LRB-1585/3
RCT&MES:kaf:jf
1997 - 1998 LEGISLATURE
October 28, 1997 - Introduced by Representatives Otte, Hasenohrl, Zukowski,
Plouff, F. Lasee, Grothman
and Hahn, cosponsored by Senators Clausing
and Grobschmidt. Referred to Committee on Ways and Means.
AB574,2,6 1An Act to repeal 20.835 (2) (q) and 71.61 (2); to renumber 91.55 (3); to
2renumber and amend
91.78; to amend 20.835 (2) (dm), 71.05 (6) (a) 17., 71.07
3(3m) (b) 1. a., 71.28 (2m) (b) 1. a., 71.47 (2m) (b) 1. a., 71.58 (8), 71.59 (1) (a), 71.59
4(1) (d) 5. and (2) (b) and (c), 71.60 (title), (1) (intro.) and (2), 79.10 (11) (b), 91.06,
591.13 (1), 91.19 (7) and (8), 91.21 (1), 91.51, 91.55 (1) (b), 91.63, 91.73 (2), 91.75
6(8) (b), 92.104 (5), 92.105 (1), 92.105 (2), 92.105 (6) and 92.14 (3) (intro.); and to
7create
20.835 (2) (r), 71.05 (6) (b) 25., 71.07 (3m) (b) 2. c., 71.26 (1) (g), 71.28
8(2m) (b) 2. c., 71.45 (2) (a) 15., 71.47 (2m) (b) 2. c., 71.58 (1) (h), 71.59 (2) (f),
971.605, 91.19 (6n), 91.25, 91.52, 91.55 (1m) (intro.) and (a), 91.72, 91.75 (10),
1091.77 (1) (e), 91.78 (2) and 92.14 (3e) of the statutes; relating to: eliminating
11farmland preservation agreements, modifying the requirement to repay
12farmland preservation credits, converting the farmland preservation credit to
13a straight percentage of property taxes accrued, creating guidelines for the
14designation of agricultural preservation areas by counties, creating guidelines

1for the rezoning of land in an exclusive agricultural zone to residential use, soil
2and water conservation standards, the requirement that an application for a
3farmland preservation agreement be signed by all persons holding a mortgage
4on the land to be covered by the agreement, release from a farmland
5preservation agreement of foreclosed land, granting rule-making authority
6and making appropriations.
Analysis by the Legislative Reference Bureau
Exclusive agricultural zoning and farmland preservation agreements
Under current law, an eligible claimant may recover a certain amount of
property taxes paid through the refundable farmland preservation credit. A
refundable tax credit means that, if the amount of the credit that is otherwise due
an eligible claimant exceeds the claimant's tax liability, or if there is no outstanding
tax liability, the excess amount of the credit is paid to the claimant by check.
One of the eligibility requirements for the farmland preservation credit under
current law is that the land to which the claim relates be subject either to a farmland
preservation agreement or to a county exclusive agricultural use zoning ordinance
that is certified by the land and water conservation board (LWCB). Under current
law, an owner may only apply for a farmland preservation agreement if the county
in which the land is located has in effect an agricultural preservation plan that is
certified by the LWCB or the land is subject to a certified exclusive agricultural use
zoning ordinance.
This bill requires the department of agriculture, trade and consumer protection
(DATCP) to establish a schedule for the recertification of county exclusive
agricultural use zoning ordinances. Current certifications expire according to that
schedule. Future certifications are for a period specified by the LWCB, not to exceed
10 years. The bill also provides that a county, except for Milwaukee County, must
have a certified agricultural preservation plan in order to obtain recertification of its
exclusive agricultural use zoning ordinance. The ordinance must be consistent with
the agricultural preservation plan. The bill requires DATCP to establish guidelines,
which are binding on counties, for agricultural preservation planning and for
rezoning of agricultural land for residential use.
This bill phases out farmland preservation agreements by prohibiting DATCP
from entering into, or extending, farmland preservation agreements for land in a
county after the date for recertification of the exclusive agricultural use zoning
ordinance for that county. The bill also requires DATCP to release land from a
farmland preservation agreement without penalty, at the owner's request, if the
recertification date for the county in which the land is located has passed or if the
land is subject to a certified exclusive agricultural use zoning ordinance.

Under current law, one of the conditions for entering into a farmland
preservation agreement is that the application form must be signed by all persons
holding a recorded mortgage on the land to be covered by the agreement. This bill
eliminates that condition. The bill also requires that DATCP release land from a
farmland preservation agreement if ownership of the land changes as a result of
foreclosure of a mortgage.
Under current law, in some of the circumstances under which DATCP may
release land from a farmland preservation agreement, or if land is rezoned from
exclusive agricultural use, DATCP is required to file a lien against the land for the
amount of the farmland preservation credit received by the owner during the last 10
years. This bill reduces the amount of the lien to the amount of the farmland
preservation credit received during the last 5 years.
Soil and water conservation standards and guidelines
Current law requires a county land conservation committee to establish soil
and water conservation standards that apply to persons who claim a farmland
preservation credit. The LWCB reviews the county soil and water conservation
standards and approves or disapproves them based on guidelines that LWCB
develops. If a county land conservation committee determines that farming
operations are not in compliance with the soil and water conservation standards, the
land owner is not eligible for the farmland preservation credit. This bill requires
county soil and water conservation standards and LWCB's guidelines to allow a
person who has no need to grow hay or grass crops to comply with the soil and water
conservation standards by using reduced tillage practices instead of growing hay or
grass crops.
Farmland tax relief credit and farmland preservation credit
The farmland tax relief credit is a refundable income and franchise tax credit
that is based on property taxes accrued on farmland and gross farm profits. Under
this bill, a person who claims the farmland tax relief credit may not also claim the
farmland preservation tax credit if both claims relate to the same taxable year. Also
under the bill, both the farmland tax relief credit and the farmland preservation tax
credit are funded from the same appropriations. Currently, these credits are funded
from different appropriations.
This bill also makes a number of changes in the farmland preservation credit.
The bill changes the definition of "claimant" to prevent a person who is ineligible for
the 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.
Current law requires recipients of the credit to be in compliance with soil and water
conservation standards at the time the claim is filed. Under the bill, recipients of the
credit are required to be in compliance with soil and water conservation standards
at the end of the year for which the credit is claimed. The bill also exempts from
income and franchise taxation amounts received under the farmland preservation
credit.
For taxable years beginning after December 31, 1997, based on property taxes
accrued in the previous year, the bill creates a new method of computing the
farmland preservation credit for farmland that, at the close of the year to which the

claim relates, is in an area zoned for exclusive agricultural use and is not subject to
a farmland preservation agreement. Under the bill, a claim under the credit is
calculated to be 50% of the property taxes accrued on farmland that is in an area
zoned by a city, village, town or county for exclusive agricultural use at the close of
the year or, if the farmland is in an area identified in a county agricultural
preservation plan as a transition area, 25% of the property taxes accrued on the
farmland. Under either calculation, the maximum credit is $7,500.
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:
AB574, s. 1 1Section 1. 20.835 (2) (dm) of the statutes is amended to read:
AB574,4,52 20.835 (2) (dm) (title) Farmland preservation credit and farmland tax relief
3credit supplement
. A sum sufficient to pay the aggregate claims approved under
4subch. IX of ch. 71 and the aggregate claims approved under ss. 71.07 (3m) (c), 71.28
5(2m) (c) and 71.47 (2m) (c) that exceed the amount appropriated under par. (r)
.
AB574, s. 2 6Section 2. 20.835 (2) (q) of the statutes is repealed.
AB574, s. 3 7Section 3 . 20.835 (2) (r) of the statutes is created to read:
AB574,4,118 20.835 (2) (r) Farmland preservation credit; farmland tax relief credit. From
9the lottery fund, a sum sufficient, not to exceed, in a fiscal year, $16,300,000, to pay
10the aggregate claims approved under subch. IX of ch. 71 and the aggregate claims
11approved under ss. 71.07 (3m) (c), 71.28 (2m) (c) and 71.47 (2m) (c).
AB574, s. 4 12Section 4 . 71.05 (6) (a) 17. of the statutes is amended to read:
AB574,4,1413 71.05 (6) (a) 17. The amount received under s. 71.07 (3m) (c) or 71.60, or both,
14that is not included in federal adjusted gross income.
AB574, s. 5 15Section 5 . 71.05 (6) (b) 25. of the statutes is created to read:
AB574,5,3
171.05 (6) (b) 25. All amounts received as a farmland preservation credit under
2subch. IX to the extent that the amounts are included in federal adjusted gross
3income.
AB574, s. 6 4Section 6. 71.07 (3m) (b) 1. a. of the statutes is amended to read:
AB574,5,125 71.07 (3m) (b) 1. a. Subject to the limitations provided in this subsection and
6s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income
7taxes otherwise due, the amount derived under par. (c). If the allowable amount of
8claim exceeds the income taxes otherwise due on the claimant's income or if there are
9no Wisconsin income taxes due on the claimant's income, the amount of the claim not
10used as an offset against income taxes shall be certified to the department of
11administration for payment to the claimant by check, share draft or other draft paid
12from the appropriation under s. 20.835 (2) (q) (dm) or (r) or both.
AB574, s. 7 13Section 7 . 71.07 (3m) (b) 2. c. of the statutes is created to read:
AB574,5,1514 71.07 (3m) (b) 2. c. If the claimant files a claim for the credit under subch. IX
15for the same taxable year for which the claimant files a claim under this subsection.
AB574, s. 8 16Section 8 . 71.26 (1) (g) of the statutes is created to read:
AB574,5,1917 71.26 (1) (g) Farmland preservation credit. Any amount received as a farmland
18preservation credit under subch. IX to the extent that such an amount is included
19in federal taxable income.
AB574, s. 9 20Section 9. 71.28 (2m) (b) 1. a. of the statutes is amended to read:
AB574,6,421 71.28 (2m) (b) 1. a. Subject to the limitations provided in this subsection and
22s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income or
23franchise taxes otherwise due, the amount derived under par. (c). If the allowable
24amount of claim exceeds the income or franchise taxes otherwise due on or measured
25by the claimant's income or if there are no Wisconsin income or franchise taxes due

1on or measured by the claimant's income, the amount of the claim not used as an
2offset against income or franchise taxes shall be certified to the department of
3administration for payment to the claimant by check, share draft or other draft paid
4from the appropriation under s. 20.835 (2) (q) (dm) or (r) or both.
AB574, s. 10 5Section 10 . 71.28 (2m) (b) 2. c. of the statutes is created to read:
AB574,6,76 71.28 (2m) (b) 2. c. If the claimant files a claim for the credit under subch. IX
7for the same taxable year for which the claimant files a claim under this subsection.
AB574, s. 11 8Section 11. 71.45 (2) (a) 15. of the statutes is created to read:
AB574,6,119 71.45 (2) (a) 15. By subtracting from federal taxable income all amounts
10received as a farmland preservation credit under subch. IX to the extent that the
11amounts are included in federal taxable income.
AB574, s. 12 12Section 12. 71.47 (2m) (b) 1. a. of the statutes is amended to read:
AB574,6,2113 71.47 (2m) (b) 1. a. Subject to the limitations provided in this subsection and
14s. 71.80 (3) and (3m), a claimant may claim as a credit against Wisconsin income or
15franchise taxes otherwise due, the amount derived under par. (c). If the allowable
16amount of claim exceeds the income or franchise taxes otherwise due on or measured
17by the claimant's income or if there are no Wisconsin income or franchise taxes due
18on or measured by the claimant's income, the amount of the claim not used as an
19offset against income or franchise taxes shall be certified to the department of
20administration for payment to the claimant by check, share draft or other draft paid
21from the appropriation under s. 20.835 (2) (q) (dm) or (r) or both.
AB574, s. 13 22Section 13 . 71.47 (2m) (b) 2. c. of the statutes is created to read:
AB574,6,2423 71.47 (2m) (b) 2. c. If the claimant files a claim for the credit under subch. IX
24for the same taxable year for which the claimant files a claim under this subsection.
AB574, s. 14 25Section 14. 71.58 (1) (h) of the statutes is created to read:
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