The Iowa Legislature passed several measures during its recently ended 2019 session that will create more opportunities for young farmers and provide greater protection for Iowa’s property taxpayers. It was a productive session for Iowa agriculture and for the state in general, according to observers speaking on behalf of several Iowa farm and commodity organizations.
Lawmakers adjourned for the year on April 27. “We are thankful the Legislature recognizes the importance of agriculture to the state, and the value of strong rural communities,” says Craig Hill, a Warren County farmer and president of Iowa Farm Bureau. “With on-farm income down more than 50% over the past five years, keeping the family farm sustainable is top priority for farm families. We applaud the Legislature’s efforts this year to support Iowa’s most important economic driver. Agriculture is responsible for 1 in 5 Iowa jobs.”
Creating a brighter future for agriculture and rural communities is the focus of the Beginning Farmer Tax Credit, an important tool to support the next generation and help beginning farmers access farmland. “We appreciate the Legislature improving the program and increasing the tax credit to previous funding levels,” Hill says.
Help for young, beginning farmers
One of the biggest challenges beginning farmers face is getting access to land to start or grow their farms. In addition to the Beginning Farmer Tax Credit, the Legislature also passed House File 778. This bill protects and enhances capital gains deductions for the sale of farmland into the future, removing disincentives to sell farmland.
Lawmakers also took steps to create a level playing field for farmers looking to purchase land, helping to ensure that private entities don’t use taxpayer dollars for a competitive advantage over farmers.
Transitioning the family farm to the next generation is a challenge, but it’s a common goal of farm families. “Easing the burden on farm succession and transitioning to the next generation ensures opportunities critical to the sustainability of Iowa agriculture and rural communities,” Hill says. “We are grateful the Legislature recognized and took important steps this session for our beginning farmers to remove some hurdles to farm transition, while protecting taxpayers.”
Measures add taxpayer protection
Also helping Iowans is passage of a property tax bill that will create accountability and transparency when local governments raise property taxes. It creates additional requirements before local governments can increase property tax collections. It requires county boards and city councils to hold a public hearing on the proposed budget and vote for any increase over the current amount at the public hearing.
“This measure is important,” says Hill, who notes that property taxes in Iowa, at $5.75 billion in fiscal 2019, have doubled in less than two decades and are approaching the size of the entire state budget.
Farm Bureau also applauds the Iowa Legislature’s extension of the SAVE sales tax for school infrastructure. SAVE stands for Secure an Advanced Vision for Education and is a sales tax that extends through 2050.
“We worked with approximately 30 new members of the Iowa Legislature this year, along with continuing the conversations with legislators we’ve worked with in the past,” says Michael Dolch, public affairs director for the Iowa Soybean Association. “Lawmakers passed several bills that will aid young farmers by enhancing their ability to rent and to purchase farmland. The Legislature passed other bills, too, that will be helpful to Iowa agriculture.”
Curt Mether, a farmer from Logan in western Iowa, is president of the Iowa Corn Growers Association. He agrees that action by the 2019 Legislature can positively impact Iowa agriculture if the bills are signed into law. “We made key progress on ICGA’s legislative priorities for this session,” he says. “We are especially excited to see the extension of the biofuels infrastructure program and continued funding for the state’s conservation cost-share program. Both are vital to the success of Iowa farmers.”
Following is a list of ag-related bills state lawmakers passed in 2019. Most of these bills are awaiting the Gov. Kim Reynolds’ signature to become law.
Beginning Farmer Tax Credit. It will provide $12 million each year in incentives for taxpayers leasing land to beginning farmers. The bill is awaiting Reynolds’ signature. The program offers a tax credit for taxpayers leasing their land to qualified beginning farmers using either cash rent, crop share or flexible lease arrangements. The newly passed bill restores funding to the prior level of $12 million per year, and ensures the program is administered in a way that is viable and allows for maximum participation.
The Iowa Legislature also passed a bill to protect and enhance capital gains deductions on the sale of farmland in Iowa. Without this change, the deduction could have been restricted beginning in 2023 and beyond, creating a significant disincentive to sell farmland.
In addition, lawmakers passed a measure to limit private entities from using the State Revolving Fund to finance land acquisition. This bill helps create a level playing field when buying land and ensures that a private organization doesn’t use taxpayer dollars to finance land purchases, which could give them a competitive advantage over farmers when buying land.
Iowa biofuels infrastructure. Iowa’s Renewable Fuels Infrastructure Program was fully funded at $3 million, the same as last year. RFIP increases consumer access to renewable fuels by providing cost-share dollars to retailers to install flex-fuel pumps, tanks or other infrastructure for E15, E85 and biodiesel fuels.
Conservation cost-share. Additional funding was passed last year with Senate File 512. This year the Legislature maintained the conservation cost-share programs at those previous funding levels of $8.3 million for soil conservation and $2.4 million for the Iowa Water Quality Initiative.
Ag appropriations. The Legislature included additional funding in the amount of $500,000 for the Iowa State University Ag Extension and Diagnostic Lab, as well as money for the Iowa Department of Agriculture and Land Stewardship to help with fighting foreign animal disease.
A couple years ago IDALS requested $500,000 for efforts to prevent the invasion of foreign animal diseases and to be ready to handle an outbreak if one should occur. Two years ago, the Legislature approved $100,000 of that total and last year upped it to $250,000. This year it added another $250,000, which means the initial request has now been met.
Ag production facility trespass. Reynolds earlier this year signed a bill making it a crime to obtain access or employment with an ag production facility with the intent to cause physical or economic harm to a facility, livestock or the owner. This new law provides further protection and security for Iowa livestock producers against special interest groups with ill intentions to exploit the livestock operation.
Special truck weight limits. Legislation was passed in 2019 to increase the maximum gross weight limit registration for special trucks from 32 to 39 tons. Special trucks include motor trucks or truck tractors used for certain farming and commodity transportation purposes, but not for hire. This bill would allow farm special registration to be used on six- and seven-axle trucks.
Hemp growing program. The 2019 Iowa Legislature passed a measure to let farmers grow up to 40 acres of hemp, starting with the 2020 growing season. Reynolds is expected to sign the bill, which authorizes the Iowa Ag Department to apply to USDA for approval of a hemp growing program in Iowa.
USDA is now working on rules based on the 2018 Farm Bill, and rulemaking for the state hemp program isn’t expected to be completed until sometime this fall. Industrial hemp had been illegal to grow in the U.S. since the 1970s. But the 2018 Farm Bill made it legal for states to allow the crop to be grown and cultivated for production to be used in food, clothing, fiber and other products.