Legislation
– 2005 Legislative Session
Relating to Agricultural Land Preservation Issues
Task Force recommended
legislation is indicated with an asterisk (*).
Task Force
inspired legislation (at least some part of the bill) is indicated with a cross
( ).
House of Delegates
legislation only:
HB 001 – Public School Construction Assistance Act of 2005
Sponsors: The
Speaker and Delegates Hixson, Conway, Healey, Barkley, Bobo, Bohanan, Bozman,
Burns, Cane, G. Clagett, V. Clagett, Conroy, Donoghue, Feldman, Frush,
Gutierrez, Haynes, Heller, Howard, Hubbard, Jones, Kaiser, King, Krysiak, Levy,
Love, Madaleno, Malone, Mandel, Menes, Montgomery, Niemann, Patterson,
Pendergrass, Petzold, Quinter, Rosenberg, Stern, Vallario, Vaughn, Zirkin,
Barve, Branch, Bronrott, Cardin, Cryor, C. Davis, Doory, Franchot, Gaines,
Goodwin, Gordon, Griffith, James, Lee, Marriott, Moe, Nathan-Pulliam, Paige,
Proctor, Ramirez, Ross, and F. Turner.
This
bill would impose recordation and transfer taxes on the transfer of real
property with a value of $1 million or more when the transfer is achieved
through the sale of a "controlling interest" in a specified
corporation, partnership, limited liability company, limited liability
partnership, or other form of unincorporated business. A controlling interest is defined as
more than 80 percent of the total value of the stock or the interest in capital
and profits. This bill would also
require specified amounts of local recordation taxes to be dedicated to school
construction for fiscal years 2006 through 2009. State transfer taxes collected under the bill would be
dedicated to land preservation programs and distributed by the formula as
provided under current law.
Sponsor: Chairman,
Environmental Matters Committee (Departmental bill).
This legislation
increases the time from 30 days to 90 days that a county government has to
notify the Foundation of its recommendation when a landowner applies to have a
MALPF easement terminated. This
change in the timeline is to allow the county sufficient time to consult its
county Agricultural Land Preservation Advisory Board, hold public hearings, and
have the request considered by the county's governing authority. Easement termination requests are only
available to landowners whose easement purchases were approved by the Board of
Public Works prior to September 30, 2004, whose easements have been held by
MALPF for 25 years, and whose properties can no longer support profitable
farming of any kind for any farmer.
All easements purchased after that date have no termination possibility.
Sponsor: Chairman,
Environmental Matters Committee (Departmental bill).
This legislation brings the
membership of the Maryland Agricultural Land Preservation Foundation's Board of
Trustees up-to-date by adding the Secretary of Planning as an ex officio member to the MALPF Board of Trustees,
allowing the Secretary of Planning to appoint a designee from within the
Maryland Department of Planning (MDP), and repealing the provision that
requires a representative of MDP to be an at-large member of the Board. Also, this legislation reduces the
number of at-large members from nine to eight. The existing law was written before Planning was a
cabinet-level department and required the representative of the Office/Department
of Planning to go through the entire appointments process to fill the at-large
position.
HB 078 – Maryland
Agricultural Land Preservation Foundation – Local Land Use
This
legislation authorizes St. Mary's County to enter into "installment
purchase agreements" (IPAs) for an aggregate purchase price of up to $20
million plus interest to acquire the development rights for agricultural or
forestry land. Under such an
agreement, St. Mary's County will acquire development rights from landowners of
agricultural or forestry land located in St. Mary's County. In doing so, the county will be required
to pay the purchase price for that land either in installments or at the
maturity of the agreement, and interest on the unpaid balance.
This bill would provide that placing an easement on land acquired
or developed under a State grant from Program Open Space (POS) does not
constitute a conversion restricted under current law.
This bill would require the Administration to repay
diverted real estate transfer taxes at a rate of approximately $20 million per
year back into the Program Open Space fund either by general obligation bonds,
repayment from the State's General Fund, or a combination of the two. This repayment would be accomplished by
a reasonable plan submitted by the Governor or, in the absence of a reasonable
plan, by a $20 million annual transfer from the State's General Fund. In the future, transfers from the
Special Fund to the General Fund would (1) be restricted to the fiscal year
following a report that shows that expenditures exceed revenues, (2) be limited
to no more than 50 percent of special fund revenues that can be transferred to
the General Fund, and (3) require that a reasonable repayment plan be submitted
by the Governor to the General Assembly.
This
bill would require MALPF to release a child's lot upon written application
submitted by the estate of a deceased landowner whose land is under a permanent
agricultural preservation easement within one year after the death of the landowner.
This bill would require charter
counties that develop a comprehensive land-use plan to include a Priority
Preservation Areas Element as part of that comprehensive plan. A designated Priority Preservation Area
must meet certain criteria, such as having productive agricultural or forest
soils, being capable of supporting profitable agricultural or forestry
enterprises, and being large enough to support agricultural activities. The Priority Preservation Area would
have to be certified by the Maryland Department of Planning and the Board of
Trustees of the Maryland Agricultural Land Preservation Foundation. Further, this bill would create
additional funding sources for the Maryland Agricultural Land Preservation
Foundation in the State property tax surcharge, by closing the loophole that
allows corporate entities to avoid the real estate transfer tax when property
is transferred by selling interest in the corporate entity rather than selling
the property directly, and by increasing the agricultural transfer tax. Finally, 50% or more of the revenues
MALPF receives from the real estate transfer taxes collected from the transfer
of property other than agricultural land or property located in a Priority
Funding Area, 50% or more of the revenues MALPF receives from the agricultural
transfer tax, and all of the revenues it receives from the new property tax
surcharge and the closing of the corporate loophole funds available to purchase
agricultural conservation easements would be restricted to being spent only in
certified Priority Preservation Areas.
Senate legislation
only:
None
House of Delegates and
Senate legislation (cross-listed bills):
HB 148/SB 127 – Budget Reconciliation Act
of 2005
Sponsors: The
Speaker of the House of Delegates (by request of the Administration).
The
President of the Senate (by request of the Administration).
Department position: support the
Administration's position.
Legislative result: unsuccessful: HB 148 was not reported out of the
Appropriations Committee of the House of Delegates; agreement was reached in
conference committee; SB 127 was not reported out of the Senate Budget and
Taxation Committee.
These cross-listed Administration bills compose one of three
omnibus bills required under the Governor's budget plan. The bill supports that plan primarily
by providing relief from mandated funding levels for several programs
throughout State government.
Changes in these provisions of law would effectuate $73.6 million in
contingent general fund reductions in the fiscal 2006 budget bill (HB 150/SB
125). Some of the provisions have
a one-time effect and some are ongoing.
Additional budget benefits result from deferring or eliminating other
funding requirements, expanding the uses of existing special funds, and
transferring a portion of transfer tax revenues to the general fund for a
multi-year period. The legislation
includes a severability clause. This
legislation affects MALPF as follows.
It would redirect real estate transfer tax revenues to the General Fund
for four years, phasing in the amount of the transfer from 75% in FY 2006, to
66.67% in FY 2007, to 50% in FY 2008, and to 25% in FY 2009. Any revenue attained over the amount
estimated in the budget would go to the General Fund on a permanent basis. The immediate impact on MALPF is that
its allocation from transfer tax revenues would go from $35,879,015 down to
$8,041,515 in FY 2006. Because
this legislation did not pass, MALPF ended up receiving the full amount of its
allocated transfer tax revenues for FY 2006.
HB 150/SB 125 – Budget Bill (Fiscal Year
2006)
Sponsors: The
Speaker of the House of Delegates (by request of the Administration).
The
President of the Senate (by request of the Administration).
Department position: support the
Administration's position.
Legislative result: successful: HB 150 was passed with amendments by
the House of Delegates and then passed with different amendments by the Senate;
the House refuses to concur, and the Senate refuses to recede; agreement was
reached in conference committee; HB 150 became law without the Governor's
signature. SB 125 was not reported
out of the Senate Budget and Taxation Committee.
This Administration legislation composes one of
three omnibus bills required under the Governor's budget plan. The budget bill for FY 2006 is created
to make the proposed appropriations contained in the State Budget for the
fiscal year ending June 30, 2006, in accordance with Article III, Section 52 of
the Maryland Constitution; and generally relating to appropriations and
budgetary provisions made related to that section. Because the budget reconciliation legislation (HB 148/SB
127) did not pass, the operational budget legislation, including programs
funded under special funds such as MALPF, determined the available funding for
FY 2006. Under this legislation,
MALPF was appropriated $64,240,113 from all sources, less $15,345,000, for a
total of $48,895,113 for both program operation expenses and the purchase of
easements.
HB 340/SB 274 – Creation of a State Debt –
Maryland Consolidated Capital Bond Loan of 2005 and the Maryland Consolidated
Capital Bond Loans of 1998, 2000, 2002, 2003, and 2004
Sponsors: The
Speaker of the House of Delegates (by request of the Administration).
The
President of the Senate (by request of the Administration).
Department position: support the
Administration's position.
Legislative result: successful: HB 340 passed with amendments by the
House of Delegates and then passed with incompatible amendments by the Senate;
agreement was reached in conference committee; HB 340 was signed by the
Governor; SB 274 was not reported out by the Senate Budget and Taxation
Committee.
These cross-listed bills would authorize the
creation of a State Debt in the amount of $665,443,000 for the purposes
specified in the bill. The
legislation alters the provisions of prior capital budgets. Specific to farmland preservation, this
legislation no longer authorizes the creation of bond funding for MALPF to make
up for the transfer of its dedicated real estate transfer tax revenues to the
General Fund. Also, GreenPrint
program funding has been ended.
Senators
Dyson and Forehand.
These
cross-listed bills would allow, subject to the approval of a county governing
body, an individual to claim a credit against the county income tax for an
easement conveyed to MALPF or the Maryland Environmental Trust (MET). This legislation states that the credit
allowed could not exceed the lesser of the State income tax for a particular
taxable year or $5,000, though it allows a county governing body to determine
the exact amount of a credit and place any additional limitations that it deems
appropriate.
Senator
Dyson.
These
cross-listed bills would establish conservation property as a separate
sub-class of real property and provide that it be valued at a rate equivalent
to the lowest rate used for agricultural use land. Conservation property includes land that is subject to a
perpetual conservation easement approved by the Board of Public Works before
June 30, 1986, and land that currently receives a property tax credit for
conservation land. Conservation
property would not be required to be actively farmed to be eligible for this
assessment. This legislation would
apply to a small number of MALPF easement properties.
Senator
Dyson.
These
cross-listed bills would expand the existing Preservation and Conservation
Easement tax credit by making the credit refundable. If the tax credit in any taxable year exceeds the state
income tax payable by an owner of property with a MALPF or Maryland
Environmental Trust (MET) easement for that taxable year, then the owner would
be able to claim a refund in the amount of the excess.
HB 561/SB 325 – Agricultural Land Preservation – Termination of Agricultural
Districts
Sponsor: Delegate
Weir
Senator
Klausmeier.
Department position: oppose.
Legislative result: unsuccessful: HB 561 received an unfavorable report
from the Environmental Matters Committee; SB 325 received an unfavorable report from the Senate Education,
Health, and Environmental Affairs Committee.
These
cross-listed bills would reduce agricultural district agreements from the
current 60-month (five-year) commitment to permit landowners to terminate
district agreements after 30 months (two-and-a-half years), reducing the
required notification time for such termination by the landowner to MALPF from
one year to 30 days. However, this
can occur only if certain conditions are met, including (1) the Foundation has
not purchased an agricultural preservation easement on the property, (2) the
Foundation has made an offer that has been rejected by the landowner, and (3)
the landowner reimburses the state for all appraisal and recording costs
associated with any easement processed during the time the property was subject
to a district agreement.
Senators
Dyson, Middleton, Colburn, Harris, and Greenip.
These
cross-listed bills would require MALPF and the Maryland Department of Planning
(MDP) to establish a Critical Farms Program to provide interim or emergency
financing for the acquisition of agricultural preservation easements on
critical farms that would otherwise be sold for non-agricultural uses. MALPF and MDP must develop criteria to
be used by counties to consider when determining whether a property qualifies
for the program. This legislation
would provide for specified evaluation criteria, such as location,
productivity, and the consistency of the proposed acquisition with county
goals. MALPF and MDP must examine
options for easement acquisition on critical farms and identify those that will
enable the critical farms program to succeed. MALPF and MDP are authorized to jointly establish regulations
to implement the provisions of the bill.
This legislation would also require MALPF and MDP to conduct a thorough
study of the options available to fund the Critical Farms Program established
under the bill and submit a report to the Governor and the General Assembly by
January 1, 2006.
Senators
Middleton, DeGrange, Dyson, and Frosh.
These cross-listed bills would require, beginning in fiscal year
2007, repayment of recent transfers totaling $390 million in State real estate
transfer tax revenues to the General Fund by including the transfer tax special
fund in the provisions relating to the disposition of any unappropriated
General Fund surplus. This
legislation would also establish provisions regarding the future transfer of
State transfer tax revenues to the General Fund and provides for the
replacement of any transferred funds.
This legislation would specifically repay State land preservation
programs, including MALPF, Program Open Space, Rural Legacy, and the Heritage
Conservation Fund.
Senators
Munson, Middleton, Brinkley, Colburn, Dyson, Hafer, Haines, Hooper, Jacobs,
Kittleman, Mooney, Pipkin, and Stoltzfus.
This
legislation authorizes the Governor to include each year in the budget bill an
appropriation to the Maryland Agricultural and Resource-Based Industry
Development Corporation (MARBIDCO) in an amount up to $5 million in order to
capitalize MARBIDCO. If the State
provided $12 million or less from fiscal years 2006 through 2010, the Governor
could include an appropriation of up to $6.5 million annually. MARBIDCO could be very useful to MALPF
by providing an institutional structure that could provide installment purchase
agreements as a settlement option to landowners selling easements to MALPF (and
other State agencies).
Land
Disposition Legislation (2005):
In the 2005 Legislative Session, a
number of bills were introduced in both chambers of the General Assembly on the
issue of the disposition of State-owned land and land in which the State of
Maryland had a real interest. The
intent of these bills was to require that the disposition of State land would
require the review and approval of the General Assembly or a committee of the
General Assembly delegated that responsibility. With some exceptions, these bills did not differentiate
between State-owned land and land in which Maryland had purchased certain
rights, such as agricultural conservation easements of the sort purchased by
the Foundation. These bills also did
not differentiate between the sale of State-owned parcels as opposed to the
normal process of straightening property lines, relocating residences on
easement properties, lot releases, or other normal administrative tasks
undertaken by a State agency such as MALPF.
The Maryland Department of
Agriculture supported the general objective of these bills, but successfully
testified orally and in writing at the consolidated hearings on these bills
that easement properties should be exempted from the land disposition
requirements. A strict
interpretation of the language of some of the initial proposed legislation
could have resulted in requiring the approval of the General Assembly for
private landowners to sell or transfer MALPF district or easement properties,
to complete a lot release, to take out a mortgage or lien on the property,
etc. Such a requirement would have
imposed a significant and unnecessary burden on MALPF program participants and
significantly increased the administrative burden on MALPF and its partners at
the Department of General Services and in the counties.
Though the following bills are
related, none were cross-listed.
Those that were successful were amended to remove easement properties
from the land disposition requirements.
However, because the constitutional amendment that was adopted has broad
language, MALPF is still waiting for a final opinion from the Office of the
Attorney General on its applicability to easement properties.
Sponsors: Delegates Busch, James, McIntosh, Griffith, Barve,
Barkley, Bobo, Bohanan, Bozman, Burns, Cane, G. Clagett, V. Clagett, Conroy,
Conway, Donoghue, Frush, Glassman, Gutierrez, Haynes, Healey, Heller, Holmes,
Hubbard, Jones, Kach, Kaiser, King, Krysiak, Levy, Love, Madaleno, Mandel,
Menes, Montgomery, Niemann, Patterson, Pendergrass, Petzold, Quinter,
Rosenberg, Ross, Stern, Vallario, Vaughn, Zirkin, Arnick, Bronrott, Hogan,
McConkey, Parker, Sossi, Weir, Nathan-Pulliam, F. Turner, Branch, Cadden,
DeBoy, Franchot, Paige, Proctor, Ramirez, Sophocleus, Trueschler, Cardin,
Kullen, Lee, Hixson, Moe, Stocksdale, Aumann, Gaines, Eckardt, Bates, Leopold,
and Edwards.
This
bill would establish new requirements for the disposition of State-owned
outdoor recreation, open space, conservation, preservation, park, or forest
real property. This bill would
also establish new requirements relating to the determination of such property
as excess, establish provisions governing the declaration of property as
surplus, and modify provisions governing disposition approval by the Board of
Public Works (BPW). This bill
would further provide for the repayment of State transfer tax revenues
transferred after fiscal year 2005, expedite the use of transfer tax revenue
over-attainment under specified conditions, and provide that a minimum of $1.5
million of the State's share of funds under Program Open Space (POS) must be
used to provide grants to Baltimore City.
CONSTITUTIONAL
AMENDMENT
Sponsor: Delegate
Franchot.
Legislative result: unsuccessful: passed with amendments by the House of
Delegates, but not reported out of the Senate Rules Committee.
CONSTITUTIONAL
AMENDMENT
Sponsors: Senators
Frosh, Dyson, Green, Astle, Britt, Brochin, Conway, Currie, DeGrange, Della,
Exum, Forehand, Garagiola, Gladden, Grosfeld, Hogan, Hollinger, Hughes, Jimeno,
Jones, Kasemeyer, Kelley, Klausmeier, Lawlah, McFadden, Miller, Pinsky, Ruben,
Stone, Teitelbaum, Brinkley, Greenip, Hafer, Haines, Harris, Hooper, Jacobs,
Kittleman, Mooney, Munson, Pipkin, Schrader, and Stoltzfus.
Legislative result: successful: passed with amendments by the Senate
and by the House of Delegates; became law without the Governor's signature per
Maryland Constitution.
This legislation amends the State
Constitution to prohibit the Board of Public Works (BPW) from approving the
sale, transfer, exchange, grant, or other permanent disposition of any
State-owned outdoor recreation, open space, conservation, preservation, forest,
or parkland without the express approval of the General Assembly or of a
committee that the General Assembly designates by statute, resolution, or
rule. This proposed constitutional
amendment would be submitted to the qualified voters of the State of Maryland
for their adoption or rejection.
Sponsors: Senators
Dyson and Frosh.
This proposed bill would prohibit
the Board of Public Works (BPW) from approving the sale, lease, transfer,
exchange, grant, or other disposition of any State-designated recreation, open
space, conservation, preservation, forest, or parkland without the approval of
the General Assembly through legislation.
Sponsor: Senator
Middleton.
This proposed bill would
establish new requirements for the determination and reporting of excess
State-owned real property, including a review of the social, community, and
environmental value of the real property.
Also, this bill would prohibit the Board of Public Works (BPW) from
approving the disposition of property owned by the State or in which the State
has an interest unless the BPW determines that the monetary value or other
benefit received by the State is the same or greater than the value of the
public features on the property.
Further, this bill would make the Legislative Policy Committee (LPC)
part of the review process for proposals to sell, lease, transfer, exchange,
grant, or other disposition of certain state-owned property or property in
which the state has an interest.
Sponsors: Senators
Dyson, Astle, Britt, Brochin, Conway, Currie, DeGrange, Della, Exum, Forehand,
Frosh, Garagiola, Gladden, Green, Grosfeld, Hogan, Hughes, Jimeno, Jones,
Kelley, Klausmeier, Lawlah, McFadden, Miller, Pinsky, Ruben, Stone, Teitelbaum,
and Middleton.
Legislative result: successful: passed with different amendments by the
Senate and by the House of Delegates; Senate concurred by the House-originated
amendments; final bill signed by the Governor.
This legislation establishes new
requirements for the Board of Public Works to fulfill before State-owned or
State-designated outdoor recreation, open space, conservation, preservation,
forest, or other parkland can be sold, leased, transferred, exchanged, granted,
or otherwise disposed. New
requirements include a public hearing with two weeks notice, determination that
the property is not wanted by another State or local government entity, two
independent appraisals, and several others.