Relating to agricultural lease agreements entered into by eligible taxpayers and qualified beginning farmers participating in the beginning farmer tax credit program, by allowing an eligible taxpayer’s unused tax credit to be transferred to the qualified beginning farmer, and including effective date provisions

GENERAL. This bill amends provisions in Code chapter 16, subchapter VIII, part 5, which establishes the beginning farmer tax credit program (program). The program applies to an eligible taxpayer (taxpayer) and qualified beginning farmer (beginning farmer) who have entered into an agricultural lease agreement (agreement). Under the bill, an agreement may allow the taxpayer to transfer unused taxpayer’s tax credits to the beginning farmer for the number of years in which their agreement is effective. The authority is required to issue a tax credit certificate to the beginning farmer in order to claim the tax credit which may be applied against the beginning farmer’s tax liability or may be paid to the beginning farmer in the form of a refund. CURRENT PROGRAM REQUIREMENTS. Under the program, an agreement must be for at least two but not more than five years, and may be renewed for at least two but not more than five years. It must involve agricultural land, including buildings, or equipment used as part of a farming operation.79(2)).81(6)). CURRENT TAX CREDIT.81(4)). The total amount of the tax credit divided over the duration of the agreement depends upon the type of rent arrangement entered into by the parties which may be based on a fixed amount or a share of the commodity produced on the leasehold. For each applicable year, the taxpayer may claim the tax credit up to the taxpayer’s tax liability for that year. The unused amount remaining may be applied to reduce the taxpayer’s liability for the following or subsequent years up to a total of years or until the remaining amount has been used up, whichever occurs first. The tax credit cannot be carried back to a prior year or refunded.82(8)(b)). EFFECTIVE DATE. The bill takes effect January 1, 2022.