Senate File 437 - Introduced SENATE FILE 437 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 367) (SUCCESSOR TO SSB 1177) A BILL FOR An Act providing for charitable food donations to food banks 1 and similar organizations, including by providing for 2 appropriations and a tax credit, and including applicability 3 provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 2205SZ (3) 85 da/sc
S.F. 437 SUBCHAPTER I 1 GENERAL 2 Section 1. NEW SECTION . 190B.101 Purpose. 3 The purpose of this chapter is to effectively and 4 efficiently utilize Iowa’s abundant supplies of nutritional 5 food to relieve situations of emergency or distress experienced 6 by individuals or families in need who reside in this state, 7 including low-income individuals or families and unemployed 8 individuals or families. 9 Sec. 2. NEW SECTION . 190B.102 Definitions. 10 As used in this chapter, unless the context otherwise 11 requires: 12 1. “Federal emergency food assistance program” means the 13 federal emergency food assistance program, as provided in 7 14 C.F.R. pts. 250 and 251. 15 2. “Food” means a substance which is used in whole or in 16 part for human consumption in compliance with federal and state 17 standards or requirements including a donated food that meets 18 the requirements of the federal emergency food assistance 19 program. 20 3. “Food commodity” means any commodity that is derived 21 from an agricultural animal or crop, both as defined in section 22 717A.1, that is produced on agricultural land as defined in 23 section 425A.2, and that is intended to be used as food in its 24 raw or processed state. 25 4. “Iowa emergency feeding organization” means a public or 26 private nonprofit organization whose mission is compatible with 27 the purpose of this chapter as provided in section 190B.101 and 28 which includes an Iowa food bank or other organization that 29 operates at a congregate nutritional site or that provides 30 home-delivered meals in this state. An Iowa emergency feeding 31 organization includes but is not limited to a food pantry, 32 hunger relief center, or soup kitchen. 33 5. “Iowa food bank” means a private nonprofit organization 34 which meets all of the following requirements: 35 -1- LSB 2205SZ (3) 85 da/sc 1/ 7
S.F. 437 a. It receives, holds, and directly or indirectly 1 distributes food principally to Iowa emergency feeding 2 organizations in a manner compatible with the purpose of this 3 chapter as provided in section 190B.101. 4 b. It is an organization described in section 501(c)(3) 5 of the Internal Revenue Code and exempt from taxation under 6 section 501(a) of the Internal Revenue Code. 7 c. It receives contributions that are deductible under 8 section 170 of the Internal Revenue Code. 9 6. “Iowa food bank association” or “association” means an 10 organization that meets all of the following requirements: 11 a. It is organized as a nonprofit corporation under chapter 12 504. 13 b. Its principal office is or has been located in this 14 state. 15 c. It is an organization described in section 501(c)(3) 16 of the Internal Revenue Code and exempt from taxation under 17 section 501(a) of the Internal Revenue Code. 18 d. It receives contributions that are deductible under 19 section 170 of the Internal Revenue Code. 20 e. Its members include Iowa food banks, or affiliations 21 of Iowa food banks, that together serve all counties in this 22 state. 23 SUBCHAPTER II 24 IOWA FOOD-LINK TO FOOD-BANK INITIATIVE 25 Sec. 3. NEW SECTION . 190B.201 Definition. 26 As used in this subchapter, “department” means the department 27 of human services. 28 Sec. 4. NEW SECTION . 190B.202 Department of human services 29 —— cooperation with other agencies. 30 1. This subchapter shall be administered by the department 31 of human services. 32 2. The department shall adopt all rules necessary to 33 administer this subchapter. 34 3. Each fiscal year, the department shall award the 35 -2- LSB 2205SZ (3) 85 da/sc 2/ 7
S.F. 437 amount appropriated in section 190B.203, to an Iowa food bank 1 association selected by the department to manage programs 2 associated with an Iowa food-link to food-bank initiative. 3 The department shall execute a contract with the association 4 to provide for the terms and conditions of the program’s 5 management. A contract shall not obligate the state to pay 6 moneys for multiple fiscal years. 7 4. The department of agriculture and land stewardship, 8 the department of public health, and the department of 9 inspections and appeals shall cooperate with the department of 10 human services to administer the Iowa food-link to food-bank 11 initiative. 12 Sec. 5. NEW SECTION . 190B.203 Iowa food-link to food-bank 13 initiative —— appropriation. 14 1. For the fiscal year beginning July 1, 2013, and ending 15 June 30, 2014, and for each subsequent fiscal year, there 16 is appropriated from the general fund of the state to the 17 department of human services the amount of two million dollars 18 to support an Iowa food-link to food-bank initiative to further 19 the purpose provided in section 190B.101. 20 2. The department of human services shall allocate 21 one million eight hundred thousand dollars of the amount 22 appropriated in subsection 1 to an Iowa food bank association 23 selected by the department as provided in section 190B.201 for 24 purposes of supporting the following programs: 25 a. An Iowa emergency food purchase program. The department 26 shall allocate one million seven hundred thousand dollars to 27 the association for the purchase of food on behalf of an Iowa 28 emergency feeding organization or for the distribution of 29 moneys to Iowa emergency feeding organizations for the purchase 30 of food. 31 (1) A preference shall be provided to the purchase of food 32 produced, processed, or packaged within this state whenever 33 reasonably practicable. 34 (2) The food shall be purchased in a manner that best 35 -3- LSB 2205SZ (3) 85 da/sc 3/ 7
S.F. 437 furthers a significant economic benefit to communities of this 1 state. 2 b. An Iowa emergency food nutritional education program. 3 The department shall allocate one hundred thousand dollars to 4 the association to distribute the moneys to one or more Iowa 5 emergency feeding organizations in order to provide instruction 6 regarding nutrition and promote a lifelong healthy diet. 7 3. The department of human services shall allocate two 8 hundred thousand dollars of the amount appropriated in 9 subsection 1 to an Iowa food bank association selected by the 10 department as provided in section 190B.202. The allocation 11 shall be used for the limited purpose of paying costs directly 12 associated with transporting or storing donated food associated 13 with the Iowa food-link to food-bank initiative as provided in 14 this subchapter. 15 SUBCHAPTER III 16 FROM FARM TO FOOD DONATION TAX CREDIT 17 Sec. 6. NEW SECTION . 190B.301 Definitions. 18 As used in this subchapter, unless the context otherwise 19 requires: 20 1. “Department” means the department of revenue. 21 2. “Tax credit” means the from farm to food donation tax 22 credit as established in this subchapter. 23 Sec. 7. NEW SECTION . 190B.302 Department of revenue —— 24 cooperation with other departments. 25 1. This subchapter shall be administered by the department 26 of revenue. 27 2. The department shall adopt all rules necessary to 28 administer this subchapter. 29 3. The department of agriculture and land stewardship, the 30 department of public health, the department of human services, 31 and the department of inspections and appeals shall cooperate 32 with the department of revenue to administer this subchapter. 33 Sec. 8. NEW SECTION . 190B.303 From farm to food donation 34 tax credit. 35 -4- LSB 2205SZ (3) 85 da/sc 4/ 7
S.F. 437 A from farm to food donation tax credit is allowed against 1 the taxes imposed in chapter 422, divisions II and III, as 2 provided in this subchapter. 3 Sec. 9. NEW SECTION . 190B.304 From farm to food donation 4 tax credit —— eligibility. 5 In order to qualify for a from farm to food donation tax 6 credit, all of the following must apply: 7 1. The taxpayer must produce the donated food commodity. 8 2. The taxpayer must transfer title to the donated food 9 commodity to an Iowa food bank, or an Iowa emergency feeding 10 organization, recognized by the department. The taxpayer shall 11 not receive remuneration for the transfer. 12 3. The donated food commodity cannot be damaged or 13 out-of-condition and declared to be unfit for human consumption 14 by a federal, state, or local health official. A food 15 commodity that meets the requirements for donated foods 16 pursuant to the federal emergency food assistance program 17 satisfies this requirement. 18 4. A taxpayer claiming the tax credit shall provide 19 documentation supporting the tax credit claim in a form and 20 manner prescribed by the department by rule. 21 Sec. 10. NEW SECTION . 190B.305 From farm to food donation 22 tax credit —— claims filed by individuals who belong to business 23 entities. 24 An individual may claim a from farm to food donation 25 tax credit of a partnership, limited liability company, 26 S corporation, estate, or trust electing to have income 27 taxed directly to the individual. The amount claimed by the 28 individual shall be based upon the pro rata share of the 29 individual’s earnings from the partnership, limited liability 30 company, S corporation, estate, or trust. 31 Sec. 11. NEW SECTION . 190B.306 From farm to food donation 32 tax credit —— limits on claims. 33 A from farm to food donation tax credit is subject to all of 34 the following limitations: 35 -5- LSB 2205SZ (3) 85 da/sc 5/ 7
S.F. 437 1. The tax credit shall not exceed a qualifying amount for 1 the tax year that the tax credit is claimed. The qualifying 2 amount is the lesser of the following: 3 a. Fifteen percent of the value of the commodities donated 4 during the tax year for which the credit is claimed. The value 5 of the commodities shall be determined in the same manner as a 6 charitable contribution of food for federal tax purposes under 7 section 170(e)(3)(C) of the Internal Revenue Code. 8 b. Five thousand dollars. 9 2. A tax credit in excess of the taxpayer’s liability for 10 the tax year is not refundable but may be credited to the tax 11 liability for the following five years or until depleted, 12 whichever is earlier. 13 3. If a tax credit is allowed, the amount of the 14 contribution for which the tax credit is claimed shall not 15 be deductible in determining taxable income for state tax 16 purposes. 17 4. A tax credit shall not be carried back to a tax year 18 prior to the tax year in which the taxpayer claims the tax 19 credit. 20 Sec. 12. NEW SECTION . 422.11E From farm to food donation 21 tax credit. 22 The taxes imposed under this division, less the credits 23 allowed under section 422.12, shall be reduced by a from farm 24 to food donation tax credit as allowed under chapter 190B, 25 subchapter III. 26 Sec. 13. Section 422.33, Code 2013, is amended by adding the 27 following new subsection: 28 NEW SUBSECTION . 30. The taxes imposed under this division 29 shall be reduced by a from farm to food donation tax credit as 30 allowed under chapter 190, subchapter III. 31 Sec. 14. APPLICABILITY. The provisions of this Act 32 providing for a from farm to food donation tax credit applies 33 to tax years beginning on or after January 1, 2014. 34 EXPLANATION 35 -6- LSB 2205SZ (3) 85 da/sc 6/ 7
S.F. 437 GENERAL. This bill provides for charitable food donations 1 to food banks and other emergency feeding organizations that 2 relieve situations of emergency or distress experienced by 3 individuals or families in need who reside in this state. 4 IOWA FOOD-LINK TO FOOD-BANK INITIATIVE. The bill creates 5 an Iowa food-link to food-bank initiative administered by the 6 department of human services. Each fiscal year, moneys from 7 the general fund are appropriated to the department in order to 8 support several programs managed by an association representing 9 Iowa food banks. The programs provide for the purchase of food 10 and instruction regarding nutrition and diet. Moneys are also 11 allocated to pay for transporting and storing donated food. 12 TAX CREDIT —— GENERAL. The bill establishes a from farm 13 to food donation tax credit against individual or corporate 14 income taxes. The tax credit may be claimed by the taxpayer 15 who produces a food commodity. The tax credit is administered 16 by the department of revenue. 17 TAX CREDIT —— TAXPAYERS. The bill provides that the taxpayer 18 may claim a tax credit for 15 percent of the value of donated 19 commodities up to $5,000. The bill requires that the donated 20 food commodities cannot be damaged or out-of-condition and 21 declared unfit for human consumption. The bill provides that 22 the tax credit is not refundable but allows a taxpayer to carry 23 forward the tax credit for up to five years. An individual may 24 claim a tax credit of a partnership, limited liability company, 25 S corporation, estate, or trust electing to have income taxed 26 directly to the individual. 27 TAX CREDIT —— APPLICABILITY. The tax credit applies to tax 28 years beginning on or after January 1, 2014. 29 -7- LSB 2205SZ (3) 85 da/sc 7/ 7