HB 242 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in tax credits relating to beginning farmers, further providing for scope of article, for definitions, for beginning farmer management tax credit and for approval of tax credit.

PRIOR PRINTER'S NO.NOS.

161161, 1485 PRINTER'S NO.

14851720 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

242 2025 INTRODUCED BY FRIEL, KHAN, McNEILL, GIRAL, BARGER, HOWARD, HADDOCK, PASHINSKI, SANCHEZ, HILL-EVANS, PIELLI, FREEMAN, ZIMMERMANZIMMERMAN, GREEN AND GREEN,WEBSTER, JANUARY 17, 2025 AS REPORTEDAMENDED FROM COMMITTEE ON FINANCE,SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES, ASMAY AMENDED,14, APRIL 24, 2025 AN ACT Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An act relating to tax reform and State taxation by codifying taxes thereon;

An owner of agricultural assets [is] and a beginning farmer are eligible for allocation ASas DETERMINEDdetermined BYby THEthe <--department DEPARTMENT of a tax credit equal to[:

or (2) ten percent of the gross rental income in each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year.] 5% of the lesser of the sale price or the fair market value of the agricultural 20250HB0242PN148520250HB0242PN1720 - 2 - asset, up to a maximum of $50,000 per farm or agricultural asset.

[(ii) Verification that the farming conducted by the applicant will be a significant source of income for the applicant.] (iii) Verification that the applicant will, if certified as a beginning farmer by the department, notify the department if the farmer no longer meets the 20250HB0242PN148520250HB0242PN1720 - 3 - certification and eligibility requirements within the three-year certification period, in which case eligibility for tax credits ends.

The 20250HB0242PN148520250HB0242PN1720 - 4 - repayment is additional income tax for the taxable year in which the department makes its decision.] (Reserved).

THE TAX CREDIT MAY NOT BE <-- REFUNDED.

(e) Use, carryover, carryback, refund and assignment of <-- credit.-- (1) The owner of an agricultural asset or beginning farmer must first apply the tax credit against the tax liability for the year in which the credit is first approved.

(2) If the owner of an agricultural asset or beginning <-- farmer cannot use the entire amount of the tax credit after the application of paragraph (1), the owner of an 20250HB0242PN1720 - 5 - agricultural asset or beginning farmer, upon application to 20250HB0242PN1485 - 5 - and approval by the Department of Revenue, may request a refund.

(3) (2) An owner of an agricultural asset or beginning <-- farmer is not entitled to carry back, sell or assign all or any portion of an unused tax credit granted to the owner of an agricultural asset or beginning farmer under this article.

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