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House Bill 3 (Pollitt, R-Sedalia) modifies the provisions relating to agricultural economic opportunities primarily in rural Missouri. After being approved by the Senate Appropriations Committee on Oct. 3, and by the Senate Governmental Accountability and Fiscal Oversight Committee on Oct. 4, the full Senate took up the bill Oct. 4 and third read and passed it by a vote of 26-3. The bill now goes to Governor Mike Parson (R) for his consideration. The legislation becomes effective 90 days after the Governor signs the bill.
HB 3 provides for eight agricultural tax credit programs to be extended into the year 2028. The bill also eliminates sales taxes on the purchase of certain farm machinery and equipment, including utility vehicles used for agricultural purposes. HB 3 also amends the Family Farms Act to allow a farmer with less than $500,000 in gross sales per year (currently $250,000) to qualify for loans for livestock.
The tax credits that are extended include Wood Energy Tax Credit, Meat Processing Facility Investment Tax Credit, Ethanol Retailers’ Incentive, Biodiesel Incentive Programs, Urban Farms, Rolling Stock Tax Credit, Agricultural Tax Credit Extensions, and Specialty Agricultural Crops.
According to estimates, the tax credits in the legislation will cost the state about $40 million annually.
HB 3 also includes issues involving land surveying, commercial log trucking, soybean producers’ assessments, and anhydrous ammonia.
The wood energy tax credit is extended for Missouri wood energy producers from June 30, 2020 to June 30, 2028.
The Meat Processing Facility Investment Tax Credit for the expansion or modernization of meat processing facilities expired on Dec. 31, 2021. The bill extends the tax credit until Dec. 31, 2028. The bill also limits the tax credit to taxpayers who own a meat processing facility in Missouri and employ fewer than 500 persons at all processing facilities nationwide.
The bill authorizes a tax credit for ethanol retailers selling higher ethanol blend at the dealer’s service station or for distributors that sell an ethanol blend directly to the final user in the state. The credit will be equal to five cents per gallon of higher ethanol blend sold and dispensed during the tax year. The total amount of tax credits authorized in a given fiscal year will not exceed $5 million, and the program sunsets on Dec. 31, 2028.
A biodiesel incentive program is included in the bill that begins Jan. 1, 2023 and sunsets on Dec. 31, 2028. The bill authorizes a tax credit for retail dealers selling a biodiesel blend at the retail dealer’s service station in the state or for distributors that sell a biodiesel blend directly to the final user in the state. The credit will be equal to two cents per gallon for a biodiesel blend between five percent and 10 percent, and five cents per gallon for a 10 percent but less than 20 percent blend sold and dispensed. The amount of the biodiesel tax credits will not exceed $16 million in any given year.
The bill allows a taxpayer to claim a tax credit against the taxpayer’s state tax liability in an amount equal to 50 percent of the taxpayer’s eligible expenses for establishing an urban farm or improving an urban farm in an urban area that produces agricultural products solely for distribution to the public. The amount of the tax credit shall not be more than $5,000 for each urban farm. Total amount of tax credits authorized shall not exceed $200,000. The program sunsets Dec. 31, 2028.
The bill reauthorizes a tax credit for eligible expenses incurred in the manufacture, maintenance, or improvement of a freight line company’s qualified rolling stock which expired on Aug. 28, 2020. The tax credit would sunset on Aug. 28, 2028.
HB 3 maintains the assessment for soybeans grown in the state.
The bill modifies the definition of “local log truck” and “local log truck tractor” to specify weight distribution and a total maximum weight for each truck, and updates weight and distance limits. Also, the bill sets fines for load-limit violations involving such vehicles.
The Agricultural Product Utilization Contributor Tax Credit and the New Generation Cooperative Incentive Tax Credit which expired on Dec. 31, 2021, are extended to Dec. 31, 2028.
The bill creates the “Specialty Agricultural Crops Act,” a loan program to be established by the Missouri Agricultural and Small Business Development Authority for the purchase of certain specialty crop resources. The maximum loan amount a producer may be eligible to receive is $35,000. The bill waives the interest payments for any approved farmer for the first year, provides financing up to 90 percent of the anticipated cost of the specialty crop purchase, and allows the authority to charge a one-time loan review fee of one percent to be charged by the lender. The bill provides a tax credit to any lender participating in the loan program equal to 100 percent of the interest waived by the lender for the first year of the loan. The amount of tax credits issued to all eligible lenders in a fiscal year may not exceed $300,000. The program sunsets Dec. 31, 2028.
The bill repeals provisions of law that give the Department of Agriculture oversight over standards relating to anhydrous ammonia and authorizes the Air Conservation Commission to adopt, promulgate, amend, and repeal rules and regulations for covered processes at agricultural stationary sources that use, store, or sell anhydrous ammonia, and regulations necessary to implement and enforce the risk management plans under the federal Clean Air Act.
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