[31 Pa.B. 1701]
[Continued from previous Web Page] Comment: The Legislative Committees offered several technical corrections to proposed § 137b.52(d), Examples (3) and (4).
IRRC also recommended these technical corrections.
Response: The technical corrections have been made in the final-form regulations.
Comment: Montgomery County reviewed proposed § 137b.52(e)(2), and suggested the provision was inconsistent with subsection (c) of this section and several provisions of sections 4(f)(2) and 6 of the act. The commentator suggested this entire subsection be deleted.
Response: The Department believes subsection (e)(2) describes the ''maximum area'' with respect to which a county may terminate preferential assessment under certain conditions, and is not inconsistent with subsection (c), as that subsection has been revised.
Comment: The Legislative Committees offered several technical corrections to proposed §§ 137b.52(e)(2)--(4) and (7)--(10) and (f).
Response: The technical corrections have been made in the final-form regulations.
Comment: The PFB recommended proposed § 137b.52(f) be revised by replacing the finall sentence of that subsection. The commentator thought the finall sentence was confusing, and recommended specific language for a replacement sentence.
Response: The Department declines to implement this recommendation in the final-form regulations. The Department believes the referenced sentence is clear and unambiguous, and that the recommended replacement sentence would not improve this subsection.
Comment: The Legislative Committees recommended the last sentence of proposed § 137b.52(g) be removed, as ''. . . there is no authority within the law to make a distinction between contiguous tracts and non-contiguous tracts in the same application (see section 6(a.3) of the act).''
IRRC also questioned whether the act provided authority for this distinction.
IRRC also commented that the proposed subsection does not indicate who is responsible for roll-back taxes and interest, if there is a change of use of the land. IRRC suggested a reference be made to the provision of section 5490.6(a.3) of the act which states that: ''The landowner changing the use of the land . . . shall be liable for the payment of roll-back taxes.''
Response: The Department has not added the reference to responsibility for roll-back taxes as suggested by IRRC, and believes this subject is adequately addressed elsewhere in the final-form regulations. The Department has implemented the Legislative Committees' recommendation in the final-form regulations.
Comment: The PFB recommended the phrase ''without a change to an ineligible use'' be deleted from proposed § 137b.52(g). The commentator was concerned that this qualifier might be construed as making the conveyor of the transferred land responsible for the payment of roll-back taxes plus interest, rather than the person who acquires the land and changes it to an ineligible use.
Response: The recommendation has been implemented in the final-form regulations.
Comment: The Legislative Committees offered several comments with respect to proposed § 137b.53 (relating to calculation and recalculation of preferential assessment). Several of these comments recommended minor technical revisions. The commentator also noted that an earlier proposed draft of this section had included a subsection specifying that a recalculation of preferential assessment in accordance with the methods described in this section would not constitute an illegal ''spot assessment.'' The commentator suggested this language be reinserted into the final-form regulations.
Response: The commentator's recommended technical revisions have been implemented in the final-form regulations.
The Department declines to implement the recommendation to reinsert the conclusory statement that recalculation of preferential assessment is not ''spot assessment.'' The Department deleted this provision from an earlier draft in response to a commentator who noted that the provision was conclusory in nature and would not carry appreciable weight with a reviewing court.
Comment: IRRC suggested proposed § 137b.53(b) be revised to contain a description of the process for calculating the ''base year'' referenced in that subsection.
Response: The Department declines to implement this suggestion.
Significantly, the Department notes that the Assessors' Committee, which offered extensive comments throughout the process of drafting the proposed regulation and with respect to the proposed regulation itself, offered no comment recommending the final-form regulations contain an explanation of the process by which ''base year'' is to be calculated.
Comment: The Assessors' Association expressed to IRRC that there appeared to be a conflict between proposed §§ 137b.53 and 137b.105 (relating to annual update of records). In particular, the commentator noted that proposed § 137b.53(b) affords a county assessor the option to recalculate preferential assessment each year or establish a base year. Proposed § 137b.105 requires an annual update of records.
The commentator also offered that the ''options'' afforded a county assessor under proposed § 137b.53(b) appear to be negated by subsections (c)--(f), which require recalculation of preferential assessments under certain circumstances.
Response: The Department disagrees with the commentator with respect to both comments. Proposed §§ 137b.53 and 137b.105 are not contradictory. The former affords a county assessor certain options. The latter requires that, if an option is exercised so as to make any of the information contained in the records referenced in that section inaccurate, the county assessor will correct those records at intervals of no greater than 1 year.
In addition, the provisions in § 137b.53(c)--(f) do not take away the options set forth in subsection (b) in the absence of the special circumstances described in each of those four subsections.
Comment: The PFB suggested proposed § 137b.53(b)(2) be clarified by adding the phrase ''unless recalculation is required under subsection (c), (d), (e) or (f)'' to the end of that paragraph.
Response: The suggestion has been implemented in the final-form regulations.
Comment: IRRC raised several questions regarding proposed § 137b.53(g). IRRC requested the Department explain the statutory authority for this subsection, the reason it is ''optional'' and the reason for the Department's selection of the ''June 1, 1998'' cut-off date.
Response: The referenced subsection has been deleted from the final-form regulations.
Comment: The Legislative Committees provided specific language it recommended be added to proposed § 137b.54, and offered the following comment in support of its recommendation:
This is the section where the clarification of the proposed definition of the term ''contributory value of farm buildings'' would be appropriate. Any attempt to extend the term further would allow for willful circumvention of the intent of the statutory definition and for lack of uniformity in administration by counties . . .IRRC offered its concurrence with the Legislative Committees' recommendation.
Response: The Department has added the recommended language to the final-form regulations.
Comment: The PFB reviewed proposed § 137b.62 (relating to enrolled ''agricultural use'' land of less than 10 contiguous acres) and suggested the section be revised to designate specific documents that would automatically suffice to demonstrate eligibility of land for preferential assessment as ''agricultural use'' land. The suggested documents are consistent with those recommended by the PFB in its comment with respect to proposed § 137b.41(e).
Response: The Department declines to implement this suggestion, for the same basic reasons as offered in response to PFB's comment regarding proposed § 137b.41(e).
Comment: The Legislative Committees recommended Example (3) in proposed § 137b.62(c) be revised to refer to ''production of an agricultural commodity'' rather than the production of swine.
IRRC offered its concurrence with this recommendation.
Response: The Department agrees the recommended language is an improvement, and has added it to the final-form regulations.
Comment: Representative Cappabianca reviewed proposed § 137b.63 (relating to notice of change of application), and suggested the word ''located'' in subsection (a) be replaced with the phrase ''preferentially assessed.'' The commentator believed this addressed the situation where a tract of enrolled land is located in more than one county.
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Department revised proposed §§ 137b.52 and 137b.84 (relating to split-off that does not comply with section 6(a.1)(1)(i) of the act) in response to the recommendations of the Legislative Committees and the PFB. Since these revisions reference the responsibility of an owner of enrolled land to provide the county a notice of termination of preferential assessment under certain circumstances and describe events that might alter the acreage receiving preferential assessment, the Legislative Committees (through Committee staff) recommended proposed § 137b.63 be revised to more affirmatively state the obligations of the landowner with respect to terminating preferential assessment and cooperating with the county in keeping records current.
Response: In response to this recommendation, the Department has added a new subsection (c), and has redesigned proposed subsection (c) to be subsection (d).
Comment: The PFB also offered a comment with respect to proposed § 137b.63, suggesting subsection (b)(6) and (7) be deleted. The commentator did not see that requiring the information described in these paragraphs would provide any tangible benefit.
Response: The referenced subparagraphs have been deleted from the final-form regulations.
Comment: IRRC reviewed proposed § 137b.64(c) (relating to agricultural reserve land to be open to the public), noted the subsection allows for an owner of enrolled land to place reasonable restrictions on public access to agricultural reserve land and asked the Department to explain the legal basis for affording the landowner this discretion.
Response: The act does not specifically grant the landowner this discretion. Nor does it disallow it. The Department believes it reasonable to allow the landowner to place some practical restrictions on the uses to which agricultural reserve land may be put. For example, if agricultural reserve land adjoins residential structures, the landowner should be allowed to prohibit hunting within a reasonable distance of these residential structures. The Department is satisfied this subsection is a reasonable exercise of the Department's regulatory authority.
Significantly, the Department notes that the Legislative Committees, which offered extensive comments throughout the process of drafting the proposed regulation and with respect to the proposed regulation itself, offered no objection to the proposed subsection.
Comment: The PFB also offered extensive comments with respect to proposed § 137b.64(c). In summary, the PFB believed the proposed subsection failed to provide any meaningful criteria for determining appropriate public uses of agricultural reserve land and failed to promote uniformity among counties. PFB also questioned the Department's use of the term ''reasonable,'' and expressed that this term may encourage ''discord, rather than uniformity'' among counties. The PFB had, in the drafting of the proposed regulation, provided the Department language that would establish more specific criteria with respect to outdoor recreational activities on agricultural reserve land. The PFB renewed its request this language be incorporated into the final-form regulations.
Response: The Department appreciates the well-written language provided by the PFB, but declines to include this recommended language in the final-form regulations.
The Department does not believe it is necessary to promulgate detailed regulations on the subject of the appropriate public uses of agricultural reserve land. The referenced subsection provides a number of examples of restrictions that a landowner might impose with respect to such uses. The Department believes that, given the infinite combinations of circumstances involved in this area (hazards on the land, danger to the soil, public safety, various potential public uses, and the like), the best approach is to simply impose a broad standard of ''reasonableness'' and offer several examples of restrictions that might be reasonable.
The Department is mindful of the numerous comments made in opposition to the definition of ''outdoor recreation'' in proposed § 137b.2. That definition attempted to provide detailed guidance and examples as to the types of activities that could be considered ''outdoor recreation.'' The definition was revised in the final-form regulations in response to these comments. Details and examples were removed from the definition, primarily at the behest of commentators from the Legislature.
The Department will continue to monitor this issue once the final-form regulations is promulgated. If there appears to be a need for more specific regulations in this area, the Department will revisit this subsection.
Comment: The Legislative Committees recommended a minor grammatical revision to proposed § 137b.64(d).
Response: The recommendation has been implemented in the final-form regulations.
Comment: The Legislative Committees reviewed proposed § 137b.71 (relating to death of an owner of enrolled land) and suggested language be added to the Example in subsection (a) and Example (1) in subsection (b) to clarify that it would be necessary for successor landowners to file amended applications to reflect changes wrought by the death of a predecessor landowner. IRRC offered its concurrence with this suggestion.
Response: The suggestion has been implemented in the final-form regulations.
Comment: Representative Cappabianca recommended proposed § 137b.71(a) be revised by adding language to clarify that preferential assessment ends on any portion of a tract of enrolled land that, through inheritance, no longer meets the minimum requirements for preferential assessment.
Response: The Department believes this subsection is clear and does not need to be revised. The subsection contains specific language indicating the circumstances under which ''. . . preferential assessment shall terminate . . .'' For this reason, the Department declines to implement the recommended revision.
Comment: The Legislative Committees recommended proposed § 137b.72(a)(1) (relating to direct commercial sales of agriculturally related products and activities; rural enterprises incidental to the operational unit) be clarified by deleting the rather cumbersome phrase at the end of that paragraph and replacing it with ''the land.''
Response: Although the Department agrees this paragraph can be clarified, it also believes the phrase ''the land'' is too general. Instead, the Department has inserted the phrase ''the remaining land'' into this paragraph. The Department's objective is to indicate that it is the land other that the land upon which the commercial enterprise is located that must remain capable of agricultural production and not the land upon which the commercial enterprise itself is located.
Comment: The Assessors' Association contacted IRRC with its suggestion that the final-form regulations clarify the meaning of ''rural enterprise,'' as that term is used in proposed § 137b.72(a)(1).
Response: The Department declines to implement this suggestion. The Department does not believe it necessary to establish a rigid definition of ''rural enterprise.'' The Department believes the intention of the act is to provide owners of enrolled land a limited (2-acre or less) opportunity to make commercial use of a portion of the enrolled land without subjecting the entirety of the land to roll-back taxes and interest or subjecting the entire tract to removal from preferential assessment. The referenced section makes clear that preferential assessment of the commercial use portion of the land ends and roll-back taxes and interest are due with respect to that rural enterprise.
The Department also notes the Legislative Committees did not request or suggest a definition of ''rural enterprise.''
Comment: The Legislative Committees offered minor technical revisions with respect to proposed § 137b.73(a) and (g) (relating to wireless or cellular telecommunications facilities).
Response: These revisions have been made in the finall-form regulation.
Comment: The Legislative Committees suggested the text of paragraph (6) of proposed § 137b.74(a) (relating to option to accept or forgive roll-back taxes in certain instances) be switched with the text of paragraph (7) to have these paragraphs in the same order as they appear in section 5490.8 of the act (relating to determination of amounts of taxes when use abandoned).
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees considered proposed § 137b.75 (relating to conveyance of enrolled land for use as a cemetery) and offered the following comment:
Once land is transferred for use as a cemetery there is no provision in the act (see § 8(e)(1)(i)) for the use of the land to change back to agricultural use, agricultural reserve or forest reserve. Furthermore, that land is no longer subject to preferential assessment, so reversion to one of the three eligible uses would require re-application to the program.Response: The revisions recommended by the commentator have been implemented in the final-form regulations.
Comment: IRRC noted that proposed §§ 137b.75 and 137b.76 (relating to conveyance of enrolled land or conveyance of an easement or right-of-way across enrolled land for use as a trail) make use of the term ''transfer'' that is not consistent with the definition of that term in proposed § 137b.2. IRRC suggested the Department replace ''transfer'' with ''convey'' in these two sections. The PFB offered substantially the same comment as IRRC
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees offered several suggestions with respect to proposed § 137b.76. The commentator recommended subsection (a)(1) be revised to include a reference to an easement or right-of-way in the land, as well as a sale of the land itself. The commentator recommended subsection (a)(2) be revised by deleting the requirement a trail be ''unpaved'' and deleting the numerous examples provided in the proposed version of that paragraph. It also recommended several technical corrections to subsection (b).
Response: The commentator's recommendations have been implemented in the final-form regulations.
Comment: The PFB also reviewed proposed § 137b.76, and recommended the last sentence of subsection (b) be deleted. The commentator believes this sentence is not necessary, in light of the provisions of section 8(e)(1) and (2) of the act (72 P. S. § 5490.8(e)(1)). The PFB expressed concern this sentence might: ''. . . be misread as requiring preferential assessment of the remaining portion of the land originally enrolled in Clean and Green to be terminated when the owner of the trail changes the use.''
Response: The recommendation has been implemented in the final-form regulations.
Comment: Several comments were received with respect to proposed § 137b.81 (relating to general).
The Assessors' Committee suggested a phrase be added to indicate that where enrolled land no longer meets the criteria for preferential assessment and the landowner is liable for payment of roll-back taxes and interest, the property shall be removed from preferential assessment.
IRRC offered essentially the same comment.
The Legislative Committees offered general agreement with the comments raised by the PFB. It also offered a minor technical revision, and suggested the phrase ''or uses the land for something other than agricultural use, agricultural reserve or forest reserve'' be deleted as repetitive.
Representative Cappabianca suggested language be added to state that if enrolled land is changed to an ineligible use it shall lose its preferential assessment.
Response: The suggestions of Representative Cappabianca, IRRC and the Assessors' Committee have been implemented in the final-form regulations.
The PFB's suggestions have been implemented in the finall-form regulation.
The Legislative Committees' suggestions have been implemented in the final-form regulations.
Comment: The Legislative Committees recommended proposed § 137b.82 be revised to clarify that the ''2-3'' acre lot size referenced in paragraph (1) refers to residential lots.
Response: The recommendation has been implemented in the final-form regulations.
Comment: The Legislative Committees suggested a minor technical revision to proposed § 137b.83 (relating to split-off that complies with section 6(a.1)(1)(i) of the act).
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees reviewed Example (2) in proposed § 137b.84 and expressed concern that the example might be read as requiring the payment of roll-back taxes twice with respect to the three 2-acre tracts described in that example, once at the time each tract is split-off and again when roll-back taxes are triggered with respect to the remaining 44-acre tract. The commentator also suggested a reference be made to the necessity of filing an amended application when split-off occurs.
Response: The Department agrees the example could be clarified, and has inserted language offered by the commentator into the final-form regulations. Although the reference to the fact that roll-back taxes would be due with respect to the entire 50-acre tract is ultimately accurate, the proposed example does not make clear that the roll-back taxes plus interest due with respect to each of the three 2-acre tracts referenced in the example would have been triggered at the time each of those tracts was split-off.
Comment: The PFB raised concerns regarding Examples (1) and (2) of proposed § 137b.84. The Legislative Committees suggested revisions to Example (2). Specifically, the PFB recommended each example be revised to reflect that where a split-off occurs, and the split-off does not comply with section 6(a.1)(1)(i) of the act, that split-off triggers liability for roll-back taxes plus interest on all of the enrolled land and terminates preferential assessment on all the enrolled land. In such a situation, the PFB suggested the landowner should submit an amended application for preferential assessment of the remaining land which continues to meet the eligibility requirements for preferential assessment. The PFB provided language to implement its recommended revision.
The Legislative Committees suggested the phrase ''upon the submission of an amended application'' be added to the end of Example (2). Apparently, the commentator believes preferential assessment ends with respect to the ''remainder'' tract and that it must again be the subject of an application for preferential assessment.
Legislative Committee staff and representatives of the PFB subsequently met and assisted in drafting the language that appears in the referenced examples in the final-form regulations.
Response: This subject is addressed in detail earlier in this Preamble, in the comments/responses relating to proposed § 137b.52. As stated, Legislative Committee staff and the PFB assisted the Department in drafting the language that has been added to Examples (1) and (2) of § 137b.84 to address the commentators' concerns.
Comment: The Legislative Committees suggested a minor technical revision to proposed § 137b.85 (relating to split-off occurring through condemnation).
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees recommended a minor technical revision to proposed § 137b.86 (relating to split-off occurring through voluntary sale in lieu of condemnation), and the use of the term ''convey'' rather than ''transfer'' in that section.
Response: The recommendations have been implemented in the final-form regulations.
Comment: The Legislative Committees suggested several minor technical corrections to proposed § 137b.87 (relating to change in use of separated land occurring within 7 years of separation).
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees recommended several minor technical corrections to proposed § 137b.88 (relating to change of use of separated land occurring 7 years or more after separation).
Response: The recommendation has been implemented in the final-form regulations.
Comment: Several groups offered comment with respect to proposed § 137b.89 (relating to calculation of roll-back taxes). In particular, commentators voiced their opinions as to whether the interest to be paid on roll-back taxes should be simple interest or compound interest.
The Legislative Committees favored leaving the proposed provision unchanged, noting:
. . . We believe the way it appears in this proposed rule is correct (simple interest). While it might be interpreted either way, we believe the intent of the act at § 5.1 is to calculate simple interest, or compound interest would have been specifically indicated.By contrast, the Assessors' Committee offered the following:The statute clearly states that interest is at the rate of 6% per annum which is compound interest, it is not simple interest on the compounding balance.The Assessors' Committee recommended substituting ''compound'' for ''simple'' in paragraph (2) and reworking the chart contained in that paragraph to reflect compound interest, and reworking Example 1 under paragraph (3) to reflect compound interest.
The Assessors' Association indicated that it was ultimately less interested in whether interest is to be simple or compound than it is in there being a single method defined so as to maintain uniformity.
Response: The Department believes there are legitimate arguments to be made on either side of the question of whether the act requires that the interest on roll-back taxes be simple interest or compound interest.
The Department notes that, in addition to the comments offered in the formal comment periods for the proposed regulation, it solicited and received comments on this same issue with respect to earlier drafts of the proposed regulation. These comments showed a similar divergence of opinion. Those favoring the simple interest side of the argument included Dr. Robert S. Barr (President, 21st Century Appraisals), John Becker (Professor of Agricultural Economics and Law, Director of Research at the Agricultural Law Research and Education Center of the Dickinson School of Law, Pennsylvania State University) and commissioners or county assessors from Lehigh County, Mifflin County and Bradford County. Those favoring the compound interest side of the argument included following persons: members of Legislative Staff (offering informal comments, and not representing these comments as the finall position of the Legislative Committees), a Clean and Green work group representing county assessors and the Chief Assessor for Montgomery County.
The Department acknowledges that the resolution of this question is a ''close call.'' On balance, though, the Department is inclined to afford the Legislative Committees' position the greatest deference. For this reason the proposed section has not been revised in the final-form regulations.
Comment: The Legislative Committees suggested subsection (b)(2) of proposed § 137b.93 (relating to disposition of interest on roll-back taxes) be revised to include a reference to the ''special roll-back account'' described in section 8(b.2) of the act.
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees reviewed proposed § 137b.102 (relating to recordkeeping) and recommended ''property record cards'' be added as a reference to an appropriate location to record preferential assessment information, and that the finall sentence of be deleted in order to ''. . . conform with the specificity of the act . . .''.
IRRC offered its concurrence with the Legislative Committees' recommendation.
The PFB also took issue with the phrase ''it deems appropriate'' in the second sentence of this section, and suggested it be deleted.
Response: The recommendations have been implemented in the final-form regulations.
Comment: The Assessors' Committee considered proposed § 137b.105 and asked for clarification of whether the provision mandates the annual reassessment of enrolled land and the annual calculation of new fair market values.
Response: The proposed section does not mandate the annual reassessment of enrolled land and the annual recalculation of fair market values. The section requires that records to be kept current.
Comment: The Legislative Committees suggested a minor technical correction to proposed § 137b.106 (relating to notification of change in preferential assessment status).
Response: The suggestion has been implemented in the final-form regulations.
Comment: Several comments were received with respect to proposed § 137b.131 (relating to civil penalties).
Section 5b(a) of the act allows for the imposition of a civil penalty upon a person for: ''. . . each violation of this act or any regulation promulgated under this act.'' The PFB raised the point that a civil penalty should not be imposed against a person who changes the use of enrolled land to some ineligible use. This change does not ''violate'' any provision of the act or the final-form regulations. The act does not prohibit the occurrence of such a change in use, it merely imposes roll-back tax consequences in the event certain land use changes occur. The PFB suggested language be added to this section to prohibit the assessment of civil penalties solely on the basis that the landowner performed some act that triggers responsibility for payment of roll-back taxes and interest.
Sullivan County offered a similar comment.
The Legislative Committees offered their general support for the comments offered by the PFB on this subject.
IRRC offered its concurrence with the comments of the Legislative Committees and the PFB.
Response: The Department agrees with the PFB and the other commentators on this subject and has added appropriate language to the final-form regulations.
Comment: IRRC suggested proposed § 137b.131(d) be revised to replace the phrase ''timely notification'' with a specific reference to the 10-day deadline set forth in subsection (b)(2).
Response: The suggestion has been implemented in the final-form regulations.
Comment: IRRC suggested proposed § 137b.131(c) be revised to replace the phrase ''10 days'' with ''10 calendar days'' in order to make the regulatory language track with section 5b(b) of the act (72 P. S. § 5490.5b(b)).
Response: The suggestion has been implemented in the final-form regulations.
Comment: The Legislative Committees offered several general comments with respect to the proposed regulation.
The commentator noted that section 10 of the act (72 P. S. § 5490.10) (relating to renegotiation of open space agreements) allows for the renegotiation of certain ''open space'' agreements, at the option of the landowner, to make them conform to the preferential assessment requirements of the act.
The commentator also noted that section 5(c) of the act (72 P. S. § 5490.5(c)) imposes certain requirements on the State Tax Equalization Board (Board).
The commentator suggested the Department add new sections to the final-form regulations to address these subjects.
Response: The Department declines to implement the suggestion the final-form regulations address the renegotiation of ''open space'' agreements or the requirements imposed upon the Board. The sections of the act which address sections 10 and 5(c) respectively, are self-executing and there is nothing helpful the Department could add through regulation.
Fiscal Impact
Commonwealth The final-form regulations will have no appreciable fiscal impact upon the Commonwealth.
Political Subdivisions The final-form regulations will impose costs upon county governments. Counties are likely to incur expenses in recalculating preferential assessments as required under the act. 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 act accomplished by Act 156 may result in tax revenue shortfalls when collections from agricultural, agricultural reserve and forest reserve lands are lower than anticipated.
Private Sector If the act, as amended by Act 156, results in a county 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 the act, as amended by Act 156, results in a county 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 offset this tax revenue shortfall.
Paperwork Requirements
The final-form regulations are not expected to result in an appreciable increase in paperwork.
Contact Person
Further information is available by contacting the Department of Agriculture, Bureau of Farmland Preservation, 2301 North Cameron Street, Harrisburg, PA 17110-9408, Attention: Raymond C. Pickering, (717) 783-3167.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on August 2, 2000, the Department submitted a copy of the notice of proposed rulemaking published at 30 Pa.B. 4573 (September 2, 2000), to IRRC and to the Chairpersons of the House and Senate Standing Committees on Agriculture and Rural Affairs for review and comment.
In preparing these final-form regulationss, the Department has considered all comments received.
Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on March 7, 2001, these final-form regulationss were deemed approved by the House Agricultural and Rural Affairs Committee and the Senate Agriculture and Rural Affairs Committee. Under section 5.1(e) of the Regulatory Review Act, IRRC met on March 8, 2001, and approved the final-form regulations.
Findings
The Department finds that:
(1) Public notice of its intention to adopt the regulations encompassed by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240)(45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder in 1 Pa. Code §§ 7.1 and 7.2.
(2) A public comment period was provided as required by law and all comments received were considered.
(3) The modifications that were made to these regulations in response to comments received do not enlarge the purpose of the proposed regulations published at 30 Pa.B. 4573 (September 2, 2000).
(4) The adoption of the regulations in the manner provided in this order is necessary and appropriate for the administration of the authorizing statute.
Order
The Department, acting under authority of the authorizing statute, orders the following:
(a) The regulations of the Department, 7 Pa. Code, are amended by adding §§ 137b.1--137b.4, 137b.11--137b.27, 137b.41--137b.46, 137b.51--137b.54, 137b.61--137b.64, 137b.71--137b.76, 137b.81--137b.93, 137b.101--137b.112, 137b.121, 137b.122 and 137b.131--137b.133; and by deleting §§ 137.1--137.12, 137.21--137.30, 137.41--137.46, 137.51--137.57, 137.61--137.70 and 137a.1--137a.24 to read as set forth in Annex A.
(b) The current interim regulations of the Department in Chapter 137a are hereby rescinded.
(c) New regulations of the Department are hereby established in Chapter 137b (relating to preferential assessment of farmland and forest land under the clean and green act), as set forth at Annex A.
(d) The Secretary of Agriculture shall submit this order and Annex A to the Office of General Counsel and to the Office of Attorney General for approval as required by law.
(e) The Secretary of Agriculture shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(f) This order shall take effect upon publication in the Pennsylvania Bulletin.
SAMUEL E. HAYES, Jr.,
SecretaryFiscal Note: Fiscal Note 2-133 remains valid for the finall adoption of the subject regulations.
Annex A
TITLE 7. AGRICULTURE
PART V-C. FARMLAND AND FOREST LAND
CHAPTER 137. (Reserved) §§ 137.1--137.12. (Reserved).
§§ 137.21--137.30. (Reserved).
§§ 137.41--137.46. (Reserved).
§§ 137.51--137.57. (Reserved).
§§ 137.61--137.70. (Reserved).
CHAPTER 137a. (Reserved) §§ 137a.1--137a.24. (Reserved).
CHAPTER 137b. PREFERENTIAL ASSESSMENT OF FARMLAND AND FOREST LAND UNDER THE CLEAN AND GREEN ACT GENERAL PROVISIONS
Sec.
137b.1. Purpose. 137b.2. Definitions. 137b.3. Responsibilities of the Department. 137b.4. Contacting the Department. ELIGIBLE LAND
137b.11. General. 137b.12. Agricultural use. 137b.13. Agricultural reserve. 137b.14. Forest reserve. 137b.15. Inclusion of farmstead land. 137b.16. Residence not required. 137b.17. Common ownership required. 137b.18. County-imposed eligibility requirements. 137b.19. Multiple tracts on a single application. 137b.20. Inclusion of all contiguous land described in the deed to the tract with respect to which enrollment is sought. 137b.21. Exclusion of noncontiguous tract described in a single deed. 137b.22. Landowner may include or exclude from the application tracts described in separate deeds. 137b.23. Land adjoining preferentially assessed land with common ownership is eligible. 137b.24. Ineligible land. 137b.25. Multiple land use categories on a single application. 137b.26. Land located in more than one tax district. 137b.27. Assessment of ineligible land. APPLICATION PROCESS
137b.41. Application forms and procedures. 137b.42. Deadline for submission of applications. 137b.43. Applications where subject land is located in more than one county. 137b.44. County processing of applications. 137b.45. Notice of qualification for preferential assessment. 137b.46. Fees of the county board for assessment appeals; recording fees; processing fees. PREFERENTIAL ASSESSMENT
137b.51. Assessment procedures. 137b.52. Duration of preferential assessment. 137b.53. Calculation and recalculation of preferential assessment. 137b.54. Calculating the contributory value of farm buildings. OBLIGATIONS OF THE OWNER OF ENROLLED LAND
137b.61. Transfer of enrolled land. 137b.62. Enrolled ''agricultural use'' land of less than 10 contiguous acres. 137b.63. Notice of change of application. 137b.64. Agricultural reserve land to be open to the public. IMPACT OF SPECIFIC EVENTS OR USES ON PREFERENTIAL ASSESSMENT
137b.71. Death of an owner of enrolled land. 137b.72. Direct commercial sales of agriculturally related products and activities; rural enterprises incidental to the operational unit. 137b.73. Wireless or cellular telecommunications facilities. 137b.74. Option to accept or forgive roll-back taxes in certain instances. 137b.75. Conveyance of enrolled land for use as a cemetery. 137b.76. Conveyance of enrolled land or conveyance of an easement or right-of-way across enrolled land for use as a trail. LIABILITY FOR ROLL-BACK TAXES
137b.81. General. 137b.82. Split-off tract. 137b.83. Split-off that complies with section 6(a.1)(1)(i) of the act. 137b.84. Split-off that does not comply with section 6(a.1)(1)(i) of the act. 137b.85. Split-off occurring through condemnation. 137b.86. Split-off occurring through voluntary sale in lieu of condemnation. 137b.87. Change in use of separated land occurring within 7 years of separation. 137b.88. Change in use of separated land occurring 7 years or more after separation. 137b.89. Calculation of roll-back taxes. 137b.90. Due date for roll-back taxes. 137b.91. Liens for nonpayment of roll-back taxes. 137b.92. Time period within which roll-back taxes are to be calculated and notice mailed. 137b.93. Disposition of interest on roll-back taxes. DUTIES OF COUNTY ASSESSOR
137b.101. General. 137b.102. Recordkeeping. 137b.103. Recording approved applications. 137b.104. Determining total use value. 137b.105. Annual update of records. 137b.106. Notification of change in preferential assessment status. 137b.107. Notification of change in factors affecting total assessment. 137b.108. Adjusting records to reflect split-off, separation or transfer. 137b.109. Enforcement and evidence gathering. 137b.110. Assessment of roll-back taxes. 137b.111. Record of tax millage. 137b.112. Submission of information to the Department. RECORDER OF DEEDS
137b.121. Duty to record. 137b.122. Fees of the recorder of deeds. MISCELLANEOUS
137b.131. Civil penalties. 137b.132. Distributing taxes and interest. 137b.133. Appealing a decision of the county assessor.
GENERAL PROVISIONS § 137b.1. Purpose.
(a) This chapter establishes procedures necessary for the uniform Statewide implementation of the act. The act provides for land devoted to agricultural use, agricultural reserve use or forest reserve use to be assessed at the value it has for that use rather than at fair market value. The intent of the act is to encourage the keeping of land in one of these uses.
(b) The benefit to an owner of enrolled land is an assurance that the enrolled land will not be assessed at the same value for tax assessment purposes as land that is not enrolled land. In almost all cases, an owner of enrolled land will see a reduction in his property assessment compared to land assessed or valued at its fair market value. The difference between assessments of enrolled land and land that is not enrolled land will be most noticeable when a county is reassessed.
§ 137b.2. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
Act--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 Act.
Agricultural commodity--Any of the following:
(i) Agricultural, apicultural, aquacultural, horticultural, floricultural, silvicultural, viticultural and dairy products.
(ii) Pasture.
(iii) Livestock and the products thereof.
(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--
(i) 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.
(ii) 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 under 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.
(iii) The term includes 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.
Class A beneficiaries for inheritance tax purposes--The following relations to a decedent: grandfather, grandmother, father, mother, husband, wife, lineal descendants, wife, widow, husband or widower of a child. Lineal descendants include all children of the natural parents and their descendants, whether or not they have been adopted by others, adopted descendants and their descendants and stepdescendants.
Contiguous tract--
(i) All portions of one operational unit as described in the deed or deeds, whether or not the portions are divided by streams, public roads or bridges and whether or not the portions are described as multiple tax parcels, tracts, purparts or other property identifiers.
(ii) 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.
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 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--Any 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. The term includes farmstead land on the tract.
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 3 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. The calculation of operating expenses does not include interest or principal payments.
Normal assessment--The total fair market value of buildings and ineligible land, as of the base year of assessment, on a tract multiplied by the assessment ratio.
Outdoor recreation--Passive recreational use of land that does not entail the erection of permanent structures or any change to the land which would render it incapable of being immediately converted to agricultural use.
Pasture--Land, other than land enrolled in the USDA Conservation Reserve Program, used primarily for the growing of grasses and legumes for consumption 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 assessment authorized under the act 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.
Rural enterprise incidental to the operational unit--A commercial enterprise or venture that is conducted within 2 acres or less of enrolled land and, when conducted, does not permanently impede or otherwise interfere with the production of an agricultural commodity on that portion of the enrolled land that is not subject to roll-back taxes under section 8(d) of the act (72 P. S. § 5490.8(d)) as a result of that commercial enterprise or venture.
Separation--A division, by conveyance or other action of the owner, of lands devoted to agricultural use, agricultural reserve or forest reserve and preferentially assessed under the act, into two or more tracts of land, the use of which continues to be agricultural use, agricultural reserve or forest reserve and all tracts so formed meet the requirements of section 3 of the act.
Split-off--A division, by conveyance or other action of the owner, of lands devoted to agricultural use, agricultural reserve or forest reserve and preferentially assessed under the act, 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 3 of the act.
Tract--
(i) A lot, piece or parcel of land.
(ii) 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.
USDA--The 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.
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.
§ 137b.3. Responsibilities of the Department.
(a) General. The Department's responsibilities are to provide the use values described in section 4.1 of the act (72 P. S. § 5490.4a) by May 1 of each year and to provide the forms and regulations necessary to promote the efficient, uniform Statewide administration of the act.
(b) Information gathering. The Department will collect information from county assessors for each calendar year to insure that the act and this chapter are being implemented fairly and uniformly throughout this Commonwealth. This information will be collected through a survey form to be provided to county assessors by the Department no later than December 15 each year, and which county assessors shall complete and submit to the Department by January 31 of the following year.
(c) Educational outreach. The Department will conduct an educational outreach effort on matters related to the administration and interpretation of the act and this chapter.
§ 137b.4. Contacting the Department.
For purposes of this chapter, communications to the Department shall be directed to the following address:
Pennsylvania Department of Agriculture
Bureau of Farmland Protection
2301 North Cameron
Street Harrisburg, PA 17110-9408
Telephone: (717) 783-3167
Facsimile: (717) 772-8798
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