The bill establishes a beginning farmer tax credit program, administered by the Iowa Finance Authority and the Department of Revenue, to facilitate the transfer of agricultural assets to qualified beginning farmers. It introduces new definitions for "agricultural assets lease agreement" and "agricultural assets sale agreement," clarifying the types of agreements eligible for the tax credit. The eligibility criteria are expanded to include participation through both lease and sale agreements, as well as provisions for related family members. The bill outlines specific conditions for awarding tax credits, including limits on participation duration and total credits received, while ensuring that asset transfers occur at fair market rates.

Additionally, the bill modifies existing provisions regarding eligibility for the tax credit, allowing individuals who exclude income from farm tenancy agreements to claim the credit. It establishes a flexible payment structure for tax credits based on various arrangements, with specific rates for different types of agreements and caps on annual credits. The bill maintains an annual aggregate limitation of $12 million for tax credit awards and streamlines the application process. Most provisions are set to take effect on January 1, 2027, while the authority to adopt administrative rules will take effect immediately upon enactment.

Statutes affected:
Introduced: 16.77, 16.78, 16.79, 175.37, 16.82A, 422.7, 16.82B, 16.81, 16.82