BILL NUMBER:S2909

TITLE OF BILL:  An act to amend the tax law, in relation to establishing
an agricultural crop loss personal income tax credit

PURPOSE:  The bill establishes a refundable personal income tax credit
to farmers for the loss of certain crops as a result of frost for the
2012 taxable year.

SUMMARY OF SPECIFIC PROVISIONS:

Section 1. Amends Section 606 of the Tax Law by adding a new subsection
(uu) which establishes an agricultural crop loss refundable personal
income tax credit to farmers for the loss or damage of certain agricul-
tural crops as a result of frost injury in 2012. To be eligible for the
credit, a taxpayer must derive at least two-thirds of reported federal
gross income from farming for the taxable year. The amount of the credit
is equal to thirty-five percent of the average value of the unit of
production for New York State as reported by the USDA National Agricul-
tural Statistics Service for 2011, multiplied by a taxpayer's acreage in
production, including newly planted acreage, for the 2012 growing
season.

Subsection (2) specifies that if the amount of the credit exceeds the
taxpayer's tax for such year, the excess shall be treated as an overpay-
ment of tax to be credited or refunded without having accrued interest.
              

Subsection (3) defines which damaged crops a taxpayer may receive a tax
credit for and includes: fruits, including apples, peaches, grapes,
cherries and berries; vegetables, including tomatoes, snap beans,
cabbage, carrots, beets and onions; and potatoes and dry beans.

Section 2. Specifies that the effective date shall be immediately.

JUSTIFICATION:  At the beginning of the 2012 growing season, New York
State's farmers experienced widespread damage and loss to their crops as
a result of an extremely rare severe frost event. Upon initial notifica-
tion, elected officials and farm organizations immediately requested
that the Governor contact the USDA Secretary of Agriculture and ask that
a disaster declaration be issued for counties where farmers experienced
damage to their crops. In doing so, farmers in counties that receive
such a designation would be eligible for low-cost loans if their losses
exceed the established threshold, as evaluated by the USDA's Farm
Service Agency.

However, preliminary damage assessment estimates indicate that New York
has experienced one of the worst statewide, multi-crop losses ever
witnessed in the State. Cornell's Lake Erie Regional Research.Laboratory
has estimated crop losses for grapes at 40%-50%; cherries at 100%,
peaches at 90%, and apples at 50%. While the level of crop loss varies
based on the region of the State, elevations and the crop's stage of

growth, there is no doubt that there is a high probability that many
farmers will face severe economic losses.

As a result, this legislation is vitally necessary to allow the State's
farm operations and their families an opportunity to be economically
viable as they plan for next year's growing season.

LEGISLATIVE HISTORY:  S7551 of 2012 - referred to investigations and
government operations

FISCAL IMPLICATIONS: Undetermined at this time.

EFFECTIVE DATE: Effective immediately.