Citations Affected: IC 6-1.1-6.9; IC 15-7-10.
Synopsis: Farmland protection program. Freezes the assessed value of
land classified in the farmland protection program. Upon withdrawal
from the classification, requires payment of the property taxes that
would have been assessed to the land during the lesser of the period of
classification or ten years, plus interest. Requires deposit of the
property taxes in the farmland protection program account. Creates the
farmland protection program to be administered by the Indiana land
resources council. Creates the farmland protection program account,
and appropriates money in the account.
Effective: July 1, 2004; January 1, 2005.
January 12, 2004, read first time and referred to Committee on Agriculture and Small
A BILL FOR AN ACT to amend the Indiana Code concerning
agriculture and animals and to make an appropriation.
SECTION 1. IC 6-1.1-6.9 IS ADDED TO THE INDIANA CODE
AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
JANUARY 1, 2005]:
Chapter 6.9. Assessment of Classified Farmland
Sec. 1. As used in this chapter, "farmland" refers to land classified in the farmland protection program under IC 15-7-10.
Sec. 2. As used in this chapter, "recapture period" means the lesser of:
(1) the period of classification of land as farmland; or
(2) the ten (10) year period immediately preceding the date on which land is withdrawn from the farmland classification.
Sec. 3. As used in this chapter, "taxpayer" refers to the owner of farmland.
Sec. 4. For each assessment date during the period of the classification of land as farmland:
(1) the land is assessed using the lesser of:
(A) the assessed value finally determined for the current
year's assessment date; or
(B) the assessed value finally determined for the assessment date that next succeeds the date of the farmland classification under IC 15-7-10;
(2) assessing officials shall keep a record of the assessed value that would apply if the land were not classified as farmland;
(3) ditch assessments on the farmland shall be paid; and
(4) oil, gas, stone, coal, or other mineral wealth obtained from farmland shall be assessed and placed on the tax duplicate.
Sec. 5. The taxpayer shall record the approved application for farmland classification under IC 15-7-10 in the county recorder's office. After an approved application is properly recorded, the county auditor shall enter the farmland for taxation at the assessed value determined under section 4(1) of this chapter.
Sec. 6. If farmland is withdrawn from the farmland classification:
(1) the Indiana land resources council shall immediately notify the assessor, auditor, and recorder of the county in which the farmland is located that the farmland has been withdrawn; and
(2) the taxpayer shall make a notation of the withdrawal in the records of the county recorder.
Sec. 7. (a) If farmland is withdrawn, other than under IC 15-7-10-11, from the farmland classification, the taxpayer shall pay to the county treasurer an amount equal to the sum of:
(1) the remainder of:
(A) the total property taxes that, if it were not for the farmland classification, would have been assessed to the land during the recapture period; minus
(B) the total property taxes assessed to the farmland during the recapture period that were paid; plus
(2) interest on the property taxes determined under subdivision (1) at the rate of ten percent (10%) per year.
(b) Property taxes under subsection (a)(1) are determined using:
(1) the assessed value of the land as recorded under section 4(2) of this chapter; and
(2) the net tax rate for the taxing district in which the farmland is located;
for each year for which the property taxes are determined.
(c) The liability imposed by this section is a lien on the land withdrawn from the farmland classification. The county treasurer shall deposit collections under this section in the farmland
protection program account established by IC 15-7-10-12. If the
liability is not satisfied, the lien is treated in the same manner that
delinquent taxes on real property are treated.
Sec. 8. A conveyance of farmland does not release a person acquiring an interest in the land from an obligation or liability imposed under this chapter.
SECTION 2. IC 15-7-10 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]:
Chapter 10. Farmland Protection Program
Sec. 1. As used in this chapter, "assistant commissioner" refers to the assistant commissioner of agriculture appointed under IC 4-4-22-20.
Sec. 2. As used in this chapter, "council" refers to the Indiana land resources council established by IC 15-7-9-4.
Sec. 3. As used in this chapter, "designated area" refers to an area of land set aside under section 8(c) of this chapter in a county within which land may be designated as farmland eligible for the program.
Sec. 4. As used in this chapter, "farmland" includes the following:
(1) Acreage used for the production of:
(D) fibre; and
(E) oilseed crops.
(2) Acreage used to raise:
(B) dairy animals;
(C) dairy products;
(E) poultry products; and
(F) furbearing animals.
(3) Acreage used to:
(A) grow horticultural and nursery stock;
(B) grow fruits;
(C) grow vegetables;
(D) grow forage;
(E) grow timber;
(F) grow trees;
(G) raise fish and other aquaculture products;
(H) raise bees and apiary products; and
(I) grow other crops used for agricultural income.
(4) Areas including;
(B) land modifications;
(E) forest land;
(F) wildlife land;
(G) riparian areas;
(H) buffers; and
(I) other areas;
that enhance or depend on the inherent productivity of the land.
Sec. 5. As used in this chapter, "livestock" has the meaning set forth in IC 4-4-3.2-1(b).
Sec. 6. As used in this chapter, "program" refers to the farmland protection program established by section 7 of this chapter.
Sec. 7. The farmland protection program is established to provide a voluntary tool to Indiana landowners to protect and conserve rural lands, including the following:
(2) Other rural natural areas as defined by the council.
Sec. 8. (a) The council shall administer the program. The council shall work with local agencies and organizations to establish a cooperative relationship in land use practices and policies. The council, after consulting with local agencies and organizations, shall develop specific program guidelines and policies to administer the program. The program must be compatible with the federal Farm and Ranch Land Protection Program (7 CFR 1491).
(b) The council may adopt rules under IC 4-22-2 to implement the program.
(c) The council, working with local agencies and organizations, shall establish criteria for designated areas of land on a county by county basis. Only land within a designated area is eligible for the program. Before establishing an area as a designated area, the council shall hold a hearing in the county in which the land is located. The council shall follow the procedures for public hearings under IC 5-14-1.5-5. The council shall obtain the approval of the local zoning authority having jurisdiction over the designated area, or, if the designated area does not lie within the jurisdiction of any
local zoning authority, the county commissioners of the county in
which the designated area is located, before designating an area as
a designated area for purposes of this chapter. The decision that an
area is a designated area is an unappealable determination and not
subject to contest.
(d) The council shall establish criteria for evaluating applications for the program, including the following:
(1) Land must have been in an agriculture production or conservation program at the time of application and for five (5) years before the application.
(2) Land must be in a designated area.
(3) Land in:
(A) a locally recognized agricultural district;
(B) an agricultural protection zone;
(C) an agricultural security area; or
(D) any effective local agricultural protection initiative;
shall be given higher consideration.
(4) At least thirty-five (35) acres of working land must be located within an agricultural area with not more than one (1) residence on a single or combined tract to meet acreage requirements with either single or multiple owners.
(5) Larger tracts must be given priority.
(6) A scoring system similar to the federal Farm and Ranch Land Protection Program (7 CFR 1491) shall be developed. There shall be a minimum score requirement to qualify for the program, including standards on:
(A) soil erosion;
(B) conservation plans with the federal Natural Resources Conservation Service's quality criteria;
(C) landowner participation; and
(D) management plans.
(e) A consistent lack of compliance with environmental permits and requirements shall disqualify a landowner from the program.
(f) Applications must be received by the council by January 1 of each year, beginning January 1, 2005. Contracts must be entered into by March 1 of each year, beginning March 1, 2005.
(g) The council may reject an application for the program if the council finds that the parcel proposed for protection was divided from a larger parcel in a transaction intended to defeat the purposes of the program.
Sec. 9. (a) A landowner may enroll in the program by entering into a contract with the council for a period of ten (10) years, with
an unlimited number of automatic renewal periods of five (5) years
each. A landowner may give notice to the state of the landowner's
intention to terminate the contract at the end of the contract
period. If a landowner is going to terminate the contract, the
landowner must give six (6) months advance notice before the
expiration date of the contract.
(b) Contract conditions run with the land and must be recorded.
(c) During the term of the contract, one (1) residential building lot may be split from the root parcel (which includes all contiguous property under substantially common ownership at the time of enrollment in the program) if the residential building lot is used for the residence of an individual who is farming the land.
(d) A split may not be made from the root parcel for manufacturing, industrial, or commercial lots unless the split is in keeping with the purpose, principles, and objectives of the program.
Sec. 10. When a county government, local planning commission, or other local entity engaged in planning for a local community has developed standards for the preservation of farmland, the council shall consider the standards when evaluating applications.
Sec. 11. (a) A landowner may withdraw from the program when proposing to enroll in an alternate land protection program of equal or greater time period and conditions.
(b) An early withdrawal, except under subsection (a), from the contract shall result in the loss of and pay back of any incentive received from the program.
(c) Any violation of the contract shall disqualify the farmland or the landowner from enrolling in the program for ten (10) years after the time of confirmation of the violation.
Sec. 12. (a) The farmland protection program account is established within the state general fund for the purpose of providing money to match federal funds under 7 CFR 1491 to be used for the protection of farmland in Indiana. The account shall be administered by the council.
(b) The account consists of:
(1) money collected under IC 6-1.1-6.9-7;
(2) gifts and bequests; and
(c) The expenses of administering the account shall be paid from money in the account.
(d) The treasurer of state shall invest the money in the account not currently needed to meet the obligations of the account in the
same manner as other public money may be invested. Interest that
accrues from these investments shall be deposited in the account.
(e) Money in the account at the end of a state fiscal year does not revert to the state general fund.
(f) Money in the account is continuously appropriated to the council for the uses specified in this section.
Sec. 13. Owners of land in the program shall be given priority for state grants or technical assistance given by the commissioner of agriculture or the department of commerce.
SECTION 3. IC 32-24-1-5.4 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2004]: Sec. 5.4. (a) For purposes of this section, "protected farmland" means land that is:
(1) included in an area designated as protected by the Indiana land resources council under IC 15-7-10-8(c); and
(2) covered under a contract between the Indiana land resources council and the landowner under IC 15-7-10-9.
(b) If land being condemned under this article is designated as protected farmland under a contract entered into under IC 15-7-10-9, the damages offered by the condemnor shall be two hundred percent (200%) of:
(1) the fair market value offered under section 5 of this chapter; or
(2) the award made by a court under this article.
(c) This section does not apply to land that is being condemned for:
(1) a highway;
(2) a road;
(3) a street; or
(4) a right-of-way under IC 32-24-4-1.
SECTION 4. [EFFECTIVE JANUARY 1, 2005] IC 6-1.1-6.9, as added by this act, applies only to property taxes first due and payable after December 31, 2005.