As the 2016 session of the Iowa Legislature came to an end on April 29, Iowa Corn Growers Association president Bob Hemesath, a farmer from Decorah, pointed out that notable progress was made on many legislative issues positively impacting agriculture.
“We succeeded in influencing the passage of many of ICGA’s state legislative priorities for the year,” says Hemesath. That includes coupling of Section 179 small business expensing, a much needed income tax break. Other new legislation that was passed which will be helpful for Iowa agriculture are a first in the nation biorenewable production tax credit, an extension of funding for the renewable fuels infrastructure program and continuation of income tax credits for retailers that offer higher blends of ethanol and biodiesel at the fuel pump.
1. Lawmakers were unable to agree on water quality funding
State lawmakers this year were unable to agree on proposed legislation to increase funding for water quality practices. So, water quality will have to wait until the 2017 session to see if progress can be made there, notes Hemesath.
Iowa Gov. Terry Branstad reflected on the just-completed legislative session, issuing the following statement:
“The future of our state is bright. This year, we worked with the Iowa Legislature to build consensus and come together for Iowans on taxpayers’ priorities. Over the next 30 days, Lt. Governor Kim Reynolds and I will carefully review the bills passed during the final days of the legislative session to ensure the budget balances, continues to fit within our 5-year budgeting projections, and honors the commitments we’ve made in the past to the Teacher Leadership system and property tax relief. We will adhere to the conservative budgeting principles that Iowans elected us to implement, and will continue to reject bad budgeting practices that led to reckless across the board cuts.”
2. Water quality efforts need long-term funding, commitment
Branstad added: “Just before my Condition of the State address in January, Lt. Gov. Reynolds and I stood up with U.S. Secretary of Agriculture Tom Vilsack and education and agriculture leaders from around the state and offered a bold plan to dedicate long-term funding for both water quality and education infrastructure in our state without raising taxes. From the beginning, we offered this plan as a framework and welcomed ideas that others may have in addressing water quality.”
“The Iowa House of Representatives responded by approving bipartisan legislation for funding, providing a distribution system similar to the one we recommended, while allocating more than $732 million over the next 13 years to water quality projects. We worked closely with legislators on this proposal and supported the progress and approach that was taken. However, we’re very disappointed that Senate Democrat leadership decided to bury the House bill with no debate and offering no alternative. Water quality is a critical issue and we will continue to work to build support for a long-term funding solution to address water quality efforts in Iowa.”
3. Missed an opportunity to provide long-term source of funding
Iowa Secretary of Agriculture Bill Northey thanked legislators for providing $9.6 million to support the Iowa Water Quality Initiative, but he highlighted the missed opportunity to identify a long-term funding source to support voluntary, science based water quality efforts in the state. He also expressed disappointment the Iowa Legislature didn’t provide additional funding to the Iowa Department of Agriculture & Land Stewardship to support foreign animal disease response planning following the outbreak of avian influenza last year.
“Governor Branstad and the Iowa House both put forward bipartisan plans to provide significant, long-term funding to support water quality efforts on our farms and in our cities. Unfortunately an agreement could not be reached with the Iowa Senate. This is a lost opportunity to demonstrate an ongoing commitment to the water quality efforts underway in the state and I hope legislators will move quickly next year on a water quality funding plan,” Northey said.
The Iowa Legislature approved the annual appropriation of $9.6 million to support the Iowa Water Quality Initiative in the next fiscal year, which starts July 1. That legislation now goes to Governor Branstad and must be signed before going into effect.
4. ICGA accomplishes key 2016 state legislative priorities
“While we are disappointed that the Iowa Legislature was unable to come together to agree on and pass a substantial plan for long-term increased water quality funding,” says Hemesath, “the recently concluded 2016 legislative session proved to be a very good state legislative year for ICGA members who guide and establish our organization’s policies and priorities.” Those legislative successes include:
Section 179—Passage of a one year, full coupling of the Iowa Tax Code Section 179 to the permanent federal provision for the 2015 tax year, allowing farmers and small businesses to expense and depreciate capital expenses on their tax returns. Iowa's farm families rely on these tax provisions to manage their cash flow and reinvest in their businesses. In a year when taxable income will be lower, reliable tax deductions are extremely important. With volatile commodity prices and a general downturn in the agricultural economy, this measure helps keep Iowa's rural economy strong and allows farmers to manage cash flow when they experience a tighter ag economy.
Biorenewable Tax Credit—This first-in-the-nation biorenewable incentive provides tax credits for the production of bio-based products that are non-food and non-fuel. As the leader in corn and biofuels production, Iowa ranks at the top for biomass and feedstock availability for biorenewable production. The law makes available approximately $92.5 million in credits over 10 years to encourage companies to come to Iowa for the research, development and commercialization of new biochemical products. Governor Branstad signed this into law in April.
Ethanol Infrastructure—The Renewable Fuels Infrastructure Program received one full year of funding at $3 million. The program provides cost share dollars for retailers who choose to install flex fuel pumps and other E15, E85, and/or biodiesel compatible above-ground infrastructure.
Biofuel Retailer Incentives—This incentive ensures Iowans have a choice at the pump to fuel up with homegrown, renewable ethanol and biodiesel. It extends the per gallon income tax benefits for retail stations who choose to offer higher blends of ethanol (E15 and E85) and/or biodiesel (B5 and B11) to their customers at the pump through 2024.
“There are two main factors that contribute to the success of ICGA’s state legislative policy efforts,” says Hemesath. “First, ICGA members are highly engaged in fostering relationships with their elected officials in bringing key issues to the table. Second, our organization is respected for its bi-partisan approach to achieving our policy objectives. The success of our policy process hinges on being able to bring both sides together for the best interest of Iowa’s farmers.” For more information, visit www.iowacorn.org.