SF 2323 (LSB 5256SZ (2) 84)

SENATE FILE 2323

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 2291)
(SUCCESSOR TO SSB 3095)

A BILL FOR

An Act providing for charitable food donations to food banks and similar organizations, including by providing for appropriations and a tax credit and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

SUBCHAPTER I

GENERAL
    Section 1.  NEW SECTION.  190B.101  Purpose.
   The purpose of this chapter is to effectively and efficiently utilize Iowa’s abundant supplies of nutritional food to relieve situations of emergency or distress experienced by individuals or families in need who reside in this state, including low-income individuals or families and unemployed individuals or families. 
    Sec. 2.  NEW SECTION.  190B.102  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Federal emergency food assistance program” means the federal emergency food assistance program, as provided in 7 C.F.R. pts. 250 and 251.
   2.  “Food” means a substance which is used in whole or in part for human consumption in compliance with federal and state standards or requirements including a donated food that meets the requirements of the federal emergency food assistance program.
   3.  “Iowa emergency feeding organization” means a public or private nonprofit organization whose mission is compatible with the purpose of this chapter as provided in section 190B.101 and which includes an Iowa food bank or other organization that operates at a congregate nutritional site or that provides home-delivered meals in this state. An Iowa emergency feeding organization includes but is not limited to a food pantry, hunger relief center, or soup kitchen.
   4.  “Iowa food bank” means a private nonprofit organization which meets all of the following requirements:
   a.  It receives, holds, and directly or indirectly distributes food principally to Iowa emergency feeding organizations in a manner compatible with the purpose of this chapter as provided in section 190B.101.
   b.  It is an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code.
   c.  It receives contributions that are deductible under section 170 of the Internal Revenue Code.
   5.  “Iowa food bank association” or “association” means an organization that meets all of the following requirements:
   a.  It is organized as a nonprofit corporation under chapter 504.
   b.  Its principal office is or has been located in this state.
   c.  It is an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the Internal Revenue Code.
   d.  It receives contributions that are deductible under section 170 of the Internal Revenue Code.
   e.  Its members include Iowa food banks, or affiliations of Iowa food banks, that together serve all counties in this state.

SUBCHAPTER II

IOWA FOOD-LINK TO FOOD-BANK INITIATIVE
    Sec. 3.  NEW SECTION.  190B.201  Definition.
   As used in this subchapter, “department” means the department of human services.
    Sec. 4.  NEW SECTION.  190B.202  Department of human services —— cooperation with other agencies.
   1.  This subchapter shall be administered by the department of human services.
   2.  The department shall adopt all rules necessary to administer this subchapter.
   3.  Each fiscal year, the department shall award the amount appropriated in section 190B.203, to an Iowa food bank association selected by the department to manage programs associated with an Iowa food-link to food-bank initiative. The department shall execute a contract with the association to provide for the terms and conditions of the program’s management. A contract shall not obligate the state to pay moneys for multiple fiscal years.
   4.  The department of agriculture and land stewardship, the department of public health, and the department of inspections and appeals shall cooperate with the department of human services to administer the Iowa food-link to food-bank initiative.
    Sec. 5.  NEW SECTION.  190B.203  Iowa food-link to food-bank initiative —— appropriation. 
   1.  For the fiscal year beginning July 1, 2012, and ending June 30, 2013, and for each subsequent fiscal year, there is appropriated from the general fund of the state to the department of human services the amount of two million dollars to support an Iowa food-link to food-bank initiative to further the purpose provided in section 190B.101.
   2.  The department of human services shall allocate one million eight hundred thousand dollars of the amount appropriated in subsection 1 to an Iowa food bank association selected by the department as provided in section 190B.201 for purposes of supporting the following programs:
   a.  An Iowa emergency food purchase program. The department shall allocate one million seven hundred thousand dollars to the association for the purchase of food on behalf of an Iowa emergency feeding organization or for the distribution of moneys to Iowa emergency feeding organizations for the purchase of food.
   (1)  A preference shall be provided to the purchase of food produced, processed, or packaged within this state whenever reasonably practicable.
   (2)  The food shall be purchased in a manner that best furthers a significant economic benefit to communities of this state.
   b.  An Iowa emergency food nutritional education program. The department shall allocate one hundred thousand dollars to the association to distribute the moneys to one or more Iowa emergency feeding organizations in order to provide instruction regarding nutrition and promote a lifelong healthy diet.
   3.  The department of human services shall allocate two hundred thousand dollars of the amount appropriated in subsection 1 to an Iowa food bank association selected by the department as provided in section 190B.202 for purposes of administering the programs provided in that section.

SUBCHAPTER III

FROM FARM TO FOOD DONATION TAX CREDIT
    Sec. 6.  NEW SECTION.  190B.301  Definitions.
   As used in this subchapter, unless the context otherwise requires:
   1.  “Agricultural land” means the same as defined in section 425A.2.
   2.  “Department” means the department of revenue.
   3.  “Food commodity” means any commodity that is derived from an agricultural animal or crop, both as defined in section 717A.1, which was produced on agricultural land and which is intended to be used as food.
   4.  “Tax credit” means the from farm to food donation tax credit as established in this subchapter. 
    Sec. 7.  NEW SECTION.  190B.302  Department of revenue —— cooperation with other departments.
   1.  This subchapter shall be administered by the department of revenue.
   2.  The department shall adopt all rules necessary to administer this subchapter.
   3.  The department of agriculture and land stewardship, the department of public health, the department of human services, and the department of inspections and appeals shall cooperate with the department of revenue to administer this subchapter.
    Sec. 8.  NEW SECTION.  190B.303  From farm to food donation tax credit.
   A from farm to food donation tax credit is allowed against the taxes imposed in chapter 422, divisions II and III, as provided in this subchapter.
    Sec. 9.  NEW SECTION.  190B.304  From farm to food donation tax credit —— eligibility.
   In order to qualify for a from farm to food donation tax credit, all of the following must apply:
   1.  The taxpayer must produce the donated food commodity.
   2.  The taxpayer must transfer title to a food commodity to an Iowa food bank, or an Iowa emergency feeding organization, recognized by the department. The taxpayer shall not receive remuneration for the transfer.
   3.
  a.  The food commodity must be intended for human consumption in its raw or processed state.
   (1)  A food commodity in its raw state for processing includes but is not limited to milk, eggs, vegetables, fruits, nuts, syrup, and honey.
   (2)  A food commodity in its processed state includes but is not limited to dairy products, meat, or poultry products. 
   b.  A food commodity cannot be damaged or out-of-condition and declared to be unfit for human consumption by a federal, state, or local health official. A food commodity that meets the requirements for donated foods pursuant to the federal emergency food assistance program satisfies this requirement.
   4.  A taxpayer claiming the tax credit shall provide documentation supporting the tax credit claim in a form and manner prescribed by the department by rule.
    Sec. 10.  NEW SECTION.  190B.305  From farm to food donation tax credit —— claims filed by individuals who belong to business entities.
   An individual may claim a from farm to food donation 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.
    Sec. 11.  NEW SECTION.  190B.306  From farm to food donation tax credit —— limits on claims.
   A from farm to food donation tax credit is subject to all of the following limitations:
   1.  The tax credit shall not exceed a qualifying amount for the tax year that the tax credit is claimed. The qualifying amount is the lesser of the following:
   a.  Ten percent of the value of the commodities donated during the tax year for which the credit is claimed. The value of the commodities shall be determined in the same manner as a charitable contribution of food for federal tax purposes under section 170(e)(3)(C) of the Internal Revenue Code.
   b.  Five thousand dollars.
   2.  A tax credit in excess of the taxpayer’s liability for the tax year is not refundable but may be credited to the tax liability for the following five years or until depleted, whichever is earlier. 
   3.  The amount of the contribution for which the tax credit is claimed shall not be deductible in determining taxable income for state tax purposes.
   4.  A tax credit shall not be carried back to a tax year prior to the tax year in which the taxpayer claims the tax credit.
    Sec. 12.  NEW SECTION.  422.11L  From farm to food donation tax credit.
   The taxes imposed under this division, less the credits allowed under section 422.12, shall be reduced by a from farm to food donation tax credit as allowed under chapter 190B, subchapter III.
    Sec. 13.  Section 422.33, Code Supplement 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  29.  The taxes imposed under this division shall be reduced by a from farm to food donation tax credit as allowed under chapter 190B, subchapter III.
    Sec. 14.  APPLICABILITY.  The provisions of this Act providing for a from farm to food donation tax credit apply to tax years beginning on or after January 1, 2013.
EXPLANATION
   GENERAL. This bill provides for charitable food donations to food banks and other emergency feeding organizations that relieve situations of emergency or distress experienced by individuals or families in need who reside in this state. 
   IOWA FOOD-LINK TO FOOD-BANK INITIATIVE. The bill creates an Iowa food-link to food-bank initiative administered by the department of human services. Each fiscal year, moneys from the general fund are appropriated to the department in order to support several programs managed by an association representing Iowa food banks. The programs include the purchase of food, the improvement of food storage and distribution infrastructure, and instruction regarding nutrition and diet. 
   TAX CREDIT —— GENERAL. The bill establishes a from farm to food donation tax credit against individual or corporate income taxes. The tax credit may be claimed by the taxpayer who produces the food. The tax credit is administered by the department of revenue.
   TAX CREDIT —— TAXPAYERS. The bill provides that the taxpayer may claim a tax credit for 10 percent of the value of donated commodities up to $5,000. The bill requires that the commodities be suitable for human consumption. The bill provides that if the tax credit is claimed by the taxpayer the amount of the contribution is not deductible for state income tax purposes. The bill provides that the tax credit is not refundable but allows a taxpayer to carry forward the tax credit for up to five years. An individual may claim a tax credit of a partnership, limited liability company, S corporation, estate, or trust electing to have income taxed directly to the individual.
   TAX CREDIT —— APPLICABILITY. The tax credit applies to tax years beginning on or after January 1, 2013.