SB370: Bill Text

October 10, 1995 - Introduced by Joint Legislative Council. Referred to Joint survey committee on Tax Exemptions.

SB370,2,2 An Act to repeal 71.61 (2); to renumber 91.55 (3); to renumber and amend 91.78; to amend 20.115 (7) (g), 20.835 (2) (dm), 66.021 (11) (title) and (a), 66.021 (11) (b), 66.021 (11) (c) (intro.), 66.021 (11) (d), 71.05 (6) (a) 17., 71.58 (8), 71.59 (1) (a), 71.59 (1) (d) 5. and (2) (b) and (c), 71.60 (title), (1) (intro.) and (2), 91.06, 91.19 (7) and (8), 91.21 (1), 91.51, 91.55 (1) (b), 91.63, 91.73 (2), 91.75 (8) (b), 92.104 (5), 92.105 (6), 92.14 (3) (intro.), 144.04 (1), 236.11 (2), 236.12 (3), 236.12 (6), 301.046 (1), 301.048 (4) (b) and 301.16 (2); and to create 20.835 (2) (r), 32.036, 66.021 (11) (d), 71.05 (6) (b) 22., 71.07 (3m) (e), 71.26 (1) (i), 71.28 (2m) (e), 71.47 (2m) (e), 71.58 (1) (h), 71.605, 91.25, 91.52, 91.55 (1m) (intro.) and (a), 91.72, 91.75 (10), 91.77 (1) (d), 91.77 (1) (e), 91.78 (2), 92.14 (3e), 145.19 (7), 147.25 (9) and 236.13 (1) (bm) of the statutes; relating to: eliminating farmland preservation agreements, modifying the requirement to repay farmland preservation credits, converting the farmland preservation credit to a straight percentage of property taxes accrued, terminating the farmland tax relief credit, creating guidelines for the designation of agricultural preservation areas by counties, creating guidelines for the rezoning of land in an exclusive agricultural zone to residential use, making conformance with certified county agricultural preservation plans a condition in certain land use decisions, granting rule-making authority and making appropriations.

Analysis by the Legislative Reference Bureau

This bill is explained in the Notes provided by the joint legislative council in the bill.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this bill.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

Prefatory note: This bill contains the recommendations of the joint legislative council's special committee on protection of rural resources. The special committee was directed by the joint legislative council to evaluate and make recommendations to enhance the effectiveness of the farmland preservation program in retaining land in agricultural use.

This bill contains a variety of proposals for modifications to the farmland preservation program, including the following key provisions:

1. Elimination of farmland preservation agreements as a farmland preservation tool and a method for landowners to obtain farmland preservation credits.

2. Reduction from 10 to 5 the number of years for which farmland preservation credits must be repaid when a farmland preservation agreement is relinquished or when farmland is no longer protected under exclusive agricultural zoning.

3. Conversion of the farmland preservation credit from an income-based formula to a straight percentage of property taxes accrued, with a $7,500 cap on the maximum amount of the credit.

4. Repeal of the farmland tax relief credit.

5. Creation of guidelines for the designation of agricultural preservation areas by counties and for the rezoning of land in an exclusive agricultural zone to residential use.

6. Establishment of linkages between county agricultural preservation plans and other current statutes with land use implications, including subdivision plat approval, sewer extensions, land condominiums, annexation and condemnation of land.

For detailed information about the provisions of this bill, see the Notes throughout the bill.

SB370, s. 1 Section 1. 20.115 (7) (g) of the statutes is amended to read:

SB370,3,2 20.115 (7) (g) (title) Agricultural impact statements Effect of condemnation on farm operators. All moneys received by the department under s. 32.035 from the preparation of agricultural impact statements and under s. 32.036 from determining whether condemnation conforms with county agricultural preservation plans, for general program operations.

Note: Allows the department of agriculture, trade and consumer protection (DATCP) to expend the fees collected for review of condemnation actions, in order to determine conformity with county agricultural preservation plans.

SB370, s. 2 Section 2. 20.835 (2) (dm) of the statutes is amended to read:

SB370,3,6 20.835 (2) (dm) (title) Farmland preservation credit supplement. A sum sufficient to pay the aggregate claims approved under subch. IX of ch. 71 that exceed the amount appropriated under par. (r).

SB370, s. 3 Section 3 . 20.835 (2) (r) of the statutes is created to read:

SB370,3,11 20.835 (2) (r) Farmland preservation credit. From the lottery fund, a sum sufficient, not to exceed, in a fiscal year, $16,300,000, less the amounts expended under par. (q) in that fiscal year, to pay the aggregate claims approved under subch. IX of ch. 71.

Note: Transfers the funding for the farmland tax relief credit, which is terminated under this bill, except for payments to persons who refile their tax returns, to fund the farmland preservation credit. The farmland tax relief credit is funded by a sum sufficient appropriation from the lottery fund, and in fiscal year 1994-95 the amount estimated for this credit was $16,300,000. This bill makes an appropriation from the lottery fund with a cap of $16,300,000, to first fund any payments for refilers for the farmland tax relief credit, with the remainder to fund the farmland preservation credit. The remainder of the funding for the farmland preservation credit is a sum sufficient appropriation from the general fund, as under current law.

SB370, s. 4 Section 4. 32.036 of the statutes is created to read:

SB370,3,14 32.036 Conformity with county agricultural preservation plan. (1) Definitions. In this section:

SB370,3,16 (a) "Department" means the department of agriculture, trade and consumer protection.

SB370,3,17 (b) "Farm operation" has the meaning given in s. 32.035 (1) (b).

SB370,3,19 (2) Applicability. This section does not apply to a project located entirely within the boundaries of a city or village.

SB370,4,7 (3) Procedure . The condemnor shall notify the department of any project involving the actual or potential exercise of the powers of eminent domain affecting a farm operation. The notice required under s. 32.035 (3) shall be considered notice under this subsection. The department may require the condemnor to compile and submit information about an affected farm operation. The department shall charge the condemnor a fee approximating the actual costs of the review and determination under this section.

SB370,4,12 (4) Review and determination . The department shall review the project and determine whether it conforms with any county agricultural preservation plan that is certified under s. 91.06. If the department determines that the project does not conform with a certified county agricultural preservation plan, the condemnor may not proceed with the project unless one of the following occurs:

SB370,4,15 (a) The county amends the agricultural preservation plan, the land and water conservation board certifies the amended plan under s. 91.06 and the department determines that the project conforms with the amended plan.

SB370,4,18 (b) The condemnor submits a petition to the land and water conservation board and the land and water conservation board determines that one or more of the conditions listed in s. 91.55 (2) exist with respect to the project.

SB370,4,23 (c) If the project consists of the creation of or an addition to a park, the condemnor submits a petition for review to the land and water conservation board and the land and water conservation board determines that the project is consistent with the statement of policy in the county agricultural preservation plan as required under s. 91.55 (1) (a).

SB370,5,3 (5) Preparation time. The department shall complete the review and determination under this section within 60 days after receiving the information requested from the condemnor under sub. (3).

Note: Requires the DATCP to review each project involving the actual or potential exercise of the powers of eminent domain and affecting a farm operation, to determine whether the project is in conformance with the applicable county agricultural preservation plan. A "condemnor" is any entity with the power of eminent domain, and includes state agencies, general purpose local units of government, special purpose districts and public utilities.

If the DATCP determines that the project is not in conformance with a county agricultural preservation plan, the condemnor may either seek to have the county plan amended or petition the land and water conservation board (LWCB) for a determination regarding the existence of any of the conditions in s. 91.55 (2) for excluding land from a county agricultural preservation plan. The conditions for excluding land from a county agricultural preservation plan are as follows:

1. Existing or planned activities adjacent to the identified agricultural area are incompatible with agricultural use.

2. The area is not economically viable for agricultural use.

3. Substantial urban growth in the area or planned urban expansion has created a public need to convert agricultural land use to other uses.

4. Maintenance of the area in agricultural use is not consistent with the goals and objectives of a county agricultural preservation plan.

If the project consists of a new or expanded park, and the project is not in conformance with the county agricultural preservation plan, the condemnor may petition the LWCB for approval of the project. The LWCB may approve the project if it is consistent with the general statements of policy in the county agricultural preservation plan, even though the project may not conform with the specific requirements of the plan.

SB370, s. 5 Section 5. 66.021 (11) (title) and (a) of the statutes are amended to read:

SB370,5,11 66.021 (11) (title) Review and approval of annexations. (a) (title) Annexations within populous counties Notice of annexation . No annexation proceeding within a county having a population of 50,000 or more shall be valid unless the person causing a notice of annexation to be published under sub. (3) shall within 5 days of the publication mail a copy of the notice, legal description and a scale map of the proposed annexation to the clerk of each municipality affected and the department of administration.

SB370,6,7 (b) (title) Review of annexations within populous counties. The department of administration may, within 20 days after receipt of the notice under par. (a) regarding an annexation proceeding within a county having a population of 50,000 or more, mail to the clerk of the town within which the territory lies and to the clerk of the proposed annexing village or city a notice that in its opinion the annexation is against the public interest. No later than 10 days after mailing the notice, the department shall advise the clerk of the town in which the territory is located and the clerk of the village or city to which the annexation is proposed of the reasons the annexation is against the public interest as defined, as that term is used in par. (c). The annexing municipality shall review the advice before final action is taken.

SB370, s. 6 Section 6 . 66.021 (11) (b) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is amended to read:

SB370,6,19 66.021 (11) (b) Review of annexations within populous counties. The department of administration development may, within 20 days after receipt of the notice under par. (a) regarding an annexation proceeding within a county having a population of 50,000 or more, mail to the clerk of the town within which the territory lies and to the clerk of the proposed annexing village or city a notice that in its opinion the annexation is against the public interest. No later than 10 days after mailing the notice, the department shall advise the clerk of the town in which the territory is located and the clerk of the village or city to which the annexation is proposed of the reasons the annexation is against the public interest, as that term is used in par. (c). The annexing municipality shall review the advice before final action is taken.

SB370, s. 7 Section 7. 66.021 (11) (c) (intro.) of the statutes is amended to read:

SB370,6,23 66.021 (11) (c) Definition of public interest. (intro.) For purposes of this subsection par. (b), the public interest is determined by the department of administration after consideration of the following:

SB370, s. 8 Section 8 . 66.021 (11) (d) of the statutes is created to read:

SB370,7,14 66.021 (11) (d) Approval of annexations. The department of administration shall, within 20 days after receipt of the notice under par. (a), mail to the clerk of the town within which the territory lies and to the clerk of the proposed annexing village or city a notice as to whether in the department's opinion the annexation conforms with a county agricultural preservation plan that is certified under s. 91.06. The department shall determine whether the annexation of territory located in any transition area of a county agricultural preservation plan conforms with the county agricultural preservation plan. No later than 10 days after mailing the notice, the department shall advise the clerk of the town in which the territory is located and the clerk of the village or city to which the annexation is proposed of the reasons that the annexation does or does not conform with the county agricultural preservation plan. If the department determines that the annexation does not conform with the county agricultural preservation plan, the city or village may not proceed with the annexation.

SB370, s. 9 Section 9 . 66.021 (11) (d) of the statutes, as affected by 1995 Wisconsin Act .... (this act), is amended to read:

SB370,8,5 66.021 (11) (d) Approval of annexations. The department of administration development shall, within 20 days after receipt of the notice under par. (a), mail to the clerk of the town within which the territory lies and to the clerk of the proposed annexing village or city a notice as to whether in the department's opinion the annexation conforms with a county agricultural preservation plan that is certified under s. 91.06. The department shall determine whether the annexation of territory located in any transition area of a county agricultural preservation plan conforms with the county agricultural preservation plan. No later than 10 days after mailing the notice, the department shall advise the clerk of the town in which the territory is located and the clerk of the village or city to which the annexation is proposed of the reasons that the annexation does or does not conform with the county agricultural preservation plan. If the department determines that the annexation does not conform with the county agricultural preservation plan, the city or village may not proceed with the annexation.

Note: The preceding 5 Sections direct the department of administration (DOA) to review all annexations and determine whether the annexations conform with the certified county agricultural preservation plan. A determination that an annexation does not conform with the county plan means that the city or village may not proceed with the annexation, unless the county amends the agricultural preservation plan, and the amendment is approved by the LWCB. Sections 6 and 9 transfer this function to the department of development effective July 1, 1996, in accordance with the reorganization of state government accomplished by 1995 Wisconsin Act 27.

SB370, s. 10 Section 10 . 71.05 (6) (a) 17. of the statutes is amended to read:

SB370,8,8 71.05 (6) (a) 17. The amount received under s. 71.07 (3m) (c) or 71.60, or both, that is not included in federal adjusted gross income.

Note: This Section and Sections 11, 13 and 22 exclude farmland preservation credits from the calculation of income for purposes of income and franchise taxes.

SB370, s. 11 Section 11 . 71.05 (6) (b) 22. of the statutes is created to read:

SB370,8,12 71.05 (6) (b) 22. All amounts received as a farmland preservation credit under subch. IX to the extent that the amounts are included in federal adjusted gross income.

SB370, s. 12 Section 12 . 71.07 (3m) (e) of the statutes is created to read:

SB370,8,15 71.07 (3m) (e) Sunset. No claim may be filed under this subsection for a taxable year that begins on or after January 1, 1996.

Note: This Section and Sections 14 and 15 end the filing of new claims under the farmland tax relief credit with tax returns for calendar year 1995. The farmland tax relief credit is a credit against a farmer's income taxes equal to 10% of net property taxes levied on the farmer's land, up to a maximum credit of $1,000. The credit does not apply to taxes levied on buildings and improvements to the land. Eligible farmland must meet the same agricultural use and minimum size requirements as for the farmland preservation credit. The farmland tax relief credit is funded by the lottery fund and approximately $16,000,000 per year is expended for this program.

SB370, s. 13 Section 13 . 71.26 (1) (i) of the statutes is created to read:

SB370,9,2 71.26 (1) (i) Farmland preservation credit. Any amount received as a farmland preservation credit under subch. IX.

SB370, s. 14 Section 14 . 71.28 (2m) (e) of the statutes is created to read:

SB370,9,5 71.28 (2m) (e) Sunset. No claim may be filed under this subsection for a taxable year that begins on or after January 1, 1996.

SB370, s. 15 Section 15 . 71.47 (2m) (e) of the statutes is created to read:

SB370,9,8 71.47 (2m) (e) Sunset. No claim may be filed under this subsection for a taxable year that begins on or after January 1, 1996.

SB370, s. 16 Section 16. 71.58 (1) (h) of the statutes is created to read:

SB370,9,12 71.58 (1) (h) For purposes of filing a claim under this subchapter, "claimant" does not include a person who has transferred farmland to a new owner and who was not able to provide the certification under s. 71.59 (1) (b) 2. at the time of the transfer.

Note: Prevents a person who is ineligible for a farmland preservation tax credit because of outstanding property taxes due on the farmland from receiving the credit after the outstanding taxes have been paid by a subsequent landowner, for example, in a foreclosure proceeding or tax sale.

SB370, s. 17 Section 17. 71.58 (8) of the statutes is amended to read:

SB370,9,23 71.58 (8) "Property taxes accrued" means property taxes, exclusive of special assessments, delinquent interest and charges for service, levied on the farmland and improvements owned by the claimant or any member of the claimant's household in any calendar year under ch. 70, less the tax credit, if any, afforded in respect of the property by s. 79.10. "Property taxes accrued" shall not exceed $6,000 for claims filed under s. 71.60. If farmland is owned by a tax-option corporation, a limited liability company or by 2 or more persons or entities as joint tenants, tenants in common or partners or is marital property or survivorship marital property and one or more such persons, entities or owners is not a member of the claimant's household, "property taxes accrued" is that part of property taxes levied on the farmland, reduced by the tax credit under s. 79.10, that reflects the ownership percentage of the claimant and the claimant's household. For purposes of this subsection, property taxes are "levied" when the tax roll is delivered to the local treasurer for collection. If farmland is sold during the calendar year of the levy the "property taxes accrued" for the seller is the amount of the tax levy, reduced by the tax credit under s. 79.10, prorated to each in the closing agreement pertaining to the sale of the farmland, except that if the seller does not reimburse the buyer for any part of those property taxes there are no "property taxes accrued" for the seller, and the "property taxes accrued" for the buyer is the property taxes levied on the farmland, reduced by the tax credit under s. 79.10, minus, if the seller reimburses the buyer for part of the property taxes, the amount prorated to the seller in the closing agreement. With the claim for credit under this subchapter, the seller shall submit a copy of the closing agreement and the buyer shall submit a copy of the closing agreement and a copy of the property tax bill.

Note: This Section and the following Section modify cross-references to conform with the changes made by Sections 20 and 21.

SB370, s. 18 Section 18. 71.59 (1) (a) of the statutes is amended to read:

SB370,11,2 71.59 (1) (a) Subject to the limitations provided in this subchapter and s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income or franchise taxes otherwise due, the amount derived under s. 71.60 or 71.605. If the allowable amount of claim exceeds the income or franchise taxes otherwise due on or measured by the claimant's income or if there are no Wisconsin income or franchise taxes due on or measured by the claimant's income, the amount of the claim not used as an offset against income or franchise taxes shall be certified to the department of administration for payment to the claimant by check, share draft or other draft drawn on the general fund.

SB370, s. 19 Section 19 . 71.59 (1) (d) 5. and (2) (b) and (c) of the statutes are amended to read:

SB370,11,11 71.59 (1) (d) 5. That soil and water conservation standards applicable to the land are established and approved as required under s. 92.105 (1) to (3) and that no notice of noncompliance is in effect under s. 92.105 (5) with respect to the claimant at the time the certificate is issued end of the taxable year for which the claim is made. A zoning authority shall not issue a zoning certificate for property for any year at the end of which a notice of noncompliance under s. 92.104 (4) or 92.105 (5) is in effect for the property.

SB370,11,14 (2) (b) If a notice of noncompliance with an applicable soil and water conservation plan under s. 92.104 is in effect with respect to the claimant at the time the claim is filed end of the taxable year for which the claim is made.

SB370,11,17 (c) If a notice of noncompliance with applicable soil and water conservation standards under s. 92.105 is in effect with respect to the claimant at the time the claim is filed end of the taxable year for which the claim is made.

Note: Requires that recipients of the farmland preservation tax credit be in compliance with soil and water conservation standards at the end of the year for which the credit is claimed, rather than at the time the claim is filed.

SB370, s. 20 Section 20 . 71.60 (title), (1) (intro.) and (2) of the statutes are amended to read:

SB370,11,23 71.60 (title) Computation; farmland preservation agreements. (1) (intro.) Except as provided in sub. (2), for farmland that is subject to a farmland preservation agreement under subch. II of ch. 91 at the close of the year to which the claim relates, the amount of any claim filed in calendar years based upon property taxes accrued in the preceding calendar year shall be determined as follows:

SB370,12,4 (2) If the farmland is subject to a certified ordinance under subch. V of ch. 91, or an agreement under subch. II of ch. 91, in effect at the close of the year for to which the credit is claimed claim relates, the amount of the claim is 10% of the property taxes accrued or the amount determined under sub. (1), whichever is greater.

Note: Provides that farmland preservation credits for farmland subject to farmland preservation agreements that are in effect on the effective date of this bill will continue to be calculated under the current formula.

SB370, s. 21 Section 21 . 71.605 of the statutes is created to read: