An erosion control and revegetation plan is required for land disturbing activities to minimize erosion and sedimentation caused by the activity.
A county permit is required for land disturbing activities in the shoreland zone if the project includes 2,000 square feet or more of land.
Counties shall exempt from the permit requirement activities that have already received permits from other identified permitting authorities.
Counties may require a wetland buffer to minimize the impacts of land disturbing activities to prevent damage to wetlands.
The “50% rule" is removed, and a standard for the regulation of nonconforming structures based on the location and size of structures is used.
Unlimited ordinary maintenance and repairs is allowed on nonconforming structures.
Structural alternations are allowed on nonconforming structures if mitigation is implemented as specified by the county.
Expansion and replacement of nonconforming accessory structures is prohibited, unless located in a campground or mobile home park, and certain standards are satisfied.
Expansions of nonconforming principal structures is allowed is the structure is set back at least 35 feet from the ordinary high water mark, if the footprint cap is not exceeded, if mitigation is implemented as specified by the county and if other standards are met.
Replacement of nonconforming principal structures is allowed on the existing foundation anywhere within the shoreland setback area, and on new foundations if the structure is setback at least 35 feet from the ordinary high water mark, if mitigation is implemented as specified by the county, and if other standards are met.
Replacement of nonconforming principal structures is prohibited if the structure has no foundation, the foundation extends below the ordinary high water mark or the structure extends over the ordinary high water mark.
Counties shall adopt a mitigation system that is roughly proportional to the impacts of activities proposed.
NOTICE IS HEREBY FURTHER GIVEN that pursuant to s.
227.114, Stats., it is not anticipated that the proposed rule will have an economic impact on small businesses. The Department's Small Business Regulatory Coordinator may be contacted at:
SmallBusinessReg.Coordinator@dnr.state.wi.us or by calling (608) 266-1959.
NOTICE IS HEREBY FURTHER GIVEN that the Department has prepared an Environmental Assessment in accordance is s.
1.11, Stats., and ch.
NR 150, Wis. Adm. Code, that has concluded that the proposed rule is not a major state action which would significantly affect the quality of the human environment and that an environmental impact statement is not required.
NOTICE IS HEREBY FURTHER GIVEN that the Department will hold question and answer session from 4:30 p.m. until 5:45 p.m. prior to each hearing. Department staff will be available to answer questions regarding the proposed rules.
NOTICE IS HEREBY FURTHER GIVEN that the hearings will be held on:
Tuesday, July 12, 2005 at 6:00 p.m.
Chippewa Valley Technical College
620 Clairemont Avenue
Eau Claire
Wednesday, July 13, 2005 at 6:00 p.m.
Wis. Indianhead Technical College
2100 Beaser Avenue
Ashland
Thursday, July 14, 2005 at 6:00 p.m.
Egg Harbor Room, Landmark Resort
7643 Hillside Road
Egg Harbor
Tuesday, July 19, 2005 at 6:00 p.m.
Western WI Technical College
304 6th Street North
La Crosse
Wednesday, July 20, 2005 at 6:00 p.m.
Whispering Pines Room, Grand Pines Resort
12355 W. Richardson Bay Road
Hayward [Additional hearing]
Thursday, July 21, 2005 at 6:00 p.m.
Sentry World Theater
1800 North Point Drive
Stevens Point
Tuesday, July 26, 2005 at 6:00 p.m.
UW Washington County
400 University Drive
West Bend
Wednesday, July 27, 2005 at 6:00 p.m.
Grand Chute Town Hall
1900 Grand Chute Boulevard
Grand Chute
Thursday, July 28, 2005 at 6:00 p.m.
Holiday Inn Express [Changed location]
Pelican/Shepherd Rooms
668 West Kemp Street
Rhinelander
Tuesday, August 2, 2005 at 6:00 p.m.
Lake Lawn Resort
2400 East Geneva Street
Delavan
Thursday, August 4, 2005 at 6:00 p.m.
Oak Hall Room, Fitchburg Community Center
5520 Lacy Road
Fitchburg
NOTICE IS HEREBY FURTHER GIVEN that pursuant to the Americans with Disabilities Act, reasonable accommodations, including the provision of information material in an alternative format, will be provided for qualified individuals with disabilities upon request. Please call Toni Herkert at (608) 266-0161 with specific information on your request at least 10 days before the date of the scheduled hearing.
The proposed rule and fiscal estimate may be reviewed and comments electronically submitted at the following Internet site: adminrules.wisconsin.gov. Written comments on the proposed rule may be submitted via U.S. mail to Toni Herkert, Bureau of Watershed Management, P.O. Box 7921, Madison, WI 53707. Comments may be submitted until August 12, 2005. Written comments whether submitted electronically or by U.S. mail will have the same weight and effect as oral statements presented at the public hearings. A personal copy of the proposed rule and fiscal estimate may be obtained from Ms. Herkert.
Notice of Hearing
Revenue
NOTICE IS HEREBY GIVEN That pursuant to s.
227.11 (2), Stats., and interpreting s.
70.32 (2r) (c), Stats., the Department of Revenue will hold a public hearing at the time and place indicated below, to consider the amendment of rules relating to
the use-value assessment of agricultural property.
Hearing Date, Time and Location
Date: July 25, 2005
Time: 1:00 P.M.
Location: Department of Revenue Building
Events Room
2135 Rimrock Road
Madison, WI
Handicap access is available at the hearing location.
Written Comments
Interested persons are invited to appear at the hearing and may make an oral presentation. It is requested that written comments reflecting the oral presentation be given to the department at the hearing. Written comments may also be submitted to the contact person shown below no later than August 1, 2005, and will be given the same consideration as testimony presented at the hearing.
Contact Person
Scott Shields
Department of Revenue
Mail Stop 6-97
2135 Rimrock Road
P.O. Box 8971
Madison, WI 53708-8971
Telephone: (608) 266-2317
Analysis Prepared by the Department of Revenue
Statutory authority:
Section
227.135, Stats.
Each agency may promulgate rules that interpret the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute.
Pursuant to s.
70.32 (2r) (c), Stats., agricultural land is assessed according to the income that could be generated from its rental for agricultural use. Wisconsin Chapter
Tax 18 specifies the formula that is used to estimate the net rental income per acre. Income, expense, and value are determined by applying an owner-operator appraisal methodology. With an owner-operator method, net income is determined by deducting all operating costs and overhead from gross income. The formula specifies corn prices, cost of corn production, and corn yield for determining net income. Net income is capitalized to determine the agricultural use-value per acre. The capitalization rate is the sum of the interest rate for a medium-sized, 1-year adjustable rate mortgage and the municipal net tax rate for property taxes levied two years prior to the assessment year.
A landlord-tenant appraisal methodology is another means to estimate rental income. The basis for this method is an agreement or crop-share lease between a landowner (landlord) and a farm operator (tenant). Crop-share leases allow landowners and farm operator to share risk and management of a farm operation. The lease provisions will specify the distribution of income and costs. Typically, income and direct operational costs are equally distributed among the landowner and farm operator with the landowner assuming all property tax payments and the farm operator assuming all labor and machinery costs.
The proposed rule order specifies the provisions of a crop-share lease for determining the net rental income per acre of agricultural land for 2006 and thereafter. The rule will specify the process and components for determining the landowner's share of gross income, cost of production, and net income.
Second, the proposed rule specifies a capitalization rate that is 11% or the sum of the interest rate for a medium-sized, 1-year adjustable rate mortgages and the municipal net tax rate for property taxes levied two years prior to the assessment year, whichever is greater.
Third, the proposed rule specifies that the annual change, either positive or negative, in use-values for 2006 and thereafter shall be limited to the percentage change in the statewide equalized value in the prior year. In determining the percentage change in the statewide equalized value, the value of agricultural land and the value of new construction are excluded.
Lastly, the proposed rule repeals subdivisions that are no longer applicable.
Further detail is provided in the summary of factual data section below.
Federal Comparison
Property taxation is governed by Wisconsin's constitution and statutes, as such there are no current or pending federal regulations regarding agricultural assessment.
State Comparisons
The valuation of agricultural land in Illinois, Michigan and Minnesota are specified by statute; therefore, there are no administrative rules related to agricultural valuation in these states. The Iowa administrative rule related to agricultural valuation provides no detail regarding the formula used to calculate agricultural land value; reference is made to the Iowa real property appraisal manual.
Summary of factual data and analytical methodologies
The proposed rule order specifies a landlord-tenant crop-share appraisal method to estimate the rental income of agricultural land. Under a crop-share lease agreement, a landowner provides the land and assumes the property tax expenses for the land. A farm operator provides the machinery, fuel, and labor. The landowner and farm operator share the direct operating expenses, including the seed, fertilizer, and pesticides or chemicals. Income from the harvested crop is also shared on the same basis as the direct operating costs. The proposed rule provides for an equal distribution of income and cost among the landowner and farm operator, which is reflective of a common crop-share lease.
Gross income, cost of production, and net income are determined based upon the following.
• Gross income is determined by multiplying the 5-year average corn yield by the 5-year average market price of corn. The result is reduced by 50% in order to determine the landowner's income under a crop-share lease.
• Cost of production is determined by multiplying the 5-year average direct operating costs of corn production by the 5-year average corn yield. The result is reduced by 50% in order to determine the landowner's costs under a crop-share lease.
• The landowner also incurs a management expense that captures the cost of maintaining and administering the operation. Management expense is 7.5% of the landowner's gross income.
• Net income is calculated by subtracting management expenses and direct operating expenses from gross income. Dividing net income by the capitalization rate provides the estimated value of agricultural land.
• Property taxes, which are a landowner responsibility, are realized in the capitalization rate.
• With the exception of the capitalization rate's municipal tax rate, all data is averaged over a 5-year period.
Fiscal Estimate
The proposed rule amending Chapter
Tax 18 would have the effect on 2006 and later assessments of agricultural land.
Under the current permanent rule, the 2006 use value of agricultural land would be based on the 5-year average corn price, cost, and yield for the 1999-2003 period, and the capitalization rate would be based on the 5-year average interest rate for the 2001-2005 period. Using the data for these periods, it is estimated that agricultural land values would be negative. It is unclear how property with negative values would be taxed.
To avoid negative values for agricultural land, the Department of Revenue issued emergency rules to hold agricultural land values at 2003 levels in both 2004 and 2005.
Under the proposed permanent rule, the 2006 and later use values would be based on income capability from agricultural land using a crop share lease approach. Under a crop share lease, a landowner and a farm operator share the cost of growing a crop. The common split in such agreement is 50-50, where the landowner and farm operator equally share the harvested grain and input expenses. The proposed rule specifies the process of determining gross income, cost of production, and net income. Also, the proposed rule specifies a capitalization rate as a 1-year adjustable rate mortgage for farmland plus the net tax rate in the municipality from all taxing jurisdictions or 11%, whichever is greater.
Under the proposed permanent rule, the annual change of agricultural land value per acre would be limited to the percentage change in equalized value of real and personal property statewide, less new construction and agricultural land. From 2003 to 2004 the statewide equalized value (less new construction and agricultural land) increased by 6%. Assuming the same growth in equalized value from 2004 to 2005, assessed values per acre for each type of soil would only increase by 6% from current values. As a result, statewide agricultural land values will approximately equal $2.1 billion in 2006. Since growth of agricultural land value will be limited to the statewide change in equalized value excluding new construction and agricultural land itself, agricultural land as a share of total equalized value will decrease.
An average 200 acre farm can be an illustration of the fiscal effect on farmland property taxes. For example, under the current permanent and emergency rules, an acre of grade 1 soil in Dodge County was assessed and then frozen at $261 per acre. Assuming an average Dodge County tax rate of $21.48 per $1,000 of assessed value, property taxes levied on a 200 acre farmland in 2005 were about $1,120 ($261 x 200 x 0.02148). Under the proposed permanent rule, a grade 1 soil would be assessed at $276 ($261 x 1.06) per acre. Because agricultural land value growth will be smaller than the growth of total equalized value, property tax on agricultural land as a percent of total levies is expected to decrease statewide. Property tax changes will vary by municipality, however, based on local decisions and changes in state aid.
Under the proposed rule, there will be no loss of state forestry tax revenue. To the extent that the current permanent rule would result in negative values for agricultural land and therefore a loss of state forestry tax revenue, the proposed rule would result in an increase of $413,000 in state forestry tax revenues ($2.1 billion x .0002).
Relative to the valuation of agricultural land under the emergency rules that were adopted to avoid negative values, however, the proposed rule will result in a forestry tax revenue increase of about $23,000.
Effect on Small Business
This proposed rule order does not have a significant effect on small business.
Text of Rule
SECTION 1. Tax 18.07 (1) (b) 1., 2., 3., are amended to read:
Tax 18.07 (1) (b) Net rental income per acre. 1. Beginning in 1997 2006 and in each year thereafter, net rental income per acre for each category of agricultural land in each municipality shall be calculated according to the income attributable to a landowner under a crop-share lease. The department shall assume a lease agreement where the income and direct operating costs are distributed equally between the landowner and farm operator. The department shall adhere to professionally accepted appraisal practices in determining gross income, cost of production, and net income that are attributable to a landowner under a crop-share lease. Net income shall be calculated by subtracting average total cost of production per acre under subd. 3. from average gross income per acre under subd. 2.
2. Beginning in 1997 2006 and in each year thereafter, the landowner's average gross income per acre for each category of agricultural land in each municipality shall be calculated by multiplying the category's 5-year average corn yield per acre, adjusted for the typical productivity of that category, by the 5-year average corn market price per unit of output.
The product shall be reduced by 50% to reflect a crop-share lease with equal distribution of income. Yield per acre shall be based on the federal soil conservation natural resource conservation service's soil productivity indices and corn market price data shall be obtained from the Wisconsin department of agriculture, trade and consumer protection. If the federal soil conservation natural resource conservation service and the Wisconsin department of agriculture, trade and consumer protection are unable to provide, or to provide timely, soil productivity indices and corn market price data, respectively, comparable data shall be obtained from other generally acceptable sources.
