Committee hears expansion of Beginning Farmer Tax Credit to include buyers, raise cap and add limited refundability

Representative Paul Friel introduced a bill to expand the Beginning Farmer Tax Credit so it benefits both sellers and buyers in farm transitions, raises the maximum credit amount and adds limited refundability after a three‑year hold period.

Friel said the bill makes existing program rules more flexible by allowing a beginning farmer who purchases or leases (with discussion about removing lease language) to use the credit, raising the maximum credit to better match land values and extending the redemption window from one to three years so new farmers have more time to use the benefit.

Russell Redding, Pennsylvania’s Secretary of Agriculture, told the committee the changes are revenue‑neutral (no increase in total tax credit authorization) and would create more flexibility for farm transitions. He said Pennsylvania has significant preserved farmland and a relatively large share of beginning farmers: “we have 650,000 acres preserved as well as 6,500 farms in the state preserved,” he said, and noted many of the state’s farms are owned by older operators. Redding told members the program has been “woefully undersubscribed” and that the Department expects the changes to increase take‑up.

Redding outlined the bill’s principal adjustments: expanding eligibility to purchasers (not just sellers), raising the credit cap to $50,000, allowing up to a three‑year period to use the credit and making a portion refundable if unused after that period. The committee packet and discussion identified the refundable mechanics: after the 3‑year period a remaining portion becomes refundable up to a stated cap; staff noted that the refundable maximum in the bill language would be $15,000 in most instances.

Ryan Brown, president of the Cumberland County Farm Bureau and a beginning farmer, testified in support and described the high cost of land and equipment for new farmers. Brown said owning land is typically necessary to obtain financing and start an operation, and that the expansion would help keep farms productive and available to future generations.

Committee members questioned whether the bill is truly revenue neutral and whether the leased/ rented component should remain. Chair Keith Greiner asked for clarification on the program’s authorization level; Secretary Redding responded that availability was set at $6 million and that the bill preserves revenue neutrality while reallocating or providing flexibility within that cap. Members noted the program has been underutilized — Redding reported approximately 304 farms have used the credit to date — and discussed removing the lease element because leasing has not been a common pathway into farming.

No formal action was taken at the hearing. The chair said the bill and related materials will be considered at a scheduled committee vote later in the week; members may submit amendments beforehand.

Ending: Supporters said the changes would make the credit more usable for younger and beginning farmers and help preserve family farms; members asked for continued administrative detail and clarification on lease versus purchase eligibility and refund mechanics.