Bill Text: MI HB4158 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Land use; farmland and open space; expiration or relinquishment of development rights agreement; modify lien payment. Amends sec. 36111 of 1994 PA 451 (MCL 324.36111).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-02-05 - Printed Bill Filed 02/05/2009 [HB4158 Detail]

Download: Michigan-2009-HB4158-Introduced.html

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HOUSE BILL No. 4158

 

February 4, 2009, Introduced by Rep. Mayes and referred to the Committee on Agriculture.

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending section 36111 (MCL 324.36111), as amended by 2002 PA

 

75.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 36111. (1) A development rights agreement expires at the

 

expiration of the term of the agreement unless renewed with the

 

consent of the owner of the land. If the owner of the land has

 

complied with the requirements of this part regarding development

 

rights agreements, the owner is entitled to automatic renewal of

 

the farmland covered by the agreement upon written request of the

 

owner. A development rights agreement may be renewed for a term of

 

not less than 7 years. If a development rights agreement is

 

renewed, the state land use agency shall send a copy of the renewal

 

contract to the local governing body. of the local unit of

 

government in which the farmland is located.

 

     (2) A development rights agreement or a portion of the

 

farmland covered by a development rights agreement may be

 

relinquished as provided in this section and section 36111a.

 

Farmland may be relinquished by this state before a termination

 

date contained in the instrument under either of the following

 

circumstances:

 

     (a) If approved by the local governing body and the state land

 

use agency, land containing structures that were present before the

 

recording of the development rights agreement may be relinquished

 

from the agreement. Not more than 2 acres may be relinquished under

 

this subdivision unless additional land area is needed to encompass

 

all of the buildings located on the parcel, in which case not more

 

than 5 acres may be relinquished. If the size of the parcel

 

proposed to be relinquished is less in area than the minimum parcel

 

size than that required by local zoning, the parcel may shall not

 

be relinquished unless a variance is obtained from the local zoning

 

board of appeals to allow for the smaller parcel size.

 

     (b) If approved by the local governing body and the state land

 

use agency, land may be relinquished from the agreement for the

 

construction of a residence by an individual essential to the

 

operation of the farm as defined in section 36110(5). Not more than

 

2 acres may be relinquished under this subdivision. If the size of

 

the parcel proposed to be relinquished is less in area than the

 

minimum parcel size than that required by local zoning, the parcel

 

may shall not be relinquished unless a variance is obtained from

 

the local zoning board of appeals to allow for the smaller parcel

 

size.

 

     (3) Until April 1, 1997, if an owner who entered into or

 

renewed a development rights agreement before April 15, 1994 makes

 

a request, in writing, to the state land use agency, to terminate

 

that development rights agreement with respect to all or a portion

 

of the farmland covered by the agreement, the state land use agency

 

shall approve the request and relinquish that farmland from the

 

development rights agreement. If farmland is relinquished under

 

this subsection, the state land use agency shall notify the local

 

governing body of the local unit of government in which the land is

 

located of the relinquishment.

 

     (4) If the request for relinquishment of the development

 

rights agreement is approved, the state land use agency shall

 

prepare an instrument, subject to subsections (5) , (6), (7), and

 

to (8), and record it with the register of deeds of the county in

 

which the land is situated.

 

     (5) If a development rights agreement or a portion of a

 

development rights agreement is to be relinquished pursuant to

 

subsection (2) or section 36111a, the state land use agency shall

 

record a lien against the property formerly subject to the

 

development rights agreement for the total amount of the allocated

 

tax credit of the last 7 years, including the year of termination,

 

received by an owner for that property under the agreement under

 

section 36109 , and attributable to the property formerly subject

 

to the development rights agreement, plus interest at the rate of

 

6% per annum simple interest from the time the credit was received

 

until the lien is placed on the property.

 

     (6) If the property being relinquished from the development

 

rights agreement is less than all of the property subject to that

 

development rights agreement, the allocated tax credit for the

 

development rights agreement shall be multiplied by the property's

 

share of the taxable value of the agreement. As used in this

 

subsection:

 

     (a) "The allocated tax credit" means the amount obtained by

 

multiplying the owner's total farmland preservation credit claimed

 

in that year on all agreements by the quotient of the ad valorem

 

property tax levied in that year on property subject to the

 

development rights agreement that included the property being

 

relinquished from the agreement divided by the total property taxes

 

levied on property subject to any development rights agreement and

 

used in determining the farmland preservation credit in that year.

 

     (b) "The property's share of the taxable value of the

 

agreement" means the quotient of the taxable value of the property

 

being relinquished from the agreement divided by the total taxable

 

value of property subject to the development rights agreement that

 

included the property being relinquished from the agreement. For

 

years before 1995, taxable value means assessed value.

 

     (7) Thirty days before the recording of a lien under this

 

section, the state land use agency shall notify the owner of the

 

farmland subject to the development rights agreement of the amount

 

of the lien, including interest, if any. If the lien amount is paid

 

before 30 days after the owner is notified, the lien shall not be

 

recorded. The lien may be paid and discharged at any time and is

 

payable to the state by the owner of record at the time when the

 

land or any portion of it is sold by the owner of record, or if the

 

land is converted to a use prohibited by the former development

 

rights agreement. The lien shall be discharged upon renewal or

 

reentry in a development rights agreement, except that a subsequent

 

lien shall not be less than the lien discharged. Notwithstanding

 

any other provision of this section, from July 1, 2009 to December

 

31, 2009, a lien under this section recorded before January 1, 2009

 

may be paid at a value that is 10% less than the face value of the

 

lien.

 

     (8) Upon the termination of all or a portion of the

 

development rights agreement under subsection (3) , the termination

 

of a development rights agreement under subsection (13), or,

 

subject to subsection (15) (14), the termination of a development

 

rights agreement under subsection (1), the state land use agency

 

shall prepare and record a lien, if any, against the property

 

formerly subject to the development rights agreement for the total

 

amount of the allocated tax credit of the last 7 years, including

 

the year of termination, received by the owner under section 36109,

 

attributable to the property formerly subject to the development

 

rights agreement plus interest at the current monthly interest rate

 

of 1 percentage point above the adjusted prime rate per annum from

 

the time the lien is recorded until it is paid. The adjusted prime

 

rate shall be determined as provided in section 23 of 1941 PA 122,

 

MCL 205.23. The lien shall be without interest or penalty and is

 

payable subject to as provided in subsection (7).

 

     (9) Upon termination of a development rights agreement, the

 

The state land use agency shall notify the department of treasury

 

for their records of the termination of a development rights

 

agreement.

 

     (10) Until October 1, 2000, the proceeds from lien payments

 

made under this part shall be used by the state land use agency to

 

administer this part and, pursuant to section 36111b, to purchase

 

development rights on farmland that does not necessitate direct

 

purchase of the fee interest in the land. Beginning on October 1,

 

2000, the The unappropriated proceeds from lien payments made under

 

this part shall be forwarded to the state treasurer for deposit in

 

the agricultural preservation fund created in section 36202. On

 

October 1, 2000, all unexpended proceeds from lien payments made

 

under this part that are held by the state shall be transferred to

 

the agricultural preservation fund created in section 36202.

 

     (11) Upon the relinquishment of all of the farmland under

 

section 36110(2) or a portion of the farmland under section

 

36110(3), the state land use agency shall prepare and record a lien

 

against the property formerly subject to a development rights

 

agreement in an amount calculated as follows:

 

     (a) Establishing a term of years by multiplying 7 by a

 

fraction, the numerator of which is the number of years the

 

farmland was under the development rights agreement, including any

 

extensions, and the denominator of which is the number representing

 

the term of years of that agreement, including any extensions.

 

     (b) The lien amount equals the total amount of the allocated

 

tax credit claimed attributable to that development rights

 

agreement in the immediately preceding term of years as determined

 

in subdivision (a).

 

     (12) When a lien is paid under this section, the state land

 

use agency shall prepare and record a discharge of lien with the

 

register of deeds in the county in which the land is located. The

 

discharge of lien shall specifically state that the lien has been

 

paid in full, that the lien is discharged, that the development

 

rights agreement and accompanying contract are terminated, and that

 

the state has no further interest in the land under that agreement.

 

     (13) An owner of farmland, upon written request to the state

 

land use agency on or before April 1, 1997, may elect to have the

 

remaining term of the development rights agreement reduced to 7

 

years if the farmland has been subject to that development rights

 

agreement for 10 or more years. If the farmland has not been

 

subject to a development rights agreement for 10 or more years, an

 

owner of farmland may, upon written request to the state land use

 

agency on or before April 1, 1997, elect to have the term of the

 

development rights agreement reduced to 17 years from the initial

 

year of enrollment.

 

     (13) (14) A farmland development rights agreement is

 

automatically relinquished when the farmland becomes subject to an

 

agricultural conservation easement or purchase of development

 

rights under section 36111b or 36206.

 

     (14) (15) If, upon expiration of the term of a farmland

 

development rights agreement, the farmland becomes subject to an

 

agricultural conservation easement or purchase of development

 

rights under section 36111b or 36206 or if a farmland development

 

rights agreement is automatically relinquished under subsection

 

(14) (13), the farmland is not subject to a lien under this

 

section.