On Friday, March 15, the Governor’s Dairy Task Force 2.0 met to debate over 50 recommendations developed from nine subcommittees. The group first met in August 2018 and worked for the next seven months to develop these ideas. A subcommittee specifically focused on credit access debated WBA’s proposal to exempt from income tax any revenue generated from agricultural loans under $10 million. The proposal was ultimately recommend by the full task force on a 23-3 vote. Ultimately, 49 proposals were recommended to Governor Tony Evers (D) for his consideration.
In 1985, the UW System and DATCP Secretary appointed a Wisconsin Dairy Task Force comprised of 31 individuals including dairy farmers, milk processors, and allied organizations. The Task Force met numerous times over the course of 14 months, and at its conclusion, unanimously approved an 82-page report that included findings and 75 recommendations for the industry. Many of the recommendations have been implemented over time to retain Wisconsin’s recognition as a dairy leader. In 2018, then-Governor Scott Walker (R) created the Wisconsin Dairy Task Force 2.0 modeled off of this previous effort.
WBA will be working with the legislature and governor’s office over the next several months to urge inclusion of the Access to Better Credit Act in the 2019-2021 State Budget.
The Access to Better Credit (ABC) Act will incentivize greater credit access to farmers. Patterned after a federal bill—H.R. 6260, Enhancing Credit Opportunities in Rural America Act of 2016 (Rep. Lynn Jenkins (R-KS-2)—this provision will provide an opportunity for increased access to cheaper credit for farmers in an increasing interest rate environment. It also provides parity in the tax code in relation to the treatment of tax on agricultural loans – it treats credit unions and banks in a similar fashion for agricultural loans under $10 million. Specifically, the provision creates an income and franchise tax deduction for the income of a lender derived from a commercial loan of less than $10,000,000 to a person residing or located in this state and made primarily for an agricultural purpose.
- Loans MUST be made to Wisconsin businesses for the purpose of a project in Wisconsin. No financial institution will receive any benefit from this provision unless it makes a loan as defined by the statute.
- Lowering the cost of the loan means cheaper credit and/or more credit available for farmers.
- The ABC Act defines eligible loans as certain loans of up $10 million to businesses with an agricultural purpose.
- To incentivize credit to farmers, the bill creates an income and franchise tax deduction for the income of a lender for these agricultural loans.
- Patterned after a federal bill, this budget provision will provide increased access to cheaper credit for farmers in an increasing interest rate environment.
Special thanks to three WBA members who served on the task force:
- Michael DeLong, First Bank of Baldwin, Baldwin
- Bradley Guse, BMO Harris Bank, Arpin
- Rene Johnson, Union Bank and Trust Co., Evansville
To view all of the work of the group, head to Dairy Task Force 2.0