House
File
2454
-
Introduced
HOUSE
FILE
2454
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
HF
2401)
(SUCCESSOR
TO
HF
2006)
A
BILL
FOR
An
Act
relating
to
the
beginning
farmer
tax
credit
program,
1
including
the
agricultural
assets
transfer
tax
credit
2
and
the
custom
farming
contract
tax
credit,
by
extending
3
the
carryover
period,
and
including
effective
date
and
4
retroactive
applicability
provisions.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
6
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DIVISION
I
1
PAST
VERSIONS
OF
THE
AGRICULTURAL
ASSETS
TRANSFER
TAX
CREDIT
2
Section
1.
APPLICABILITY
OF
CARRYOVER
PROVISIONS.
3
1.
This
section
shall
apply,
notwithstanding
the
directive
4
to
strike
subsequent
amendments
to
section
175.37,
as
provided
5
in
2013
Iowa
Acts,
chapter
125,
section
25,
subsection
3.
6
2.
A
tax
credit
issued,
awarded,
or
allowed
to
a
taxpayer
7
under
section
175.37,
Code
2013,
that
was
first
claimed
in
a
8
tax
year
beginning
on
or
after
January
1,
2009,
and
ending
by
9
December
31,
2012,
and
that
was
in
excess
of
the
taxpayer’s
10
liability,
may
be
credited
to
the
tax
liability
of
that
11
taxpayer
for
the
following
ten
tax
years,
beginning
with
the
12
tax
year
the
tax
credit
was
first
claimed,
or
until
depleted,
13
whichever
is
earlier.
14
3.
The
carryover
provisions
of
this
section
shall
continue
15
to
be
effective
until
no
longer
applicable,
included
by
16
application
to
tax
years
beginning
on
or
after
January
1,
2018.
17
Sec.
2.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
18
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
19
enactment.
20
Sec.
3.
RETROACTIVE
APPLICABILITY.
This
division
of
21
this
Act
applies
retroactively
to
a
tax
credit
first
issued,
22
awarded,
or
allowed
to
a
taxpayer
for
a
tax
year
beginning
on
23
or
after
January
1,
2009,
and
ending
by
December
31,
2012.
24
DIVISION
II
25
CURRENT
VERSION
OF
THE
AGRICULTURAL
ASSETS
TRANSFER
TAX
26
Sec.
4.
Section
175.37,
subsection
6,
Code
2014,
is
amended
27
to
read
as
follows:
28
6.
A
tax
credit
in
excess
of
the
taxpayer’s
liability
29
for
the
tax
year
may
be
credited
to
the
tax
liability
for
30
the
following
five
ten
years
or
until
depleted,
whichever
is
31
earlier.
A
tax
credit
shall
not
be
carried
back
to
a
tax
year
32
prior
to
the
tax
year
in
which
the
taxpayer
redeems
the
tax
33
credit.
A
tax
credit
shall
not
be
transferable
to
any
other
34
person
other
than
the
taxpayer’s
estate
or
trust
upon
the
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taxpayer’s
death.
1
Sec.
5.
APPLICABILITY
OF
CARRYOVER
PROVISIONS.
2
1.
This
section
shall
apply,
notwithstanding
the
directive
3
to
strike
subsequent
amendments
to
section
175.37,
as
provided
4
in
2013
Iowa
Acts,
chapter
125,
section
25,
subsection
3.
5
2.
A
tax
credit
issued,
awarded,
or
allowed
to
a
taxpayer
6
under
section
175.37,
as
enacted
in
2013
Iowa
Acts,
chapter
7
125,
division
I,
that
was
first
claimed
in
a
tax
year
beginning
8
on
or
after
January
1,
2013,
and
ending
by
December
31,
2017,
9
that
was
in
excess
of
the
taxpayer’s
liability,
may
be
credited
10
to
the
tax
liability
of
that
taxpayer
for
the
following
ten
tax
11
years,
beginning
with
the
tax
year
the
tax
credit
was
first
12
claimed,
or
until
depleted,
whichever
is
earlier.
13
3.
The
carryover
provisions
of
this
section
shall
continue
14
to
be
effective
until
no
longer
applicable,
including
by
15
application
to
tax
years
beginning
on
or
after
January
1,
2018.
16
Sec.
6.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
17
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
18
enactment.
19
Sec.
7.
RETROACTIVE
APPLICABILITY.
This
division
of
20
this
Act
applies
retroactively
to
a
tax
credit
first
issued,
21
awarded,
or
allowed
to
a
taxpayer
for
a
tax
year
beginning
on
22
or
after
January
1,
2013,
and
ending
by
December
31,
2017.
23
DIVISION
III
24
FUTURE
VERSION
OF
THE
AGRICULTURAL
ASSETS
TRANSFER
TAX
25
Sec.
8.
APPLICABILITY
OF
CARRYOVER
PROVISIONS.
26
Upon
the
repeal
of
amendments
to
section
175.37,
as
enacted
in
27
2013
Iowa
Acts,
chapter
125,
section
25,
the
following
shall
28
apply:
Section
175.137,
subsection
7,
Code
2013,
is
amended
by
29
striking
the
words
“five
years”
and
inserting
in
lieu
thereof
30
the
words
“ten
tax
years”.
31
Sec.
9.
EFFECTIVE
DATE.
This
division
of
this
Act,
takes
32
effect
January
1,
2018.
33
Sec.
10.
APPLICABILITY.
This
division
of
this
Act
applies
34
to
tax
years
beginning
on
or
after
January
1,
2018.
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DIVISION
IV
1
CUSTOM
FARMING
CONTRACT
TAX
CREDIT
2
Sec.
11.
Section
175.38,
subsection
9,
Code
2014,
is
amended
3
to
read
as
follows:
4
9.
A
custom
farming
contract
tax
credit
in
excess
of
the
5
taxpayer’s
liability
for
the
tax
year
may
be
credited
to
the
6
tax
liability
for
the
following
five
ten
tax
years
or
until
7
depleted,
whichever
is
earlier.
A
tax
credit
shall
not
be
8
carried
back
to
a
tax
year
prior
to
the
tax
year
in
which
the
9
taxpayer
redeems
the
tax
credit.
A
tax
credit
shall
not
be
10
transferable
to
any
other
person
other
than
the
taxpayer’s
11
estate
or
trust
upon
the
taxpayer’s
death.
12
Sec.
12.
APPLICABILITY
OF
CARRYOVER
PROVISIONS.
13
1.
A
tax
credit
issued,
awarded,
or
allowed
to
a
taxpayer
14
under
section
175.38,
that
was
first
claimed
in
a
tax
year
15
beginning
on
or
after
January
1,
2013,
and
ending
by
December
16
31,
2017,
that
was
in
excess
of
the
taxpayer’s
liability,
may
17
be
credited
to
the
tax
liability
of
that
taxpayer
for
the
18
following
ten
tax
years,
beginning
with
the
tax
year
the
tax
19
credit
was
first
claimed,
or
until
depleted,
whichever
is
20
earlier.
21
2.
The
carryover
provisions
of
this
section
shall
continue
22
to
be
effective
until
no
longer
applicable,
including
by
23
application
to
tax
years
beginning
on
or
after
January
1,
2018.
24
Sec.
13.
EFFECTIVE
UPON
ENACTMENT.
This
division
of
this
25
Act,
being
deemed
of
immediate
importance,
takes
effect
upon
26
enactment.
27
Sec.
14.
RETROACTIVE
APPLICABILITY.
This
division
of
28
this
Act
applies
retroactively
to
a
tax
credit
first
issued,
29
awarded,
or
allowed
to
a
taxpayer
for
a
tax
year
beginning
on
30
or
after
January
1,
2013,
and
ending
by
December
31,
2017.
31
EXPLANATION
32
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
33
the
explanation’s
substance
by
the
members
of
the
general
assembly.
34
BILL’S
PROVISIONS
——
GENERAL.
This
bill
extends
from
five
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to
10
years
the
period
when
a
taxpayer
may
carry
over
a
tax
1
credit
under
the
agricultural
assets
transfer
tax
credit
(Code
2
section
175.37)
and
the
custom
farming
contract
tax
credit
3
(Code
section
175.38).
Both
provisions
are
referred
to
as
4
part
of
the
beginning
farmer
tax
credit
program
(Code
section
5
175.36A).
A
tax
credit
carryover
provision
allows
a
taxpayer
6
who
has
satisfied
a
tax
liability
in
one
tax
year
to
save
any
7
unused
amount
of
the
tax
credit
for
use
in
a
subsequent
tax
8
year
or
tax
years
until
no
amount
remains
or
a
specific
number
9
of
years
has
elapsed.
10
BILL’S
PROVISIONS
——
AGRICULTURAL
ASSETS
TRANSFER
TAX
11
CREDIT.
For
the
agricultural
assets
transfer
tax
credit,
the
12
bill
allows
the
extended
10-year
carryover
period
to
apply
13
to
a
taxpayer
filing
under
three
different
versions
of
Code
14
section
175.37:
(1)
a
tax
credit
which
was
first
claimed
in
a
15
tax
year
beginning
on
or
after
January
1,
2009,
and
ending
by
16
December
31,
2012;
(2)
a
tax
credit
which
was
or
may
be
first
17
claimed
in
a
tax
year
beginning
on
or
after
January
1,
2013,
18
and
ending
by
December
31,
2017;
and
(3)
a
tax
credit
which
may
19
be
first
claimed
on
or
after
January
1,
2018.
In
each
case,
the
20
taxpayer
may
continue
to
apply
the
remaining
amount
of
a
tax
21
credit
that
was
then
applicable
under
Code
section
175.37
for
22
the
following
10
tax
years
notwithstanding
that
the
section
may
23
have
been
replaced
by
a
subsequent
version.
24
BILL’S
PROVISIONS
——
CUSTOM
FARMING
CONTRACT
TAX
CREDIT.
25
For
the
custom
farming
contract
tax
credit,
the
bill
allows
26
the
extended
10-year
carryover
period
to
apply
to
a
tax
credit
27
first
claimed
in
a
tax
year
beginning
on
or
after
January
28
1,
2013,
and
ending
by
December
31,
2017.
The
taxpayer
may
29
continue
to
use
any
remaining
amount
of
the
tax
credit
in
30
future
tax
years,
regardless
of
the
fact
that
the
tax
credit
is
31
to
be
eliminated
on
December
31,
2017.
32
BILL’S
PROVISIONS
——
APPLICABILITY
AND
EFFECTIVE
DATES.
The
33
bill
applies
to
each
taxpayer
differently
depending
on
the
34
version
of
the
applicable
law
under
which
the
taxpayer
first
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claimed
the
tax
credit.
It
applies
retroactively
to
the
tax
1
year
beginning
January
1,
2009,
for
a
taxpayer
who
claimed
2
an
agricultural
assets
transfer
tax
credit
under
the
first
3
version
of
Code
section
175.37.
It
applies
retroactively
to
4
the
tax
year
beginning
January
1,
2013,
for
a
taxpayer
who
5
claimed
the
same
tax
credit
under
the
second
version
of
Code
6
section
175.37.
It
also
applies
retroactively
to
the
tax
year
7
beginning
January
1,
2013,
for
a
taxpayer
who
claimed
a
custom
8
farming
contract
tax
credit.
The
bill
applies
prospectively
9
to
a
tax
year
beginning
on
and
after
January
1,
2018,
for
a
10
taxpayer
who
will
claim
a
tax
credit
under
the
third
version
of
11
the
agricultural
assets
transfer
tax
credit.
Those
provisions
12
applying
retroactively
take
effect
upon
enactment.
The
13
provision
applying
prospectively
takes
effect
on
January
1,
14
2018.
15
BACKGROUND.
In
2006,
the
general
assembly
enacted
SF
2268
16
(2006
Iowa
Acts,
chapter
1161)
establishing
an
agricultural
17
assets
transfer
tax
credit,
administered
by
the
agricultural
18
development
authority,
to
assist
beginning
farmers
to
acquire
19
agricultural
assets
by
lease
or
rental
arrangements.
In
2013,
20
the
general
assembly
enacted
HF
599
(2013
Iowa
Acts,
chapter
21
125),
creating
the
program
which
included
the
second
version
22
of
the
agricultural
assets
transfer
tax
credit
and
the
new
23
custom
farming
contract
tax
credit.
HF
599
also
increased
from
24
$6
million
to
$12
million
the
ceiling
limit
used
to
support
25
the
program
through
the
issuance
of
tax
credit
certificates
26
(Code
section
175.39).
The
program
and
the
dollar
amount
27
limit
applied
retroactively
to
tax
years
beginning
on
or
after
28
January
1,
2013,
and
is
to
expire
on
December
31,
2017.
The
29
Code
editor
is
directed
to
codify
the
third
version
of
the
Code
30
section
by
restoring
the
tax
credit
with
its
$6
million
ceiling
31
limit
to
that
existing
immediately
prior
to
the
enactment
32
of
HF
599.
The
custom
farming
contract
tax
credit
is
to
be
33
eliminated
on
that
same
date.
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