H.F. 2490 DIVISION I 1 AGRICULTURAL ASSETS TRANSFER TAX CREDIT PROGRAM 2 Section 1. Section 2.48, subsection 3, paragraph e, 3 subparagraph (1), Code 2018, is amended to read as follows: 4 (1) The agricultural assets transfer tax credit program as 5 provided in section 16.80 chapter 16, subchapter VIII, part 5, 6 subpart B . 7 Sec. 2. Section 16.1, Code 2018, is amended by adding the 8 following new subsection: 9 NEW SUBSECTION . 38. “Veteran” means the same as defined in 10 section 35.1 . 11 Sec. 3. NEW SECTION . 16.77 Administration. 12 1. To every extent practicable, the authority shall 13 administer an agricultural assets transfer tax credit program 14 in a manner that encourages participation by eligible taxpayers 15 and qualified beginning farmers. The authority shall determine 16 a beginning farmer’s low or moderate net worth by using 17 a single method applicable to all its programs under this 18 subchapter as provided under section 16.59 . 19 2. The authority shall establish a due date to receive 20 applications to participate in the agricultural assets transfer 21 tax credit program. 22 3. The department of revenue shall cooperate with the 23 authority in administering the agricultural assets transfer tax 24 credit program. 25 Sec. 4. NEW SECTION . 16.78 Criteria for participation. 26 1. A taxpayer is eligible to participate in the agricultural 27 assets transfer tax credit program as required by rules adopted 28 by the authority. At a minimum, the taxpayer must be a person 29 who may acquire or otherwise obtain or lease agricultural land 30 in this state pursuant to chapter 9H or 9I . However, the 31 taxpayer must not be a person who may acquire or otherwise 32 obtain or lease agricultural land exclusively because of an 33 exception provided in one of those chapters or in a provision 34 of another chapter of this Code including but not limited to 35 -1- LSB 2617HZ (4) 87 da/rj 1/ 16

H.F. 2490 chapter 10 , 10D , or 501 , or section 15E.207 . 1 2. A beginning farmer qualifies to participate in the 2 agricultural assets transfer tax credit program by meeting all 3 of the following criteria: 4 a. Is a resident of the state. If the beginning farmer is a 5 partnership, all partners must be residents of the state. If a 6 beginning farmer is a family farm corporation, all shareholders 7 must be residents of the state. If the beginning farmer is 8 a family farm limited liability company, all members must be 9 residents of the state. 10 b. Has sufficient education, training, or experience in 11 farming. If the beginning farmer is a partnership, each 12 partner who is not a minor must have sufficient education, 13 training, or experience in farming. If the beginning farmer 14 is a family farm corporation, each shareholder who is not a 15 minor must have sufficient education, training, or experience 16 in farming. If the beginning farmer is a family farm limited 17 liability company, each member who is not a minor must have 18 sufficient education, training, or experience in farming. 19 c. Has access to adequate working capital and production 20 items. 21 d. Will materially and substantially participate in 22 farming. If the beginning farmer is a partnership, family 23 farm corporation, or family farm limited liability company, 24 each partner, shareholder, or member who is not a minor must 25 materially and substantially participate in farming. 26 e. Is not responsible for managing or maintaining 27 agricultural land and other agricultural assets that are 28 greater than necessary to adequately support a beginning farmer 29 as determined by the authority according to rules which shall 30 be adopted by the authority. 31 Sec. 5. NEW SECTION . 16.79 Agricultural assets transfer 32 agreement. 33 1. An agricultural assets transfer tax credit is 34 allowed only for agricultural assets that are subject to an 35 -2- LSB 2617HZ (4) 87 da/rj 2/ 16

H.F. 2490 agricultural assets transfer agreement executed by an eligible 1 taxpayer and a qualifying beginning farmer participating in the 2 agricultural assets transfer tax credit program. 3 2. The agricultural assets transfer agreement shall 4 include the lease of agricultural land located in this state, 5 including any improvements, and may provide for the rental of 6 agricultural equipment as defined in section 322F.1 . 7 3. a. The agricultural assets transfer agreement shall 8 be made on a cash basis or on a commodity share basis which 9 includes a share of the crops or livestock produced on the 10 agricultural land. The agreement may be made on both a cash 11 basis and commodity share basis to the extent allowed by the 12 authority. 13 b. The agreement shall be in writing. 14 c. The agreement shall be for at least two years, but not 15 more than five years. The agreement may be renewed by the 16 taxpayer and beginning farmer for a term of at least two years, 17 but not more than five years. 18 d. The agreement shall not include a lease or the rental of 19 equipment intended as a security. 20 e. The agreement cannot be assigned and the agricultural 21 land subject to the agreement shall not be subleased. 22 Sec. 6. Section 16.80, Code 2018, is amended by striking the 23 section and inserting in lieu thereof the following: 24 16.80 Agricultural assets transfer tax credit —— agreement. 25 1. An agricultural assets transfer tax credit is allowed 26 under the agricultural assets transfer tax credit program. The 27 tax credit is allowed against the taxes imposed in chapter 422, 28 division II , as provided in section 422.11M , and in chapter 29 422, division III , as provided in section 422.33 , to facilitate 30 the transfer of agricultural assets from a participating 31 taxpayer to a participating beginning farmer as described in 32 section 16.78. 33 2. An individual may claim an agricultural assets transfer 34 tax credit under this section of a partnership, limited 35 -3- LSB 2617HZ (4) 87 da/rj 3/ 16

H.F. 2490 liability company, S corporation, estate, or trust electing 1 to have income taxed directly to the individual. The amount 2 claimed by the individual shall be based upon the pro rata 3 share of the individual’s earnings from the partnership, 4 limited liability company, S corporation, estate, or trust. 5 3. The agricultural assets transfer tax credit shall be 6 based on an agricultural assets transfer agreement as required 7 in section 16.79. 8 a. For an agreement made on a cash basis, the tax credit 9 shall be computed as follows: 10 (1) If the beginning farmer is not a veteran, the taxpayer 11 may claim a tax credit equal to five percent of the gross 12 amount paid to the taxpayer under the agreement for each tax 13 year that the tax credit is allowed. 14 (2) If the beginning farmer is a veteran, the taxpayer may 15 claim a tax credit equal to six percent of the gross amount 16 paid to the taxpayer under the agreement for the first year 17 that the tax credit is allowed and five percent of the gross 18 amount paid to the taxpayer for each subsequent tax year that 19 the taxpayer is allowed the tax credit. However, the taxpayer 20 may only claim five percent of the gross amount paid to the 21 taxpayer under a renewed agreement or a new agreement executed 22 by the same parties. 23 b. For an agreement made on a commodity share basis, the tax 24 credit shall be computed as follows: 25 (1) (a) If the beginning farmer is not a veteran, the 26 taxpayer may claim a tax credit equal to fifteen percent of the 27 amount paid to the taxpayer from crops or livestock sold under 28 the agreement. 29 (b) If the beginning farmer is a veteran, the taxpayer 30 may claim a tax credit equal to sixteen percent of the amount 31 paid to the taxpayer from crops or livestock sold under the 32 agreement for the first tax year that the taxpayer is allowed 33 the tax credit and fifteen percent of the amount paid to the 34 taxpayer for each subsequent tax year that the taxpayer is 35 -4- LSB 2617HZ (4) 87 da/rj 4/ 16

H.F. 2490 allowed the tax credit. However, the taxpayer may only claim 1 fifteen percent of the amount paid to the taxpayer from crops 2 or livestock sold for any tax year under a renewed agreement or 3 a new agreement executed by the same parties. 4 (2) Notwithstanding subparagraph (1), the authority may 5 elect an alternative method to compute a tax credit for an 6 agreement based on a crop share basis. The alternative method 7 shall utilize a formula which uses data compiled by the United 8 States department of agriculture. The formula shall calculate 9 the amount of the tax credit by multiplying the average per 10 bushel yield for the same type of grain as produced under the 11 lease in the same county where the leased agricultural land is 12 located by a per bushel state price established for such type 13 of grain harvested the previous fall. 14 4. a. The authority must review and approve an application 15 for an agricultural assets transfer tax credit as provided by 16 rules adopted by the authority. The application must include 17 a copy of the agricultural assets transfer agreement. The 18 authority may require that the parties to an agreement provide 19 additional information as determined relevant by the authority. 20 The authority shall review an application which includes the 21 renewal of an agreement to determine that the parties to the 22 renewed agreement meet the same qualifications as required for 23 an original application. 24 b. After approving an application, the authority shall issue 25 an agricultural assets transfer tax credit certificate to a 26 taxpayer as provided in section 16.81, regardless of whether 27 the taxpayer has previously been allowed a tax credit under 28 this section or section 175.37 as it existed prior to January 29 1, 2015. 30 c. The authority shall not approve an application or issue 31 an agricultural assets transfer tax credit certificate to 32 a taxpayer for an amount in excess of twenty-five thousand 33 dollars. In addition, the authority shall not approve an 34 application or issue an agricultural assets transfer tax credit 35 -5- LSB 2617HZ (4) 87 da/rj 5/ 16

H.F. 2490 certificate to a taxpayer if any of the following applies: 1 (1) The taxpayer is at fault for terminating a prior 2 agricultural assets transfer agreement as determined by the 3 authority. 4 (2) The taxpayer is any of the following: 5 (a) A party to a pending administrative or judicial action, 6 including a contested case proceeding under chapter 17A , 7 relating to an alleged violation involving an animal feeding 8 operation as regulated by the department of natural resources, 9 regardless of whether the pending action is brought by the 10 department or the attorney general. 11 (b) Classified as a habitual violator for a violation of 12 state law involving an animal feeding operation as regulated by 13 the department of natural resources under chapter 459. 14 (3) The agricultural assets are being leased or rented at 15 a rate that is substantially higher or lower than the market 16 rate for similar agricultural assets leased or rented within 17 the same community, as determined by the authority. 18 5. An agricultural assets transfer tax credit in excess 19 of the taxpayer’s liability for the tax year may be credited 20 to the tax liability for the following ten tax years or until 21 depleted, whichever is earlier. A tax credit shall not be 22 carried back to a tax year prior to the tax year in which the 23 taxpayer redeems the tax credit. A tax credit shall not be 24 transferable to any other person other than the taxpayer’s 25 estate or trust upon the taxpayer’s death. 26 6. A taxpayer or the beginning farmer may terminate an 27 agricultural assets transfer agreement as provided in the 28 agreement or by law. The taxpayer must immediately notify 29 the authority of the termination. Any prior properly claimed 30 agricultural assets transfer tax credit shall be allowed. 31 a. If the authority determines that the taxpayer is not 32 at fault for the termination, the authority shall not issue 33 an agricultural assets transfer tax credit certificate to 34 the taxpayer for a subsequent tax year based on the approved 35 -6- LSB 2617HZ (4) 87 da/rj 6/ 16

H.F. 2490 application. The taxpayer may apply for and be issued another 1 agricultural assets transfer tax credit certificate under a 2 new agreement for the same agricultural assets as provided in 3 this section for any remaining tax years for which a tax credit 4 certificate was not issued. 5 b. If the authority determines that the taxpayer is at 6 fault for the termination, the agricultural assets transfer 7 tax credit that had been allowed for that tax year shall be 8 disallowed and the amount shall be considered a tax payment 9 due. If a taxpayer does not immediately notify the authority 10 of the termination, the taxpayer shall be conclusively deemed 11 at fault for the termination. 12 Sec. 7. NEW SECTION . 16.81 Tax credit certificates —— 13 amount and availability. 14 1. A taxpayer shall not claim an agricultural assets 15 transfer tax credit unless an agricultural assets transfer tax 16 credit certificate issued by the authority is included with the 17 taxpayer’s tax return for the tax year for which the tax credit 18 is claimed. 19 2. The amount of the agricultural assets transfer tax credit 20 that may be issued under the agricultural assets transfer tax 21 credit program shall not in the aggregate exceed nine million 22 dollars in any year. 23 3. The authority shall issue agricultural assets transfer 24 tax credit certificates on a first-come, first-served basis. 25 Sec. 8. Section 422.11M, Code 2018, is amended to read as 26 follows: 27 422.11M Agricultural assets transfer tax credit. 28 The taxes imposed under this division , less the credits 29 allowed under section 422.12 , shall be reduced by an 30 agricultural assets transfer tax credit as allowed under 31 section 16.80 as provided in chapter 16, subchapter VIII, part 32 5, subpart B . 33 Sec. 9. Section 422.33, subsection 21, Code 2018, is amended 34 to read as follows: 35 -7- LSB 2617HZ (4) 87 da/rj 7/ 16

H.F. 2490 21. The taxes imposed under this division shall be reduced 1 by an agricultural assets transfer tax credit as allowed under 2 section 16.80 chapter 16, subchapter VIII, part 5, subpart B . 3 Sec. 10. EFFECTIVE DATE. This division of this Act, being 4 deemed of immediate importance, takes effect upon enactment. 5 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 6 Act applies retroactively to January 1, 2018, for tax years 7 beginning on or after that date. 8 DIVISION II 9 FUTURE REPEAL OF AGRICULTURAL ASSETS TRANSFER TAX CREDIT 10 PROGRAM AND REPLACEMENT WITH CURRENT AGRICULTURAL ASSETS 11 TRANSFER TAX CREDIT 12 Sec. 12. Section 2.48, subsection 3, paragraph e, 13 subparagraph (1), as amended by this Act, is amended by 14 striking the subparagraph and inserting in lieu thereof the 15 following: 16 (1) The agricultural assets transfer tax credit as provided 17 in section 16.80. 18 Sec. 13. Section 16.1, subsection 38, as amended by this 19 Act, is amended by striking the subsection. 20 Sec. 14. Section 16.80, as amended by this Act, is amended 21 by striking the section and inserting in lieu thereof the 22 following: 23 16.80 Agricultural assets transfer tax credit —— agreement. 24 1. An agricultural assets transfer tax credit is allowed 25 under this section. The tax credit is allowed against the 26 taxes imposed in chapter 422, division II, as provided in 27 section 422.11M, and in chapter 422, division III, as provided 28 in section 422.33, to facilitate the transfer of agricultural 29 assets from a taxpayer to a beginning farmer. 30 2. In order to qualify for the tax credit, the taxpayer 31 must meet qualifications established by rules adopted by the 32 authority. At a minimum, the taxpayer must comply with all of 33 the following: 34 a. Be a person who may acquire or otherwise obtain or lease 35 -8- LSB 2617HZ (4) 87 da/rj 8/ 16

H.F. 2490 agricultural land in this state pursuant to chapter 9H or 9I. 1 However, the taxpayer must not be a person who may acquire 2 or otherwise obtain or lease agricultural land exclusively 3 because of an exception provided in one of those chapters or in 4 a provision of another chapter of this Code including but not 5 limited to chapter 10, 10D, or 501, or section 15E.207. 6 b. Execute an agricultural assets transfer agreement with a 7 beginning farmer as provided in this section. 8 3. An individual may claim a tax credit under this section 9 of a partnership, limited liability company, S corporation, 10 estate, or trust electing to have income taxed directly to 11 the individual. The amount claimed by the individual shall 12 be based upon the pro rata share of the individual’s earnings 13 from the partnership, limited liability company, S corporation, 14 estate, or trust. 15 4. The tax credit is allowed only for agricultural assets 16 that are subject to an agricultural assets transfer agreement. 17 The agreement shall provide for the lease of agricultural land 18 including any improvements and may provide for the rental of 19 agricultural equipment as defined in section 322F.1. 20 a. The agreement may be made on a cash basis or on a 21 commodity share basis which includes a share of the crops or 22 livestock produced on the agricultural land. The agreement 23 must be in writing. 24 b. The agreement shall be for at least two years, but 25 not more than five years. The agreement or that part of 26 the agreement providing for the lease may be renewed by the 27 beginning farmer for a term of at least two years, but not more 28 than five years. An agreement does not include a lease or the 29 rental of equipment intended as a security. 30 5. The tax credit shall be calculated based on the gross 31 amount paid to the taxpayer under the agricultural assets 32 transfer agreement. 33 a. Except as provided in paragraph “b” , the tax credit shall 34 equal five percent of the amount paid to the taxpayer under the 35 -9- LSB 2617HZ (4) 87 da/rj 9/ 16

H.F. 2490 agreement. 1 b. The tax credit shall equal fifteen percent of the 2 amount paid to the taxpayer from crops or animals sold under 3 an agreement in which the payment is exclusively made from the 4 sale of crops or animals. 5 6. In order to qualify as a beginning farmer, a person 6 must be eligible to receive financial assistance under section 7 16.75. 8 7. A tax credit in excess of the taxpayer’s liability 9 for the tax year may be credited to the tax liability for 10 the following ten tax years or until depleted, whichever is 11 earlier. A tax credit shall not be carried back to a tax year 12 prior to the tax year in which the taxpayer redeems the tax 13 credit. A tax credit shall not be transferable to any other 14 person other than the taxpayer’s estate or trust upon the 15 taxpayer’s death. 16 8. A taxpayer shall not claim a tax credit under this 17 section unless a tax credit certificate issued by the authority 18 is included with the taxpayer’s tax return for the tax year for 19 which the tax credit is claimed. The authority must review 20 and approve an application for a tax credit as provided by 21 rules adopted by the authority. The application must include 22 a copy of the agricultural assets transfer agreement. The 23 authority may approve an application and issue a tax credit 24 certificate to a taxpayer who has previously been allowed a 25 tax credit under this section. The authority may require 26 that the parties to an agricultural assets transfer agreement 27 provide additional information as determined relevant by the 28 authority. The authority shall review an application for a tax 29 credit which includes the renewal of an agricultural assets 30 transfer agreement to determine that the parties to the renewed 31 agreement meet the same qualifications as required for an 32 original application. However, the authority shall not approve 33 an application or issue a certificate to a taxpayer if any of 34 the following applies: 35 -10- LSB 2617HZ (4) 87 da/rj 10/ 16

H.F. 2490 a. The taxpayer is at fault for terminating a prior 1 agricultural assets transfer agreement as determined by the 2 authority. 3 b. The taxpayer is any of the following: 4 (1) A party to a pending administrative or judicial action, 5 including a contested case proceeding under chapter 17A, 6 relating to an alleged violation involving an animal feeding 7 operation as regulated by the department of natural resources, 8 regardless of whether the pending action is brought by the 9 department or the attorney general. 10 (2) Classified as a habitual violator for a violation of 11 state law involving an animal feeding operation as regulated by 12 the department of natural resources. 13 c. The beginning farmer is responsible for managing or 14 maintaining agricultural land and other agricultural assets 15 that are greater than necessary to adequately support a 16 beginning farmer as determined by the authority according to 17 rules which shall be adopted by the authority. 18 d. The agricultural assets are being leased or rented at 19 a rate which is substantially higher or lower than the market 20 rate for similar agricultural assets leased or rented within 21 the same community, as determined by the authority. 22 9. A taxpayer or the beginning farmer may terminate an 23 agricultural assets transfer agreement as provided in the 24 agreement or by law. The taxpayer must immediately notify the 25 authority of the termination. 26 a. If the authority determines that the taxpayer is not 27 at fault for the termination, the authority shall not issue a 28 tax credit certificate to the taxpayer for a subsequent tax 29 year based on the approved application. Any prior tax credit 30 is allowed as provided in this section. The taxpayer may 31 apply for and be issued another tax credit certificate for the 32 same agricultural assets as provided in this section for any 33 remaining tax years for which a certificate was not issued. 34 b. If the authority determines that the taxpayer is at fault 35 -11- LSB 2617HZ (4) 87 da/rj 11/ 16

H.F. 2490 for the termination, any prior tax credit allowed under this 1 section is disallowed. The tax credit shall be recaptured 2 and the amount of the tax credit shall be immediately due and 3 payable to the department of revenue. If a taxpayer does 4 not immediately notify the authority of the termination, 5 the taxpayer shall be conclusively deemed at fault for the 6 termination. 7 10. The amount of tax credit certificates that may be issued 8 pursuant to this section shall not exceed six million dollars 9 in any fiscal year. The authority shall issue the tax credit 10 certificates on a first-come, first-served basis. 11 Sec. 15. Section 422.11M, as amended by this Act, is amended 12 by striking the section and inserting in lieu thereof the 13 following: 14 422.11M Agricultural assets transfer tax credit. 15 The taxes imposed under this division, less the credits 16 allowed under section 422.12, shall be reduced by an 17 agricultural assets transfer tax credit as allowed under 18 section 16.80. 19 Sec. 16. Section 422.33, subsection 21, as amended by this 20 Act, is amended by striking the subsection and inserting in 21 lieu thereof the following: 22 21. The taxes imposed under this division shall be reduced 23 by an agricultural assets transfer tax credit as allowed under 24 section 16.80. 25 Sec. 17. REPEAL. Sections 16.77, 16.78, 16.79, and 16.81, 26 as enacted by this Act, are repealed. 27 Sec. 18. REPEAL. Any intervening provision effective prior 28 to January 1, 2023, that amends a section as enacted in another 29 division of this Act, and repealed in this division of this Act 30 is also repealed, unless that Act or another Act specifically 31 provides otherwise. 32 Sec. 19. EFFECTIVE DATE. 33 1. Except as provided in subsection 2, this division of this 34 Act takes effect January 1, 2023. 35 -12- LSB 2617HZ (4) 87 da/rj 12/ 16

H.F. 2490 2. The section of this division of this Act that relates to 1 an intervening provision takes effect upon enactment. 2 Sec. 20. APPLICABILITY. This division of this Act applies 3 to tax years beginning on or after January 1, 2023. 4 EXPLANATION 5 The inclusion of this explanation does not constitute agreement with 6 the explanation’s substance by the members of the general assembly. 7 GENERAL —— THREE VERSIONS. This bill strikes the 8 agricultural assets transfer tax credit (tax credit) as it 9 has existed since January 1, 2018 (herein referred to as the 10 current version), and replaces it with the tax credit as it 11 had existed on December 31, 2017, with certain changes and 12 designated as the “Agricultural Assets Transfer Tax Credit 13 Program” (herein referred to as the new revised version). The 14 bill provides that the new revised version will be replaced 15 again with the current version on January 1, 2023 (herein 16 referred to as the restored current version). 17 PROCEDURAL HISTORY. The three versions are based on two 18 forms of earlier legislation. The current version and restored 19 current versions are based on SF 2268 enacted in 2006 which was 20 administered by the agricultural development board under Code 21 chapter 175 (2006 Iowa Acts, chapter 1161). The new revised 22 version is based on HF 599 enacted in 2013 that included 23 amendments to the original 2006 legislation (2013 Iowa Acts, 24 chapter 125) and a new custom farming contract tax credit. 25 Both tax credits were designated under the title “Beginning 26 Farmer Tax Credit Program”. The program was administered 27 by the agricultural development board. In that same year, 28 supervision of the board was transferred to the Iowa finance 29 authority (authority) (2013 Iowa Acts, chapter 100) and a year 30 later the general assembly enacted SF 2328 transferring the 31 program to Code chapter 16 as reorganized (2014 Iowa Acts, 32 chapter 1080). 33 PROVISIONS IN COMMON. Under the three versions, a taxpayer 34 who holds agricultural assets which must include agricultural 35 -13- LSB 2617HZ (4) 87 da/rj 13/ 16

H.F. 2490 land, and may include associated agricultural equipment, is 1 entitled to claim a tax credit based on an agricultural assets 2 transfer agreement (agreement) entered into by the taxpayer and 3 a beginning farmer. The agreement must provide for the lease 4 of agricultural land and may provide for the associated rental 5 of agricultural equipment. The tax credit applies against 6 individual or corporate tax liability equal to a percentage of 7 the rent paid to the taxpayer by the beginning farmer on a cash 8 or commodity share basis. A beginning farmer’s eligibility 9 is based on the same requirements that apply to the beginning 10 farmer loan program that is now also administered under the 11 supervision of the authority. An agreement cannot be for less 12 than two and not more than five years, but renewal is allowed. 13 A tax credit is not available under certain circumstances, 14 including if the taxpayer is (1) at fault for terminating a 15 prior agreement, (2) a party to a pending administrative or 16 judicial action involving an environmental violation involving 17 an animal feeding operation, or (3) classified as a habitual 18 violator of such environmental regulations. It also cannot 19 be claimed if the agricultural assets are being leased or 20 rented at a rate that is substantially higher or lower than 21 the market rate. Finally, the tax credit is not available if 22 the agreement has been terminated. A tax credit certificate 23 is issued to the taxpayer on a first-come, first-served basis. 24 The number of tax credit certificates is limited by a ceiling 25 of moneys available to support the tax credit. The legislative 26 tax expenditure committee must review the tax credit according 27 to its scheduled review of a number of other credits. 28 DIFFERENCE IN PROVISIONS —— TAX CREDIT CALCULATED. The 29 current and restored current versions provide that the tax 30 credit equals 5 percent of the amount paid to the taxpayer 31 under the agreement if made on a cash basis and 15 percent 32 of the amount paid to the taxpayer if made on a commodity 33 share basis. Note, under these versions, there is no cap on 34 the amount that may be claimed by the taxpayer in any tax 35 -14- LSB 2617HZ (4) 87 da/rj 14/ 16

H.F. 2490 year. The new revised version provides the taxpayer may claim 1 the same percentages as provided in the current version but 2 also includes a preference for veterans. In that case, the 3 percentage is increased by 1 percent for the first tax year. 4 In addition, a taxpayer cannot claim more than $25,000 in any 5 tax year. Under the 2013 amendments, if the agreement was 6 made on a cash basis, the tax credit equaled 7 percent and 7 if the agreement was made on a commodity share basis the tax 8 credit equaled 17 percent. The 2013 amendments also included a 9 veterans preference equal to a one-year 1 percent increase for 10 both types of payment arrangements (8 percent for cash and 18 11 percent for veterans). The 2013 amendments also limited the 12 tax credit to not more than $50,000 in any tax year. 13 DIFFERENCE IN PROVISIONS —— AVAILABLE CEILING. The current 14 version and restored current version provide a $6 million 15 ceiling on the aggregate amount of tax credit certificates 16 that may be issued during any one year. The new revised 17 version provides a $9 million ceiling. The 2013 amendments 18 had included a $12 million ceiling that supported both the 19 agricultural assets transfer tax credit and the custom farming 20 contract tax credit. The new revised version, based on the 21 2013 amendments, no longer includes a custom farming contract 22 tax credit. 23 DIFFERENCES IN PROVISIONS —— MISCELLANEOUS. The current 24 version and restored current version provides that the tax 25 credit is based on an agreement which includes arrangements 26 for lease and rental payments based on either a cash or 27 commodity share basis. The new revised version provides that 28 the tax credit may be based on either or both arrangements 29 to the extent allowed by the authority. The 2013 amendments 30 also allowed for both arrangements but without an express 31 limitation. The current version and restored current version 32 allow for capturing a prior allowed tax credit while the new 33 revised version allows for any properly claimed tax credit but 34 provides that the tax credit that had been allowed for the 35 -15- LSB 2617HZ (4) 87 da/rj 15/ 16

H.F. 2490 current tax year in which the termination occurs is disallowed. 1 The 2013 amendments had also included a recapture provision. 2 EFFECTIVE AND APPLICABILITY DATES. The provisions of 3 the bill that strike the current version and replace it with 4 the new revised version take effect upon enactment and apply 5 retroactively to January 1, 2018, for tax years beginning on 6 or after that date. The provisions of the bill that strike the 7 new revised version and replace it with the restored current 8 version take effect January 1, 2023, and apply to tax years 9 beginning on or after that date. 10 -16- LSB 2617HZ (4) 87 da/rj 16/ 16