Current law specifies situations in which DATCP may release land from, or terminate, a farmland preservation agreement. Generally, when land is released or an agreement is terminated DATCP is required to place a lien on the land until the owner of the land makes a payment to this state that is equal to the farmland preservation tax credits received by the owner during the preceding ten years plus interest.
This bill eliminates the lien requirement. Under the bill, DATCP may release land from, or terminate, a farmland preservation agreement if it finds that the termination or release will not impair or limit agricultural use of other farmland that is covered by an agreement or is in a farmland preservation zoning district and if the owner of the land pays to DATCP an amount equal to the number of acres rezoned multiplied by three times the per acre value of the highest value of cropland in the city, village, or town in which the land is located as determined by DOR for the purposes of use value assessment.
Soil and water conservation
Current law requires counties to establish soil and water conservation standards. The county must have the standards approved by LWCB in order for farmers in the county to be eligible for farmland preservation tax credits. The law requires a county to monitor compliance with its soil and water conservation standards. If a county determines that a farmer violates the standards, it must issue a notice of noncompliance to the farmer. As long as a farmer is out of compliance with the county standards, the farmer is ineligible for the farmland preservation tax credit.
This bill eliminates the requirement that each county establish soil and water conservation standards. Under the bill, a farmer must comply with land and water conservation standards that DATCP has promulgated under other current laws. The bill continues the requirement that a county monitor compliance with the standards and specifically requires a county to inspect each farm for which the owner claims farmland preservation tax credits at least once every four years. The bill also requires farmers to certify compliance annually. The bill requires DATCP to review county compliance with the monitoring requirement. The bill requires a county to issue a notice of noncompliance if it determines that a farmer violates the standards or fails to certify compliance. The county must provide a copy of each notice to DOR. As long as a farmer is out of compliance with DATCP's standards, the farmer is ineligible for the farmland preservation tax credit.
For a description of the changes in the farmland preservation tax credit, please see "TAXATION."
taxation
Income taxation
Under current law, an eligible claimant may recover a certain amount of property taxes paid through the refundable farmland preservation tax credit. A refundable tax credit means that, if the amount of the credit which 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 current law eligibility requirements for the farmland preservation tax credit is that the farmland to which the claim relates be subject either to a farmland preservation agreement or to a county exclusive agricultural use zoning ordinance. A farmland preservation agreement and an exclusive agricultural use zoning ordinance require the claimant to abide by certain soil and water conservation standards. A farmland preservation agreement is generally entered into for a term of 10 to 25 years, although the parties may agree to relinquish the agreement under certain circumstances.
The credit is computed under a formula that is based on property taxes accrued on the claimant's farmland in the preceding calendar year, the claimant's household income, and the agreement, planning, or zoning provisions that cover the farmland. The maximum credit that a claimant is eligible for is $4,200, and the minimum credit that an eligible claimant may receive is $600. The maximum credit for which the claimant is otherwise eligible is reduced based on the zoning ordinances that are in effect in the county in which the farmland is located, although the minimum credit is never less than $600 for an eligible claimant.
Under this bill, no new claims may be filed for taxable years beginning after December 31, 2009, but an otherwise eligible claimant who is subject to a farmland preservation agreement that is in effect on January 1, 2010, may continue to file a claim for the credit until the agreement expires.
This bill also creates a new farmland preservation credit which is refundable. The credit is funded from the lottery fund, up to approximately $15,000,000 of claims, and any excess claims, up to approximately $12,280,000 are funded from the general fund. Under the bill, the maximum amount of credits that may be claimed each year may not exceed $27,280,000. If the total amount of eligible claims exceed $27,280,00, DOR is required to pay the excess claims in the next subsequent fiscal year and prorate the per acre amounts (see below) to account for prior year claims that are paid in the year subsequent to that year. If a claimant's payment is so delayed, the claimant may not receive any interest on his delayed payment, or any other refund.
The new farmland preservation credit is calculated by multiplying a claimant's qualifying acres (QA) by one of the following amounts: $10, if the QA are in a farmland preservation zoning district and are subject to a new farmland preservation agreement (FPA), meaning a FPA that was entered into after the effective date of the bill; $7.50 if the QA are located in a farmland preservation zoning district, but are not subject to a new FPA; or $5.00 if the QA are subject to a new FPA, but are not located in a farmland preservation zoning district.
Generally, the bill defines QA as the number of acres of farm that correlate to a claimant's percentage of ownership interest in a farm, the extent to which the farm is covered by a new FPA, and whether the farm is in farmland preservation zoning district. For a description of the requirements of a new FPA, see "AGRICULTURE."
For further information see the state 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:
SECTION 1. 20.115 (7) (dm) of the statutes is created to read:
20.115 (7) (dm) Farmland preservation planning grants. The amounts in the schedule for farmland preservation planning grants under s. 91.10 (6). No moneys may be encumbered under this paragraph after June 30, 2016.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 2. 20.115 (7) (tb) of the statutes is created to read:
20.115 (7) (tb) Principal and interest; agricultural conservation easements, working lands fund. From the working lands fund, the amounts in the schedule to reimburse s. 20.866 (1) (u) for the principal and interest costs incurred in purchasing agricultural conservation easements under s. 93.73, to make the payments determined by the building commission under s. 13.488 (1) (m) that are attributable to the proceeds of obligations incurred to purchase those easements, and to make payments under an agreement or ancillary arrangement entered into under s. 18.06 (8) (a).
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
****NOTE: This SECTION depends on the inclusion of LRB-0202 in the bill. If that draft is not included, this SECTION must be deleted.
SECTION 3. 20.115 (7) (tg) of the statutes is created to read:
20.115 (7) (tg) Agricultural conservation easements. From the working lands fund, the amounts in the schedule for the purchase of agricultural conservation easements under s. 93.73.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
****NOTE: This SECTION depends on the inclusion of LRB-0202 in the bill. If that draft is not included, this SECTION must be deleted.
SECTION 4. 20.115 (7) (tm) of the statutes is created to read:
20.115 (7) (tm) Farmland preservation planning grants, working lands fund. From the working lands fund, the amounts in the schedule for farmland preservation planning grants under s. 91.10 (6).
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 5. 20.115 (7) (ts) of the statutes is created to read:
20.115 (7) (ts) Working lands programs. From the working lands fund, the amounts in the schedule for administration of the farmland preservation program under ch. 91 and the program to purchase conservation easements under s. 93.73.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
****NOTE: This reference in this SECTION to s. 93.73 depends on the inclusion of LRB-0202 in the bill. If that draft is not included, this SECTION must be modified.
SECTION 6. 20.566 (1) (t) of the statutes is created to read:
20.566 (1) (t) Farmland preservation credit, 2010 and beyond. From the working lands fund, the amounts in the schedule for administration of the farmland preservation tax credit under s. 71.613.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 7. 20.835 (2) (d) of the statutes is repealed.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 8. 20.835 (2) (dm) of the statutes is amended to read:
20.835 (2) (dm) Farmland preservation credit. A sum sufficient to pay the aggregate claims approved under subch. IX of ch. 71 ss. 71.57 to 71.61.
SECTION 9. 20.835 (2) (do) of the statutes is created to read:
20.835 (2) (do) Farmland preservation credit, 2010 and beyond. The amounts in the schedule to pay the aggregate claims approved under s. 71.613 (2), to the extent that these claims are not paid under par. (qb).
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 10. 20.835 (2) (q) of the statutes is amended to read:
20.835 (2) (q) Farmland tax relief credit. From the lottery fund, a sum sufficient to pay the aggregate claims approved under ss. 71.07 (3m) (c), 71.28 (2m) (c), and 71.47 (2m) (c), to the extent that these claims are not paid under par. (ka). No moneys may be encumbered or expended from this appropriation account during 1999-00, or for a taxable year that begins after December 31, 2009.
SECTION 11. 20.835 (2) (qb) of the statutes is created to read:
20.835 (2) (qb) Farmland preservation credit, 2010 and beyond; lottery fund. From the lottery fund, the amounts in the schedule to pay the aggregate claims approved under s. 71.613 (2).
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 12. 23.094 (2) (c) 3. of the statutes is repealed.
SECTION 13. 25.17 (1) (yx) of the statutes is created to read:
25.17 (1) (yx) Working lands fund (s. 25.466);
SECTION 14. 25.466 of the statutes is created to read:
25.466 Working lands fund. There is created a separate trust fund designated as the working lands fund, consisting of all moneys received under ss. 91.48 (2) (c) and 91.66 (1) (c).
SECTION 15. 30.29 (3) (b) of the statutes is amended to read:
30.29 (3) (b) Agriculture activities. A person operating a motor vehicle while the person is engaged in agricultural use, as defined under s. 91.01 (1) (2).
SECTION 16. 32.035 (1) (b) of the statutes is amended to read:
32.035 (1) (b) "Farm operation" means any activity conducted solely or primarily for the production of one or more agricultural commodities resulting from an agricultural use, as defined in s. 91.01 (1) (2), for sale and home use, and customarily producing the commodities in sufficient quantity to be capable of contributing materially to the operator's support.
SECTION 17. 66.0307 (7m) of the statutes is amended to read:
66.0307 (7m) ZONING IN TOWN TERRITORY. If a town is a party to a cooperative plan with a city or village, the town and city or village may agree, as part of the cooperative plan, to authorize the town, city or village to adopt a zoning ordinance under s. 60.61, 61.35 or 62.23 for all or a portion of the town territory covered by the plan. The exercise of zoning authority by a town under this subsection is not subject to s. 60.61 (3) or 60.62 (3). If a county zoning ordinance applies to the town territory covered by the plan, that ordinance and amendments to it continue until a zoning ordinance is adopted under this subsection. If a zoning ordinance is adopted under this subsection, that zoning ordinance continues in effect after the planning period ceases until a different zoning ordinance for the territory is adopted under other applicable law. This subsection does not affect zoning ordinances adopted under ss. s. 59.692, or 87.30 or 91.71 to 91.78 ch. 91.
SECTION 18. 66.0721 (1) (a) of the statutes is amended to read:
66.0721 (1) (a) "Agricultural use" has the meaning given in s. 91.01 (1) (2) and includes any additional agricultural uses of land, as determined by the town sanitary district or town.
SECTION 19. 66.0721 (1) (b) of the statutes is amended to read:
66.0721 (1) (b) "Eligible farmland" means a parcel of 35 or more acres of contiguous land which is devoted exclusively to agricultural use which during the year preceding the year in which the land is subject to a special assessment under this section produced gross farm profits, as defined in s. 71.58 (4), of not less than $6,000 or which, during the 3 years preceding the year in which the land is subject to a special assessment under this section, produced gross farm profits, as defined in s. 71.58 (4), of not less than $18,000 that is eligible for farmland preservation tax credits under ss. 71.58 to 71.61 or 71.613.
SECTION 20. 71.07 (2fd) of the statutes is repealed.
SECTION 21. 71.07 (3m) (a) 1. (intro.) of the statutes is amended to read:
71.07 (3m) (a) 1. (intro.) "Claimant" means an owner of farmland, as defined in s. 91.01 (9), 2007 stats., of farmland domiciled in this state during the entire year for which a credit under this subsection is claimed, except as follows:
SECTION 22. 71.07 (3m) (a) 3. of the statutes is amended to read:
71.07 (3m) (a) 3. "Farmland" means 35 or more acres of real property, exclusive of improvements, in this state, in agricultural use, as defined in s. 91.01 (1), 2007 stats., and owned by the claimant or any member of the claimant's household during the taxable year for which a credit under this subsection is claimed if the farm of which the farmland is a part, during that year, produced not less than $6,000 in gross farm profits resulting from agricultural use, as defined in s. 91.01 (1), 2007 stats., or if the farm of which the farmland is a part, during that year and the 2 years immediately preceding that year, produced not less than $18,000 in such profits, or if at least 35 acres of the farmland, during all or part of that year, was enrolled in the conservation reserve program under 16 USC 3831 to 3836.
SECTION 23. 71.07 (3m) (a) 4. of the statutes is amended to read:
71.07 (3m) (a) 4. "Gross farm profits" means gross receipts, excluding rent, from agricultural use, as defined in s. 91.01 (1), 2007 stats., including the fair market value at the time of disposition of payments in kind for placing land in federal programs or payments from the federal dairy termination program under 7 USC 1446 (d), less the cost or other basis of livestock or other items purchased for resale which are sold or otherwise disposed of during the taxable year.
SECTION 24. 71.07 (3m) (e) of the statutes is created to read:
71.07 (3m) (e) Sunset. No new claim may be filed under this subsection for a taxable year that begins after December 31, 2009.
SECTION 25. 71.28 (1fd) of the statutes is repealed.
SECTION 26. 71.28 (2m) (a) 1. (intro.) of the statutes is amended to read:
71.28 (2m) (a) 1. (intro.) "Claimant" means an owner of farmland, as defined in s. 91.01 (9), 2007 stats., of farmland domiciled in this state during the entire year for which a credit under this subsection is claimed, except as follows:
SECTION 27. 71.28 (2m) (a) 3. of the statutes is amended to read:
71.28 (2m) (a) 3. "Farmland" means 35 or more acres of real property, exclusive of improvements, in this state, in agricultural use, as defined in s. 91.01 (1), 2007 stats., and owned by the claimant or any member of the claimant's household during the taxable year for which a credit under this subsection is claimed if the farm of which the farmland is a part, during that year, produced not less than $6,000 in gross farm profits resulting from agricultural use, as defined in s. 91.01 (1), 2007 stats., or if the farm of which the farmland is a part, during that year and the 2 years immediately preceding that year, produced not less than $18,000 in such profits, or if at least 35 acres of the farmland, during all or part of that year, was enrolled in the conservation reserve program under 16 USC 3831 to 3836.
SECTION 28. 71.28 (2m) (a) 4. of the statutes is amended to read:
71.28 (2m) (a) 4. "Gross farm profits" means gross receipts, excluding rent, from agricultural use, as defined in s. 91.01 (1), 2007 stats., including the fair market value at the time of disposition of payments in kind for placing land in federal programs or payments from the federal dairy termination program under 7 USC 1446 (d), less the cost or other basis of livestock or other items purchased for resale which are sold or otherwise disposed of during the taxable year.
SECTION 29. 71.28 (2m) (e) of the statutes is created to read:
71.28 (2m) (e) Sunset. No new claim may be filed under this subsection for a taxable year that begins after December 31, 2009.
SECTION 30. 71.47 (1fd) of the statutes is repealed.
SECTION 31. 71.47 (2m) (a) 1. (intro.) of the statutes is amended to read:
71.47 (2m) (a) 1. (intro.) "Claimant" means an owner of farmland, as defined in s. 91.01 (9), 2007 stats., of farmland domiciled in this state during the entire year for which a credit under this subsection is claimed, except as follows:
SECTION 32. 71.47 (2m) (a) 3. of the statutes is amended to read:
71.47 (2m) (a) 3. "Farmland" means 35 or more acres of real property, exclusive of improvements, in this state, in agricultural use, as defined in s. 91.01 (1), 2007 stats., and owned by the claimant or any member of the claimant's household during the taxable year for which a credit under this subsection is claimed if the farm of which the farmland is a part, during that year, produced not less than $6,000 in gross farm profits resulting from agricultural use, as defined in s. 91.01 (1), 2007 stats., or if the farm of which the farmland is a part, during that year and the 2 years immediately preceding that year, produced not less than $18,000 in such profits, or if at least 35 acres of the farmland, during all or part of that year, was enrolled in the conservation reserve program under 16 USC 3831 to 3836.
SECTION 33. 71.47 (2m) (a) 4. of the statutes is amended to read:
71.47 (2m) (a) 4. "Gross farm profits" means gross receipts, excluding rent, from agricultural use, as defined in s. 91.01 (1), 2007 stats., including the fair market value at the time of disposition of payments in kind for placing land in federal programs or payments from the federal dairy termination program under 7 USC 1446 (d), less the cost or other basis of livestock or other items purchased for resale which are sold or otherwise disposed of during the taxable year.
SECTION 34. 71.47 (2m) (e) of the statutes is created to read:
71.47 (2m) (e) Sunset. No new claim may be filed under this subsection for a taxable year that begins after December 31, 2009.
SECTION 35. 71.57 of the statutes is amended to read:
71.57 Purpose. The purpose of this subchapter ss. 71.58 to 71.61 is to provide credit to owners of farmland which is subject to agricultural use restrictions, through a system of income or franchise tax credits and refunds and appropriations from the general fund.
SECTION 36. 71.58 (intro.) of the statutes is amended to read:
71.58 Definitions. (intro.) In this subchapter ss. 71.57 to 71.61:
SECTION 37. 71.58 (1) (intro.) of the statutes is amended to read:
71.58 (1) (intro.) "Claimant" means an owner of farmland, as defined in s. 91.01 (9), 2007 stats., of farmland, domiciled in this state during the entire year for which a credit under this subchapter ss. 71.57 to 71.61 is claimed, except as follows:
SECTION 38. 71.58 (1) (b) of the statutes is amended to read:
71.58 (1) (b) If any person in a household has claimed or will claim credit under subch. VIII, all persons from that household are ineligible to claim any credit under this subchapter ss. 71.57 to 71.61 for the year to which the credit under subch. VIII pertained.
SECTION 39. 71.58 (1) (d) of the statutes is amended to read:
