LRB-4533/1
MDK:jld/emw/amn
2015 - 2016 LEGISLATURE
February 3, 2016 - Introduced by Senators Ringhand,
Carpenter and Vinehout,
cosponsored by Representatives
Spreitzer, Danou, Berceau, Hesselbein,
Kahl, Kitchens, Jorgensen, Novak, Quinn and Tranel. Referred to
Committee on Universities and Technical Colleges.
SB706,1,6
1An Act to amend 15.01 (4) and 227.01 (1); and
to create 15.137 (7), 20.235 (1)
2(em), 39.52 and 71.05 (6) (b) 53. of the statutes;
relating to: creating a program
3for reimbursing the higher education debt of small farm operators, creating an
4individual income tax deduction for certain amounts received from such a
5program, granting rule-making authority, making an appropriation, and
6providing a penalty.
Analysis by the Legislative Reference Bureau
This bill provides for establishing a program for reimbursing certain
individuals who operate small farms for their higher education debt. An individual
is eligible for reimbursement if he or she graduated from an accredited public or
nonprofit institution that awards associate's or baccalaureate degrees or if he or she
completed a farm and industry short course offered by the University of Wisconsin
System. However, no more than 25 percent of the amount appropriated for the
program in a fiscal year can be used to reimburse individuals who complete a farm
and industry short course. Debt is not eligible for reimbursement if it is reimbursed,
assumed, or paid for under another program.
The bill defines "small farm" as a farm with annual gross cash farm income that
is not less than $35,000 nor more than $500,000 or 140 percent of the maximum
amount for a small farm under the typology of the economic research service of the
U.S. Department of Agriculture, whichever is greater. Whether a farm qualifies as
a small farm is determined at the time an individual first receives a reimbursement
payment under the program.
The bill creates a five-member council in the Department of Agriculture, Trade
and Consumer Protection, called the Small Farm Higher Education Debt Council,
which must establish the program and has rule-making power. The council consists
of the DATCP secretary or his or her designee and the chancellor of the
UW-Extension or his or her designee. The DATCP secretary appoints the following
other members for three-year terms: 1) an individual who administers or
participates or cooperates in programs of the Farm Service Agency of the U.S.
Department of Agriculture; 2) a representative of agricultural lenders; and 3) a
representative of higher education loan providers or servicers. The bill requires
DATCP to provide administrative support to the council.
To be eligible for reimbursement, the council must find that an individual
satisfies the above educational requirements and that an individual is a state
resident whose primary occupation is to operate a small farm. The bill defines
"operate" as to engage in agricultural activities at a small farm and participate in the
day-to-day operation of the farm. Also, to be eligible, an individual must begin to
operate a small farm no later than five years after obtaining a baccalaureate or
associate's degree or completing a farm and industry short course. In addition, the
individual must intend to operate a small farm for at least five years after applying
to the council for reimbursement. An individual is not eligible for reimbursement if
another individual who also operates the small farm obtains reimbursement under
the program.
The bill requires the Higher Educational Aids Board to enter into agreements
with individuals whom the council finds satisfy the eligibility requirements. In
addition, HEAB must find that the repayment period of each student that is
reimbursed under the program does not exceed ten years, and, for a federal student
loan, that the individual has entered into the standard repayment plan of the federal
Department of Education. However, HEAB may waive the foregoing requirements
based on financial hardship. In an agreement with HEAB, an individual must
express his or her commitment to pursue a long-term career in farming in this state
and to make a good faith effort to comply with the requirements of the program. An
agreement must also require an individual to annually submit documentation to
HEAB showing that the individual continues to be a state resident whose primary
occupation is to operate a small farm and that in the preceding year he or she has
made all required payments on outstanding higher education debt. An agreement
must also require an individual to notify HEAB within 60 days if he or she ceases to
be a state resident or his or her primary occupation ceases to be the operation of a
small farm. Except as described below, an agreement and the payments terminate
if an individual ceases to be a state resident or ceases to have as a primary occupation
the operation of a small farm. The bill provides that an individual whose agreement
terminates is liable to HEAB for a specified portion of the individual's most recent
annual payment.
The bill requires HEAB to make five annual payments of equal amounts to
individuals who satisfy the bill's requirements. HEAB must make the first payment
as soon as practicable after entering into the agreement and the subsequent
payments annually thereafter after receiving the documentation required in an
agreement. The total amount of the annual payments is $30,000, which is adjusted
for inflation, or the total amount of an individual's outstanding higher education
debt, whichever is less. The bill appropriates the following maximum amounts for
the program: in fiscal year 2016-17, $60,000; in fiscal year 2017-18, $120,000; in
fiscal year 2018-19, $180,000; in fiscal year 2019-20, $240,000; and in fiscal year
2020-21 and each fiscal year thereafter, $300,000. The Department of
Administration must adjust the foregoing amounts based on inflation.
The bill creates a penalty for individuals who intentionally provide false
information to HEAB or the council, which is a civil forfeiture of no more than $500.
In addition, if an individual with whom HEAB has entered into an agreement
intentionally provides false information or fails to notify HEAB that he or she ceases
to be a state resident or ceases to operate a small farm as his or her primary
occupation, the agreement terminates and the individual is liable to HEAB for the
total amount of payments he or she has received together with 10 percent annual
interest. If funding is available due to agreement terminations or because the
maximum amounts described above have not been exceeded in a fiscal year, the
council may advise HEAB of other individuals who are eligible for reimbursement
payments and, based on the amount of available funding, HEAB may limit the total
amount of annual payments to those individuals. If funding is not available to make
payments to all eligible individuals who apply for reimbursement, the council must
give priority to applicants in specified categories.
The bill allows certain individuals with whom HEAB has entered into
agreements to remain eligible for payments despite ceasing to be state residents or
ceasing to have as a primary occupation the operation of small farms. The bill
requires HEAB to consult with the council and promulgate rules allowing such
individuals to remain eligible if the ineligibility is due to circumstances beyond their
control, and those circumstances must include deployment in the United States
armed forces or national guard. The rules must provide for suspending the payments
during ineligibility and reinstituting the payments when an individual is a state
resident or has as a primary occupation the operation of a small farm.
The bill also creates an individual income tax subtract modification (deduction)
for payments made to an individual under the bill. The deduction first applies to
taxable years beginning after December 31, 2015.
The bill requires the Legislative Audit Bureau to evaluate the effectiveness of
the program in achieving the purpose of the program, which the bill specifies as to
recruit and retain new Wisconsin farmers of diverse backgrounds who have
completed postsecondary education, regardless of field of study, previous state
residency, or background in agriculture. The bill also specifies that the purpose is
to sustain the state's small and midsize family farms while fostering innovation in
sustainable best practices. Employment of sustainable best practices is one of the
categories for the council to prioritize applicants if sufficient funding is not available.
No later than July 1, 2023, and every ten years thereafter, the Legislative Audit
Bureau must submit a report to the legislature regarding the evaluation. The report
must include the bureau's recommendations on terminating, continuing, revising, or
expanding the program, including any funding recommendations.
Because this bill relates to an exemption from state or local taxes, it may be
referred to the Joint Survey Committee on Tax Exemptions for a report to be printed
as an appendix to the bill.
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:
SB706,4,103
15.01
(4) "Council" means a part-time body appointed to function on a
4continuing basis for the study, and recommendation of solutions and policy
5alternatives, of the problems arising in a specified functional area of state
6government, except the council on physical disabilities has the powers and duties
7specified in s. 46.29 (1) and (2), the state council on alcohol and other drug abuse has
8the powers and duties specified in s. 14.24,
the small farm higher education debt
9council has the powers and duties specified in s. 39.52 (3) and (9), and the electronic
10recording council has the powers and duties specified in s. 706.25 (4).
SB706,2
11Section
2. 15.137 (7) of the statutes is created to read:
SB706,4,1712
15.137
(7) Small farm higher education debt council. There is created in the
13department of agriculture, trade and consumer protection a small farm higher
14education debt council consisting of the secretary of agriculture, trade and consumer
15protection or his or her designee, the chancellor of the University of
16Wisconsin-Extension or his or her designee, and the following members appointed
17by the secretary of agriculture, trade and consumer protection for 3-year terms:
SB706,5,3
1(a) An individual who administers or participates or cooperates in programs
2of the farm service agency of the U.S. department of agriculture. The secretary may
3consult with the farm service agency in making the appointment.
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(b) An individual representing agricultural lenders.
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(c) An individual representing higher education loan providers or servicers.
SB706,3
6Section
3. 20.235 (1) (em) of the statutes is created to read:
SB706,5,127
20.235
(1) (em)
Small farm operators. A sum sufficient to make reimbursement
8payments to small farm operators under the program under s. 39.52. Subject to s.
939.52 (6), the amount appropriated under this paragraph in fiscal year 2016-17 may
10not exceed $60,000, in fiscal year 2017-18 may not exceed $120,000, in fiscal year
112018-19 may not exceed $180,000, in fiscal year 2019-20 may not exceed $240,000,
12and in fiscal year 2020-21 and each fiscal year thereafter may not exceed $300,000.
SB706,4
13Section
4. 39.52 of the statutes is created to read:
SB706,5,14
1439.52 Small farm operators. (1) Definitions. In this section:
SB706,5,1515
(a) "Council" means the small farm higher education debt council.
SB706,5,2016
(b) "Higher education debt" means debt, including interest, incurred in pursuit
17of a degree from an institution of higher education or to complete a farm and industry
18short course offered by the University of Wisconsin System, but does not include any
19debt reimbursed, assumed, or otherwise paid for under any public or private program
20other than the program established under sub. (3).
SB706,5,2421
(c) "Institution of higher education" means a nonprofit or public educational
22institution that awards an associate's or baccalaureate degree and that is accredited
23by an accrediting agency that is recognized by the secretary of the federal
24department of education.
SB706,5,2525
(d) "Operate a small farm" means to do both of the following:
SB706,6,1
11. Engage in agricultural activities at a small farm.
SB706,6,22
2. Participate in the day-to-day operation of a small farm.
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(e) "Small farm" means farm premises, as specified in s. 102.04 (3), in this state
4that, at the time of the first payment to an individual under sub. (5) or (9) (b), has
5annual gross cash farm income that is not less than $35,000 nor more than $500,000
6or 140 percent of the maximum annual gross cash farm income for a small farm under
7the typology of the economic research service of the U.S. department of agriculture,
8whichever is greater.
SB706,6,21
9(2) Findings. The legislature finds that farming is central to this state's
10traditions and economy and essential for feeding residents of this state and beyond.
11The legislature also finds that as the population of farmers ages, this state faces a
12challenge recruiting and retaining new farmers. The legislature believes that higher
13education debt is a significant barrier for new farmers who work towards economic
14viability during the early years of their careers. The legislature therefore finds it in
15the best interest of the state to establish a program to provide financial assistance
16to new farmers carrying student debt in their first years of farming in exchange for
17a commitment to farming in this state. The purpose of the program is to recruit and
18retain new Wisconsin farmers of diverse backgrounds who have completed
19postsecondary education, regardless of field of study, previous state residency, or
20background in agriculture, and to sustain this state's small and midsize family farms
21while fostering innovation in sustainable best practices.
SB706,6,24
22(3) Reimbursement program; eligibility. (a) The council shall establish a
23program that reimburses the higher education debt under sub. (5) or (9) (b) if the
24council finds that all of the following are satisfied:
SB706,7,2
11. The individual is a state resident whose primary occupation is to operate a
2small farm.
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2. The individual satisfies one of the following:
SB706,7,54
a. The individual has graduated from an institution of higher education with
5an associate's or baccalaureate degree.
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b. The individual has completed a farm and industry short course offered by
7the University of Wisconsin System.
SB706,7,98
3. No later than 5 years after satisfying the requirement under subd. 2., the
9individual begins to operate a small farm.
SB706,7,1110
4. No later than 5 years after satisfying the requirement under subd. 2., the
11individual applies to the council for reimbursement.
SB706,7,1312
5. The individual intends to operate a small farm for at least 5 years after
13applying to the council for reimbursement.
SB706,7,1514
6. No other individual who also operates the small farm specified in subd. 3.
15is reimbursed for his or her higher education debt under sub. (5) or (9) (b).
SB706,7,1716
(b) The council shall allow an individual to apply for reimbursement prior to
17satisfying the requirement under par. (a) 2.