By Amanda Bilek, senior public policy director for the Minnesota Corn Growers Association
The last few updates have focused on our top legislative priority of increasing Minnesota’s biofuel standard from 10 to 15 percent for all gasoline sold in the state. While we have seen some positive movement, more work needs to be done working with stakeholders to address concerns and to work with lawmakers outside of the agriculture committees to understand why increasing the standard is important to local communities and the state’s corn growers.
While that work continues, this week we will take a look at other policy priorities for the Minnesota Corn Growers Association (MCGA):
Although full conformity on Section 179 remains the goal of many legislators and leaders, additional options for how to address one of the issues facing farmers—tax liabilities on traded in equipment—continues to emerge.
These proposals might not be as costly as full conformity on Section 179, but would address a very unfortunate situation many farmers find themselves in: facing new tax bills for traded in equipment. Two Minnesota farmers provided powerful testimony describing the real world impact on farmers due to this conflict between federal and state law.
HF 3882, authored by Rep. Paul Marquart (DFL-Dillworth), was heard in the House Taxes committee last week, which would provide full retroactive conformity to Section 179 for property acquired through a trade-in but carve out that property from the state five-year add back to the Section 179 deduction.
Another proposal heard during the same hearing, HF 3136, authored by Rep. Chris Swedzinski (R-Ghent) would allow a carryover allowance under Section 179 to be used to reduce taxable income. These two house proposals add to the list of options before lawmakers as they consider full conformity on Section 179 or any of the options presented so far in House Taxes committee if full conformity is not possible this session.
Financing and access to capital is an important issue for farmers. Many Minnesota farmers have been able to work with the Rural Finance Authority to utilize low-interest loan programs to secure financing for a variety of activities including helping young and beginning farmers purchase land, finance agriculture improvements, expand livestock production facilities or restructure farm debt to improve cash flow.
Funding for the Rural Finance Authority (RFA) is made available through user-financed bonds. Last week the Minnesota House of Representatives voted 127-2 to approve $50 million in bonds for the RFA, which had run out of money at the end of February. The Senate is expected to approve the measure this week and Governor Walz is anticipated to sign it, delivering certainty for farmers who rely on the RFA for farm financing.