Overview
Title
To amend the Internal Revenue Code of 1986 to establish a credit for investments in innovative agricultural technology.
ELI5 AI
H.R. 9263 wants to give people money back if they invest in cool new farming tools that help grow plants better. It's like saying, "Good job, here's a reward!" for using smart farming technology.
Summary AI
H.R. 9263, titled the “Supporting Innovation in Agriculture Act of 2024,” aims to amend the Internal Revenue Code of 1986 to introduce a tax credit for investments in innovative agricultural technology. This tax credit is 30% of the qualified investment for projects using advanced agricultural technologies, like precision agriculture and controlled environment agriculture, aimed at enhancing the production of specialty crops. The bill also outlines what qualifies as innovative agricultural technology and specifies that the tax credit applies to projects starting after January 1, 2023, and placed in service before December 31, 2035.
Published
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AnalysisAI
General Summary of the Bill
The proposed bill, titled the "Supporting Innovation in Agriculture Act of 2024," aims to amend the Internal Revenue Code of 1986 to provide a 30% tax credit for investments in innovative agricultural technology projects. These projects are defined to include those utilizing precision agriculture and controlled environment agriculture to enhance the production, storage, processing, and packaging of specialty crops. The overarching goal is to incentivize the adoption of advanced agricultural technologies by reducing the financial burden on businesses through tax credits.
Summary of Significant Issues
Several substantial issues accompany this bill:
Broad Definitions: The term "qualified property" is broadly defined, leading to potential ambiguities. This could make it easier for almost any agricultural technology project to qualify for the credit, hence widening the scope beyond what might have been intended.
Potential for Disproportionate Benefits: The broad definition of "innovative agricultural technology project" may disproportionately benefit larger agricultural businesses that can invest heavily in technology, potentially leaving smaller farms at a disadvantage.
Overlap with Existing Programs: There is a concern about potential overlaps or double-counting with existing grant programs designed to support similar objectives. This could result in inefficient use of taxpayer dollars, as businesses might receive multiple financial benefits for the same investment.
Complexities in the Tax System: The provision for elective payment of credit is another point of concern. This could lead to complexities and potential exploitation within the tax system, especially if businesses take advantage of this option in ways that were not intended by the legislation.
Technological Innovation Timeline: The bill limits projects to those placed in service before December 31, 2035, which may restrict the development and implementation of new technologies after this date, potentially stifling future innovation.
Impact on the Public
The bill seeks to drive technological advancement in agriculture by providing financial incentives, which could lead to increased efficiency in crop production, enhanced food security, and potentially lower food prices for consumers over time. However, the complex and technical nature of the bill's language might make it difficult for the public to understand its implications, possibly leading to issues related to transparency and accessibility.
Impact on Specific Stakeholders
Large Agricultural Businesses: These entities might be the primary beneficiaries of the bill, as they have the resources to invest in the advanced technologies necessary to qualify for the tax credits. This could enhance their competitive edge and profitability.
Small Farmers: These stakeholders might face challenges if they lack the capital to invest in the required technologies, leading to concerns regarding equity and fair competition within the industry.
Taxpayers and Public Administration: On the fiscal side, if the bill extends benefits too broadly or allows overlaps with existing programs, taxpayers might bear the brunt of inefficient resource allocation. Additionally, administering the program could become cumbersome due to the complexity and technical nature of qualifying conditions.
Technology Developers and Vendors: Companies that specialize in precision agriculture and controlled environment technologies could see increased demand for their products and services, thus benefiting from the heightened investment driven by tax incentives.
Overall, while the bill has the potential to modernize the agricultural sector substantially, careful consideration and precise definitions will be critical to ensuring that the benefits are equitably distributed and that financial resources are optimally utilized.
Issues
The definition of 'qualified property' in Section 48F(b)(2) is broad and could potentially include a wide range of items, leading to ambiguities and potential abuse. This could open the door to interpreting almost any agricultural technology as eligible, making the credit too easy to qualify for and leading to unintended financial consequences.
The term 'innovative agricultural technology project' in Section 48F(b)(3) might be interpreted broadly and may disproportionately benefit projects if not clearly defined, thus potentially allowing larger agricultural businesses to take more advantage of the credits than smaller operations, creating ethical concerns around fairness and competitive balance.
The 'controlled environment agriculture technology' definition in Section 48F(d)(2) is extensive, potentially making it difficult for oversight and ensuring that investments lead to anticipated outcomes. This could cause both financial risk in terms of resource allocation and legal challenges in enforcement.
There is a risk of overlap or double-counting in benefits with existing grant programs as outlined in Section 48F(c)(2), which may lead to inefficient allocation of taxpayer resources and potentially invite legal scrutiny over the bill's financial management.
The effective date provision lacks clarity on how incomplete projects are treated as of January 1, 2023, which could cause confusion or unequal treatment of taxpayers based on project timelines, resulting in legal challenges or financial discrepancies.
The language used in the bill, such as definitions in Section 48F(d), is very technical, making it difficult for the general public to understand the bill's implications, potentially raising political issues relating to transparency and accessibility.
The provision allowing the elective payment of credit under Section 6417 could lead to complexities in the tax system, as taxpayers might elect this option even when it was not intended, possibly resulting in financial mismanagement or tax exploitation.
The definition of 'innovative agricultural technology project' limits projects to those placed in service before December 31, 2035, in Section 48F(b)(3), which could be restrictive if technological progress continues beyond this date, hindering future innovation.
The requirement that the Secretary can determine what constitutes 'controlled environment agriculture technology' or 'precision agriculture technology' could lead to ambiguity and lack of clarity in application, depending on resource allocation and decision-making processes at the time, leading to political and legal challenges.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill is titled "Short title," and it specifies that the Act can be referred to as the “Supporting Innovation in Agriculture Act of 2024.”
2. Credit for investment in innovative agricultural technology Read Opens in new tab
Summary AI
The section introduces a 30% tax credit for investments in innovative agricultural technology projects, such as those using precision agriculture and controlled environment agriculture, with the goal of enhancing the production, storage, processing, and packaging of specialty crops. It defines eligible investments and properties, specifies conditions for the credit, and incorporates special rules to avoid double benefits from other grant programs, applying to projects starting after January 1, 2023.
48F. Innovative agricultural technology investment credit Read Opens in new tab
Summary AI
The section describes a tax credit for investments in innovative agricultural technology projects, where taxpayers can receive a credit equal to 30% of their investment in qualifying projects. These projects must use advanced technology for growing specialty crops, either through precision agriculture or controlled environments, and include tools like GPS systems, sensors, and automated equipment.