[§235-110.93]  Important agricultural land
qualified agricultural cost tax credit.  (a)  There shall be allowed to
each taxpayer an important agricultural land qualified agricultural cost tax
credit that may be claimed in taxable years beginning after the taxable year
during which the tax credit under section 235-110.46 is repealed, exhausted, or
expired.  The credit shall be deductible from the taxpayer's net income tax
liability, if any, imposed by this chapter for the taxable year in which the
credit is properly claimed.  The tax credit amount shall be determined as
follows:



(1)  In the first year in which the credit is claimed,
twenty-five per cent of the lesser of the following:



(A)  The qualified agricultural costs incurred
by the taxpayer after July 1, 2008; or



(B)  $625,000;



(2)  In the second year in which the credit is
claimed, fifteen per cent of the lesser of the following:



(A)  The qualified agricultural costs incurred
by the taxpayer after July 1, 2008; or



(B)  $250,000; and



(3)  In the third year in which the credit is claimed,
ten per cent of the lesser of the following:



(A)  The qualified agricultural costs incurred
by the taxpayer after July 1, 2008; or



(B)  $125,000.



The taxpayer may incur qualified agricultural costs
during a taxable year in anticipation of claiming the credit in future taxable
years during which the credit is available.  The taxpayer may claim the credit
in any taxable year after the taxable year during which the taxpayer incurred
the qualified agricultural costs upon which the credit is claimed.  The
taxpayer also may claim the credit in consecutive or inconsecutive taxable
years until exhausted.



(b)  No other credit may be claimed under this
chapter for qualified agricultural costs for which a credit is claimed under
this section for the taxable year.



(c)  The amount of the qualified agricultural
costs eligible to be claimed under this section shall be reduced by the amount
of funds received by the taxpayer during the taxable year from the irrigation
repair and maintenance special fund under section 167-24.



(d)  The cost upon which the tax credit is
computed shall be determined at the entity level.  In the case of a
partnership, S corporation, estate, trust, or other pass through entity,
distribution and share of the credit shall be determined pursuant to section
235-110.7(a).



If a deduction is taken under section 179 (with
respect to election to expense depreciable business assets) of the Internal
Revenue Code, no tax credit shall be allowed for that portion of the qualified
agricultural cost for which a deduction was taken.



The basis of eligible property for depreciation
or accelerated cost recovery system purposes for state income taxes shall be
reduced by the amount of credit allowable and claimed.  No deduction shall be
allowed for that portion of otherwise deductible qualified agricultural costs
on which a credit is claimed under this section.



(e)  If the credit under this section exceeds
the taxpayer's net income tax liability for the taxable year, the excess of the
credit over liability shall be refunded to the taxpayer; provided that no
refunds or payments on account of the credits allowed by this section shall be
made for amounts less than $1.



All claims for a tax credit under this section,
including amended claims, shall be filed on or before the end of the twelfth
month following the close of the taxable year for which the credit is claimed. 
Failure to comply with the foregoing provision shall constitute a waiver of the
right to claim the credit.



(f)  The director of taxation:



(1)  Shall prepare any forms that may be necessary to
claim a credit under this section;



(2)  May require the taxpayer to furnish information
to ascertain the validity of the claim for credit made under this section; and



(3)  May adopt rules pursuant to chapter 91 to
effectuate this section.



(g)  The department of agriculture shall:



(1)  Maintain records of the total amount of qualified
agricultural costs for each taxpayer claiming a credit;



(2)  Verify the amount of the qualified agricultural
costs claimed;



(3)  Total all qualified agricultural costs claimed;
and



(4)  Certify the total amount of the tax credit for
each taxable year.



Upon each determination, the department of
agriculture shall issue a certificate to the taxpayer verifying the qualifying
agricultural costs and the credit amount certified for each taxable year.  For
a taxable year, the department of agriculture may certify a credit for a
taxpayer who could have claimed the credit in a previous taxable year, but chose
not to because the maximum annual credit amount under subsection (h) was
reached in that taxable year.



The taxpayer shall file the certificate with
the taxpayer's tax return with the department of taxation.  Notwithstanding the
department of agriculture's certification authority under this section, the
director of taxation may audit and adjust certification to conform to the
facts.



Notwithstanding any other law to the contrary,
the information required by this subsection shall be available for public inspection
and dissemination under chapter 92F.



(h)  If in any taxable year the annual amount
of certified credits reaches $7,500,000 in the aggregate, the department of
agriculture shall immediately discontinue certifying credits and notify the
department of taxation.  In no instance shall the department of agriculture
certify a total amount of credits exceeding $7,500,000 per taxable year.  To
comply with this restriction, the department of agriculture shall certify
credits on a first come, first served basis.



The department of taxation shall not allow the
aggregate amount of credits claimed to exceed that amount per taxable year.



(i)  The department of agriculture, in
consultation with the department of taxation, shall annually determine the
information necessary to provide a quantitative and qualitative assessment of
the outcomes of the tax credit.



Every taxpayer, no later than the last day of
the taxable year following the close of the taxpayer's taxable year in which
the credit is claimed, shall submit a certified written statement to the
department of agriculture.  Failure to provide the information shall result in
ineligibility and a recapture of any credit already claimed for that taxable
year.  The amount of the recaptured tax credit shall be added to the taxpayer's
tax liability for the taxable year in which the recapture occurs.



Notwithstanding any law to the contrary, a
statement submitted under this subsection shall be a public document.



(j)  The department of agriculture, in
consultation with the department of taxation, shall annually submit a report
evaluating the effectiveness of the tax credit.  The report shall include but
not be limited to findings and recommendations to improve the effectiveness of
the tax credit to further encourage the development of agricultural businesses.



(k)  As used in this section:



"Agricultural business" means any
person with a commercial agricultural, silvicultural, or aquacultural facility
or operation, including:



(1)  The care and production of livestock and livestock
products, poultry and poultry products, apiary products, and plant and animal
production for nonfood uses;



(2)  The planting, cultivating, harvesting, and
processing of crops; and



(3)  The farming or ranching of any plant or animal
species in a controlled salt, brackish, or freshwater environment;



provided that the principal place of the
agricultural business is maintained in the State and more than fifty per cent
of the land the agricultural business owns or leases, excluding land classified
as conservation land, is important agricultural land.



"Important agricultural lands" means
lands identified and designated as important agricultural lands pursuant to
part III of chapter 205.



"Net income tax liability" means
income tax liability reduced by all other credits allowed under this chapter.



"Qualified agricultural costs" means
expenditures for:



(1)  The plans, design, engineering, construction,
renovation, repair, maintenance, and equipment for:



(A)  Roads or utilities, primarily for
agricultural purposes, where the majority of the lands serviced by the roads or
utilities, excluding lands classified as conservation lands, are important
agricultural lands;



(B)  Agricultural processing facilities in the
State, primarily for agricultural purposes, where the majority of the crops or
livestock processed, harvested, treated, washed, handled, or packaged are from
agricultural businesses;



(C)  Water wells, reservoirs, dams, water
storage facilities, water pipelines, ditches, or irrigation systems in the State,
primarily for agricultural purposes, providing water for lands, the majority of
which, excluding lands classified as conservation lands, are important
agricultural lands; and



(D)  Agricultural housing in the State,
exclusively for agricultural purposes; provided that:



(i)  The housing units are occupied solely by
farmers or employees for agricultural businesses and their immediate family
members;



(ii)  The housing units are owned by the
agricultural business;



(iii)  The housing units are in the general
vicinity, as determined by the department of agriculture, of agricultural lands
owned or leased by the agricultural business; and



(iv)  The housing units conform to any other
conditions that may be required by the department of agriculture;



(2)  Feasibility studies, regulatory processing, and
legal and accounting services related to the items under paragraph (1);



(3)  Equipment, primarily for agricultural purposes,
used to cultivate, grow, harvest, or process agricultural products by an
agricultural business; and



(4)  Regulatory processing, studies, and legal and
other consultant services related to obtaining or retaining sufficient water
for agricultural activities and retaining the right to farm on lands identified
as important agricultural lands.



(l)  The department of agriculture shall cease
certifying credits pursuant to this section after the fourth taxable year
following the taxable year during which the credits are first claimed; provided
that a taxpayer with accumulated, but unclaimed, certified credits may continue
claiming the credits in subsequent taxable years until exhausted.



[(m)]  The department of taxation, in
consultation with the department of agriculture, shall submit to the
legislature an annual report, no later than twenty days prior to the convening
of each regular session, beginning with the regular session of 2010, regarding
the quantitative and qualitative assessment of the impact of the important
agricultural land qualified agricultural cost tax credit. [L 2008, c 233, §§4,
5]