The House Agriculture Committee passed House Study Bill 69, regarding Iowa’s beginning farmers, on Feb. 13. The bill creates a new Custom Farming Tax Credit, expands the current Beginning Farmer Tax Credit, streamlines the administrative processes for implementing the tax credit programs, and increases the existing Ag Asset Transfer tax credit rates.
Custom Farming Tax Credit
House Study Bill 69 creates a new credit available to land owners who hire beginning farmers to custom farm a portion of the landowners’ farmland in the amount of seven percent for the value of the custom work performed by the beginning farmer. This credit would encourage existing farmland operator who may be exiting the industry to begin a business relationship with a beginning farmer.
Beginning Farmer Tax Credit Expansion
House Study Bill 69 propose to double the amount of tax credits that are available for beginning farmer tax credit programs from the current $6 million per year to $12 million per year.
The bill generally simplifies calculated thresholds and caps to facilitate an easier and more efficient process by the Iowa Agricultural Development Authority.
Ag Asset Transfer Tax Credit Rates
House Study Bill 69 increases the current Ag Asset Transfer Tax Credit rates by two percent for both cash leases and commodity share leases.
“We must work to ensure Iowa’s rich farming heritage is continued into the next generation,” said committee member, Rep. Lee Hein, (R-Monticello). “This bill is a good first step to helping Iowa’s young farmers get the tools they need to be successful.”
It passed the Agriculture Committee unanimously and is now eligible to be debated on the House floor.