HOUSE FILE 631

BY  COMMITTEE ON AGRICULTURE

(SUCCESSOR TO HSB 182)

A BILL FOR

An Act providing for a cow-calf tax credit, providing for an appropriation, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION.  422.120  Cow-calf tax credit allowed.
   1.
  a.  There is allowed a cow-calf tax credit for cow-calf operations located in the state. The amount of the tax credit equals ten cents for each corn equivalent consumed by the qualified livestock in the cow-calf operation as specified under this section. The tax credit shall be refunded as provided in section 422.122. 
   b.
  (1)  The tax credit shall be available to an individual or corporate taxpayer if the taxpayer’s federal taxable income is not more than ninety-nine thousand six hundred dollars for the tax year. In the case of married taxpayers, their combined federal taxable income shall be used to determine if they qualify for the credit.
   (2)  For each subsequent tax year, the maximum taxable income amount specified in subparagraph (1) shall be multiplied by the cumulative index factor for that tax year. “Cumulative index factor” means the product of the annual index factor for the 2012 calendar year and all annual index factors for subsequent calendar years. The cumulative index factor applies to all tax years beginning on or after January 1 of the calendar year for which the latest annual index factor has been determined. 
   (3)  The annual index factor for the 2012 calendar year is one hundred percent. For each subsequent calendar year, the annual index factor equals the annual inflation factor for that calendar year as computed in section 422.4 for purposes of the individual income tax.
   2.
  a.  The amount of the tax credit per cow-calf operation is determined by adding together for each head of qualified livestock in the cow-calf operation the product of ten cents times the number of corn equivalents consumed by that head of qualified livestock. The amount of tax credit per cow-calf operation per tax year shall not exceed three thousand dollars and the amount of the tax credit per taxpayer per tax year shall not exceed three thousand dollars. 
   b.  The maximum amount of corn equivalents for a head of qualified livestock in a cow-calf operation is one hundred eleven and one-half.
   3.  As used in this division,“cow-calf operation” means an operation that includes qualified livestock of the following livestock:
   a.  Mature beef cows bred or for breeding. 
   b.  Bred yearling heifers. 
   c.  Breeding bulls. 
   4.  If the cow-calf operation is carried on partly within and partly without the state, the portion of the cow-calf operation attributable to this state shall be determined pursuant to rules adopted by the department. The department may adjust the allocation upon request of the taxpayer in order to reflect the actual cow-calf operation carried on within this state. 
   5.  In calculating the tax credit for cow-calf operations for tax years beginning in the 2012 calendar year, mature beef cows bred or for breeding, bred yearling heifers, and breeding bulls in the operations’ inventory on December 31 of the tax year which were also in the operations’ inventory on July 1 of the tax year and stockers and feeders sold during the tax year may be counted. In calculating the tax credit for cow-calf operations for tax years beginning on or after January 1, 2013, only those bred cows, bred heifers, and breeding bulls in the operations’ inventory on December 31 of the tax year which were also in the operations’ inventory on July 1 of the tax year may be counted.
   6.  An individual may claim the tax credit allowed a partnership, limited liability company, subchapter S corporation, or estate or trust electing to have the income taxed directly to the individual. The amount claimed by the individual shall be based upon the pro rata share of the individual’s earning of the partnership, limited liability company, subchapter S corporation, or estate or trust. 
   7.  A fraudulent claim for a credit refund under this division shall cause the forfeiture of any right or interest to a tax credit refund in subsequent tax years under this division.
   Sec. 2.  NEW SECTION.  422.121  Appropriation —— limitation.
   Beginning with the fiscal year beginning July 1, 2011, there is appropriated annually from the general fund of the state two million dollars to refund the tax credit allowed under this division.
   Sec. 3.  NEW SECTION.  422.122  Refund of cow-calf tax credit claims.
   1.  Each tax year the total amount of tax credit for cow-calf operations refund claims that shall be paid pursuant to section 422.120 shall not exceed the amount appropriated by the general assembly for that purpose. If the total dollar amount of the refund claims exceeds that amount, each claim shall be paid an amount equal to that total dollar amount divided by the total number of claims, not to exceed the amount of the taxpayer’s claim. Remaining funds shall be prorated among those claims not paid in full in the proportion that each such claim bears to the total amount of such claims not paid in full. 
   2.  In the case where refund claims are not paid in full, the amount of the refund to which the taxpayer is entitled is the amount computed in subsection 1, and paid to the taxpayer, and the taxpayer is not entitled to any unpaid portion of a claim and is not entitled to carry forward or backward to another tax year any unpaid portion of a claim. A taxpayer shall not use a refund as an estimated payment for the succeeding tax year. 
   3.  A taxpayer must file a claim for refund within ten months from the last day of the taxpayer’s tax year. An extension for filing shall not be allowed. The department shall determine by February 28 of the calendar year following the calendar year in which the claims were filed if the total amount of claims for refund exceeds the amount appropriated for that purpose by the general assembly for the tax year. If the claim is not payable on February 28 because the taxpayer is a fiscal year filer, the claim shall be considered as a claim filed for the following tax year. 
   4.  A claim for refund shall be made on claim forms to be made available by the department. In order for a taxpayer to have a valid refund claim, the taxpayer must supply legible copies of documents the director deems necessary to verify the amount of the refund.
   Sec. 4.  DIRECTIONS TO CODE EDITOR.  The Code editor shall codify sections designated in this Act as 422.120 through 422.122 as a new division in chapter 422.
   Sec. 5.  APPLICABILITY.  The sections of this Act enacting sections 422.120 through 422.122, establishing a tax credit and refund for cow-calf operations, apply to tax years beginning on or after January 1, 2012.
EXPLANATION
   This bill restores the so-called cow-calf tax credit originally enacted by the general assembly in 1996 (1996 Iowa Acts, ch. 1197), and repealed by the general assembly in 2009 (2009 Iowa Acts, ch. 179). The bill provides for a tax credit for a cow-calf operations located in this state and includes a standing limited appropriation to support the tax credit. The bill eliminates other livestock operations which were originally part of the statute but never made eligible for the tax credit funding. 
   The amount of the tax credit is computed by multiplying a designated amount by the amount of corn equivalents consumed by qualifying livestock ($.10 x 111.5). Qualifying livestock includes mature beef cows bred or for breeding, bred yearling heifers, and breeding bulls. A taxpayer must have a federal taxable income of not more than $99,600 for the tax year. The amount of tax credit per cow-calf operation cannot exceed $3,000. The tax credit is available to an individual or corporate taxpayer who owns qualifying livestock.
   The amount of the standing limited appropriation is $2 million per fiscal year, beginning with the FY 2011-2012.
   The bill provisions creating a tax credit and refund for cow-calf operations apply to tax years beginning on and after January 1, 2012.