STATEMENTS OF POLICY
Title 7--AGRICULTURE
DEPARTMENT OF AGRICULTURE
[7 PA. CODE CH. 137a]
Clean and Green
[29 Pa.B. 3072] The Department of Agriculture (Department) gives notice of the interim regulations for implementing the Pennsylvania Farmland and Forest Land Assessment Act of 1974 (72 P. S. §§ 5490.1--5490.13), commonly referred to as the Clean and Green Law.
The most recent amendment of the Clean and Green Law was accomplished by the act of December 21, 1998 (P.L. 1225, No. 156) (Act 156). The interim regulations implement the changes accomplished by Act 156 of 1998, and should be read in conjunction with the existing regulations in Chapter 137 (relating to preferential assessment of farmland and forest land). To the extent any provision of that chapter is inconsistent with any provision of the interim regulations, the interim regulations shall prevail.
In summary, the Clean and Green Law allows owners of agricultural, agricultural reserve or forest reserve land to apply for preferential assessment of their land. If the application is approved, the land receives an assessment based upon its use value, rather than its market value.
Authority
The interim regulations are offered under authority of section 12 of Act 156 (72 P. S. § 5490.4a note). That section requires the Department to promulgate interim regulations to provide county assessors guidelines and standardized worksheets for use in implementing the provisions of Act 156. The interim regulations are specifically exempted from the formal regulatory review process described in the Regulatory Review Act (71 P. S. §§ 745.1--745.15), section 205 of the act of July 31, 1968 (P.L. 764, No. 240) (45 P. S. § 1205) (CDL) and section 204(b) of the Commonwealth Attorneys Act (71 P. S. § 732-204).
Need for the Interim Regulations
The interim regulations are required by statute. In addition, the interim regulations will help bring about uniform interpretation and application of the Clean and Green Law throughout this Commonwealth. Act 156 amended the Clean and Green Law. The interim regulations are necessary to implement the changes wrought by Act 156, and provide county assessors guidance in determining the appropriate preferential assessment for agricultural, agricultural reserve and forest reserve land enrolled in accordance with the Clean and Green Law.
In summary, the Department is satisfied there is a need for the interim regulations, and that they are otherwise consistent with Executive Order 1996-1, ''Regulatory Review and Promulgation.''
Summary of the Interim Regulations
The interim regulations implement the amendments to the Clean and Green Law required by Act 156.
Section 137a.2 (relating to definitions) consolidates definitions found in the Clean and Green Law, its current attendant regulations in Chapter 137 and Act 156. It also adds several new terms, such as ''enrolled land'' and ''ineligible land.''
Section 137a.3 (relating to eligibility) clarifies the circumstances under which land may be enrolled under the Clean and Green Law to receive a preferential tax assessment. This section clarifies that ''farmstead land'' is to be included in the eligible land. It also clarifies that ineligible land may be included in an application for preferential assessment, but may not be preferentially assessed. The section contains a number of examples.
Section 137a.5 (relating to deadline for submission of applications) describes the application window for persons seeking preferential assessment of their land under the Clean and Green Law. A landowner who applies for preferential assessment by June 1 of a particular year, and whose application is subsequently approved, will begin to receive the preferential assessment as of the commencement of the tax year of each taxing body in the following calendar year.
Section 137a.7 (relating to fees of the county board for assessment appeals) describes the fees which may be charged by a county board for assessment appeals for processing or amending applications for preferential assessment. Subsection (b) lists the circumstances when an application should be amended without charge.
Section 137a.9 (relating to assessment procedures) describes the assessment process. In summary, the Department will provide a county assessor with use values for various land use categories and land use subcategories. The county assessor will use these values in determining a total use value for a tract of enrolled land. This total use value is used in calculating the preferential assessment for the enrolled land. A county assessor remains free to establish use values that are lower than those provided by the Department.
Section 137a.10 (relating to duration of preferential assessment) describes various circumstances that would alter or end preferential assessment of enrolled land. It also clarifies that the payment of roll-back taxes with respect to some portion of a tract of enrolled land does not automatically trigger the removal of the entire tract from preferential assessment. Subsection (c) sets forth a number of examples to illustrate this point. Subsection (e) lists some of the circumstances under which a county should terminate the preferential assessment of a tract of enrolled land.
Section 137a.11 (relating to calculation and recalculation of preferential assessment) requires a county assessor to recalculate the preferential assessment of currently-enrolled land if farmstead land on the currently-enrolled land is not also preferentially assessed, or if the current assessment was calculated with use values that are higher than those provided by the Department. Also, if a county conducts a countywide reassessment, it must recalculate the preferential assessment of all enrolled land. This section does not limit a landowner's right to seek recalculation of the preferential assessment.
Section 137a.12 (relating to death of an owner of enrolled land) provides that a Class A beneficiary who inherits enrolled land is not liable for roll-back taxes if the tract the beneficiary inherits does not meet the minimum requirements for preferential assessment. If the beneficiary subsequently changes the character or use of the land so that it no longer meets the minimum requirements for preferential assessment, though, preferential assessment shall cease and roll-back taxes shall be due.
Section 137a.13 (relating to direct commercial sales of agriculturally related products and activities; rural enterprises incidental to the operational unit) allows for up to 2 acres of enrolled land to be used for activities related to agriculture and supportive of agricultural production on the remaining enrolled land. Preferential assessment would end on this up-to-2-acre tract, and roll-back taxes would also be due.
Section 137a.14 (relating to wireless or cellular telecommunications facilities) allows for a small portion of enrolled land to be leased for the erection and operation of a cellular communications tower. Preferential assessment ends with respect to the leased tract and roll-back taxes are due with respect to that leased tract, as well.
Section 137a.15 (relating to option to accept or forgive roll-back taxes in certain instances) affords a county assessor the option to waive roll-back taxes with respect to certain enrolled land that is transferred to specific charitable organizations for charitable purposes.
Sections 137a.16 and 137a.17 (relating to transfer of enrolled land for use as a cemetery; and transfer of enrolled land or transfer of an easement or right-of-way across enrolled land for use as a trail) address situations where transfers of enrolled land to specific entities for specific uses are allowed without triggering liability for roll-back taxes or ending preferential assessment of that portion of the enrolled land that is not transferred.
Section 137a.19 (relating to notice of change of application) clarifies that it is the landowner's responsibility to notify the county assessor if the use of the enrolled land changes to something other than agricultural, agricultural reserve or forest reserve, or if there is a change in ownership of the enrolled land.
Section 137a.20 (relating to liability for roll-back taxes) addresses the situations in which a landowner may be liable for roll-back taxes with respect to enrolled land. Subsection (h) provides the formula for calculating roll-back taxes.
Section 137a.21 (relating to duties of a county assessor) provides an overview of the various responsibilities of a county assessor under the Clean and Green Law. These duties involve recordkeeping, recording approved applications, updating records on an annual basis, determining total use values, notifying landowners of changes in status, enforcement, evidence gathering and assessment of roll-back taxes.
Section 137a.22 (relating to disposition of interest on roll-back taxes) implements section 9 of the Clean and Green Law (72 P. S. § 5490.8(b.1)).
Section 137a.23 (relating to civil penalties) restates the penalty provisions set forth in section 5.2 of the Clean and Green Law (72 P. S. § 5490.5b).
Persons Likely to be Affected
The interim regulations implement changes to the Clean and Green Law accomplished by Act 156. Although a number of persons and entities are likely to be impacted by the subject matter of the interim regulations, it is Act 156, rather than these interim regulations, that is driving these impacts.
Owners of agricultural, agricultural reserve and forest reserve land meeting the minimum requirements for preferential assessment set forth in the Clean and Green Law will be affected by the interim regulations. The use values prescribed by the Clean and Green Law are likely to decrease taxes for these owners of enrolled land.
Taxpayers who do not own agricultural, agricultural reserve and forest reserve land meeting the minimum requirements for preferential assessment in the Clean and Green Law will be impacted by these interim regulations, in that they are the likely entity to be called upon to make up any tax revenue shortfalls caused by a decrease in the taxes of those persons described in the preceding paragraph.
County governments will be affected by the interim regulations, in that there is likely to be expense involved in recalculating preferential assessments as required under the Clean and Green Law. There may also be costs involved as owners of currently-enrolled land seek recalculation of the preferential assessments of their land. In addition, the amendment to the Clean and Green Law accomplished by Act 156 may result in tax revenue shortfalls where collections from agricultural, agricultural reserve and forest reserve lands are lower than anticipated.
Fiscal Impact
Commonwealth The interim regulations will have no appreciable fiscal impact upon the Commonwealth.
Political Subdivisions The interim regulations will impose costs upon county governments. As stated previously, counties are likely to incur expenses in recalculating preferential assessments as required under the Clean and Green Law. There may also be costs involved as owners of currently-enrolled land seek recalculation of the preferential assessments of their land. In addition, the amendment to the Clean and Green Law accomplished by Act 156 may result in tax revenue shortfalls where collections from agricultural, agricultural reserve and forest reserve lands are lower than anticipated.
Private Sector If Act 156 results in counties receiving less tax revenue than anticipated from agricultural, agricultural reserve and forest reserve lands, other taxpayers from the private sector (that is, owners of lands that are not in agricultural use, agricultural reserve or forest reserve) may ultimately be called upon to make up this tax revenue shortfall.
General Public If Act 156 results in counties receiving less tax revenue than anticipated from agricultural, agricultural reserve and forest reserve lands, other taxpayers (that is, owners of lands that are not in agricultural use, agricultural reserve or forest reserve) may ultimately be called upon to make up this tax revenue shortfall.
Paperwork Requirements
The interim regulations will not result in an appreciable increase in the paperwork handled by the Department.
Regulatory Review
Section 12 of Act 156 exempts the interim regulations from the formal regulatory review process described in the Regulatory Review Act, section 205 of the CDL and section 204(b) of the Commonwealth Attorneys Act.
Contact Person
Further information is available by contacting the Department of Agriculture, Bureau of Farmland Protection, 2301 North Cameron Street, Harrisburg, PA 17110-9408, Attention: Raymond C. Pickering, (717) 783-3167.
Sunset/Expiration Date
The interim regulations will expire no later than April 30, 2001, and will be replaced by regulations promulgated as provided by law. This expiration date is prescribed by section 12(b) of Act 156 of 1998.
Effective Date
The interim regulations will take effect upon publication in the Pennsylvania Bulletin.
SAMUEL E. HAYES, Jr.,
Secretary(Editor's Note: The regulations of the Department, 7 Pa. Code, are amended by adding a statement of policy in §§ 137a.1--137a.24 to read as set forth in Annex A.)
Fiscal Note: 2-125. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 7. AGRICULTURE
PART V-C. FARMLAND AND FOREST LAND
CHAPTER 137a. CLEAN AND GREEN ACT--STATEMENT OF POLICY Sec.
137a.1. Purpose. 137a.2. Definitions. 137a.3. Eligibility. 137a.4. Application forms and procedures. 137a.5. Deadline for submission of applications. 137a.6. County processing of applications. 137a.7. Fees of the county board for assessment appeals. 137a.8. Fees of the recorder of deeds. 137a.9. Assessment procedures. 137a.10. Duration of preferential assessment. 137a.11. Calculation and recalculation of preferential assessment. 137a.12. Death of an owner of enrolled land. 137a.13. Direct commercial sales of agriculturally related products and activities; rural enterprises incidental to the operational unit. 137a.14. Wireless or cellular telecommunications facilities. 137a.15. Option to accept or forgive roll-back taxes in certain instances. 137a.16. Transfer of enrolled land for use as a cemetery. 137a.17. Transfer of enrolled land or transfer of an easement or right-of-way across enrolled land for use as a trail. 137a.18. Transfer of enrolled land. 137a.19. Notice of change of application. 137a.20. Liability for roll-back taxes. 137a.21. Duties of a county assessor. 137a.22. Disposition of interest on roll-back taxes. 137a.23. Civil penalties. 137a.24. Contacting the Department. § 137a.1. Purpose.
(a) General. This chapter provides interim regulations for county boards for assessment appeals and county assessors to implement the act, which revised the act--commonly known as the Clean and Green Law.
(b) Relationship to Chapter 137. This chapter should be used in conjunction with regulations in Chapter 137 (relating to preferential assessment of farmland and forest land). If a provision of this chapter is inconsistent with a provision of Chapter 137, the provision of this chapter shall prevail. To the extent a provision of Chapter 137 is not affected by this chapter, the provision of Chapter 137 shall prevail.
§ 137a.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings:
Act--The Pennsylvania Farmland and Forest Land Assessment Act of 1974 (72 P. S. §§ 5490.1--5490.13).
Agricultural commodity--Any of the following:
(i) Agricultural, apicultural, aquacultural, horticultural (including Christmas trees), floricultural, silvicultural, viticultural and dairy products.
(ii) Pasture.
(iii) Livestock and the products thereof, including, but not limited to, equine.
(iv) Ranch-raised furbearing animals and the products thereof.
(v) Poultry and the products of poultry.
(vi) Products commonly raised or produced on farms which are intended for human consumption or are transported or intended to be transported in commerce.
(vii) Processed or manufactured products of products commonly raised or produced on farms which are intended for human consumption or are transported or intended to be transported in commerce.
Agricultural reserve--Noncommercial open space lands used for outdoor recreation or the enjoyment of scenic or natural beauty and open to the public for that use, without charge or fee, on a nondiscriminatory basis. The term includes any farmstead land on the tract.
Agricultural use--Land which is used for the purpose of producing an agricultural commodity or is devoted to and meets the requirements and qualifications for payments or other compensation pursuant to a soil conservation program under an agreement with an agency of the Federal government.
(i) The term includes any farmstead land on the tract.
(ii) The term includes a woodlot and land which is rented to another person and used for the purpose of producing an agricultural commodity.
Assessment ratio or county's established predetermined ratio--The ratio established by a taxing body that determines on what portion of the assessed value the millage rate is to be levied, as prescribed by assessment law.
Capitalization rate--The percentage rate used to convert income to value, as determined by the most recent 5-year rolling average of 15-year fixed loan interest rates offered to landowners by the Federal Agricultural Mortgage Corporation or other similar Federal agricultural lending institution, adjusted to include the landowner's risk of investment and the effective tax rate.
Contiguous tract--All portions of one operational unit as described in the deed, whether or not the portions are divided by streams, public roads, railroads, rights-of-way or bridges and whether or not the portions are described as multiple tax parcels, tracts, purparts or other property identifiers. The term includes supportive lands, such as unpaved field access roads, drainage areas, border strips, hedgerows, submerged lands, marshes, ponds and streams.
Contributory value of farm building--The value of the farm building as an allocated portion of the total fair market value assigned to the tract, irrespective of replacement cost of the building.
(i) The preferred method of calculating the contributory value of a farm building shall be a method based upon fair market comparison and the extraction of the value of the farm building from the total fair market value of the parcel.
(ii) Alternate methods of calculating this value may be used when the contributory value of a farm building using the preferred approach would not accurately reflect this contributory value.
County--The county assessor, the county board of assessment or other county entity responsible to perform or administer a specific function under the act.
Curtilage--The land surrounding a residential structure and farm building used for a yard, driveway, onlot sewage system or access to any building on the tract.
Department--The Department of Agriculture of the Commonwealth.
Enrolled land--Land eligible for a preferential assessment under an approved application for preferential assessment filed in accordance with the act.
Fair market value--The price as of the valuation date for the highest and best use of the property which a willing and informed seller who is not obligated to sell would accept for the property, and which a willing and informed buyer who is under no obligation to buy would pay for the property.
Farm building--A structure utilized to store, maintain or house farm implements, agricultural commodities or crops, livestock and livestock products, as defined in the Agricultural Area Security Law (3 P. S. §§ 901--915).
Farmstead land--Curtilage and land situated under a residence, farm building or other building which supports a residence, including a residential garage or workshop.
Forest reserve--Land, 10 acres or more, stocked by forest trees of any size and capable of producing timber or other wood products.
(i) The term includes farmstead land on the tract.
(ii) The term includes land which is rented to another person and used for the purpose of producing timber or other wood products.
Income approach--The method of valuation which uses a capitalization rate to convert annual net income to an estimate of present value. Present value is equal to the net annual return to land divided by the capitalization rate.
Ineligible land--Land which is not used for any of the three eligible uses (agricultural use, agricultural reserve or forest reserve) and therefore cannot receive use value assessment.
Land use category--Agricultural use, agricultural reserve or forest reserve.
Land use subcategory--A category of land in agricultural use, agricultural reserve or forest reserve, established by the Department and assigned a particular use value in accordance with sections 2 and 4.1 of the act (72 P. S. §§ 5490.3 and 5490.4a). A land use subcategory may be based upon soil type, forest type, soil group or any other recognized subcategorization of agricultural or forest land.
Net return to land--Annual net income per acre after operating expenses are subtracted from gross income. Calculation of operating expenses may not include interest or principal payments.
Normal assessment--The total fair market value of buildings and ineligible land on a tract multiplied by the assessment ratio.
Outdoor recreation--Passive recreational use of land that does not entail the erection of permanent structures, grading of the land, the disturbance or removal of topsoil or any change to the land which would render it incapable of being immediately converted to agricultural use.
(i) The term includes hiking, hunting, horseback riding and similar passive recreational uses of the land.
(ii) The term does not include the use of land for baseball, soccer fields, football fields, golf courses or similar uses.
Pasture--Land, other than land enrolled in the USDA Conservation Reserve Program, used primarily for the growing of grasses and legumes, which are consumed by livestock in the field and at least 90% of which is clear of trees, shrubs, vines or other woody growth not consumed by livestock.
Person--A corporation, partnership, limited liability company, business trust, other association, government entity (other than the Commonwealth), estate, trust, foundation or natural person.
Preferential assessment--The total use value of land qualifying for assessment under the act.
Roll-back tax--The amount equal to the difference between the taxes paid or payable on the basis of the valuation and the taxes that would have been paid or payable had that land not been valued, assessed and taxed as other land in the taxing district in the current tax year, the year of change, and in 6 of the previous tax years or the number of years of preferential assessment up to 7. The amount also includes interest on each year's roll-back at the rate of 6% per annum.
Rural enterprise incidental to the operational unit--An activity or use of land that does not permanently impede or otherwise interfere with the production of an agricultural commodity. Examples of uses that would permanently impede or otherwise interfere with the production of an agricultural commodity include quarrying, mining or selling topsoil.
Separation--A division, by conveyance or other action of the owner, of enrolled land into two or more tracts of land, the use of which continues to be agricultural, agricultural reserve or forest reserve and all tracts so formed meet the requirements of section 2 of the act.
Split-off--A division, by conveyance or other action of the owner, of enrolled land into two or more tracts of land, the use of which on one or more of the tracts does not meet the requirements of section 2 of the act.
Tract--A lot, piece or parcel of land. The term does not refer to any precise dimension of land.
Transfer--A conveyance of all of the enrolled land described in a single application for preferential assessment under the act, when the use of the enrolled land continues to be agricultural use, agricultural reserve or forest reserve.
USDA--United States Department of Agriculture.
USDA-ERS--The United States Department of Agriculture--Economic Research Service.
USDA-NRCS--The United States Department of Agriculture--Natural Resources Conservation Service.
Use value--The value that land qualifying for assessment under the chapter has for its particular use as determined by the county assessor, considering available evidence of the soils capability for its particular use.
Woodlot--An area of less than 10 acres, stocked by trees of any size and contiguous to or part of land in agricultural use or agricultural reserve.
§ 137a.3. Eligibility.
(a) Inclusion of farmstead land. Farmstead land is an integral part of land in agricultural use, agricultural reserve or forest reserve. In considering whether land is in agricultural use, agricultural reserve or forest reserve, a county shall include any portion of that land that is farmstead land. Farmstead land shall be considered to be land that qualifies for use value assessment under §§ 137.8--137.10 (relating to land qualifying as an agricultural use; land qualifying as an agricultural reserve; and land qualifying as a forest reserve), and other provisions in Chapter 137 (relating to preferential assessment of farmland and forest land) referencing land in agricultural use, agricultural reserve and forest reserve.
(b) Residence not required. A county may not require that an applicant for preferential assessment under the act be a resident of the county or reside on the land with respect to which preferential assessment is sought.
(c) Common ownership required. A landowner seeking preferential assessment under the act shall be the owner of every tract of land listed on the application.
Example 1: Husband and wife are joint owners of 2 contiguous 100-acre tracts of farmland. They have common ownership of both tracts and may include these tracts in a single application for preferential assessment.Example 2: Husband and wife are joint owners of a 100-acre tract of farmland. Husband and son are joint owners of a contiguous 100-acre tract of farmland. These two tracts may not be combined in a single application for preferential assessment.(d) County-imposed eligibility requirements. A county assessor may not impose eligibility requirements or conditions other than those prescribed in section 2 of the act (72 P. S. § 5490.3).
Example: A county may not require an owner of contiguous--but separately deeded--tracts of land to consolidate the tracts in a single deed or require any alteration of existing deeds as a condition of eligibility for preferential assessment.(e) Multiple tracts on a single application. A landowner seeking preferential assessment under the act may include more than one tract in a single application for preferential assessment, regardless of whether the tracts on the application have separate deeds, are identified by separate tax parcel numbers or are otherwise distinct from each other.
(1) Contiguous tracts. A landowner seeking preferential assessment under the act may include in the application individual contiguous tracts that would not--if considered individually--qualify for preferential assessment. If two or more tracts on a single application for preferential assessment are contiguous, the entire contiguous area shall meet the use and minimum size requirements for eligibility.
(2) Noncontiguous tracts. If any tract on a single application for preferential assessment is not contiguous to another tract described on that application, that individual tract shall--by itself--meet the use and minimum size requirements for eligibility.
(f) Inclusion of all contiguous land described in the deed to the tract with respect to which enrollment is sought. A landowner may not apply for preferential assessment for less than the entire contiguous portion of land described in the deed applicable to a tract with respect to which preferential assessment is sought.
Example 1: A landowner owns a single, 100-acre tract of farmland described in a single deed, and wishes to apply for preferential assessment under the act. The application may not be for less than the entire 100 acres.Example 2: A landowner owns 150 acres of farmland described in a single deed, and wishes to apply for preferential assessment under the act. The deed to this land describes 3 separate tracts: 2 contiguous 50-acre tracts and a noncontiguous 50 acre tract. The landowner has the option to enroll either of the 2 contiguous tracts individually or to enroll both tracts together in preferential assessment. The landowner also has the option to enroll or not enroll the noncontiguous 50-acre tract.(g) Exclusion of noncontiguous tract described in a single deed. If two or more tracts of land are described in a single deed, a landowner seeking preferential assessment under the act may exclude from the application for preferential assessment any separately-described tract that is not contiguous to the tract or tracts for which preferential assessment is sought.
Example: A landowner owns 150 acres of farmland described in a single deed, and wishes to apply for preferential assessment under the act. The deed to this land describes 3 separate tracts: 2 contiguous 50-acre tracts and a noncontiguous 50 acre tract. The landowner has the option to seek to enroll the noncontiguous 50-acre tract.(h) Landowner may include or exclude from the application tracts described in separate deeds. If the landowner seeking preferential assessment under the act owns contiguous tracts that are described in separate deeds, the landowner may include or exclude any of the contiguous tracts from the application for preferential assessment.
(i) Land adjoining preferentially assessed land with common ownership is eligible.
(1) General. A tract of land in agricultural use, agricultural reserve or forest reserve shall receive a preferential assessment under the act regardless of whether the tract meets the 10-contiguous-acres minimum acreage requirement or the $2,000-per-year minimum anticipated gross income requirement, or both, established in section 2 of the act if all of the following occur:
(i) The landowner owns both the tract for which preferential assessment is sought and a contiguous tract of enrolled land.
(ii) The landowner files an amended application for preferential assessment, describing both the tract for which preferential assessment is sought and the contiguous tract of enrolled land. The amended application shall be in accordance with the act, this chapter and Chapter 137.
(2) Roll-back taxes. A violation of the provisions of preferential assessment on a tract added under paragraph (1) shall trigger roll-back taxes on that tract and all other contiguous tracts identified in the amended application.
(j) Ineligible land may appear on an application, although it cannot receive preferential assessment. A landowner seeking preferential assessment under the act shall include ineligible land on the application if the ineligible land is part of a larger contiguous tract of eligible land, and the use of the land which causes it to be ineligible exists at the time the application is filed. Although this ineligible land may not receive preferential assessment, the applicant shall specify the boundaries and acreage of the ineligible land and may not be required, as a condition of county acceptance or approval of the application, to survey or redeed the tract so as to exclude the ineligible land.
Example: A landowner owns a 100-acre tract of land --90 acres of which is productive farmland and 10 acres of which is occupied by an auto salvage yard. If the landowner seeks preferential assessment of the 90 acres of farmland, the application shall describe the entire 100-acre tract and the county will not require the 10-acre tract be surveyed-out or redeeded as a prerequisite to the application being considered. If preferential assessment is granted, it will apply to the 90 acres of farmland. The 10-acre tract would continue to be assigned its fair market value and assessed accordingly.(k) Multiple land use categories on a single application. An applicant for preferential assessment under the act may include land in more than one land use category in the application. A county assessor shall allow the applicant to submit an application that designates those portions of the tract to be assessed under each of the different land use categories.
Example: A landowner owns 100 acres of land. The landowner may submit an application that designates 75 acres in agricultural use, 13 acres in agricultural reserve and 12 acres in forest reserve, if the acreage identified by the landowner for the particular land use category meets the minimum criteria in section 2 of the act for that land use category.(l) Assessment of ineligible land. Land and buildings that are included in an application for preferential assessment under the act but are ineligible for preferential assessment shall be given a fair market value and shall be assessed accordingly.
§ 137a.4. Application forms and procedures.
(a) Standardized application form required. A county shall require a person seeking to apply for preferential assessment under the act to make that application on a uniform preferential assessment application form developed by the Department. The Department will provide these forms to a county upon request. The county shall maintain an adequate supply of these forms.
(b) Required language. An application for preferential assessment shall contain the following statement:
The applicant for preferential assessment hereby agrees, if the application is approved for preferential assessment, to submit 30 days written notice to the County Assessor of a proposed change in use of the land, a change in ownership of a portion of the land or of any type of division or conveyance of the land. The applicant for preferential assessment hereby acknowledges that, if the application is approved for preferential assessment, roll-back taxes under the act in 72 P. S. § 5490.5a may be due for a change in use of the land, a change in ownership of any portion of the land, or any type of division or conveyance of the land.(c) Signature of all landowners required. An application for preferential assessment shall not be accepted by a county if it does not bear the signature of all of the owners of the land described in the application.
§ 137a.5. Deadline for submission of applications.
(a) General. A landowner seeking preferential assessment under the act shall apply to the county by June 1. If the application is approved by the county, preferential assessment shall be effective as of the commencement of the tax year of each taxing body commencing in the calendar year immediately following the application deadline.
Example 1: A landowner applies for preferential assessment on or before June 1, 1999. The application is subsequently approved. Preferential assessment shall be effective as of the commencement of the tax year for each taxing body in calendar year 2000.Example 2: A landowner applies for preferential assessment on or after June 2, 1999, but not later than June 1, 2000. The application is subsequently approved. The application deadline is June 1, 2000. Preferential assessment shall be effective as of the commencement of the tax year for each taxing body in calendar year 2001.(b) Exception: years in which a county implements countywide reassessment. In those years when a county implements a countywide reassessment, or a countywide reassessment of enrolled land, the application deadline shall be extended to either a date 30 days after the final order of the county board for assessment appeals or by October 15 of the same year, whichever date is sooner. This deadline is applicable regardless of whether judicial review of the order is sought.
§ 137a.6. County processing of applications.
A county shall accept and process in a timely manner all complete and accurate applications for preferential assessment so that, if the application is accepted, preferential assessment is effective as of the tax year of each taxing body commencing in the calendar year immediately following the application deadline.
Example 1: An application for preferential assessment is filed on or before June 1, 1999. The county must review and process the application so that--if the application is approved--preferential assessment can take effect as of the commencement of the tax year of each taxing body commencing in 2000 (the calendar year immediately following the application deadline).Example 2: An application for preferential assessment is filed at some point from June 2, 1999, through June 1, 2000. The county must review and process the application such that--if the application is approved-- preferential assessment can take effect as of the commencement of the tax year of each taxing body commencing in 2001 (the calendar year immediately following the application deadline).§ 137a.7. Fees of the county board for assessment appeals.
(a) Application processing fee. A county board for assessment appeals may impose a fee of no more than $50 for processing an application for preferential assessment under the act, or for processing changes other than those described in subsection (b). This fee may be charged regardless of whether the application is ultimately approved.
(b) Circumstances under which initial application shall be amended without charge. A county board for assessment appeals may not charge any fee for amending an initial application for preferential assessment to reflect changes resulting from one or more of the following:
(1) Split-off.
(2) Separation.
(3) Transfer or change of ownership.
§ 137a.8. Fees of the recorder of deeds.
A recorder of deeds may charge a landowner whose application for preferential assessment is approved a fee for filing the approved application in a preferential assessment docket. This fee may also be charged with respect to the filing of an amendment to a previously-approved application. A recording fee may not be charged unless the application or amendment has been approved by the county board for assessment appeals. The maximum fee for recording approved preferential assessment applications and amendments thereto shall be in accordance with laws relating to the imposition of fees by recorders of deeds.
§ 137a.9. Assessment procedures.
(a) Use values and land use subcategories to be provided by the Department. The Department will determine the land use subcategories and provide county assessors use values for each land use subcategory. The Department will provide these land use subcategories and use values to each county assessor by June 30, 1999, and by May 1 of each year thereafter.
(b) Determining use values and land use subcategories.
(1) Agricultural use and agricultural reserve. In calculating appropriate county-specific agricultural use values and agricultural reserve use values, and land use subcategories, the Department will consult with the Department of Agricultural Economics and Rural Sociology of the College of Agricultural Sciences at the Pennsylvania State University, the Pennsylvania Agricultural Statistics Service, USDA- ERS, USDA-NRCS and other sources the Department deems appropriate. In determining county-specific agricultural use and agricultural reserve use values, the Department will use the income approach for asset valuation.
(2) Forest reserve. In calculating appropriate county-specific forest reserve use values and land use subcategories, the Department will consult with the Bureau of Forestry of the Department of Conservation and Natural Resources.
(c) County assessor to determine total use value.
(1) For each application for preferential assessment, the county assessor shall establish a total use value for land in agricultural use and agricultural reserve, including farmstead land, by considering available evidence of the capability of the land for its particular use utilizing the USDA-NRCS Agricultural Land Capability Classification system and other information available from USDA-ERS, The Pennsylvania State University and the Pennsylvania Agricultural Statistics Service. Contributory value of farm buildings shall be used.
(2) For each application for preferential assessment, the county assessor shall establish a total use value for land in forest reserve, including farmstead land, by considering available evidence of capability of the land for its particular use. Contributory value of farm buildings shall be used.
(d) Determining preferential assessment. The preferential assessment of land is determined by multiplying the number of acres in each land use subcategory by the use value for that particular land use subcategory, and then adding these products. The Department will establish land use subcategories as part of the procedure to establish use values.
(e) Option of county assessors to establish and use lower use values. A county assessor may establish use values that are less than the use values established by the Department. A county assessor may use these lower use values in determining preferential assessments under the act. Regardless of whether the county assessor applies use values established by the Department or lower use values established by the county assessor, the county assessor shall apply the use values uniformly when calculating or recalculating preferential assessments, and shall apply these use values to the same land use subcategories as established by the Department. Calculation and recalculation of preferential assessments shall be made in accordance with § 137a.11 (relating to calculation and recalculation of preferential assessment). A county assessor may not, under any circumstances, establish or apply use values that are higher than those use values established by the Department.
§ 137a.10. Duration of preferential assessment.
(a) General. Enrolled land shall remain under preferential assessment for as long as it continues to meet the minimum qualifications for preferential assessment. Land that is in agricultural use, agricultural reserve or forest reserve shall remain under preferential assessment even if its use changes to either of the other two uses.
Example: A landowner owns a 100-acre tract of enrolled land, consisting of 85 acres in agricultural use and 15 acres in forest reserve. If the landowner later amends his application to one in which 60 acres are in agricultural use, 30 acres are in agricultural reserve and 10 acres are in forest reserve, the entire 100-acre tract continues to receive preferential assessment (although different use values and land use subcategories may apply in recalculating the preferential assessment).(b) Split-offs, separations, transfers and other events. Split-offs, separations and transfers under the act, Chapter 137 or this chapter may not result in termination of preferential assessment on the land which is retained by the landowner and which continues to meet the requirements of section 2 of the act (72 P. S. § 5490.3). In addition, the following events may not result in termination of preferential assessment on that portion of enrolled land which continues to meet the requirements of section 2 of the act:
(1) The lease of a portion of the enrolled land to be used for a wireless or cellular communication tower in accordance with section 6(b.1) of the act (72 P. S. § 5490.6(b.1)) and § 137a.14 (relating to wireless or cellular telecommunications facilities).
(2) The change of use of a portion of the enrolled land to another land use category (agricultural use, agricultural reserve or forest reserve).
(3) Condemnation of a portion of the land.
(4) The sale or donation of a portion of the enrolled land to any of the entities described in section 8(b)(1)--(7) of the act (72 P. S. § 5490.8(b)(1)--(7)), for the purposes described in that section, and § 137a.15 (relating to option to forgive roll-back taxes in certain instances).
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