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Beginning farmers, tax issues on the agendaBeginning farmers, tax issues on the agenda

Legal Issues: Iowa Legislature is in session, and the budget is a big issue for ag.

Erin Herbold-Swalwell

January 29, 2019

4 Min Read
iowa capital building
LOOKING AHEAD: To maximize opportunities for the next generation, ag groups are urging the Iowa Legislature to enhance the Beginning Farmer Tax Credit program.

The Iowa Legislature on Jan. 14 began the 2019 session of the 88th Iowa General Assembly. In this column, we’ll focus on key issues that appear to be on the forefront, a few of the bills that have been introduced thus far and a look-ahead.

Water quality (and how to further fund it) remains a priority for Iowa’s ag leaders. Several proposals have been discussed for additional funding sources, and we will monitor that issue closely. Other issues on the list are beginning farmer programs, tax relief, livestock regulation, research funding for animal disease outbreak prevention and rural infrastructure access (i.e., broadband and rural housing).

Gov. Kim Reynolds, in her first Condition of the State address, proposed a plan for $20 million over two years to expand access to high-speed internet in rural areas, and proposed doubling the workforce housing tax credits for rural communities to $10 million. The Iowa Farm Bureau is advocating for the Legislature to enhance the Beginning Farmer Tax Credit program and to maintain current funding levels for the Homestead Property Tax Credit and the Ag Land/Family Farm Tax Credit.

Early bills introduced
At the beginning of the session, several bills were introduced that may highlight the path the Legislature will take in 2019:  

  • Two bills were introduced relating to animal abuse of non-livestock animals, increasing penalties for such offenses.

  • A bill has been introduced, proposing to amend the definition of farm tenancy under Iowa’s landlord tenant law — striking equine boarding from the definition altogether. 

  • SF 20, a bill proposing to amend Iowa’s Animal Ag Compliance Act, provides for purposes of state air and water quality regulation that two confinement feeding operations are deemed to be a single operation and related if some of the structures are within 2,500 feet, and the operations share common ownership or common roads or utilities, private water well, or other personal property, and they share common manure treatment plans/facilities. 

  • Another bill was filed allowing a farm owner or tenant to use a farm turkey or deer hunting license in any season.

It should be noted that some similar bills were introduced last session that did not survive the legislative funnel deadlines. We will follow-up on this important issue more in-depth in the next column as information becomes available and following the funnel.

Tax reform proposals
Several early bills were introduced proposing a complete repeal of the Iowa State Inheritance Tax, proposing to repeal the tax for those dying as of July 2019. Another bill proposes a set repeal date of 2025 for various tax credits that currently have no repeal date, including but not limited to the ag assets transfer tax credit, the sales and use tax refund, solar energy system tax credit, wind energy production tax credit, and the renewable energy tax credit.

This year’s legislative timeline? To keep on pace to finish the session in 110 days, the Legislature sets two self-imposed “funnel” deadlines. According to the 2019 Iowa Legislative Session Timetable, there are two “funnel” deadlines. The first is March 8, 2019 (when Senate bills must be reported out of Senate committees and House Bills must be reported out of House committees). The second deadline is April 5, 2019, (when Senate bills must be reported out of House committees and House bills must be reported out of Senate Committees). The 2019 session is currently scheduled to end on May 3.

In short, any bill introduced that doesn’t pass in its committee of origin prior to the first funnel deadline is deemed “dead” and doesn’t progress, thus limiting the number of bills the Legislature has to deal with in the session.

It’s important to note that appropriations, ways and means, and oversight bills are not subject to the funnel deadlines. Policy bills that contain spending or taxing provisions that passed the policy committees then move on to the appropriation committee, or ways and means committee for review. It remains to be seen whether the Legislature will finish on time this year — something that has not happened in past years.

In next month’s Legal Issues column, we will continue to provide updates on bills introduced this session, their status, and potential effect on farms and farm families.

What impact will budget issues have on family farmers and agriculture this session? Stay tuned for new developments and answers to those questions and other reader questions. The information in this article is current as of Jan. 21. For more information on any of the bills mentioned in this column, visit legis.iowa.gov.

Herbold-Swalwell is an attorney with Brick-Gentry in Des Moines. Contact [email protected].

About the Author(s)

Erin Herbold-Swalwell

Erin Herbold-Swalwell is an attorney with Brick-Gentry PC in Des Moines. 

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