Senate File 439 - Introduced SENATE FILE 439 BY COMMITTEE ON APPROPRIATIONS (SUCCESSOR TO SF 437) (SUCCESSOR TO SF 367) (SUCCESSOR TO SSB 1177) A BILL FOR An Act relating to 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 2205SW (2) 85 da/sc

S.F. 439 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 2205SW (2) 85 da/sc 1/ 8

S.F. 439 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 2205SW (2) 85 da/sc 2/ 8

S.F. 439 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. The 3 moneys appropriated in section 190B.203 shall be allocated on 4 a matching basis as provided in that section. The department 5 shall execute a contract with the association to provide 6 for the terms and conditions of the program’s management. 7 A contract shall not obligate the state to pay moneys for 8 multiple fiscal years. 9 4. The department of agriculture and land stewardship, 10 the department of public health, and the department of 11 inspections and appeals shall cooperate with the department of 12 human services to administer the Iowa food-link to food-bank 13 initiative. 14 Sec. 5. NEW SECTION . 190B.203 Iowa food-link to food-bank 15 initiative —— appropriation. 16 1. For the fiscal year beginning July 1, 2013, and ending 17 June 30, 2014, and for each subsequent fiscal year, there 18 is appropriated from the general fund of the state to the 19 department of human services the amount of two million dollars 20 to support an Iowa food-link to food-bank initiative to further 21 the purpose provided in section 190B.101. 22 2. The department of human services shall allocate up 23 to one million eight hundred thousand dollars of the amount 24 appropriated in subsection 1 to an Iowa food bank association 25 selected by the department as provided in section 190B.202 for 26 purposes of supporting the following programs: 27 a. An Iowa emergency food purchase program. The department 28 shall allocate up to one million seven hundred thousand dollars 29 to the association for the purchase of food on behalf of an 30 Iowa emergency feeding organization or for the distribution of 31 moneys to Iowa emergency feeding organizations for the purchase 32 of food. 33 (1) A preference shall be provided to the purchase of food 34 produced, processed, or packaged within this state whenever 35 -3- LSB 2205SW (2) 85 da/sc 3/ 8

S.F. 439 reasonably practicable. 1 (2) The food shall be purchased in a manner that best 2 furthers a significant economic benefit to communities of this 3 state. 4 b. An Iowa emergency food nutritional education program. 5 The department shall allocate up to one hundred thousand 6 dollars to the association to distribute the moneys to one or 7 more Iowa emergency feeding organizations in order to provide 8 instruction regarding nutrition and promote a lifelong healthy 9 diet. 10 c. A transportation and storage program. The department 11 shall allocate up to two hundred thousand dollars of the amount 12 appropriated in subsection 1 to an association for the limited 13 purposes of paying costs directly associated with transporting 14 or storing donated food associated with the Iowa food-link to 15 food-bank initiative as provided in this subchapter. 16 3. The moneys appropriated in subsection 1 shall be 17 allocated as provided in subsection 2 only to the extent that 18 the allocated moneys are matched on a dollar-for-dollar basis 19 with moneys contributed by one or more sources, including but 20 not limited to an Iowa food bank, but not including the state. 21 The department shall establish procedures or other requirements 22 for making and tracking matching contributions. 23 SUBCHAPTER III 24 FROM FARM TO FOOD DONATION TAX CREDIT 25 Sec. 6. NEW SECTION . 190B.301 Definitions. 26 As used in this subchapter, unless the context otherwise 27 requires: 28 1. “Department” means the department of revenue. 29 2. “Tax credit” means the from farm to food donation tax 30 credit as established in this subchapter. 31 Sec. 7. NEW SECTION . 190B.302 Department of revenue —— 32 cooperation with other departments. 33 1. This subchapter shall be administered by the department 34 of revenue. 35 -4- LSB 2205SW (2) 85 da/sc 4/ 8

S.F. 439 2. The department shall adopt all rules necessary to 1 administer this subchapter. 2 3. The department of agriculture and land stewardship, the 3 department of public health, the department of human services, 4 and the department of inspections and appeals shall cooperate 5 with the department of revenue to administer this subchapter. 6 Sec. 8. NEW SECTION . 190B.303 From farm to food donation 7 tax credit. 8 A from farm to food donation tax credit is allowed against 9 the taxes imposed in chapter 422, divisions II and III, as 10 provided in this subchapter. 11 Sec. 9. NEW SECTION . 190B.304 From farm to food donation 12 tax credit —— eligibility. 13 In order to qualify for a from farm to food donation tax 14 credit, all of the following must apply: 15 1. The taxpayer must produce the donated food commodity. 16 2. The taxpayer must transfer title to the donated food 17 commodity to an Iowa food bank, or an Iowa emergency feeding 18 organization, recognized by the department. The taxpayer shall 19 not receive remuneration for the transfer. 20 3. The donated food commodity cannot be damaged or 21 out-of-condition and declared to be unfit for human consumption 22 by a federal, state, or local health official. A food 23 commodity that meets the requirements for donated foods 24 pursuant to the federal emergency food assistance program 25 satisfies this requirement. 26 4. A taxpayer claiming the tax credit shall provide 27 documentation supporting the tax credit claim in a form and 28 manner prescribed by the department by rule. 29 Sec. 10. NEW SECTION . 190B.305 From farm to food donation 30 tax credit —— claims filed by individuals who belong to business 31 entities. 32 An individual may claim a from farm to food donation 33 tax credit of a partnership, limited liability company, 34 S corporation, estate, or trust electing to have income 35 -5- LSB 2205SW (2) 85 da/sc 5/ 8

S.F. 439 taxed directly to the individual. The amount claimed by the 1 individual shall be based upon the pro rata share of the 2 individual’s earnings from the partnership, limited liability 3 company, S corporation, estate, or trust. 4 Sec. 11. NEW SECTION . 190B.306 From farm to food donation 5 tax credit —— limits on claims. 6 A from farm to food donation tax credit is subject to all of 7 the following limitations: 8 1. The tax credit shall not exceed a qualifying amount for 9 the tax year that the tax credit is claimed. The qualifying 10 amount is the lesser of the following: 11 a. Fifteen percent of the value of the commodities donated 12 during the tax year for which the credit is claimed. The value 13 of the commodities shall be determined in the same manner as a 14 charitable contribution of food for federal tax purposes under 15 section 170(e)(3)(C) of the Internal Revenue Code. 16 b. Five thousand dollars. 17 2. A tax credit in excess of the taxpayer’s liability for 18 the tax year is not refundable but may be credited to the tax 19 liability for the following five years or until depleted, 20 whichever is earlier. 21 3. If a tax credit is allowed, the amount of the 22 contribution for which the tax credit is claimed shall not 23 be deductible in determining taxable income for state tax 24 purposes. 25 4. A tax credit shall not be carried back to a tax year 26 prior to the tax year in which the taxpayer claims the tax 27 credit. 28 Sec. 12. NEW SECTION . 422.11E From farm to food donation 29 tax credit. 30 The taxes imposed under this division, less the credits 31 allowed under section 422.12, shall be reduced by a from farm 32 to food donation tax credit as allowed under chapter 190B, 33 subchapter III. 34 Sec. 13. Section 422.33, Code 2013, is amended by adding the 35 -6- LSB 2205SW (2) 85 da/sc 6/ 8

S.F. 439 following new subsection: 1 NEW SUBSECTION . 30. The taxes imposed under this division 2 shall be reduced by a from farm to food donation tax credit as 3 allowed under chapter 190B, subchapter III. 4 Sec. 14. APPLICABILITY. The provisions of this Act 5 providing for a from farm to food donation tax credit applies 6 to tax years beginning on or after January 1, 2014. 7 EXPLANATION 8 GENERAL. This bill provides for charitable food donations 9 to food banks and other emergency feeding organizations that 10 relieve situations of emergency or distress experienced by 11 individuals or families in need who reside in this state. 12 APPROPRIATIONS. The bill creates an Iowa food-link to 13 food-bank initiative administered by the department of 14 human services. Each fiscal year, moneys from the general 15 fund are appropriated to the department in order to support 16 several programs managed by an association representing Iowa 17 food banks. The programs provide for the purchase of food 18 and instruction regarding nutrition and diet. Moneys are 19 also allocated to pay for transporting and storing donated 20 food. The appropriated moneys are to be allocated on a 21 dollar-for-dollar match from nonstate sources. 22 TAX CREDIT —— GENERAL. The bill establishes a from farm 23 to food donation tax credit against individual or corporate 24 income taxes. The tax credit may be claimed by the taxpayer 25 who produces a food commodity. The tax credit is administered 26 by the department of revenue. 27 TAX CREDIT —— TAXPAYERS. The bill provides that the taxpayer 28 may claim a tax credit for 15 percent of the value of donated 29 commodities up to $5,000. The bill requires that the donated 30 food commodities cannot be damaged or out-of-condition and 31 declared unfit for human consumption. The bill provides that 32 the tax credit is not refundable but allows a taxpayer to carry 33 forward the tax credit for up to five years. An individual may 34 claim a tax credit of a partnership, limited liability company, 35 -7- LSB 2205SW (2) 85 da/sc 7/ 8