House File 768 - Reprinted HOUSE FILE 768 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HF 647) (SUCCESSOR TO HSB 173) (As Amended and Passed by the House April 24, 2019 ) A BILL FOR An Act relating to agricultural development, by providing for 1 the Iowa finance authority, a beginning farmer tax credit 2 program, fees, and including effective date and retroactive 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 HF 768 (3) 88 da/jh/md

H.F. 768 Section 1. Section 2.48, subsection 3, paragraph e, 1 subparagraph (1), Code 2019, is amended to read as follows: 2 (1) The agricultural assets transfer beginning farmer 3 tax credit program as provided in section 16.80 chapter 16, 4 subchapter VIII, part 5, subpart B . 5 Sec. 2. Section 16.2, subsection 1, unnumbered paragraph 1, 6 Code 2019, is amended to read as follows: 7 An Iowa finance authority board of directors is created. The 8 powers of the authority are vested in and shall be exercised 9 by the board. The authority includes nine members appointed 10 by the governor subject to confirmation by the senate. The 11 authority also includes one ex officio voting member who must 12 be designated by the agricultural development board created in 13 section 16.2C and be a member of that board. 14 Sec. 3. Section 16.2, subsections 2 and 3, Code 2019, are 15 amended to read as follows: 16 2. Members The members of the authority shall be appointed 17 by the governor shall serve for staggered terms of six years 18 beginning and ending as provided in section 69.19 . A person 19 appointed by the governor to fill a vacancy shall serve only 20 for the unexpired portion of the term. A member is eligible 21 for reappointment. The ex officio voting member designated by 22 the agricultural development board shall serve at the pleasure 23 of that board. A member of the authority may be removed from 24 office by the governor for misfeasance, malfeasance, or willful 25 neglect of duty or other just cause, after notice and hearing, 26 unless the notice and hearing is expressly waived in writing. 27 3. Five Six members of the authority constitute a quorum and 28 the affirmative vote of a majority of the appointed members is 29 necessary for any substantive action taken by the authority. 30 The majority shall not include any member who has a conflict of 31 interest and a statement by a member of a conflict of interest 32 shall be conclusive for this purpose. A vacancy in the 33 membership does not impair the right of a quorum to exercise 34 all rights and perform all duties of the authority. 35 -1- HF 768 (3) 88 da/jh/md 1/ 16

H.F. 768 Sec. 4. Section 16.2B, subsection 3, paragraph b, Code 2019, 1 is amended to read as follows: 2 b. Obtain agricultural assets transfer Claim beginning 3 farmer tax credits, including tax credit certificates issued 4 pursuant to subchapter VIII, part 5 , subpart B . 5 Sec. 5. Section 16.59, subsection 4, Code 2019, is amended 6 to read as follows: 7 4. For a family farm limited liability company, an aggregate 8 net worth of all members, including each member’s ownership 9 interest in the family farm limited liability company, and 10 each member’s spouse and minor children of not greater than 11 twice the low or moderate net worth. However, the aggregate 12 net worth of each member and that member’s spouse and minor 13 children shall not exceed the low or moderate net worth. 14 Sec. 6. NEW SECTION . 16.77 Definitions. 15 As used in this subpart B, unless the context otherwise 16 requires: 17 1. “Agricultural development board” means the agricultural 18 development board created in section 16.2C. 19 2. “Agricultural lease agreement” or “agreement” means an 20 agreement for the transfer of agricultural assets, that must at 21 least include a lease of agricultural land, from an eligible 22 taxpayer to a qualified beginning farmer as provided in section 23 16.79A. 24 3. “Department” means the department of revenue. 25 4. “Eligible taxpayer” means a taxpayer who may participate 26 in the beginning farmer tax credit program, including by 27 meeting all the criteria as provided in section 16.79. 28 5. “Program” means the beginning farmer tax credit program 29 created pursuant to section 16.78. 30 6. “Qualified beginning farmer” means a beginning farmer 31 as defined in section 16.58 who meets the requirements to 32 participate in a beginning farmer tax credit program as 33 provided in section 16.79. 34 7. “Tax credit” means the beginning farmer tax credit 35 -2- HF 768 (3) 88 da/jh/md 2/ 16

H.F. 768 allowed under section 16.82. 1 Sec. 7. NEW SECTION . 16.78 Beginning farmer tax credit 2 program —— establishment and administration. 3 1. A beginning farmer tax credit program is established 4 under the control of the authority. 5 2. The authority and the department shall cooperate in 6 administering the program. The department shall have all 7 rulemaking powers necessary to administer its responsibilities 8 under this subpart as it does under chapter 422. 9 3. To every extent practicable, the authority shall 10 administer the program in a manner that encourages 11 participation by eligible taxpayers and qualifying beginning 12 farmers for the primary purposes of providing beginning farmers 13 access to farmland and enhancing the stability of the beginning 14 farmer’s farming business. 15 4. The authority and the department shall each adopt 16 rules in accordance with chapter 17A as necessary for the 17 administration of their respective responsibilities under this 18 subpart. The eligibility requirements for taxpayers and the 19 qualifications for beginning farmers as provided in the rules 20 shall not be more stringent than provided in this subpart. 21 5. The authority shall provide for the preparation or 22 revision and publication or distribution of forms necessary to 23 administer their responsibilities under this subpart. 24 Sec. 8. NEW SECTION . 16.79 Beginning farmer tax credit 25 program —— eligibility criteria. 26 1. A taxpayer is eligible to participate in the beginning 27 farmer tax credit program if the taxpayer meets all of the 28 following requirements: 29 a. The taxpayer is a person who may acquire or otherwise 30 obtain or lease agricultural land in this state pursuant to 31 chapter 9H or 9I. However, the taxpayer must not be a person 32 who may acquire or otherwise obtain or lease agricultural 33 land exclusively because of an exception provided in one of 34 those chapters or in a provision of another chapter of this 35 -3- HF 768 (3) 88 da/jh/md 3/ 16

H.F. 768 Code including but not limited to chapter 10, 10D, or 501, or 1 section 15E.207. 2 b. The taxpayer has entered into an agricultural lease 3 agreement with a qualified beginning farmer to lease 4 agricultural land as provided in section 16.79A. 5 c. The taxpayer has not been at fault for terminating a 6 prior agreement under the program or another agreement in which 7 the taxpayer was allowed to claim a tax credit under section 8 175.37 as it existed prior to January 1, 2015, or section 16.80 9 as it existed prior to January 1, 2018. 10 d. If the agreement includes the lease of a confinement 11 feeding operation structure as defined in section 459.102, the 12 taxpayer is not a party to a pending administrative or judicial 13 action, including a contested case proceeding under chapter 14 17A, relating to an alleged violation involving an animal 15 feeding operation as regulated by the department of natural 16 resources, regardless of whether the pending action is brought 17 by the department or the attorney general. 18 e. The taxpayer is not classified as a habitual violator for 19 a violation of state law involving an animal feeding operation 20 as regulated by the department of natural resources under 21 chapter 459. 22 f. The taxpayer is not a partner of a partnership, 23 shareholder of a family farm corporation, or member of a 24 family farm limited liability company that is the lessee of 25 an agricultural asset that is part of an agricultural lease 26 agreement. 27 2. A beginning farmer is a qualified beginning farmer 28 eligible to participate in the program by meeting all of the 29 following criteria: 30 a. Is a resident of the state. If the beginning farmer is a 31 partnership, all partners must be residents of the state. If a 32 beginning farmer is a family farm corporation, all shareholders 33 must be residents of the state. If the beginning farmer is 34 a family farm limited liability company, all members must be 35 -4- HF 768 (3) 88 da/jh/md 4/ 16

H.F. 768 residents of the state. 1 b. Has sufficient education, training, or experience in 2 farming. If the beginning farmer is a partnership, at least 3 one partner who is not a minor must have sufficient education, 4 training, or experience in farming. If the beginning farmer is 5 a family farm corporation, at least one shareholder who is not 6 a minor must have sufficient education, training, or experience 7 in farming. If the beginning farmer is a family farm limited 8 liability company, at least one member who is not a minor must 9 have sufficient education, training, or experience in farming. 10 c. Has access to adequate working capital and production 11 items. 12 d. Will materially and substantially participate in 13 farming. If the beginning farmer is a partnership, family farm 14 corporation, or family farm limited liability company, at least 15 one of the partners, shareholders, or members who is not a 16 minor must materially and substantially participate in farming. 17 e. Does not own more than a ten percent ownership interest 18 in an agricultural asset included in the agreement. 19 Sec. 9. NEW SECTION . 16.79A Agricultural lease agreement. 20 1. A beginning farmer tax credit is allowed only for 21 agricultural assets that are subject to an agricultural lease 22 agreement entered into by an eligible taxpayer and a qualifying 23 beginning farmer participating in the beginning farmer tax 24 credit program established pursuant to section 16.78. 25 2. The agreement must include the lease of agricultural 26 land located in this state, including any improvements, and may 27 provide for the rental of agricultural equipment as defined in 28 section 322F.1. 29 3. a. The agreement must include provisions which describe 30 the consideration paid for the agreement in a manner that 31 allows the authority to calculate the value of the lease in 32 order to determine the tax credit amount as provided in section 33 16.82. 34 b. The agreement must be in writing. 35 -5- HF 768 (3) 88 da/jh/md 5/ 16

H.F. 768 c. The agreement must be for at least two years, but not 1 more than five years. The agreement may be renewed by the 2 eligible taxpayer and qualified beginning farmer for a term of 3 at least two years, but not more than five years. 4 d. The agreement shall not include a lease or rental of 5 equipment intended as a security. 6 e. The agreement cannot be assigned and the agricultural 7 land subject to the agreement shall not be subleased. 8 f. (1) The agricultural assets shall not be leased or 9 rented at a rate that is substantially higher than the market 10 rate for similar agricultural assets leased or rented within 11 the same community. 12 (2) As used in subparagraph (1), when referring to an 13 agricultural asset that is cropland, “substantially higher” 14 means not more than thirty percent above the average cash rent 15 paid for cropland rented in the same county according to the 16 most recent cash rent survey for cropland published by a unit 17 of Iowa state university of science and technology recognized 18 by the authority. 19 4. a. The agreement may be amended after the authority 20 approves an application and makes a tax credit award without 21 changing the eligibility status of the taxpayer, except as 22 provided in paragraph “b” . 23 b. The underlying lease for agricultural land may only be 24 amended without submitting a new application if any of the 25 following apply: 26 (1) The terms of the amended lease are more favorable to the 27 qualified beginning farmer, including but not limited to the 28 rent payment being reduced. 29 (2) A party has changed their name. 30 (3) The owner of an agricultural asset is changed to the 31 owner’s estate or trust upon the eligible taxpayer’s death. 32 c. If an amendment to an agreement changes the total amount 33 that will be paid to the eligible taxpayer under the agreement, 34 the eligible taxpayer shall notify the authority in a manner 35 -6- HF 768 (3) 88 da/jh/md 6/ 16

H.F. 768 and form prescribed by the authority within thirty days of the 1 date the amendment is executed by the parties. 2 (1) If the amendment will reduce the total amount paid to 3 the eligible taxpayer under the agreement, the authority shall 4 recalculate and reduce the eligible taxpayer’s tax credit award 5 under section 16.82A. 6 (2) If the amendment will increase the total amount paid to 7 the eligible taxpayer under the agreement, the tax credit award 8 shall not be increased unless the eligible taxpayer submits an 9 amended application to the authority in the manner and form 10 prescribed by the authority and that meets the requirements of 11 section 16.81. If the amended application is approved under 12 section 16.81, the authority may increase the amount of the tax 13 credit award. The increased amount of the tax credit award 14 shall be subject to the aggregate award limitation in section 15 16.82A for the calendar year in which the increased award is 16 made. 17 (3) This paragraph “c” does not apply to an amendment to an 18 agreement that requires a new application under paragraph “b” in 19 order to be valid. 20 5. An eligible taxpayer or qualified beginning farmer may 21 terminate an agreement as provided in the agreement or by 22 law. The eligible taxpayer must notify the authority of the 23 termination within thirty days of the date of termination in 24 the manner and form prescribed by the authority. 25 Sec. 10. NEW SECTION . 16.81 Beginning farmer tax credit 26 —— application. 27 1. The deadline for submitting an application to the 28 authority to claim a beginning farmer tax credit is August 1 of 29 each year. The application shall be for a period that is not 30 longer than the term of the lease. 31 2. a. The authority shall impose, assess, and collect 32 application fees on an interim basis until December 31, 2021. 33 The amount of an application fee shall not be more than the 34 following: 35 -7- HF 768 (3) 88 da/jh/md 7/ 16

H.F. 768 (1) For an application that includes an agreement for the 1 lease of one hundred acres or less of agricultural land, a fee 2 of three hundred dollars. 3 (2) For an application that includes an agreement for the 4 lease of more than one hundred acres, but not more than two 5 hundred fifty acres of agricultural land, a fee of four hundred 6 dollars. 7 (3) For an application that includes an agreement for the 8 lease of more than two hundred fifty acres of agricultural 9 land, a fee of five hundred dollars. 10 (4) For an amendment to an agreement that is part of an 11 application that has been previously approved, a fee of one 12 hundred dollars. 13 b. Any amount of fees collected by the authority under this 14 subsection shall be considered repayment receipts as defined 15 in section 8.2. 16 c. This subsection is repealed on January 1, 2022. 17 3. a. The authority shall impose, assess, and collect 18 application fees and shall adopt rules as necessary to 19 administer this subsection, including by providing for the rate 20 of those fees. 21 b. The authority may establish different rates based on 22 separate categories of applications or agricultural lease 23 agreements as determined relevant by the authority. 24 c. The authority shall calculate the rates of the 25 application fees to be effective for each successive 26 twelve-month period. The total amount of application fees 27 collected by the authority for that period shall not be more 28 than the authority’s estimate of the total amount of revenues 29 necessary to administer the provisions of this subpart based 30 on the expected revenue to be collected from the application 31 fees and the expected costs to be incurred by the authority 32 in administering the provisions of this subpart during that 33 period. The authority may adjust the rates throughout that 34 period as the authority determines necessary to comply with 35 -8- HF 768 (3) 88 da/jh/md 8/ 16

H.F. 768 this paragraph. 1 d. The amount of application fees collected by the authority 2 under this subsection shall be considered repayment receipts as 3 defined in section 8.2. 4 e. (1) The rules described in this subsection shall first 5 take effect immediately after the repeal of subsection 2. 6 (2) This paragraph “e” is repealed immediately after the 7 rules described in this subsection take effect. 8 4. An eligible taxpayer shall not participate in the 9 beginning farmer tax credit program for more than ten years, 10 and shall not receive more than ten tax credit certificates 11 under the program. 12 5. The agricultural development board shall review and 13 recommend approval of an application for a tax credit as 14 provided by rules adopted by the authority. The application 15 must include a copy of the agricultural lease agreement. The 16 authority may require that the parties to an agreement provide 17 additional information as determined relevant by the authority. 18 6. The authority shall approve all beginning farmer tax 19 credit applications that meet the requirements of this subpart 20 and make tax credit awards on a first-come, first-served basis, 21 subject to the limitations in section 16.82A. 22 7. After the authority has approved an application and made 23 a tax credit award, all of the following apply: 24 a. The authority shall issue beginning farmer tax credit 25 certificates to an eligible taxpayer on an annual basis as 26 provided in section 16.82A. 27 b. An eligible taxpayer may claim the tax credit each tax 28 year as provided in section 16.82. 29 8. Any financial, contractual, or legal authorization 30 records provided to the authority shall be kept confidential 31 and are not subject to chapter 22. 32 Sec. 11. NEW SECTION . 16.82 Beginning farmer tax credit 33 —— allowance. 34 1. A beginning farmer tax credit is authorized under the 35 -9- HF 768 (3) 88 da/jh/md 9/ 16

H.F. 768 beginning farmer tax credit program as provided in section 1 16.78. The beginning farmer tax credit is allowed against 2 the taxes imposed in chapter 422, division II, as provided in 3 section 422.11E, and in chapter 422, division III, as provided 4 in section 422.33, subsection 21, to facilitate the transfer of 5 agricultural assets from an eligible taxpayer to a qualifying 6 beginning farmer participating in the program. 7 2. An individual may claim a beginning farmer tax credit 8 under this section of a partnership, limited liability company, 9 S corporation, estate, or trust electing to have income 10 taxed directly to the individual. The amount claimed by the 11 individual shall be based upon the pro rata share of the 12 individual’s earnings from the partnership, limited liability 13 company, S corporation, estate, or trust. 14 3. Subject to the limitations described in subsections 5, 15 6, and 7, the authority shall determine the amount of the tax 16 credit under an agreement using the following methods: 17 a. In the case of an agreement on a fixed basis, in which 18 an eligible taxpayer receives a fixed cash rent payment, the 19 amount of the tax credit equals five percent of the amount of 20 the fixed cash rent payment for each year. 21 b. In the case of an agreement on a commodity share basis, 22 in which an eligible taxpayer receives as a rent payment a 23 percentage of the commodity produced, the amount of the tax 24 credit shall equal fifteen percent of the gross amount that 25 the eligible taxpayer would receive as a rent payment from 26 the sale of the eligible taxpayer’s share of the crop in each 27 harvest year. The amount of the tax credit shall be based on 28 an equation established by rule adopted by the authority which 29 shall use data compiled by the United States department of 30 agriculture, which shall include all of the following factors: 31 (1) The past ten-year average per bushel yield for the 32 same type of grain as produced under the agreement in the same 33 county where the leased agricultural land is located excluding 34 the years of highest and lowest per bushel yields. 35 -10- HF 768 (3) 88 da/jh/md 10/ 16

H.F. 768 (2) The per bushel state price established for the same 1 type of grain harvested as described in subparagraph (1). 2 Price information shall be averaged from the past five years 3 excluding the years of the highest and lowest per bushel state 4 price. 5 c. In the case of an agreement made on a flexible basis in 6 which an eligible taxpayer receives a rent payment consisting 7 of a fixed cash payment and an amount subject to adjustment 8 according to a risk-sharing arrangement, or receives a rent 9 payment consisting of an amount subject to adjustment according 10 to a risk-sharing arrangement, the amount of the tax credit 11 equals the sum of the following amounts: 12 (1) To the extent that a portion of the amount of the 13 rent payment is calculated on a fixed basis as described in 14 paragraph “a” , that portion of the tax credit equals five 15 percent of the fixed cash payment in the same manner as 16 provided in paragraph “a” . 17 (2) To the extent that a portion of the amount of the rent 18 payment is calculated on a commodity share basis as described 19 in paragraph “b” , that portion of the tax credit equals fifteen 20 percent of the amount that the eligible taxpayer would receive 21 from the sale of the eligible taxpayer’s share of the commodity 22 in the same manner as provided in paragraph “b” . 23 (3) (a) To the extent that the amount of the rent payment 24 may be adjusted after taking into account all risk-sharing 25 factors provided in the agreement, that portion of the tax 26 credit equals fifteen percent of the highest adjusted amount 27 that the eligible taxpayer could receive in excess of the 28 amounts calculated in subparagraphs (1) and (2) based on an 29 equation adopted by rule by the authority. 30 (b) As used in subparagraph division (a), “risk-sharing 31 factor” means an occurrence or lack of occurrence that may 32 affect the commodity’s production or profitability as provided 33 in the agreement, and which may include but is not limited to 34 production costs, per acre crop yield, gross revenue, or market 35 -11- HF 768 (3) 88 da/jh/md 11/ 16

H.F. 768 price. 1 (c) The authority shall adopt rules establishing criteria 2 for commonly used risk-sharing factors and adjustment limits. 3 4. The authority shall provide the department with data, in 4 the format prescribed by the department, of eligible taxpayers 5 and persons who have been decertified due to lease termination 6 or other cause of ineligibility by January 31 of each year. 7 The data shall include the amount of the tax credit issued 8 for the most recent year and all expected future tax credits 9 under an agreement for each eligible taxpayer and the type of 10 agreement. 11 5. The amount of tax credits that may be awarded to an 12 eligible taxpayer for any one year under all agreements shall 13 not exceed fifty thousand dollars. 14 6. The amount of the tax credit shall be reduced by the 15 percent ownership interest of the qualifying beginning farmer 16 in the agricultural asset. 17 7. A tax credit in excess of the eligible taxpayer’s 18 tax liability for the tax year is not refundable but may be 19 credited to the tax liability for the following ten tax years 20 or until depleted, whichever is earlier. A tax credit shall 21 not be carried back to a tax year prior to the tax year in which 22 the eligible taxpayer redeems the tax credit. 23 8. a. To claim a tax credit under this section, an eligible 24 taxpayer shall include one or more tax credit certificates with 25 the eligible taxpayer’s tax return pursuant to rules adopted 26 by the department. 27 b. A tax credit shall not be transferable to any other 28 person other than the eligible taxpayer’s estate or trust upon 29 the eligible taxpayer’s death pursuant to rules adopted by the 30 department. 31 9. If an agreement is terminated by the eligible taxpayer, 32 all of the following shall apply: 33 a. Any tax credit properly claimed by the eligible taxpayer 34 prior to the date of termination or for the year during which 35 -12- HF 768 (3) 88 da/jh/md 12/ 16

H.F. 768 the termination occurred shall be allowed except as provided 1 in paragraph “b” , but no additional tax credits may be issued 2 or claimed under the program for that agreement. The eligible 3 taxpayer may apply for and be awarded another beginning farmer 4 tax credit under a new agreement for the same agricultural 5 assets as provided in this section. 6 b. If the authority determines that the eligible taxpayer is 7 at fault for the termination, any beginning farmer tax credit 8 that is claimed by the eligible taxpayer for the year during 9 which the termination occurred shall be disallowed and the 10 amount shall be considered a tax payment due. If an eligible 11 taxpayer does not notify the authority of the termination 12 within thirty days of the date of the termination in the manner 13 and form prescribed by the authority, the eligible taxpayer 14 shall be conclusively deemed at fault for the termination. 15 Sec. 12. NEW SECTION . 16.82A Beginning farmer tax credit 16 awards —— amount and availability. 17 1. a. Upon approval of an application as provided in 18 section 16.81, the authority shall make a tax credit award 19 to the eligible taxpayer. The tax credit award shall equal 20 the sum of the tax credits calculated by the authority under 21 section 16.82 for all eligible years under the approved 22 agreement. 23 b. The authority shall notify the eligible taxpayer of 24 the tax credit award under the program. The notification 25 shall include the total tax credit award, the amount of the 26 tax credit award that will be issued by way of a tax credit 27 certificate in each future year under the approved agreement, 28 and a statement that the eligible taxpayer has no right to 29 receive tax credit certificates and claim tax credits under the 30 program if all requirements of the agreement and the program 31 are not satisfied. 32 c. If after making a tax credit award the eligible taxpayer 33 or qualified beginning farmer no longer meets the requirements 34 of the agreement or the program, the authority may revoke a tax 35 -13- HF 768 (3) 88 da/jh/md 13/ 16

H.F. 768 credit award and may rescind a tax credit certificate. 1 2. The amount of beginning farmer tax credits that may be 2 awarded by the authority in any one calendar year under the 3 beginning farmer tax credit program shall not in the aggregate 4 exceed a limit of twelve million dollars. Tax credits shall 5 be awarded by the authority not later than December 15 of each 6 calendar year after the agricultural development board reviews 7 applications as provided in section 16.81 and the authority 8 determines tax credit amounts for the approved applications as 9 provided in section 16.82, aggregated for purposes of meeting 10 the annual program award limits. 11 3. a. The authority shall issue tax credit certificates 12 on an annual basis to eligible taxpayers who have received a 13 tax credit award. The tax credit certificate shall contain the 14 information required by the department. 15 b. The aggregate amount of tax credit certificates issued to 16 an eligible taxpayer shall not exceed the eligible taxpayer’s 17 tax credit award. 18 c. A tax credit certificate, unless rescinded by the 19 authority, shall be accepted by the department as payment for 20 taxes pursuant to chapter 422, divisions II and III, subject 21 to any conditions or restrictions placed by the authority upon 22 the face of the tax credit certificate and subject to the 23 limitations of the program. 24 Sec. 13. NEW SECTION . 422.11E Beginning farmer tax credit 25 program. 26 The taxes imposed under this division, less the credits 27 allowed under section 422.12, shall be reduced by a beginning 28 farmer tax credit as allowed under chapter 16, subchapter VIII, 29 part 5, subpart B. 30 Sec. 14. Section 422.33, subsection 21, Code 2019, is 31 amended to read as follows: 32 21. The taxes imposed under this division shall be reduced 33 by an agricultural assets transfer a beginning farmer tax 34 credit as allowed under section 16.80 chapter 16, subchapter 35 -14- HF 768 (3) 88 da/jh/md 14/ 16

H.F. 768 VIII, part 5, subpart B . 1 Sec. 15. REPEAL. Sections 16.80 and 422.11M, Code 2019, 2 are repealed. 3 Sec. 16. APPLICABILITY OF PRIOR TAX CREDITS —— APPROVED 4 APPLICATIONS AND CERTIFICATES. 5 1. Notwithstanding any provision of this Act to the 6 contrary, any agricultural asset transfer tax credit 7 application approved prior to the effective date of this Act 8 under section 16.80 as that section existed on or before 9 December 31, 2018, for a year prior to 2019 but for which tax 10 credit certificates could have been issued for a tax year 11 beginning on or after January 1, 2019, shall be governed by 12 section 16.80, Code 2019, and shall be eligible to receive 13 tax credit certificates for tax years beginning on or after 14 January 1, 2019, for the remainder of the agricultural lease 15 term as provided by section 16.80, Code 2019. Tax credit 16 certificates approved and issued pursuant to this subsection 17 are not considered an award subject to the maximum tax credit 18 award limitation in section 16.82A, as enacted in this Act. 19 2. a. Any application which was submitted prior to the 20 effective date of this Act for the agricultural assets transfer 21 tax credit pursuant to section 16.80 as that section existed 22 on December 31, 2018, for the tax year beginning January 1, 23 2019, shall be governed by section 16.80, Code 2019, except as 24 provided in paragraph “b”. 25 b. Any amount of tax credit certificate approved and issued 26 pursuant to this subsection shall not be subject to the maximum 27 tax credit issuance limitation in section 16.80, subsection 28 10, Code 2019, but shall instead be counted in the same manner 29 as an award for purposes of the twelve million dollar calendar 30 year award limitation in section 16.82A, subsection 2, as 31 enacted in this Act, and shall reduce, dollar-for-dollar, that 32 maximum calendar year award limitation for the calendar year 33 during which the tax credit certificate is issued. 34 Sec. 17. APPLICABILITY OF PRIOR TAX CREDITS —— CONTINUANCE 35 -15- HF 768 (3) 88 da/jh/md 15/ 16

H.F. 768 OF CARRYOVER PROVISIONS. For any tax year commencing in 1 calendar years 2014 through 2018, a tax credit that could 2 have been first issued, awarded, or allowed and claimed under 3 sections 16.75 through 16.82 as those sections existed on 4 December 31, 2017, or under section 16.80 as that section 5 existed on December 31, 2018, may be credited to the tax 6 liability of that taxpayer for ten tax years following the tax 7 year for which the eligible taxpayer could have first claimed 8 the tax credit, or until depleted, whichever is earlier. 9 Sec. 18. EFFECTIVE DATE. This Act, being deemed of 10 immediate importance, takes effect upon enactment. 11 Sec. 19. RETROACTIVE APPLICABILITY. This Act applies 12 retroactively to January 1, 2019, for tax years beginning on 13 or after that date. 14 -16- HF 768 (3) 88 da/jh/md 16/ 16