned and the land subject to the agreement cannot be
subleased. The bill increases the amount of the tax credit.
For an agreement which includes a lease on a cash basis, the
credit is increased from 5 to 7 percent of the gross amount
paid to the taxpayer under the agreement. For an agreement
which includes a lease on a commodity share basis, the rate
is increased from 15 to 17 percent. However, the percentages
are increased by one percentage point if the beginning farmer
is a veteran. The bill also allows the authority to elect an
alternative method to compute a tax credit for a lease based on
a crop share basis according to a formula which multiplies the
average per bushel yield in the same county where the leased
land is located by a per bushel state price. The bill provides
that an agricultural assets transfer tax credit cannot exceed
$50,000.
BILL —— CUSTOM FARMING CONTRACT TAX CREDIT. The bill
establishes a custom farming contract tax credit to encourage
taxpayers who hold agricultural land to execute custom farming
contracts with beginning farmers who qualify under the terms of
the bill. The bill provides that the custom farming contract
tax credit is also to be administered by the authority.
The bill provides that the contract amount of a custom
farming contract cannot be substantially higher or lower than
the market rate for similar contracts. The contract must be
-14-
LSB 1450HZ (2) 85
da/sc 14/ 16

H.F. 599
in writing and cannot be for more than 12 months’ duration.
The taxpayer must make all management decisions substantially
contributing to or affecting the production of crops or
livestock located on the taxpayer’s agricultural land, although
the qualified beginning farmer may make day-to-day operational
decisions affecting production. The qualified beginning farmer
must provide any necessary tools, machinery, or equipment
and labor must be furnished on a regular, continuous, and
substantial basis. In addition, the taxpayer and the beginning
farmer cannot have a common legal or equitable interest in
the agricultural land or be related to each other as family
members.
A custom farming contract tax credit is allowed only for the
amount paid by the taxpayer to a qualified beginning farmer
under a custom farming contract on a cash basis equaling at
least $1,000. The tax credit equals 7 percent of the gross
amount paid to the beginning farmer under the custom farming
contract. The tax credit is increased to 8 percent for one
year if the beginning farmer is a veteran. It allows the
tax credit to be carried forward but not back, and is not
transferrable. The department of revenue may recapture the
amount of the tax credit if the contract is terminated due
to the taxpayer’s fault, as specified in the bill. The bill
requires the authority to issue a tax certificate to the
taxpayer which must be attached to the tax return. A tax
credit certificate cannot exceed $50,000.
TAX CREDIT CERTIFICATES. The bill allows the authority to
issue each year up to $12 million in tax credit certificates
for both the current agricultural assets transfer tax credit
and the bill’s new custom farming contract tax credit. Each
year, $8 million is allocated to support the agricultural
assets transfer tax credit and $4 million is allocated to
support the custom framing contract tax credit. However, the
authority may adjust the allocation during the year as it deems
necessary. The authority must issue tax credit certificates
-15-
LSB 1450HZ (2) 85
da/sc 15/ 16

H.F. 599
allocated under the new program on a first-come, first-served
basis, as is the case for the agricultural assets transfer tax
credit.
EFFECTIVE DATE AND RETROACTIVITY. The bill takes effect
upon enactment and applies retroactively to January 1, 2013,
for tax years beginning on or after that date.
-16-
LSB 1450HZ (2) 85
da/sc 16/ 16