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:
AB574,7,3
171.58
(1) (h) For purposes of filing a claim under this subchapter, "claimant"
2does not include a person who has transferred farmland to a new owner and who was
3not able to provide the certification under s. 71.59 (1) (b) 2. at the time of the transfer.
AB574, s. 15
4Section
15. 71.58 (8) of the statutes is amended to read:
AB574,8,35
71.58
(8) "Property taxes accrued" means property taxes, exclusive of special
6assessments, delinquent interest and charges for service, levied on the farmland and
7improvements owned by the claimant or any member of the claimant's household in
8any calendar year under ch. 70, less the tax credit, if any, afforded in respect of the
9property by s. 79.10. "Property taxes accrued" shall not exceed $6,000
for claims filed
10under s. 71.60. If farmland is owned by a tax-option corporation, a limited liability
11company or by 2 or more persons or entities as joint tenants, tenants in common or
12partners or is marital property or survivorship marital property and one or more
13such persons, entities or owners is not a member of the claimant's household,
14"property taxes accrued" is that part of property taxes levied on the farmland,
15reduced by the tax credit under s. 79.10, that reflects the ownership percentage of
16the claimant and the claimant's household. For purposes of this subsection, property
17taxes are "levied" when the tax roll is delivered to the local treasurer for collection.
18If farmland is sold during the calendar year of the levy the "property taxes accrued"
19for the seller is the amount of the tax levy, reduced by the tax credit under s. 79.10,
20prorated to each in the closing agreement pertaining to the sale of the farmland,
21except that if the seller does not reimburse the buyer for any part of those property
22taxes there are no "property taxes accrued" for the seller, and the "property taxes
23accrued" for the buyer is the property taxes levied on the farmland, reduced by the
24tax credit under s. 79.10, minus, if the seller reimburses the buyer for part of the
25property taxes, the amount prorated to the seller in the closing agreement. With the
1claim for credit under this subchapter, the seller shall submit a copy of the closing
2agreement and the buyer shall submit a copy of the closing agreement and a copy of
3the property tax bill.
AB574, s. 16
4Section
16. 71.59 (1) (a) of the statutes is amended to read:
AB574,8,135
71.59
(1) (a) Subject to the limitations provided in this subchapter and s. 71.80
6(3) and (3m), a claimant may claim as a credit against Wisconsin income or franchise
7taxes otherwise due, the amount derived under s. 71.60
or 71.605. If the allowable
8amount of claim exceeds the income or franchise taxes otherwise due on or measured
9by the claimant's income or if there are no Wisconsin income or franchise taxes due
10on or measured by the claimant's income, the amount of the claim not used as an
11offset against income or franchise taxes shall be certified to the department of
12administration for payment to the claimant by check, share draft or other draft
13drawn on the general fund.
AB574, s. 17
14Section
17
. 71.59 (1) (d) 5. and (2) (b) and (c) of the statutes are amended to
15read:
AB574,8,2216
71.59
(1) (d) 5. That soil and water conservation standards applicable to the
17land are established and approved as required under s. 92.105 (1) to (3) and that no
18notice of noncompliance is in effect under s. 92.105 (5) with respect to the claimant
19at the
time the certificate is issued end of the taxable year for which the claim is
20made. A zoning authority shall not issue a zoning certificate for property for any year
21at the end of which a notice of noncompliance under s. 92.104 (4) or 92.105 (5) is in
22effect for the property.
AB574,8,25
23(2) (b) If a notice of noncompliance with an applicable soil and water
24conservation plan under s. 92.104 is in effect with respect to the claimant at the
time
25the claim is filed end of the taxable year for which the claim is made.
AB574,9,3
1(c) If a notice of noncompliance with applicable soil and water conservation
2standards under s. 92.105 is in effect with respect to the claimant at the
time the
3claim is filed end of the taxable year for which the claim is made.
AB574, s. 18
4Section
18. 71.59 (2) (f) of the statutes is created to read:
AB574,9,75
71.59
(2) (f) If the claimant files a claim for the credit under s. 71.07 (3m), 71.28
6(2m) or 71.47 (2m) for the same taxable year for which the claimant files a claim
7under this subchapter.
AB574, s. 19
8Section
19
. 71.60 (title), (1) (intro.) and (2) of the statutes are amended to read:
AB574,9,13
971.60 (title)
Computation; farmland preservation agreements. (1)
10(intro.) Except as provided in sub. (2),
for farmland that is subject to a farmland
11preservation agreement under subch. II of ch. 91 at the close of the year to which the
12claim relates, the amount of any claim filed in calendar years based upon property
13taxes accrued in the preceding calendar year shall be determined as follows:
AB574,9,17
14(2) If the farmland is subject to
a certified ordinance under subch. V of ch. 91,
15or an agreement under subch. II of ch. 91, in effect at the close of the year
for to which
16the
credit is claimed claim relates, the amount of the claim is 10% of the property
17taxes accrued or the amount determined under sub. (1), whichever is greater.
AB574, s. 20
18Section
20
. 71.605 of the statutes is created to read:
AB574,9,24
1971.605 Computation; exclusive agricultural zoning.
(1) For farmland
20that, at the close of the year to which the claim relates, is in an area zoned for
21exclusive agricultural use under subch. V of ch. 91 by a city, village, town or county
22and is not subject to a farmland preservation agreement under subch. II of ch. 91, the
23amount of any claim filed in a calendar year based upon property taxes accrued in
24the preceding calendar year shall be determined as follows:
AB574,9,2525
(a) Except as provided in par. (b), 50% of the property taxes accrued.
AB574,10,2
1(b) If the farmland is in a transition area identified under s. 91.55 (1) (b), 25%
2of the property taxes accrued.
AB574,10,4
3(2) The maximum credit for a claim filed under this section is $7,500 for each
4claimant.