House Study Bill 157 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON AGRICULTURE BILL BY CHAIRPERSON GRASSLEY) A BILL FOR An Act providing for a cow-calf credit and refund, providing 1 for an appropriation, and including applicability 2 provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2130YC (3) 85 da/sc
H.F. _____ Section 1. NEW SECTION . 422.120 Definitions. 1 As used in this division, unless the context otherwise 2 requires: 3 1. “Cow-calf operation” means an animal feeding operation as 4 defined in section 459.102 that is located in this state and 5 that keeps qualified cattle. 6 2. “Cow-calf refund claim” means a cow-calf credit 7 calculated as provided in section 422.121 and claimed as a 8 refund pursuant to section 422.123. 9 3. “Credit” means the cow-calf credit as provided in section 10 422.121. 11 4. “Qualified cattle” means any of the following: 12 a. A mature beef cow bred or for breeding. 13 b. A bred yearling heifer. 14 c. A breeding bull. 15 Sec. 2. NEW SECTION . 422.121 Cow-calf credit —— allowed —— 16 calculation. 17 1. There is allowed a state credit for cow-calf operations 18 located in this state. The credit calculated under this 19 section shall be filed with the department as a cow-calf refund 20 claim pursuant to section 422.123. 21 2. A taxpayer claiming the cow-calf credit must calculate 22 the taxpayer’s qualifying taxable income. 23 a. The credit shall be available to an individual or 24 corporate taxpayer if the taxpayer’s federal taxable income is 25 not more than one hundred forty-four thousand three hundred 26 fifty-eight dollars for the tax year. In the case of married 27 taxpayers, their combined federal taxable income shall be not 28 more than that same amount for the tax year. 29 b. For each subsequent tax year, the maximum taxable income 30 amount specified in paragraph “a” shall be multiplied by the 31 cumulative index factor for that tax year. “Cumulative index 32 factor” means the product of the annual index factor for the 33 2014 calendar year and all annual index factors for subsequent 34 calendar years. The cumulative index factor applies to all tax 35 -1- LSB 2130YC (3) 85 da/sc 1/ 5
H.F. _____ years beginning on or after January 1 of the calendar year for 1 which the latest annual index factor has been determined. 2 c. The annual index factor for the 2014 calendar year is 3 one hundred percent. For each subsequent calendar year, the 4 annual index factor equals the annual inflation factor for 5 that calendar year as computed in section 422.4, subsection 1, 6 paragraph “a” , for purposes of the individual income tax. 7 3. a. The amount of the credit equals eleven dollars and 8 fifteen cents for each head of qualified livestock kept as part 9 of the cow-calf operation. 10 b. In calculating the cow-calf credit as provided in 11 paragraph “a” , only those qualified cattle that are kept at the 12 cow-calf operation on July 1 through December 31 of the tax 13 year are counted. 14 4. If the cow-calf operation is carried on partly within and 15 partly outside the state, the portion of the cow-calf operation 16 attributable to this state shall be determined pursuant to 17 rules adopted by the department. The department may adjust the 18 allocation upon request of the taxpayer in order to reflect the 19 actual cow-calf operation carried on within this state. 20 5. A person who fraudulently claims a cow-calf credit under 21 this section shall forfeit any right to be paid for a refund 22 claim or interest on a refund claim as provided in section 23 422.123 in subsequent tax years. 24 Sec. 3. NEW SECTION . 422.122 Appropriation —— limitation. 25 There is appropriated annually from the general fund of the 26 state four million dollars to refund cow-calf credits allowed 27 under section 422.123. 28 Sec. 4. NEW SECTION . 422.123 Refund of eligible cow-calf 29 credit claims. 30 1. A taxpayer may file a cow-calf credit refund claim as 31 calculated pursuant to section 422.121. 32 2. Each tax year the total amount paid to taxpayers filing 33 eligible cow-calf credit refund claims as calculated pursuant 34 to section 422.121 shall not exceed the amount appropriated by 35 -2- LSB 2130YC (3) 85 da/sc 2/ 5
H.F. _____ the general assembly pursuant to section 422.122. 1 a. If the total dollar amount of refund claims exceeds that 2 appropriated amount, each refund claim shall be paid an amount 3 equal to the appropriated amount divided by the total number of 4 refund claims. However, a taxpayer shall not be paid an amount 5 that exceeds the taxpayer’s refund claim. Remaining moneys 6 shall be prorated among those refund claims not paid in full in 7 the proportion that each such claim bears to the total amount 8 of such refund claims not paid in full. 9 b. In the case where a taxpayer’s refund claim is not paid 10 in full, the amount of the refund claim to which the taxpayer 11 is entitled to be paid is the amount computed in paragraph 12 “a” , and paid to the taxpayer. The taxpayer is not entitled 13 to be paid for any unpaid portion of a refund claim and is not 14 entitled to carry forward or backward to another tax year any 15 unpaid portion of a refund claim. 16 c. A taxpayer shall not use a paid refund claim as an 17 estimated payment for the succeeding tax year. 18 3. A taxpayer must file a cow-calf credit refund claim 19 within ten months from the last day of the taxpayer’s tax year. 20 An extension for filing shall not be allowed. 21 a. The department shall determine by February 28 of the 22 calendar year following the calendar year in which the refund 23 claims were filed if the total amount of refund claims exceeds 24 the amount appropriated pursuant to section 422.122. 25 b. If a refund claim is not payable on February 28 because 26 the taxpayer is a fiscal year filer, the claim shall be 27 considered as a claim filed for the following tax year. 28 4. A refund claim shall be made on forms made available 29 by the department and filed in a manner and according to 30 procedures required by the department. In order for a taxpayer 31 to have a valid refund claim, the taxpayer must supply legible 32 copies of documents as determined necessary by the department 33 to verify the refund claim’s accuracy. 34 Sec. 5. APPLICABILITY. This Act applies to tax years 35 -3- LSB 2130YC (3) 85 da/sc 3/ 5
H.F. _____ beginning on or after January 1, 2014. 1 EXPLANATION 2 BACKGROUND. In 1996, the general assembly enacted SF 3 2449 (1996 Iowa Acts, chapter 1197) which in part provided 4 a livestock production tax credit not to exceed $3,000 per 5 operation in total for a tax year. The tax credit was made 6 available to an individual or corporate taxpayer and was 7 computed by multiplying 10 cents times the amount of corn or 8 corn equivalents consumed by the livestock in the production 9 operation. For example the corn equivalency for cow-calf 10 operations (mature beef cattle bred or for breeding, bred 11 yearling heifers, and breeding bulls) equaled 111.5 (10 cents 12 x 111.5 = $11.15). The Act also included a standing limited 13 annual appropriation of $2 million to support the tax credit. 14 The tax credit was not used to directly reduce the taxpayer’s 15 income tax liability but instead was used to calculate the 16 amount of a refund paid to the taxpayer who filed a refund 17 claim with the department of revenue. The Act also included 18 procedures for use by the department to prorate refund claim 19 amounts in case the annual appropriation was not sufficient 20 to satisfy all claims. In addition, the Act provided that 21 it would be used only to support cow-calf operations for the 22 current tax year. In 1997, the general assembly enacted HF 23 726 (1997 Iowa Acts, chapter 206), which provided that the 24 tax credit would only apply to such operations. In addition 25 the Act replaced a maximum threshold net worth requirement 26 for tax filers with a federally taxable income threshold 27 equaling $99,600 for tax year beginning January 1, 1997, and 28 automatically adjusted each year for inflation. In 2009, the 29 general assembly enacted SF 478 repealing the tax credit (2009 30 Iowa Acts, chapter 179). 31 BILL —— RESTORATION OF THE COW-CALF CREDIT. This bill 32 specifically provides for a cow-calf operations credit based 33 on the provisions in the 1996 legislation establishing the 34 livestock production tax credit. The income threshold for 35 -4- LSB 2130YC (3) 85 da/sc 4/ 5
H.F. _____ qualifying taxpayers is increased to not more than $144,358, 1 as adjusted each year for inflation. The standing limited 2 appropriation is increased to $4 million. However, the same 3 method is used for calculating the payment of eligible refund 4 claims when the total amount of such claims exceeds the 5 appropriated amount. The new cow-calf credit applies to tax 6 years beginning on or after January 1, 2014. 7 -5- LSB 2130YC (3) 85 da/sc 5/ 5