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Regular Session, 2013
SENATE BILL NO. 211
BY SENATORS LONG, GALLOT AND GARY SMITH
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 established farmers and fishermen in the industry4
to promote sustainability of industries and to incentivize young people to enter these5
vital industries; to authorize the development and establishment of the Beginning6
Farmer and Fisherman Income Tax Credit Act; to provide for an income tax credit7
for established Louisiana farmers, livestock producers, and commercial fishermen,8
and for Louisiana's qualified beginning farmers, livestock producers, and fishermen;9
to provide for qualifications; to provide for the administration of the income tax10
credit; 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 "Beginning17 SB NO. 211
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Farmer 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 mentor9
Louisiana's qualified beginning farmers and fishermen who lease their capital10
agricultural assets or fishing assets to qualified beginning farmers and11
fishermen.12
C. Definitions. For the purposes of this Section, the following terms13
shall 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 cumulative years, and who farms or raises crops or livestock on18
a farm on land located in 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 and who21
holds a resident commercial fishing license for less than five cumulative years,22
who has a net income of less than thirty thousand dollars, including any23
holdings by a spouse or dependent, based on fair market value, and who fishes24
in state coastal waters as defined in R.S. 49:214.23(4) for their product,25
including but not limited to fish, shrimp, crabs, alligators, frogs, and oysters.26
(3) "Established Louisiana commercial fisherman" means an individual27
who is a resident of this state, who holds a resident commercial fishing license28
for a minimum of ten years, who derives at least fifty percent of his gross annual29 SB NO. 211
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income from commercial fishing, and who owns fishing assets.1
(4) "Fishing assets" means vessels registered in this state, which are to2
be used for commercial fishing for products derived from state coastal waters3
as defined in R.S. 49:214.23(4), including but not limited to fish, shrimp, crabs,4
alligators, frogs, and oysters.5
(5) "Established Louisiana farmer" means an individual or trustee who6
is a resident of this state and who derives at least fifty percent of his gross7
annual income from farming or livestock production, and who has engaged in8
a majority of the day-to-day physical labor and management of a farm for at9
least ten years.10
(6) "Agricultural assets" means agricultural land, livestock, farming, or11
livestock production facilities or buildings and machinery used for farming or12
livestock production located in this state.13
(7) "Farm" means any tract of land in excess of ten acres in areas used14
for or devoted to the commercial production of farm products.15
(8) "Farm product" means plants and animals useful to man, including16
but not limited to forages and sod crops, grains and feed crops, dairy and dairy17
products, poultry and poultry products, livestock, including breeding and18
grazing livestock, fruits and vegetables.19
(9) "Farming or livestock production" means the active use,20
management, and operation of real and personal property for the production21
of a farm product.22
D. Beginning Farmer and Fisherman Income Tax Credits.23
(1)(a) Purchases. An Income Tax Credit of up to five percent of the24
purchase price shall be available to an established Louisiana farmer who sells25
agricultural assets to a qualified beginning farmer and to an established26
Louisiana commercial fisherman who sells fishing assets to a qualified27
beginning fisherman. The credit is limited to ten thousand dollars. Each28
established Louisiana farmer and each established Louisiana commercial29 SB NO. 211
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fisherman may earn only one Beginning Farmer and Fisherman Income Tax1
Credit during their lifetime. Taxpayers who have earned the credit in2
Subparagraph (b) of this Paragraph are not eligible to earn this credit. The3
credit is earned in the tax year in which the qualified beginning farmer or4
fisherman first uses the assets in their farming or fishing business. To be5
eligible to earn the credit, the established Louisiana farmer or commercial6
fisherman and the qualified beginning farmer or fisherman shall submit a joint7
application to the Department of Revenue on a form prescribed by the8
secretary. For purposes of this Subsection, both spouses shall be considered one9
taxpayer.10
(b) Leases and share agreements. An income tax credit of up to ten11
percent of the annual lease price or value of the share agreement shall be12
available to the established Louisiana farmer who enters into a lease or share13
agreement for the use of agricultural assets with a qualified beginning farmer14
and to the established Louisiana commercial fisherman who enters into a lease15
or share agreement for the use of fishing assets with a qualified beginning16
fisherman. The qualified beginning farmer or fisherman shall earn a credit17
equal to the credit earned by the established Louisiana farmer or commercial18
fisherman. The credit is limited to one thousand dollars per tax year and can19
may be earned for a maximum of five tax years. Each taxpayer who earns the20
credit under this Subparagraph shall be limited to a five thousand dollar21
lifetime cap of Beginning Farmer and Fisherman Income Tax Credits.22
Taxpayers who have earned the credit in Subparagraph (a) of this Paragraph23
are not eligible to earn this credit. The credit may be earned for up to five tax24
years and is earned in each tax year in which the qualified beginning farmer or25
fisherman first uses the assets in their farming or fishing business. To be26
eligible to earn the credit, the established Louisiana farmer or commercial27
fisherman and the qualified beginning farmer or fisherman shall submit a joint28
application to the Department of Revenue on a form prescribed by the29 SB NO. 211
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secretary. For purposes of this Subsection, both spouses shall be considered one1
taxpayer.2
(2) The amount of the Beginning Farmer and Fisherman Income Tax3
Credits issued by the Department of Revenue shall not exceed four hundred4
thousand dollars annually and shall be claimed on a first-come basis.5
(3) The tax credit authorized under this Section shall be nonrefundable6
and any credit in excess of the income tax liability for the tax year in which the7
credit is earned may carry forward the credit for a period of up to five years.8
E. Administration. (1) The Department of Revenue shall adopt and9
promulgate rules and regulations, in consultation with the Department of10
Agriculture and Forestry and the Department of Wildlife and Fisheries,11
consistent with the policy objectives of this Section to implement the income tax12
credit program. 13
(2) The Department of Revenue, the Department of Agriculture and14
Forestry, and the Department of Wildlife and Fisheries may enter into15
agreements, including memoranda of understanding, to provide for the16
administration of this section. Such agreements shall include providing for17
information sharing among the agencies, maintaining the confidentiality of any18
information shared and, such other terms and conditions necessary to effectuate19
the agreement. 20
(3) If the Department of Revenue determines there is a violation of the21
requirements of this Section, the income tax credit shall not be issued for22
subsequent years and the department shall recapture any credit issued during23
a tax year when such violation occurred. The Department of Agriculture and24
Forestry, if the person is a farmer or livestock producer, or the Department of25
Wildlife and Fisheries, if the person is a commercial fisherman, shall notify the26
Department of Revenue if they become aware that a person has claimed a27
Beginning Farmer or Fisherman Income Tax Credit in violation of the28
provisions of this Section. The violation shall be referred to the Department of29 SB NO. 211
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Revenue for recapture under this Paragraph. The provisions of this Paragraph1
are in addition to and shall not limit the authority of the Department of2
Revenue to assess or collect under any other provision of law.3
(4) The Department of Wildlife and Fisheries shall certify to the4
Department of Revenue that the beginning fisherman and established Louisiana5
commercial fisherman have a qualified vessel and commercial licenses and6
landings sufficient to qualify for the Beginning Farmer and Fisherman Income7
Tax Credit.8
(5) The Department of Agriculture and Forestry shall certify to the9
Department of Revenue that the beginning farmer is substantially participating10
in the day-to-day physical labor and management of the business, is11
participating in using the assets subject to the lease/charter, and has adequate12
experience or demonstrates knowledge in the field for which he seeks assistance.13
The Department of Agriculture and Forestry shall also determine if the sale14
price is not higher or lower than market rate for similar assets within the same15
community. 16
F. Eligibility of qualified beginning fisherman. (1) A beginning17
fisherman shall be qualified pursuant to Paragraph (2) in Subsection C and18
have acquired a qualified fishing asset from an established Louisiana19
commercial fisherman pursuant to Paragraphs (3) and (4) of Subsection C.20
(2) A beginning fisherman must assume the financial risk associated with21
operating his vessel, and submit a copy of Internal Revenue Service Schedule22
C of declared profits or losses from his fishing business, or similar data23
revealing income from his operations to the Department of Revenue.24
(3) A beginning fisherman shall certify and provide sufficient25
documentation to the Department of Revenue of his trip ticket submissions26
obtained from the Department of Wildlife and Fisheries and the vessels used to27
operate his business to demonstrate evidence of his participation in the28
operation and management of his business.29 SB NO. 211
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(4) A beginning fisherman may be a relative of the established Louisiana1
commercial fisherman, but a background check shall be included with the2
application that specifically details the involvement of the related party and3
identifies sources which can independently confirm the legitimacy of the4
transaction.5
(5) The sale price shall not be substantially higher or lower than fair6
market value for similar assets within the same community as determined by7
an independent appraiser.8
G. Eligibility of beginning farmer or livestock producer. (1) A beginning9
farmer or livestock producer shall be a resident of this state and his business10
shall be located on a farm in this state and he shall have a net worth of less than11
four hundred thousand dollars, including any holdings by a spouse or12
dependent, based on fair market value.13
(2) A beginning farmer or livestock producer shall provide sufficient14
documentation of participation in the day-to-day physical labor and15
management of his business and in farming the assets subject to the sale or16
lease, as well as the adequate experience or knowledge in the field for which he17
seeks assistance. This certification shall be subject to review and confirmation18
by the Department of Agriculture and Forestry.19
(3) The beginning farmer or livestock producer may be a relative of the20
established Louisiana farmer, but a background check and documentation shall21
be included with the application specifically detailing the involvement of the22
related party and identifying sources which can independently confirm the23
legitimacy of the transaction.24
(4) The sale or lease price of an eligible transaction shall not be25
substantially higher or lower than fair market value for similar assets within the26
same community as determined by the Department of Agriculture and Forestry.27
(5) The Department of Agriculture and Forestry shall certify to the28
Department of Revenue that the beginning farmer is substantially participating29 SB NO. 211
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in the day-to-day physical labor and management of the business, is1
participating in using the assets subject to the lease or charter, and has2
adequate experience or demonstrated knowledge in the field for which he seeks3
assistance. The Department of Agriculture and Forestry shall determine if the4
sale price is not higher or lower than fair market value for similar assets within5
the same community. 6
H. Termination of tax credit program. The tax credit program7
authorized under this Section shall terminate on December 31, 2018. No tax8
credit authorized pursuant to the provisions of this Section shall be issued after9
December 31, 2018.10
Section 2. This Act shall become effective upon signature by the governor or, if not11
signed by the governor, upon expiration of the time for bills to become law without signature12
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If13
vetoed by the governor and subsequently approved by the legislature, this Act shall become14
effective on the day following such approval.15
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Danielle Doiron.
DIGEST
Long (SB 211)
Proposed law creates the Beginning Farmer and Fisherman Income Tax Credit Program to
promote beginning farmers, livestock producers, and fishermen to enter the farming and
fishing industries in the state, and provides incentives to established Louisiana farmers and
commercial fishermen who mentor qualified beginning farmers and fishermen and who sell
or lease their capital agricultural assets or their fishing assets 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 qualified beginning
fishermen and established Louisiana commercial fishermen, and by the Department of
Agriculture and Forestry for qualified beginning farmers that are 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 cumulative
years, and who farm or raises crops or livestock on a farm on land located in this
state.
(2)"Qualified beginning fisherman" means an individual who resides in this state, who SB NO. 211
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has engaged in commercial fishing as a career and holds a resident commercial
fishing license for less than five cumulative 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)"Established Louisiana commercial fisherman" means an individual who is a resident
of this state, who holds a resident commercial fishing license for a minimum of ten
years, who derives at least 50% of his gross annual income from commercial fishing,
and who owns fishing assets.
(4)"Fishing assets" means vessels registered in the state to be used for commercial
fishing for products from state coastal waters, including but not limited to fish,
shrimp, crabs, alligators, frogs, and oysters.
(5)"Established Louisiana farmer" 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.
(6)"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.
(7)"Farm" means any tract of land over ten acres in areas used for or devoted to the
commercial production of farm products.
(8)"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.
(9)"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, of up to 5% of the purchase price, to an
established La. farmer who sells agricultural assets to a qualified beginning farmer or
to an established La. commercial fisherman who sells fishing assets to a qualified
beginning fisherman. Limits the credit to $10,000 and only one beginning farmer or
fisherman during their lifetime. Provides that the credit be earned in the tax year in
which the qualified farmer or fisherman first uses the assets in their farming or fishing
business. Requires submission of a joint application to the Department of Revenue by
the established La. farmer or commercial fisherman and the qualified beginning
farmer or fisherman.
Proposed law provides that an income tax credit of up to 10% of the annual lease
price or value of the share agreement be available to the established La. farmer who
enters into a lease or share agreement for the use of agricultural assets with a qualified
beginning farmer and an established La. commercial fisherman who enters into a
lease or share agreement for the use of fishing assets with a qualified beginning
fisherman. Limits the credit to $1,000 per tax year for a maximum of five tax years.
Provides that only one tax credit available under proposed law is available to a
taxpayer.
Proposed law limits the amount of the income tax credits issued by the Department of
Revenue not to exceed $400,000 annually and that it be claimed on a first-come basis. SB NO. 211
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Further provides the tax credit is nonrefundable and any credit in excess of tax liability for
the tax year the credit is earned may carry forward the credit for up to five years.
Proposed law requires the Department of Revenue, in consultation with the Department of
Agriculture and Forestry and with the Department of Wildlife and Fisheries, to promulgate
rules and regulations to implement the income tax credit program.
Proposed law provides the Department of Revenue, Department of Agriculture and Forestry,
and the Department of Wildlife and Fisheries to enter into agreements, to share necessary
information among the agencies, while maintaining confidentiality, to provide for the
administration of the program.
Proposed law provides for reporting violations of the tax credit program and recapture of
credits awarded.
Proposed law requires the Department of Wildlife and Fisheries (LDWF) to certify to the
Department of Revenue that the qualified beginning fisherman and the established Louisiana
commercial fisherman have a qualified vessel and commercial licenses and landings
sufficient to qualify for the tax credit. Requires an independent appraiser 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 qualified beginning fisherman to provide documentation to the
Department of Revenue of his trip ticket submissions obtained from the Department of
Wildlife and Fisheries and the vessels used to operate his business and demonstrate evidence
of participation in the operation and management of his business.
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 and to recapture those tax credits.
Proposed law provides for the termination of the Beginning Farmer and Fisherman Income
Tax Credit Program on December 31, 2018.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:6039)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill
1. Changes "Owner of fishing assets" to "Established Louisiana commercial
fisherman" and "Owner of agricultural assets" to "Established Louisiana
farmer" and adds requirements to definition.
2. Adds "Fishing assets" definition and requirements.
3. Adds eligibility requirements.
4. Adds a $10,000 credit limit to established Louisiana farmers or commercial SB NO. 211
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fishermen and to qualified beginning farmers or fishermen for purchases of
fishing or agricultural assets.
5. Adds a $1,000 credit limit per tax year up to 5 tax years, and a lifetime cap
of $5,000 to established Louisiana farmers or commercial fishermen and to
qualified beginning farmers or fishermen for leases and share agreements of
fishing or agricultural assets.
6. Adds a lifetime cap of one tax credit per established Louisiana farmer or
commercial fisherman and per qualified beginning farmer or fisherman for
purchases of eligible fishing or farming assets.
7. Changes the program cap from "$2,000,000 annually" to "$400,000
annually".
8. Requires a joint application of both spouses from the Louisiana farmer or
commercial fisherman and from the qualified beginning farmer or fisherman
to the Department of Revenue.
9. Deletes the January 1 deadline for the Department of Revenue to issue tax
credits.
10.Requires the Department of Revenue to consult with the Department of
Agriculture and Forestry and the Department of Wildlife and Fisheries to
promulgate rules and regulations to implement the program.
11.Requires the Department of Revenue, Department of Agriculture and
Forestry, and the Department of Wildlife and Fisheries to enter into
agreements, to share necessary information among the agencies, while
maintaining confidentiality, to provide for the administration of the program.
12.Provides for the Department of Revenue to recapture any credit in which
there is a violation and deletes other requirements to Department of
Agriculture and Forestry and the Department of Wildlife and Fisheries.
13. Adds certification requirements from the Department of Wildlife and
Fisheries for established Louisiana commercial fishermen and qualified
beginning fishermen.
14. Adds qualifications for eligibility of qualified beginning fishermen and
established Louisiana commercial fishermen.
15.Removes the Department of Wildlife and Fisheries from determining fair
market value of sales of fishing assets and provides for determination by an
independent appraiser.