SENATE BILL No. 932

 

 

November 29, 2007, Introduced by Senator BIRKHOLZ and referred to the Committee on Finance.

 

 

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending sections 8716, 14501, 36109, and 73301 (MCL 324.8716,

 

324.14501, 324.36109, and 324.73301), section 8716 as amended by

 

2003 PA 163, section 14501 as amended by 2006 PA 254, section 36109

 

as amended by 2002 PA 75, and section 73301 as added by 1995 PA 58.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 8716. (1) The freshwater protection fund is created

 

within the state treasury.

 

     (2) The state treasurer may receive money or other assets from

 

any source for deposit into the fund, including general fund

 

general purpose appropriations, gifts, grants, and bequests. , and,

 

if provided by law, revenue from the sale of Michigan freshwater

 


protection bonds or the Michigan freshwater protection checkoff on

 

state income and single business tax returns. The director shall

 

annually seek matching general fund general purpose appropriations

 

in amounts equal to the groundwater protection fees collected under

 

section 8715 that are deposited into the fund pursuant to this

 

part. The state treasurer shall direct the investment of the fund.

 

The state treasurer shall credit to the fund interest and earnings

 

from fund investments.

 

     (3) Money in the fund at the close of the fiscal year shall

 

remain in the fund and shall not lapse to the general fund.

 

     (4) The department shall be the administrator of the fund for

 

auditing purposes.

 

     (5) (4) The department shall expend money from the fund, upon

 

appropriation, only for 1 or more of the following purposes:

 

     (a) Direct assistance.

 

     (b) Indirect assistance.

 

     (c) Emergency response and removal of potential sources of

 

groundwater contamination. Expenditures pursuant to this

 

subdivision shall not exceed $15,000.00 per location.

 

     (d) Groundwater protection and groundwater regulatory program.

 

     (e) Administrative costs. Expenditures pursuant to this

 

subdivision shall not exceed 20% of the annual appropriations from

 

the fund.

 

     (6) (5) The department shall establish criteria and procedures

 

for approving proposed expenditures from the fund.

 

     (7) (6) Notwithstanding section 8715, if at the close of any

 

fiscal year the amount of money in the fund exceeds $3,500,000.00,

 


the department shall not collect a groundwater protection fee for

 

the following year. After the groundwater protection fees have been

 

suspended under this subsection, the fees shall only be reinstated

 

if, at the close of any succeeding fiscal year, the amount of money

 

in the fund is less than $1,000,000.00.

 

     (8) (7) The department of treasury shall, before November 1 of

 

each year, notify the department of the balance in the fund at the

 

close of the preceding fiscal year.

 

     (9) (8) As used in this section:

 

     (a) "Administrative costs" includes, but is not limited to,

 

costs incurred during any of the following:

 

     (i) Groundwater monitoring for pesticides and fertilizers.

 

     (ii) Development and enforcement of groundwater protection

 

rules.

 

     (iii) Coordination of programs under this part with the United

 

States environmental protection agency and other state programs

 

with groundwater and pesticide management responsibilities.

 

     (iv) Management of pesticide sales information.

 

     (b) "Direct assistance" includes, but is not limited to,

 

programs that will provide for any of the following:

 

     (i) Provision of alternate noncommunity water supplies.

 

     (ii) Closure of wells that may impact groundwater, such as

 

abandoned, improperly constructed, or drainage wells.

 

     (iii) The environmentally sound disposal or recycling of

 

specialty pesticide containers.

 

     (iv) The environmentally sound disposal or recycling of

 

nonspecialty pesticide containers.

 


     (v) Specialty and nonspecialty pesticide pickup programs for

 

pesticides not currently registered for use.

 

     (vi) Programs devoted to integrated pest and crop management

 

that strive to encourage the judicious use of pesticides and

 

fertilizers through targeted applications as part of a systems

 

approach to pest control and related crop management decisions.

 

     (vii) Incentive and cost share programs for persons in the

 

groundwater stewardship program for implementation of groundwater

 

stewardship practices or groundwater protection rules.

 

     (viii) Incentive and cost share programs for persons who notify

 

the director of potential sources of groundwater contamination on

 

their property.

 

     (ix) Monitoring of private well water for pesticides and

 

fertilizers.

 

     (x) Removal of soils and waters contaminated by pesticides and

 

fertilizers and the land application of those materials at

 

agronomic rates.

 

     (xi) Groundwater stewardship program grants pursuant to section

 

8710.

 

     (xii) Other programs established pursuant to this part.

 

     (c) "Indirect assistance" includes, but is not limited to,

 

programs that will provide for any of the following:

 

     (i) Public education and demonstration programs on specialty

 

pesticide container recycling and environmentally sound disposal

 

methods.

 

     (ii) Educational programs for pesticide and fertilizer end

 

users.

 


     (iii) Technical assistance programs for pesticide and fertilizer

 

end users.

 

     (iv) The promotion and implementation of on-site evaluation

 

systems and groundwater stewardship practices.

 

     (v) Research programs for determination of the impacts of

 

alternate pesticide and fertilizer management practices.

 

     (vi) Research program for determination of aquifer sensitivity

 

and vulnerability to contamination by pesticides and fertilizers.

 

     Sec. 14501. As used in this part:

 

     (a) "Agricultural biomass" means residue and waste generated

 

on a farm or by farm co-operative members from the production and

 

processing of agricultural products, animal wastes, food processing

 

wastes, or other materials as approved by the director.

 

     (b) "Department" means the department of environmental

 

quality.

 

     (c) "Director" means the director of the department of

 

environmental quality.

 

     (d) "Eligible farmer or agricultural processor" means a person

 

who processes agricultural products or a person who is engaged as

 

an owner-operator of a farm in the production of agricultural goods

 

as defined by section 35(1)(h) of the single business tax act, 1975

 

PA 228, MCL 208.35 207(1)(d) of the Michigan business tax act, 2007

 

PA 36, MCL 208.1207.

 

     (e) "Environmental wastes" means all environmental pollutants,

 

wastes, discharges, and emissions, regardless of how they are

 

regulated and regardless of whether they are released to the

 

general environment or the workplace environment.

 


     (f) "Pollution prevention" means all of the following:

 

     (i) "Source reduction" as defined in 42 USC 13102.

 

     (ii) "Pollution prevention" as described in the United States

 

environmental protection agency's pollution prevention statement

 

dated June 15, 1993.

 

     (iii) Environmentally sound on-site or off-site reuse or

 

recycling including, but not limited to, the use of agricultural

 

biomass by qualified agricultural energy production systems.

 

     (g) "Qualified agricultural energy production system" means

 

the structures, equipment, and apparatus to be used to produce a

 

gaseous fuel from the noncombustive decomposition of agricultural

 

biomass and the apparatus and equipment used to generate

 

electricity or heat from the gaseous fuel or store the gaseous fuel

 

for future generation of electricity or heat. Qualified

 

agricultural energy production system may include, but is not

 

limited to, a methane digester, biomass gasification technology, or

 

thermal depolymerization technology.

 

     (h) "RETAP" means the retired engineers technical assistance

 

program created in section 14511.

 

     (i) "Retap fund" means the retired engineers technical

 

assistance program fund created in section 14512.

 

     (j) "Small business" means a business that is not dominant in

 

its field as described in 13 CFR part 121 and meets both of the

 

following requirements:

 

     (i) Is independently owned or operated, by a person that

 

employs 500 or fewer individuals.

 

     (ii) Is a small business concern as defined in 15 USC 632.

 


     Sec. 36109. (1) An owner of farmland and related buildings

 

subject to 1 or more development rights agreements under section

 

36104 or agricultural conservation easements or purchases of

 

development rights under section 36111b or 36206 who is required or

 

eligible to file a return as an individual or a claimant under the

 

state income tax act may claim a credit against the state income

 

tax liability for the amount by which the property taxes on the

 

land and structures used in the farming operation, including the

 

homestead, restricted by the development rights agreements,

 

agricultural conservation easements, or purchases of development

 

rights exceed 3.5% of the household income as defined in section

 

508 of the income tax act of 1967, 1967 PA 281, MCL 206.508,

 

excluding a deduction if taken under section 613 of the internal

 

revenue code of 1986, 26 USC 613. For the purposes of this section,

 

all of the following apply:

 

     (a) A partner in a partnership is considered an owner of

 

farmland and related buildings owned by the partnership and covered

 

by a development rights agreement, agricultural conservation

 

easement, or purchase of development rights. A partner is

 

considered to pay a proportion of the property taxes on that

 

property equal to the partner's share of ownership of capital or

 

distributive share of ordinary income as reported by the

 

partnership to the internal revenue service or, if the partnership

 

is not required to report that information to the internal revenue

 

service, as provided in the partnership agreement or, if there is

 

no written partnership agreement, a statement signed by all the

 

partners. A partner claiming a credit under this section based upon

 


the partnership agreement or a statement shall file a copy of the

 

agreement or statement with his or her income tax return. If the

 

agreement or statement is not filed, the department of treasury

 

shall deny the credit. All partners in a partnership claiming the

 

credit allowed under this section shall compute the credit using

 

the same basis for the apportionment of the property taxes.

 

     (b) A shareholder of a corporation that has filed a proper

 

election under subchapter S of chapter 1 of subtitle A of the

 

internal revenue code of 1986, 26 U.S.C. USC 1361 to 1379, is

 

considered an owner of farmland and related buildings covered by a

 

development rights agreement that are owned by the corporation. A

 

shareholder is considered to pay a proportion of the property taxes

 

on that property equal to the shareholder's percentage of stock

 

ownership for the tax year as reported by the corporation to the

 

internal revenue service. Except as provided in subsection (8),

 

this subdivision applies to tax years beginning after 1987.

 

     (c) Except as otherwise provided in this subdivision, an

 

individual in possession of property for life under a life estate

 

with remainder to another person or holding property under a life

 

lease is considered the owner of that property if it is farmland

 

and related buildings covered by a development rights agreement.

 

Beginning January 1, 1986, if an individual in possession of

 

property for life under a life estate with remainder to another

 

person or holding property under a life lease enters into a written

 

agreement with the person holding the remainder interest in that

 

land and the written agreement apportions the property taxes in the

 

same manner as revenue and expenses, the life lease or life estate

 


holder and the person holding the remainder interest may claim the

 

credit under this act as it is apportioned to them under the

 

written agreement upon filing a copy of the written agreement with

 

the return.

 

     (d) If a trust holds farmland and related buildings covered by

 

a development rights agreement and an individual is treated under

 

subpart E of subchapter J of subchapter A of chapter 1 of the

 

internal revenue code of 1986, 26 U.S.C. USC 671 to 679, as the

 

owner of that portion of the trust that includes the farmland and

 

related buildings, that individual is considered the owner of that

 

property.

 

     (e) An individual who is the sole beneficiary of a trust that

 

is the result of the death of that individual's spouse is

 

considered the owner of farmland and related buildings covered by a

 

development rights agreement and held by the trust if the trust

 

conforms to all of the following:

 

     (i) One hundred percent of the trust income is distributed to

 

the beneficiary in the tax year in which the trust receives the

 

income.

 

     (ii) The trust terms do not provide that any portion of the

 

trust is to be paid, set aside, or otherwise used in a manner that

 

would qualify for the deduction allowed by section 642(c) of the

 

internal revenue code of 1986, 26 USC 642.

 

     (f) A member in a limited liability company is considered an

 

owner of farmland and related buildings covered by a development

 

rights agreement that are owned by the limited liability company. A

 

member is considered to pay a proportion of the property taxes on

 


that property equal to the member's share of ownership or

 

distributive share of ordinary income as reported by the limited

 

liability company to the internal revenue service.

 

     (2) An owner of farmland and related buildings subject to 1 or

 

more development rights agreements under section 36104 or

 

agricultural conservation easements or purchases of development

 

rights under section 36111b or 36206 to whom subsection (1) does

 

not apply may claim a credit under the single Michigan business tax

 

act, 1975 PA 228, MCL 208.1 to 208.145 2007 PA 36, MCL 208.1101 to

 

208.1601, for the amount by which the property taxes on the land

 

and structures used in farming operations restricted by the

 

development rights agreements, agricultural conservation easements,

 

or purchases of development rights exceed 3.5% of the adjusted

 

business income tax base of the owner as defined in section 36 of

 

the single business tax act, 1975 PA 228, MCL 208.36 201 of the

 

Michigan business tax act, 2007 PA 36, MCL 208.1201, plus

 

compensation to shareholders not included in adjusted the business

 

income tax base, excluding any deductions if taken under section

 

613 of the internal revenue code of 1986, 26 USC 613. When

 

calculating adjusted business income for tax years beginning before

 

1987, federal taxable income shall not be less than zero for the

 

purposes of this subsection only. A participant is not eligible to

 

claim a credit and refund against the state single Michigan

 

business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, unless the

 

participant demonstrates that the participant's agricultural gross

 

receipts of the farming operation exceed 5 times the property taxes

 

on the land for each of 3 out of the 5 tax years immediately

 


preceding the year in which the credit is claimed. This eligibility

 

requirement does not apply to those participants who executed

 

farmland development rights agreements under this part before

 

January 1, 1978. A participant may compare, during the contract

 

period, the average of the most recent 3 years of agricultural

 

gross receipts to property taxes in the first year that the

 

participant entered the program under the present contract in

 

calculating the gross receipts qualification. Once an election is

 

made by the participant to compute the benefit in this manner, all

 

future calculations shall be made in the same manner.

 

     (3) If the farmland and related buildings covered by a

 

development rights agreement under section 36104 or an agricultural

 

conservation easement or purchase of development rights under

 

section 36111b or 36206 are owned by more than 1 owner, each owner

 

is allowed to claim a credit under this section based upon that

 

owner's share of the property tax payable on the farmland and

 

related buildings. The department of treasury shall consider the

 

property tax equally apportioned among the owners unless a written

 

agreement signed by all the owners is filed with the return, which

 

agreement apportions the property taxes in the same manner as all

 

other items of revenue and expense. If the property taxes are

 

considered equally apportioned, a husband and wife shall be

 

considered 1 owner, and a person with respect to whom a deduction

 

under section 151 of the internal revenue code of 1986, 26 USC 151,

 

is allowable to another owner of the property shall not be

 

considered an owner.

 

     (4) A beneficiary of an estate or trust to which subsection

 


(1) does not apply is entitled to the same percentage of the credit

 

provided in this section as that person's percentage of all other

 

distributions by the estate or trust.

 

     (5) If the allowable amount of the credit claimed exceeds the

 

state income tax or the state single business tax otherwise due for

 

the tax year or if there is no state income tax or the state single

 

business tax due for the tax year, the amount of the claim not used

 

as an offset against the state income tax or the state single

 

business tax, after examination and review, shall be approved for

 

payment to the claimant pursuant to 1941 PA 122, MCL 205.1 to

 

205.31. The total credit allowable under this part and chapter 9 of

 

the income tax act of 1967, 1967 PA 281, MCL 206.501 to 206.532, or

 

the single business tax act, 1975 PA 228, MCL 208.1 to 208.145

 

Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601,

 

shall not exceed the total property tax due and payable by the

 

claimant in that year. The amount the credit exceeds the property

 

tax due and payable shall be deducted from the credit claimed under

 

this part.

 

     (6) For purposes of audit, review, determination, appeals,

 

hearings, notices, assessments, and administration relating to the

 

credit program provided by this section, the state income tax act,

 

1967 PA 281, MCL 206.1 to 206.36, or single business tax act, 1975

 

PA 228, MCL 208.1 to 208.145 the Michigan business tax act, 2007 PA

 

36, MCL 208.1101 to 208.1601, applies according to which tax the

 

credit is claimed against. If an individual is allowed to claim a

 

credit under subsection (1) based upon property owned or held by a

 

partnership, S corporation, or trust, the department of treasury

 


may require that the individual furnish to the department a copy of

 

a tax return, or portion of a tax return, and supporting schedules

 

that the partnership, S corporation, or trust files under the

 

internal revenue code.

 

     (7) The department of treasury shall account separately for

 

payments under this part and not combine them with other credit

 

programs. A payment made to a claimant for a credit claimed under

 

this part shall be issued by 1 or more warrants made out to the

 

county treasurer in each county in which the claimant's property is

 

located and the claimant, unless the claimant specifies on the

 

return that a copy of the receipt showing payment of the property

 

taxes that became a lien in the year for which the credit is

 

claimed, or that became a lien in the year before the year for

 

which the credit is claimed, is attached to the income tax or

 

single business tax return filed by the claimant. If the claimant

 

specifies that a copy of the receipt is attached to the return, the

 

payment shall be made directly to the claimant. A warrant made out

 

to a claimant and a county treasurer shall be used first to pay

 

delinquent property taxes, interest, penalties, and fees on

 

property restricted by the development rights agreement. If the

 

warrant exceeds the amount of delinquent taxes, interest,

 

penalties, and fees, the county treasurer shall remit the excess to

 

the claimant. If a claimant falsely specifies that the receipt

 

showing payment of the property taxes is attached to the return and

 

if the property taxes on the land subject to that development

 

rights agreement were not paid before the return was filed, all

 

future payments to that claimant of credits claimed under this act

 


attributable to that development rights agreement may be made

 

payable to the county treasurer of the county in which the property

 

subject to the development rights agreement is located and to that

 

claimant.

 

     (8) For property taxes levied after 1987, a person that was an

 

S corporation and had entered into a development rights agreement

 

before January 1, 1989, and paid property taxes on that property,

 

may claim the credit allowed by this section as an owner eligible

 

under subsection (2). A subchapter S corporation claiming a credit

 

as permitted by this subsection for taxes levied in 1988 through

 

1990 shall claim the credit by filing an amended return under the

 

single business tax act, 1975 PA 228, MCL 208.1 to 208.145. If a

 

subchapter S corporation files an amended return as permitted by

 

this subsection and if a shareholder of the subchapter S

 

corporation claimed a credit under subsection (1)(b) for the same

 

property taxes, the shareholder shall file an amended return under

 

the state income tax act. A subchapter S corporation is not

 

entitled to a credit under this subsection until all of its

 

shareholders file the amended returns required by this subsection.

 

The department of treasury shall first apply a credit due to a

 

subchapter S corporation under this subsection to repay credits

 

claimed under this section by the subchapter S corporation's

 

shareholders for property taxes levied in 1988 through 1990 and

 

shall refund any remaining credit to the S corporation. Interest or

 

penalty is not due or payable on an income tax liability resulting

 

from an amended return required by this subsection. A subchapter S

 

corporation electing to claim a credit as an owner eligible under

 


subsection (2) shall not claim a credit under subsection (1) for

 

property taxes levied after 1987.

 

     Sec. 73301. (1) Except as otherwise provided in this section,

 

a cause of action shall not arise for injuries to a person who is

 

on the land of another without paying to the owner, tenant, or

 

lessee of the land a valuable consideration for the purpose of

 

fishing, hunting, trapping, camping, hiking, sightseeing,

 

motorcycling, snowmobiling, or any other outdoor recreational use

 

or trail use, with or without permission, against the owner,

 

tenant, or lessee of the land unless the injuries were caused by

 

the gross negligence or willful and wanton misconduct of the owner,

 

tenant, or lessee.

 

     (2) A cause of action shall not arise for injuries to a person

 

who is on the land of another without paying to the owner, tenant,

 

or lessee of the land a valuable consideration for the purpose of

 

entering or exiting from or using a Michigan trailway as designated

 

under part 721 or other public trail, with or without permission,

 

against the owner, tenant, or lessee of the land unless the

 

injuries were caused by the gross negligence or willful and wanton

 

misconduct of the owner, tenant, or lessee. For purposes of this

 

subsection, a Michigan trailway or public trail may be located on

 

land of any size including, but not limited to, urban, suburban,

 

subdivided, and rural land.

 

     (3) A cause of action shall not arise against the owner,

 

tenant, or lessee of land or premises for injuries to a person who

 

is on that land or premises for the purpose of gleaning

 

agricultural or farm products, unless that person's injuries were

 


caused by the gross negligence or willful and wanton misconduct of

 

the owner, tenant, or lessee.

 

     (4) A cause of action shall not arise against the owner,

 

tenant, or lessee of a farm used in the production of agricultural

 

goods as defined by section 35(1)(h) of the single business tax

 

act, Act No. 228 of the Public Acts of 1975, being section 208.35

 

of the Michigan Compiled Laws 207(1)(d) of the Michigan business

 

tax act, 2007 PA 36, MCL 208.1207, for injuries to a person who is

 

on that farm and has paid the owner, tenant, or lessee valuable

 

consideration for the purpose of fishing or hunting, unless that

 

person's injuries were caused by a condition which involved an

 

unreasonable risk of harm and all of the following apply:

 

     (a) The owner, tenant, or lessee knew or had reason to know of

 

the condition or risk.

 

     (b) The owner, tenant, or lessee failed to exercise reasonable

 

care to make the condition safe, or to warn the person of the

 

condition or risk.

 

     (c) The person injured did not know or did not have reason to

 

know of the condition or risk.

 

     (5) A cause of action shall not arise against the owner,

 

tenant, or lessee of land or premises for injuries to a person,

 

other than an employee or contractor of the owner, tenant, or

 

lessee, who is on the land or premises for the purpose of picking

 

and purchasing agricultural or farm products at a farm or "u-pick"

 

operation, unless the person's injuries were caused by a condition

 

that involved an unreasonable risk of harm and all of the following

 

apply:

 


     (a) The owner, tenant, or lessee knew or had reason to know of

 

the condition or risk.

 

     (b) The owner, tenant, or lessee failed to exercise reasonable

 

care to make the condition safe, or to warn the person of the

 

condition or risk.

 

     (c) The person injured did not know or did not have reason to

 

know of the condition or risk.

 

     (6) As used in this section, "agricultural or farm products"

 

means the natural products of the farm, nursery, grove, orchard,

 

vineyard, garden, and apiary, including, but not limited to, trees

 

and firewood.