FARM Act of 2025
- Bill Number
- H.R. 1754
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-02-27: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-05-07T18:20:01Z
AI-Generated Summary
Purpose of the Legislation
The FARM Act of 2025 aims to protect agricultural land by restricting federal tax credits for renewable energy production, specifically solar and wind facilities operated by public utilities on farmland. This encourages the continued use of such land for farming rather than energy projects.
Key Provisions
- Denial of Solar Energy Credit: Amends Section 48 of the Internal Revenue Code (IRC) to exclude tax credits for solar energy equipment placed in service by a public utility on agricultural land.
- Agricultural land is defined as "eligible land" under the Food Security Act of 1985, which generally includes land used for farming, ranching, or forestry.
- Public utility refers to entities defined in IRC Section 136(c)(2), typically large regulated energy providers.
- Denial of Wind and Solar Production Credit: Amends Section 45 of the IRC to deny tax credits for electricity generated by solar or wind facilities placed in service after the bill's enactment if operated by a public utility on agricultural land.
- Effective Date: Applies to property or facilities placed in service after the date the bill becomes law.
Significant Changes to Existing Law
- Previously, under IRC Sections 45 and 48, public utilities could claim tax credits (e.g., investment tax credits for solar equipment or production tax credits for wind/solar electricity) without restrictions based on land use.
- This bill introduces a new exclusion specifically targeting agricultural land, closing a loophole that allowed renewable energy incentives on farmland. It adds a subsection to Section 48 and revises Section 45(e)(6) to enforce this denial.
Potential Impacts
- On Government Agencies: The IRS would need to update tax credit administration and verification processes to check land use and utility status, potentially increasing administrative workload.
- On Citizens: Farmers and rural landowners may benefit from preserved access to land for agriculture, reducing competition from energy projects. However, it could limit local job opportunities from renewable energy developments and slow the transition to clean energy, affecting broader environmental goals.
- On International Relations: Minimal direct impact, though it may indirectly influence U.S. commitments to global renewable energy targets (e.g., under the Paris Agreement) by constraining domestic solar and wind expansion on certain lands.
Main Stakeholders Affected
- Farmers and Agricultural Landowners: Primary beneficiaries, as the bill prioritizes farming over energy use on their land.
- Public Utilities and Renewable Energy Developers: Face reduced financial incentives, potentially increasing project costs and deterring investments in solar and wind on farmland.
- Taxpayers: Indirectly affected through forgone tax credits, which could lead to higher overall tax revenues but slower clean energy adoption.
- Environmental and Energy Advocates: May oppose the bill for hindering renewable energy growth.
Notable Legal, Constitutional, or Political Implications
- Legal: The changes are narrowly tailored to tax policy and do not alter broader environmental regulations, but could face challenges if seen as discriminatory against utilities. It relies on existing definitions from other laws, ensuring consistency without creating new ambiguities.
- Constitutional: No apparent issues; tax incentives are a congressional power under Article I, and the bill does not infringe on property rights or equal protection.
- Political: Highlights tensions between agricultural interests (e.g., preserving farmland) and clean energy goals, potentially fueling debates in farm states versus energy-focused regions. Introduced by Republican representatives, it aligns with priorities to support rural economies over expansive green initiatives.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Tiffany, Thomas P. [R-WI-7]
Cosponsors (6)
Rep. Davidson, Warren [R-OH-8], Rep. Cline, Ben [R-VA-6], Rep. Williams, Roger [R-TX-25], Rep. Harris, Andy [R-MD-1], Rep. Wied, Tony [R-WI-8], Rep. Van Orden, Derrick [R-WI-3]
Recent Actions
- 2025-02-27: Referred to the House Committee on Ways and Means.
- 2025-02-27: Introduced in House
- 2025-02-27: Introduced in House
Bill Versions
- Future Agriculture Retention and Management Act of 2025 — issued 2025-02-27 — PDF (3 pages)