Bill Text: MN HF970 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Beginning farmer program tax credits provided.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2011-03-09 - Introduction and first reading, referred to Agriculture and Rural Development Policy and Finance [HF970 Detail]
Download: Minnesota-2011-HF970-Introduced.html
1.2relating to taxation; income; providing beginning farmer program tax credits;
1.3amending Minnesota Statutes 2010, section 290.06, by adding subdivisions;
1.4proposing coding for new law in Minnesota Statutes, chapter 41B.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [41B.0391] BEGINNING FARMER PROGRAM; TAX CREDITS.
1.7 Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
1.8section.
1.9(b) "Agricultural assets" means agricultural land, livestock, farming or livestock
1.10production facilities or buildings, and machinery used for farming or livestock production
1.11located in Minnesota.
1.12(c) "Beginning farmer or livestock producer" means a resident of Minnesota who:
1.13(1) is seeking entry or has entered within the last ten years into farming or livestock
1.14production;
1.15(2) intends to farm or raise crops or livestock on land located within the state borders
1.16of Minnesota;
1.17(3) is not related by blood or marriage to the owner of the agricultural assets from
1.18whom the beginning farmer or livestock producer is seeking to rent agricultural assets;
1.19(4) is not related by blood or marriage to a partner, member, shareholder, or trustee
1.20of the owner of agricultural assets from whom the beginning farmer or livestock producer
1.21is seeking to rent agricultural assets; and
1.22(5) meets the following eligibility requirements as determined by the authority:
1.23(i) has a net worth of not more than $200,000, including any holdings by a spouse
1.24or dependent, based on fair market value;
2.1(ii) provides the majority of the day-to-day physical labor and management of the
2.2farm;
2.3(iii) has, by the judgment of the authority, adequate farming or livestock production
2.4experience or demonstrates knowledge in the type of farming or livestock production for
2.5which the beginning farmer seeks assistance from the authority;
2.6(iv) demonstrates to the authority a profit potential by submitting projected earnings
2.7statements;
2.8(v) asserts to the satisfaction of the authority that farming or livestock production
2.9will be a significant source of income for the beginning farmer or livestock producer;
2.10(vi) participates in a financial management program approved by the authority
2.11or the commissioner of agriculture; and
2.12(vii) has other such qualifications as specified by the authority.
2.13(d) "Farm" means any tract of land over ten acres in area used for or devoted to the
2.14commercial production of farm products.
2.15(e) "Farming or livestock production" means the active use, management, and
2.16operation of real and personal property for the production of a farm product.
2.17(f) "Farm product" means those plants and animals useful to humans and includes,
2.18but is not limited to, forage and sod crops, grain and feed crops, dairy and dairy products,
2.19poultry and poultry products, livestock, fruits, and vegetables.
2.20(g) "Owner of agricultural assets" means a person who is the owner in fee of
2.21agricultural land or who has legal title to any other agricultural asset.
2.22(h) "Share-rent agreement" means a rental agreement in which the principal
2.23consideration given to the owner of agricultural assets is a predetermined portion of the
2.24production of farm products produced from the rented agricultural assets and which
2.25provides for sharing production costs or risk of loss, or both.
2.26 Subd. 2. Tax credit for owners of agricultural assets. (a) An owner of agricultural
2.27assets may take a credit against the tax due under chapter 290 for the rental of agricultural
2.28assets to a beginning farmer or livestock producer. An owner of agricultural assets may
2.29take a credit equal to:
2.30(1) ten percent of the gross rental income in each of the first, second, and third
2.31years of a rental agreement; or
2.32(2) 15 percent of the cash equivalent of the gross rental income in each of the first,
2.33second, and third years of a share-rent agreement.
2.34(b) A qualifying rental agreement includes cash rent of agricultural assets or a
2.35share-rent agreement. The agricultural asset must be rented at prevailing community
3.1rates as determined by the authority. The credit may be claimed only after approval and
3.2certification by the authority.
3.3(c) An owner of agricultural assets or beginning farmer or livestock producer may
3.4terminate a rental agreement, including a share-rent agreement, for reasonable cause upon
3.5approval of the authority. If a rental agreement is terminated without the fault of the owner
3.6of agricultural assets, the tax credits shall not be retroactively disallowed. If an agreement
3.7is terminated with fault by the owner of agricultural assets, any prior tax credits claimed
3.8under this subdivision by the owner of agricultural assets shall be disallowed and must
3.9be repaid to the commissioner of revenue.
3.10(d) The credit is limited to the liability for tax, as computed under chapter 290, for
3.11the taxable year. If the amount of the credit determined under this section for any taxable
3.12year exceeds this limitation, the excess is a beginning farmer incentive credit carryover
3.13according to section 290.06, subdivision 36.
3.14 Subd. 3. Beginning farmer management tax credit. (a) A beginning farmer or
3.15livestock producer may take a credit against the tax due under chapter 290 for participating
3.16in a financial management program approved by the authority. The credit is equal to 100
3.17percent of the cost of participating in the program or $700, whichever is less. The credit
3.18is available for up to three years while the farmer is in the program. The authority shall
3.19maintain a list of approved financial management programs and establish a procedure for
3.20approving equivalent programs that are not on the list.
3.21(b) The credit is limited to the liability for tax, as computed under chapter 290, for
3.22the taxable year. If the amount of the credit determined under this section for any taxable
3.23year exceeds this limitation, the excess is a beginning farmer management credit carryover
3.24according to section 290.06, subdivision 37.
3.25 Subd. 4. Authority's duties. The authority shall:
3.26(1) approve and certify beginning farmers and livestock producers as eligible for
3.27the program under this section;
3.28(2) approve and certify owners of agricultural assets as eligible for the tax credit
3.29under subdivision 2;
3.30(3) provide necessary and reasonable assistance and support to beginning farmers
3.31and livestock producers for qualification and participation in financial management
3.32programs approved by the authority; and
3.33(4) refer beginning farmers and livestock producers to agencies and organizations
3.34that may provide additional pertinent information and assistance.
4.1 Sec. 2. Minnesota Statutes 2010, section 290.06, is amended by adding a subdivision
4.2to read:
4.3 Subd. 36. Beginning farmer incentive credit. (a) A beginning farmer incentive
4.4credit is allowed against the tax due under this chapter for the rental of agricultural assets
4.5to a beginning farmer or livestock producer according to section 41B.0391, subdivision 2.
4.6(b) The credit may be claimed only after approval and certification by the Rural
4.7Finance Authority according to section 41B.0391.
4.8(c) The credit is limited to the liability for tax, as computed under this chapter, for
4.9the taxable year. If the amount of the credit determined under this subdivision for any
4.10taxable year exceeds this limitation, the excess is a beginning farmer incentive credit
4.11carryover to each of the 15 succeeding taxable years. The entire amount of the excess
4.12unused credit for the taxable year is carried first to the earliest of the taxable years to
4.13which the credit may be carried and then to each successive year to which the credit may
4.14be carried. The amount of the unused credit under this paragraph must not exceed the
4.15taxpayer's liability for tax in a taxable year.
4.16 Sec. 3. Minnesota Statutes 2010, section 290.06, is amended by adding a subdivision
4.17to read:
4.18 Subd. 37. Beginning farmer management credit. (a) A taxpayer who is a
4.19beginning farmer or livestock producer may take a credit against the tax due under
4.20this chapter for participation in a financial management program according to section
4.2141B.0391, subdivision 3.
4.22(b) The credit may be claimed only after approval and certification by the Rural
4.23Finance Authority according to section 41B.0391.
4.24(c) The credit is limited to the liability for tax, as computed under this chapter, for
4.25the taxable year. If the amount of the credit determined under this subdivision for any
4.26taxable year exceeds this limitation, the excess is a beginning farmer management credit
4.27carryover to each of the three succeeding taxable years. The entire amount of the excess
4.28unused credit for the taxable year is carried first to the earliest of the taxable years to
4.29which the credit may be carried and then to each successive year to which the credit may
4.30be carried. The amount of the unused credit under this paragraph must not exceed the
4.31taxpayer's liability for tax in a taxable year.
4.32 Sec. 4. EFFECTIVE DATE.
4.33Sections 1 to 3 are effective for taxable years beginning after December 31, 2010.
1.3amending Minnesota Statutes 2010, section 290.06, by adding subdivisions;
1.4proposing coding for new law in Minnesota Statutes, chapter 41B.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.6 Section 1. [41B.0391] BEGINNING FARMER PROGRAM; TAX CREDITS.
1.7 Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
1.8section.
1.9(b) "Agricultural assets" means agricultural land, livestock, farming or livestock
1.10production facilities or buildings, and machinery used for farming or livestock production
1.11located in Minnesota.
1.12(c) "Beginning farmer or livestock producer" means a resident of Minnesota who:
1.13(1) is seeking entry or has entered within the last ten years into farming or livestock
1.14production;
1.15(2) intends to farm or raise crops or livestock on land located within the state borders
1.16of Minnesota;
1.17(3) is not related by blood or marriage to the owner of the agricultural assets from
1.18whom the beginning farmer or livestock producer is seeking to rent agricultural assets;
1.19(4) is not related by blood or marriage to a partner, member, shareholder, or trustee
1.20of the owner of agricultural assets from whom the beginning farmer or livestock producer
1.21is seeking to rent agricultural assets; and
1.22(5) meets the following eligibility requirements as determined by the authority:
1.23(i) has a net worth of not more than $200,000, including any holdings by a spouse
1.24or dependent, based on fair market value;
2.1(ii) provides the majority of the day-to-day physical labor and management of the
2.2farm;
2.3(iii) has, by the judgment of the authority, adequate farming or livestock production
2.4experience or demonstrates knowledge in the type of farming or livestock production for
2.5which the beginning farmer seeks assistance from the authority;
2.6(iv) demonstrates to the authority a profit potential by submitting projected earnings
2.7statements;
2.8(v) asserts to the satisfaction of the authority that farming or livestock production
2.9will be a significant source of income for the beginning farmer or livestock producer;
2.10(vi) participates in a financial management program approved by the authority
2.11or the commissioner of agriculture; and
2.12(vii) has other such qualifications as specified by the authority.
2.13(d) "Farm" means any tract of land over ten acres in area used for or devoted to the
2.14commercial production of farm products.
2.15(e) "Farming or livestock production" means the active use, management, and
2.16operation of real and personal property for the production of a farm product.
2.17(f) "Farm product" means those plants and animals useful to humans and includes,
2.18but is not limited to, forage and sod crops, grain and feed crops, dairy and dairy products,
2.19poultry and poultry products, livestock, fruits, and vegetables.
2.20(g) "Owner of agricultural assets" means a person who is the owner in fee of
2.21agricultural land or who has legal title to any other agricultural asset.
2.22(h) "Share-rent agreement" means a rental agreement in which the principal
2.23consideration given to the owner of agricultural assets is a predetermined portion of the
2.24production of farm products produced from the rented agricultural assets and which
2.25provides for sharing production costs or risk of loss, or both.
2.26 Subd. 2. Tax credit for owners of agricultural assets. (a) An owner of agricultural
2.27assets may take a credit against the tax due under chapter 290 for the rental of agricultural
2.28assets to a beginning farmer or livestock producer. An owner of agricultural assets may
2.29take a credit equal to:
2.30(1) ten percent of the gross rental income in each of the first, second, and third
2.31years of a rental agreement; or
2.32(2) 15 percent of the cash equivalent of the gross rental income in each of the first,
2.33second, and third years of a share-rent agreement.
2.34(b) A qualifying rental agreement includes cash rent of agricultural assets or a
2.35share-rent agreement. The agricultural asset must be rented at prevailing community
3.1rates as determined by the authority. The credit may be claimed only after approval and
3.2certification by the authority.
3.3(c) An owner of agricultural assets or beginning farmer or livestock producer may
3.4terminate a rental agreement, including a share-rent agreement, for reasonable cause upon
3.5approval of the authority. If a rental agreement is terminated without the fault of the owner
3.6of agricultural assets, the tax credits shall not be retroactively disallowed. If an agreement
3.7is terminated with fault by the owner of agricultural assets, any prior tax credits claimed
3.8under this subdivision by the owner of agricultural assets shall be disallowed and must
3.9be repaid to the commissioner of revenue.
3.10(d) The credit is limited to the liability for tax, as computed under chapter 290, for
3.11the taxable year. If the amount of the credit determined under this section for any taxable
3.12year exceeds this limitation, the excess is a beginning farmer incentive credit carryover
3.13according to section 290.06, subdivision 36.
3.14 Subd. 3. Beginning farmer management tax credit. (a) A beginning farmer or
3.15livestock producer may take a credit against the tax due under chapter 290 for participating
3.16in a financial management program approved by the authority. The credit is equal to 100
3.17percent of the cost of participating in the program or $700, whichever is less. The credit
3.18is available for up to three years while the farmer is in the program. The authority shall
3.19maintain a list of approved financial management programs and establish a procedure for
3.20approving equivalent programs that are not on the list.
3.21(b) The credit is limited to the liability for tax, as computed under chapter 290, for
3.22the taxable year. If the amount of the credit determined under this section for any taxable
3.23year exceeds this limitation, the excess is a beginning farmer management credit carryover
3.24according to section 290.06, subdivision 37.
3.25 Subd. 4. Authority's duties. The authority shall:
3.26(1) approve and certify beginning farmers and livestock producers as eligible for
3.27the program under this section;
3.28(2) approve and certify owners of agricultural assets as eligible for the tax credit
3.29under subdivision 2;
3.30(3) provide necessary and reasonable assistance and support to beginning farmers
3.31and livestock producers for qualification and participation in financial management
3.32programs approved by the authority; and
3.33(4) refer beginning farmers and livestock producers to agencies and organizations
3.34that may provide additional pertinent information and assistance.
4.1 Sec. 2. Minnesota Statutes 2010, section 290.06, is amended by adding a subdivision
4.2to read:
4.3 Subd. 36. Beginning farmer incentive credit. (a) A beginning farmer incentive
4.4credit is allowed against the tax due under this chapter for the rental of agricultural assets
4.5to a beginning farmer or livestock producer according to section 41B.0391, subdivision 2.
4.6(b) The credit may be claimed only after approval and certification by the Rural
4.7Finance Authority according to section 41B.0391.
4.8(c) The credit is limited to the liability for tax, as computed under this chapter, for
4.9the taxable year. If the amount of the credit determined under this subdivision for any
4.10taxable year exceeds this limitation, the excess is a beginning farmer incentive credit
4.11carryover to each of the 15 succeeding taxable years. The entire amount of the excess
4.12unused credit for the taxable year is carried first to the earliest of the taxable years to
4.13which the credit may be carried and then to each successive year to which the credit may
4.14be carried. The amount of the unused credit under this paragraph must not exceed the
4.15taxpayer's liability for tax in a taxable year.
4.16 Sec. 3. Minnesota Statutes 2010, section 290.06, is amended by adding a subdivision
4.17to read:
4.18 Subd. 37. Beginning farmer management credit. (a) A taxpayer who is a
4.19beginning farmer or livestock producer may take a credit against the tax due under
4.20this chapter for participation in a financial management program according to section
4.2141B.0391, subdivision 3.
4.22(b) The credit may be claimed only after approval and certification by the Rural
4.23Finance Authority according to section 41B.0391.
4.24(c) The credit is limited to the liability for tax, as computed under this chapter, for
4.25the taxable year. If the amount of the credit determined under this subdivision for any
4.26taxable year exceeds this limitation, the excess is a beginning farmer management credit
4.27carryover to each of the three succeeding taxable years. The entire amount of the excess
4.28unused credit for the taxable year is carried first to the earliest of the taxable years to
4.29which the credit may be carried and then to each successive year to which the credit may
4.30be carried. The amount of the unused credit under this paragraph must not exceed the
4.31taxpayer's liability for tax in a taxable year.
4.32 Sec. 4. EFFECTIVE DATE.
4.33Sections 1 to 3 are effective for taxable years beginning after December 31, 2010.
