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Regular Session, 2013
SENATE BILL NO. 211
BY SENATOR LONG
TAX/TAXATION. Provides income tax credits under the Beginning Farmer and Fisherman
Income Tax Credit Program. (gov sig)
AN ACT1
To enact R.S. 47:6039, relative to establishing an incentive program to assist and connect2
Louisiana farmers, livestock producers, and fisherman entering into the fishing3
industry and farming industry with experienced farmers and fishermen in the4
industry to promote sustainability of industries and to incentivize young people to5
enter these vital industries; to authorize the development and establishment of the6
Beginning Farmer and Fisherman Income Tax Credit Act; to provide for an income7
tax credit to encourage owners of capital agricultural assets and commercial fishing8
vessels to sell or lease to Louisiana's qualified beginning farmers, livestock9
producers, and fisherman; to provide for the administration of the income tax credit;10
to provide for financing; to provide for definitions; to provide for certain11
requirements; to provide for an effective date and termination date of tax credit; and12
to provide for related matters.13
Be it enacted by the Legislature of Louisiana:14
Section 1. R.S. 47:6039 is hereby enacted to read as follows:15
ยง6039. Tax credit for beginning farmer and fisherman16
A. This Section shall be known and referred to as the "Beginning Farmer17 SB NO. 211
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and Fisherman Income Tax Credit Act" to promote beginning farmers,1
livestock producers, and fishermen to enter the farming and fishing industries.2
B. Declaration of Purpose. The Legislature of Louisiana hereby finds3
and declares that farming and commercial fishing are crucial to Louisiana's4
economy and way of life. These industries must be sustained and promoted.5
Therefore, it is declared to be the purpose of this Section to promote the6
creation and retention of new jobs in the farming and fishing industries and to7
encourage young people to seek careers in these industries by providing8
incentives to established Louisiana farmers and fishermen who assist9
Louisiana's qualified beginning farmers and fishermen and owners who sell or10
lease their capital agricultural assets and commercial fishermen who sell or11
lease their vessels to the qualified beginning farmers and fishermen.12
C. Definitions. For the purposes of this Section, the following terms shall13
have the meaning hereinafter ascribed to them, unless the context clearly14
indicates otherwise:15
(1) "Qualified beginning farmer" means an individual who resides in this16
state, who has been engaged in farming or livestock production as a career for17
less than five years, and who farm or raise crops or livestock on land located in18
this state.19
(2) "Qualified beginning fisherman" means an individual who resides in20
this state, who has been engaged in commercial fishing as a career for less than21
five years, who has a net income of less than thirty thousand dollars, including22
any holdings by a spouse or dependent, based on fair market value, and who23
fishes in state coastal waters as defined in R.S. 49:214.23(4) for their product,24
including but not limited to fish, shrimp, crabs, alligators, frogs, and oysters.25
(3) "Owner of fishing assets" means an individual who owns a vessel26
registered in this state, which is to be used for commercial fishing for products27
derived from state coastal waters as defined in R.S. 49:214.23(4), including but28
not limited to fish, shrimp, crabs, alligators, frogs, and oysters.29 SB NO. 211
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(4) "Owner of agricultural assets" means an individual or trustee who1
is a resident of this state and who derives at least fifty percent of his gross2
annual income from farming or livestock production, and who has engaged in3
a majority of the day-to-day physical labor and management of a farm for at4
least ten years.5
(5) "Agricultural assets" means agricultural land, livestock, farming, or6
livestock production facilities or buildings and machinery used for farming or7
livestock production located in this state.8
(6) "Farm" means any tract of land in excess of ten acres in areas used9
for or devoted to the commercial production of farm products.10
(7) "Farm product" means plants and animals useful to man, including11
but not limited to, forages and sod crops, grains and feed crops, dairy and dairy12
products, poultry and poultry products, livestock, including breeding and13
grazing livestock, fruits and vegetables.14
(8) "Farming or livestock production" means the active use,15
management, and operation of real and personal property for the production16
of a farm product.17
D. Tax credit. (1) An income tax credit equal to five percent of the18
purchase price under a cash sale agreement and ten percent of the value of the19
share of the seller or the purchaser under a share agreement, not to exceed five20
thousand dollars annually, shall be available to fishermen and farmers who sell,21
purchase or lease fishing or farming assets to a qualified beginning fisherman22
or qualified beginning farmer.23
(2) The amount of the income tax credits issued by the Department of24
Revenue shall not exceed two million dollars annually and shall be claimed on25
a first-come basis.26
(3) The tax credit authorized under this Section shall be non-refundable27
and any credit in excess of the income tax liability for a single year may be28
credited towards the taxpayer's income tax liability for up to five years or until29 SB NO. 211
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the amount of the credit is depleted, whichever is first.1
G. Administration. (1) The Department of Revenue shall adopt and2
promulgate rules and regulations, consistent with the policy objectives of this3
Section to implement the income tax credit program and shall issue tax credits4
annually for any eligible sale or lease prior to January first of the following5
year.6
(2) If the Department of Revenue determines there is a violation of the7
requirements of this Section, the income tax credit shall not be issued for8
subsequent years and the violation shall be referred to the Department of9
Agriculture and Forestry if the individual is a farmer or livestock producer or10
to the Department of Wildlife and Fisheries if the individual is a fisherman for11
administrative review. If either department determines that a violation has12
occurred, the amount of the wrongly claimed prior tax credits shall be13
immediately due and payable to the Department of Revenue.14
(3) The Department of Wildlife and Fisheries shall certify to the15
Department of Revenue that the beginning fisherman is qualified to participate16
in the program and is substantially participating in the day-to-day physical17
labor and management of the business, using a qualified vessel, and has18
adequate experience and demonstrates knowledge in the field for which he seeks19
assistance. The Department of Wildlife and Fisheries shall also determine if the20
sale price is not higher or lower than market rate for similar assets within the21
same community.22
(4) The Department of Agriculture and Forestry shall certify to the23
Department of Revenue that the beginning farmer is substantially participating24
in the day-to-day physical labor and management of the business, is25
participating in using the assets subject to the lease/charter, and has adequate26
experience or demonstrates knowledge in the field for which he seeks assistance.27
The Department of Agriculture and Forestry shall also determine if the sale28
price is not higher or lower than market rate for similar assets within the same29 SB NO. 211
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community. 1
E. Eligibility of qualified beginning fisherman. (1) A beginning2
fisherman shall be a resident of this state, and the fishing vessel used for the3
operation of his business shall be registered in this state and he shall have a net4
worth of less than thirty-thousand dollars, including any holdings by a spouse5
or dependent, based on fair market value.6
(2) A beginning fisherman must assume the financial risk associated with7
operating his vessel, and submit a copy of Internal Revenue Service Schedule8
C of declared profits or losses from his fishing business, or similar data9
revealing income from his operations to the Department of Revenue.10
(3) A beginning fisherman shall certify and provide sufficient11
documentation of participation in the day-to-day physical labor and12
management of his business and the vessels used to operate the business. This13
certification shall be subject to review and confirmation by the Department of14
Wildlife and Fisheries.15
(4) A beginning fisherman may be a relative of the seller of the fishing16
assets, but a background check shall be included with the application that17
specifically details the involvement of the related party and identifies sources18
which can independently confirm the legitimacy of the transaction.19
(5) The sale price shall not be substantially higher or lower than fair20
market value for similar assets within the same community as determined by21
Department of Wildlife and Fisheries.22
F. Eligibility of beginning farmer or livestock producer. (1) A beginning23
farmer or livestock producer shall be a resident of this state and his business24
shall be located in this state and he shall have a net worth of less than four25
hundred thousand dollars, including any holdings by a spouse or dependent,26
based on fair market value.27
(2) A beginning farmer or livestock producer shall provide sufficient28
documentation of participation in the day-to-day physical labor and29 SB NO. 211
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management of his business and in farming the assets subject to the sale or1
lease, as well as the adequate experience or knowledge in the field for which he2
seeks assistance. This certification shall be subject to review and confirmation3
by the Department of Agriculture and Forestry.4
(3) The beginning farmer or livestock producer may be a relative of the5
seller or lessor of assets, but a background check and documentation shall be6
included with the application specifically detailing the involvement of the7
related party and identifies sources which can independently confirm the8
legitimacy of the transaction.9
(4) The sale or lease price of an eligible transaction shall not be10
substantially higher or lower than fair market value for similar assets within the11
same community as determined by the Department of Agriculture and Forestry.12
(5) The Department of Agriculture and Forestry shall certify to the13
Department of Revenue that the beginning farmer is substantially participating14
in the day-to-day physical labor and management of the business, is15
participating in using the assets subject to the lease or charter, and has16
adequate experience or demonstrated knowledge in the field for which he seeks17
assistance. The Department of Agriculture and Forestry shall determine if the18
sale price is not higher or lower than fair market value for similar assets within19
the same community. 20
H. Termination of tax credit program. The tax credit program21
authorized under this Section shall terminate on December 31, 2018. No tax22
credit authorized pursuant to the provisions of this Section shall be issued after23
December 31, 2018.24
Section 2. This Act shall become effective upon signature by the governor or, if not25
signed by the governor, upon expiration of the time for bills to become law without signature26
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If27
vetoed by the governor and subsequently approved by the legislature, this Act shall become28
effective on the day following such approval.29 SB NO. 211
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Danielle Doiron.
DIGEST
Proposed law creates the Beginning Farmer and Fisherman Income Tax Credit Program to
assist beginning farmers, livestock producers, and fishermen to enter the farming and fishing
industry in the state, and provides incentives to established state farmers and fishermen who
assist qualified beginning farmers and fishermen and owners who sell or lease their capital
agricultural assets and commercial fishermen who sell or lease their vessels to qualified
beginning farmers and fishermen.
Proposed law authorizes the Department of Revenue to administer the tax credit program
with supervision by the Department of Wildlife and Fisheries for fishermen and the
Department of Agriculture and Forestry for farmers eligible for the program.
Proposed law provides for definitions of terms to describe eligibility of farmers and
fishermen:
(1)"Qualified beginning farmer" means an individual who resides in this state, who has
been engaged in farming or livestock production for not more than five years, and
who farms or raises crops or livestock on land located in this state.
(2)"Qualified beginning fisherman" means an individual who resides in this state, who
has engaged in commercial fishing as a career for less than five years and who has
a net income of less than $30,000, including any holdings by a spouse or dependent,
based on fair market value, and who fishes in state coastal waters for their product,
including but not limited to fish, shrimp, crabs, alligators, frogs, and oysters.
(3)"Owner of fishing assets" means an individual who owns a vessel registered in the
state to be used for commercial fishing in state coastal waters, including but not
limited to fish, shrimp, crabs, alligators, frogs, and oysters.
(4)"Owner of agricultural assets" means an individual or trustee who is a resident of this
state and who derives at least 50% of his gross annual income from farming or
livestock production, and provides the majority of the day-to-day physical labor and
management of a farm for at least ten years.
(5)"Agricultural assets" means agricultural land, livestock, farming, or livestock
production facilities or buildings and machinery used for farming or livestock
production located in this state.
(6)"Farm" means any tract of land over ten acres in areas used for or devoted to the
commercial production of farm products.
(7)"Farm product" means plants and animals useful to man, including but not limited
to forages and sod crops, grains and feed crops, dairy and dairy products, poultry and
poultry products, livestock, including breeding and grazing livestock, fruits and
vegetables.
(8)"Farming or livestock production" means the active use, management, and operation
of real and personal property for the production of a farm product.
Proposed law provides an income tax credit equal to 5% of the purchase price under a cash
sale agreement and ten percent of the value of the share of the seller or the purchaser under
a share agreement, not to exceed $5,000 annually, available for fishermen and farmers who
sell, purchase or lease fishing or farming assets to a qualified beginning fisherman or a SB NO. 211
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qualified beginning farmer.
Proposed law limits the amount of the income tax credits issued by the Department of
Revenue not to exceed $2,000,000 annually and that it be claimed on a first-come basis.
Further provides the tax credit is non-refundable and any credit in excess of tax liability
within a year may be credited for income tax liability for up to five years or until depleted,
whichever is first.
Proposed law requires the Department of Revenue to promulgate rules and regulations to
implement the income tax credit program and to issue the tax credits on an annual basis prior
to Jan. 1 of the following year the application is submitted.
Proposed law requires the Department of Wildlife and Fisheries (DWF) to certify that the
beginning fisherman is qualified to participate in the program and is substantially
participating in the day-to-day physical labor and management of the business, using a
qualified vessel, and has adequate experience and demonstrates knowledge in the field for
which he seeks assistance. Requires DWF to determine if the sale price is not higher or
lower than market rate for similar assets within the same community.
Proposed law requires the Department of Agriculture and Forestry to certify that the
beginning farmer is substantially participating in the day-to-day physical labor and
management of the business, is participating in using the assets subject to the lease/charter,
and has adequate experience or demonstrates knowledge in the field for which he seeks
assistance. Requires the Department of Agriculture and Forestry to determine if the sale
price is not higher or lower than market rate for similar assets within the same community.
Proposed law requires the Department of Revenue to determine any violations of the tax
credit program by a fisherman and refer the violations to the Department of Wildlife and
Fisheries for administrative review. Further requires the individual to immediately pay back
the wrongly claimed tax credits to the Department of Revenue.
Proposed law requires the Department of Revenue to determine any violations of the tax
credit program by a farmer or livestock producer and refer the violations to the Department
of Agriculture and Forestry for administrative review. Further requires the individual to
immediately pay back the wrongly claimed tax credits to the Department of Revenue.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:6039)