Sponsors (22)
The bill makes modernization and sustainable technology adoption materially cheaper and more liquid for specialty-crop producers through a transferable 30% tax credit, while increasing federal costs and introducing tax/accounting complexities and potential conflicts with existing USDA grant support.
Specialty-crop farmers and small agricultural businesses receive a 30% investment tax credit for qualifying precision and controlled-environment agriculture, lowering the net cost of modernization and making upgrades more affordable.
Taxpayers (including small ag businesses and non‑pass‑through entities after 12/31/2023) can transfer the credit or elect to receive it as a direct payment, improving liquidity and allowing faster monetization or cash‑flow relief for modernization investments.
Specialty-crop producers and rural communities are incentivized to adopt sensors, automation, AI, and controlled-environment agriculture systems that can increase yields, reduce input use, and conserve water, supporting more efficient and sustainable production.
Taxpayers who claim the credit must reduce the depreciable basis of the property, which can increase taxable income in later years, complicate depreciation planning, and raise future tax liabilities for some recipients.
The 30% credit reduces federal tax revenue and increases the federal budget cost, which could contribute to higher deficits or require offsets/cuts elsewhere.
Recipients of certain USDA grants cannot 'double‑dip'—they may lose eligibility to claim the credit, need to adjust grant awards, or be required to repay/modify funding, reducing support available to some producers.
Based on analysis of 2 sections of legislative text.
Introduced February 27, 2025 by Mike Kelly · Last progress February 27, 2025
Creates a new 30% nonrefundable investment tax credit for qualifying investments in innovative agricultural technology projects that produce, store, process, or package specialty crops using precision agriculture or controlled-environment agriculture. The credit applies to the basis of eligible depreciable or amortizable property (including certain equipment and software) placed in service before December 31, 2035, with construction required to begin after January 1, 2025. The legislation also adds the credit to existing elective payment and transferability rules so taxpayers can monetize the credit under those regimes, applies standard tax rules to prevent double benefits, and makes conforming amendments to related tax code provisions.