(k) The apparent willingness of each landowner to convey the proposed agricultural conservation easement.
(5) PRELIMINARY APPROVAL OF APPLICATIONS. The department may give preliminary approval to an application under sub. (3) after evaluating the application under sub. (4) and consulting with the council under sub. (13). The department shall give its preliminary approval in writing. Approval of an application is contingent on the signing of a contract under sub. (6m).
(6) INFORMATION RELATED TO PROPOSED EASEMENT. A cooperating entity that receives a preliminary approval under sub. (5) shall submit all of the following to the department:
(a) A copy of the proposed instrument for conveying the agricultural conservation easement.
(b) A professional appraisal of the proposed agricultural conservation easement.
(c) A statement of the purchase cost of the agricultural conservation easement.
(d) An estimate of the transaction costs that the cooperating entity will incur in connection with the purchase of the proposed agricultural conservation easement.
(e) The record of a complete search of title records that verifies ownership of the land that would be subject to the proposed agricultural conservation easement and identifies any potentially conflicting property interests, including any liens, mortgages, easements, or reservations of mineral rights.
(f) Documentation showing to the satisfaction of the department that any material title defects will be eliminated and any materially conflicting property interests will be subordinated to the proposed agricultural conservation easement or eliminated.
(6m) CONTRACT WITH COOPERATING ENTITY. After a cooperating entity complies with sub. (6) and the department determines that the proposed instrument of conveyance complies with sub. (7), the department and the cooperating entity may enter into a written contract that specifies the terms and conditions of the department's participation in the purchase of the proposed agricultural conservation easement. The cooperating entity shall agree to pay the full purchase cost and the transaction costs related to the purchase of the proposed agricultural conservation easement, subject to reimbursement under sub. (9) of the department's agreed upon share of the costs.
(7) PURCHASE OF EASEMENT. After a cooperating entity has entered into a contract under sub. (6m), the cooperating entity may, in accordance with the contract, purchase the agricultural conservation easement on behalf of the cooperating entity and the department if the agricultural conservation easement does all of the following:
(a) Prohibits the land subject to the agricultural conservation easement from being developed for a use that would make the land unavailable or unsuitable for agricultural use.
(b) Continues in perpetuity, except as provided in par. (dm).
(c) Provides that the cooperating entity and the department, on behalf of this state, are both holders of the agricultural conservation easement.
(d) Prohibits any holder of the agricultural conservation easement other than the department from transferring or relinquishing the holder's interest without 60 days' prior notice to the department.
(dm) Provides that a court may do all of the following if, at any time, the court finds that due to unforeseen circumstances it is no longer possible for the agricultural conservation easement to serve its original purpose:
1. Terminate the agricultural conservation easement.
2. Order the property owner to pay compensation to the holders of the agricultural conservation easement, including this state, under the terms the court determines to be appropriate.
(e) Complies with any other conditions specified in the contract under sub. (6m).
(8) ACCEPTANCE AND RECORDING OF EASEMENT. A cooperating entity that purchases an agricultural conservation easement under sub. (7) shall submit the agricultural conservation easement to the department for its acceptance. Upon acceptance by the department, the cooperating entity shall promptly record the agricultural conservation easement and acceptance with the register of deeds of the county in which the land subject to the agricultural conservation easement is located and shall provide to the department a copy of the recorded instrument conveying the agricultural conservation easement, certified by the register of deeds under s. 59.43 (1) (i).
(9) PAYMENT. The department shall reimburse a cooperating entity for the department's agreed upon portion of the purchase cost and transaction costs related to the purchase of an agricultural conservation easement after the cooperating entity does all of the following:
(a) Complies with sub. (8).
(b) Submits documentation showing that any material title defects have been eliminated and any materially conflicting property interests have been eliminated or subordinated to the agricultural conservation easement, as required by the contract under sub. (6m).
(c) Submits proof of the amount of the purchase cost and transaction costs that the cooperating entity has paid, consistent with the contract under sub. (6m).
(10) TRANSFER OR RELINQUISHMENT OF HOLDER'S INTEREST. The transfer or relinquishment of another holder's interest does not affect the department's interest in an agricultural conservation easement.
(11) ENFORCEMENT OF EASEMENT. The department or any other holder of an agricultural conservation easement purchased under this section may enforce and defend the agricultural conservation easement.
(12) RECORD OF EASEMENTS. The department shall maintain a record of all agricultural conservation easements purchased under this section.
(13) COUNCIL. The department shall appoint a council under s. 15.04 (1) (c) to advise the department on the administration of this section.
(End)
LRB-0203LRB-0203/2
RCT&MES:cjs:md
2009 - 2010 LEGISLATURE
DOA:......Miner, BB0112 - Change farmland preservation program
For 2009-11 Budget -- Not Ready For Introduction
2009 BILL
AN ACT ...; relating to: farmland preservation, the farmland preservation tax credit, the farmland tax relief credit, making an appropriation, and granting rule-making authority.
Analysis by the Legislative Reference Bureau
Agriculture
Farmland Preservation Program
General
This bill makes numerous changes in the Farmland Preservation Program, which contains some of the requirements that a farmer must meet to qualify for the farmland preservation tax credit. The Farmland Preservation Program includes farmland preservation planning, farmland preservation zoning, farmland preservation agreements, and soil and water conservation requirements.
Under current law, for a farmer to qualify for the farmland preservation tax credit the farm must be in a zoning district zoned exclusively for agriculture under a zoning ordinance certified by the Land and Water Conservation Board (LWCB) or be covered by a farmland preservation agreement executed by DATCP, or both. In order for DATCP to enter into a farmland preservation agreement, the county in which the farmer lives must have a farmland preservation plan that is certified by LWCB.
Under the bill, DATCP certifies farmland preservation plans and zoning ordinances.
Farmland preservation planning
This bill requires every county to adopt a farmland preservation plan. The bill does not require that a county get its plan certified, but if a county does not have a certified plan, a farmer in the county is ineligible for the farmland preservation tax credit, unless the farm is covered by a farmland preservation agreement entered into before the bill becomes law.
The bill provides that the certifications of current farmland preservation plans expire according to a schedule specified in the bill, except for certifications that currently contain expiration dates. The expiration dates in the bill range from December 31, 2011, to December 31, 2015. The higher increase in the population per square mile of a county, the sooner its farmland preservation plan certification expires. A county must submit an updated farmland preservation plan that meets the requirements in the bill and get it certified by DATCP to enable to farmers in the county to continue to claim the farmland preservation tax credit. Under the bill, DATCP must certify a plan for a period of not more than ten years.
The bill requires a county to include all of the following in its farmland preservation plan:
1. A statement of the county's policy and goals related to farmland preservation and agricultural development.
2. A description of trends and plans related to development that may affect farmland preservation and agricultural development.
3. A description of current agricultural uses of land in the county; agricultural resources, such as available land and water; agricultural infrastructure, such as processing and transportation facilities; trends in the county related to agricultural land use; and actions that the county will take to preserve farmland and promote agricultural development.
4. An identification of farmland preservation areas, which are areas that the county plans to preserve for agricultural use and for related uses, such as facilities for processing agricultural products or agricultural waste.
The bill requires a county that has a comprehensive plan (including what is commonly known as a smart growth plan) to ensure that the farmland preservation plan is consistent with its comprehensive plan.
The bill requires a county seeking to have DATCP certify its farmland preservation plan to submit the plan and related information to DATCP. The county must certify that the plan complies with the requirements in the bill. DATCP may certify the plan based on the county's certification or may review the plan and determine whether it does comply with those requirements. The bill requires a county with a certified farmland preservation plan to submit any amendments to the plan to DATCP for certification.
The bill establishes a program under which DATCP awards planning grants to counties. A grant may reimburse a county for up to 50 percent of the cost of preparing a farmland preservation plan. DATCP may not distribute more than 50 percent of a grant before the county submits the plan to DATCP for certification.
Farmland preservation zoning
Under this bill, as under current law, a city, village, town, or county (political subdivision) may adopt a zoning ordinance that enables farmers to be eligible for the farmland preservation tax credit.
The bill provides that certifications of current farmland preservation zoning ordinances expire according to a schedule specified in the bill, except for certifications that currently contain expiration dates. The dates range from December 31, 2012, to December 31, 2016. The higher the increase in population per square mile of a political subdivision, the sooner its certification expires. A political subdivision must submit an updated farmland preservation zoning ordinance that meets the requirements in the bill and have it certified by DATCP to enable the farmers in the political subdivision to continue to claim the farmland preservation tax credit based on the zoning ordinance. Under the bill, DATCP must certify a zoning ordinance for a period of not more than ten years.
Under the bill, to be eligible for certification, a farmland preservation zoning ordinance must be substantially consistent with a certified county farmland preservation ordinance.
Under current law, land in a farmland preservation zoning district must be limited to agricultural use, with certain exceptions. Current law allows, as conditional uses, agriculturally related, religious, utility, institutional, or governmental uses that are consistent with agricultural use and are necessary in light of alternative locations available. Family farm businesses may also be allowed, with a conditional use permit, if they are conducted in existing structures.
Under the bill, in addition to agricultural uses, a political subdivision may allow accessory uses and agriculture-related uses in a farmland preservation zoning district with a conditional use permit. Accessory uses are conducted on a farm and include uses that are incidental to agricultural uses and family farm businesses. Agriculture-related uses include businesses that sell farm equipment or supplies and businesses that store or process agricultural products or that process agricultural wastes. A political subdivision may also include undeveloped natural resource and open space areas in a farmland preservation zoning district. DATCP may promulgate rules that specify additional uses that may be allowed in farmland preservation districts without a conditional use permit.
The bill also specifies other uses that may be allowed in a farmland preservation zoning district with a conditional use permit. Generally, transportation, communications, utility, governmental, institutional, religious, and nonprofit community uses are in this category if the political subdivision makes certain determinations. The determinations include that the proposed use and its location in the zoning district are reasonable and appropriate, considering alternative locations, that the use is reasonably designed to minimize the conversion of land from agricultural use or open space, and that the use does not substantially impair the agricultural use of surrounding parcels that are zoned for agricultural use.
Current law requires a political subdivision to specify a minimum lot size for farmland preservation zoning districts. This bill eliminates that requirement.
This bill provides two methods for political subdivisions to allow the construction of nonfarm residences in farmland preservation zoning districts. A political subdivision may issue a conditional use permit for the construction of one nonfarm residence if several requirements are satisfied. The requirements include that the ratio of nonfarm residential acreage to farm acreage on the base farm tract on which the residence will be located will not be greater that 1 to 20 after the residence is constructed and that there will not be more than four nonfarm dwelling units, nor five dwelling units of any kind, on the base farm tract after the nonfarm residence is constructed. A base farm tract is all of the land, whether one parcel or two or more contiguous parcels, that is in a farmland preservation zoning district and is part of a single farm when DATCP first certifies the updated farmland preservation zoning ordinance.
The bill also authorizes a political subdivision to issue a conditional use permit that covers more than one nonfarm residence in what is called a nonfarm residential cluster. The parcels on which the nonfarm residences would be constructed must be contiguous and the political subdivision must ensure that if all of the nonfarm residences were constructed, each would satisfy the conditions described above for approval of one nonfarm residence.
The bill requires a political subdivision seeking to have DATCP certify its farmland preservation zoning ordinance to submit the ordinance and related information to DATCP. The political subdivision must certify that the ordinance complies with the requirements in this bill. DATCP may certify the ordinance based on the political subdivision's certification or may review the ordinance and determine whether it does comply with those requirements.
Under current law, a political subdivision may rezone land out of a farmland preservation zoning district only after making findings based on consideration of whether adequate public facilities exist or will be provided to accommodate development, whether providing public facilities to accommodate development will place an unreasonable burden on affected local governments, whether the land proposed for rezoning is suitable for development, and whether development will cause undue water or air pollution or unreasonably adverse effects on rare natural areas. The law requires political subdivisions to notify DATCP when they rezone land out of a farmland preservation district.
Under the bill, in order to rezone land out of a farmland preservation zoning district, a political subdivision must make a number of findings, including that the land is better suited for a use not allowed in a farmland preservation zoning district, that the rezoning is substantially consistent with the certified county farmland preservation plan, and that the rezoning will not not substantially impair the agricultural use of surrounding parcels that are zoned for agricultural use. The bill does not require a political subdivision to report each rezoning, but it does require an annual report of the amount and location of land that was rezoned.
Under current law, when property is rezoned out of a farmland preservation zoning district, DATCP is required to place a lien on the rezoned 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 of the land during the preceding ten years plus interest. The law also requires DATCP to file a lien when a conditional use permit is granted for a use that is not an agricultural use.
The bill eliminates the lien requirements. Under the bill, a political subdivision may not rezone land out of a farmland preservation zoning district until the owner of the land makes a payment to the political subdivision 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. A political subdivision must annually pay this amount to DATCP for each parcel of land that it rezones. A political subdivision may require a higher payment for rezoning and retain the amount in excess of what it must pay to DATCP.
Under the bill, most amendments to a certified farmland preservation zoning ordinance are automatically considered to be certified. An amendment that is a comprehensive revision of the ordinance or an amendment that extends coverage of an ordinance to a town that was not previously covered is not automatically considered to be certified, and DATCP may specify other types of amendments that are not automatically considered to be certified.
Farmland preservation agreements
Under current law, DATCP enters into farmland preservation agreements with farmers in counties with certified farmland preservation plans. To qualify for coverage under an agreement, the land must consist of at least 35 acres and produce a specified amount of farm profits and must be in an agricultural preservation planning area or in a farmland preservation zoning district under a certified ordinance. An agreement requires the landowner to maintain the land in agricultural use for a term specified in the agreement, except that DATCP may release land from the agreement under specified circumstances. The term of a farmland preservation agreement must be from ten to 25 years, subject to renewal for additional ten- to 25-year terms.
This bill prohibits DATCP from renewing current farmland preservation agreements. The bill authorizes DATCP to enter into a new farmland preservation agreement only for land that is in an agricultural enterprise area, designated by DATCP using the current statutory procedure for promulgating emergency rules. To qualify for coverage by a farmland preservation agreement, land must produce a specified amount of gross farm revenues. A farmland preservation agreement must be for a term of at least 15 years.
Under the bill, DATCP may not designate agricultural enterprise areas with a combined area of more than 1,000,000 acres and, before January 1, 2012, may not designate agricultural enterprise areas with a combined area of more than 200,000 acres. DATCP may not designate an area as an agricultural enterprise area unless it is entirely located in a farmland preservation area identified in a certified farmland preservation plan and it is primarily in agricultural use. DATCP may not designate an area as an agricultural enterprise area unless it receives a petition requesting the designation filed by each political subdivision in which any part of the area is located and by the owners of at least five farms that would be eligible for coverage by farmland preservation agreements.
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:
