BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.20.683 pertaining to specialty and unique crops; additional requirements for agricultural land classification

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO: All Concerned Persons

 

1. On December 5, 2019, at 10:00 a.m., the Department of Revenue will hold a public hearing in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed amendment of the above-stated rule. The conference room is most readily accessed by entering through the east doors of the building.

 

2. The Department of Revenue will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, please advise the department of the nature of the accommodation needed, no later than 5 p.m. on November 15, 2019. Please contact Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or [email protected].

 

3. The rule as proposed to be amended provides as follows, new matter underlined, deleted matter interlined:

 

42.20.683 SPECIALTY AND UNIQUE CROPS; ADDITIONAL REQUIREMENTS FOR AGRICULTURAL LAND CLASSIFICATION (1) For the purpose of this rule, the term "specialty and unique crops" includes, but is not limited to, the agricultural products provided in (3)(a) through (g).

(1) (2)  An applicant applying A landowner may apply for agricultural land classification for specialty and unique crops. To receive this agricultural land classification, the landowner must prove that: the land indicated in the application actually produced an agricultural crop as defined in 15-1-101, MCA, and that the crop produced $1,500 in annual agricultural income based on parcel size as set forth in ARM 42.20.620. The agricultural land, indicated in the application, must actually produce the crop(s).

(a) the agricultural products they grow, raise, or produce meet the definition of agricultural in 15-1-101, MCA;

(b) the agricultural products are grown, raised, or produced by the land referenced in the agricultural land classification application; and

(c) the marketing of agricultural products, other than livestock grown, raised, or produced by the land results in at least $1,500 annual gross income, as described in ARM 42.20.620.

(3) In addition to the agricultural land classification criteria provided in ARM 42.20.620 and (1), agricultural products grown, raised, or produced by the land must also meet applicable specialty and unique crops requirements.

(2) (a)  Ppoultry or game birds must be raised in an unconfined area and receiving receive their general dietary requirements from the land. Game birds raised in a building, cage, or enclosed area, are considered activities that are not supported and produced by the land. Land used for For poultry and game birds raised in this manner a building, cage, or enclosed area, the land is are not eligible for consideration as for agricultural land classification.

(3) (b)  Tthe sale of honey and other products from bees will be is considered agricultural income. For valuation as agricultural land, if the landowner of the land must provide proof that the or the landowner's business is registered with the Montana Department of Agriculture as an apiary.

(4) (c)  Tthe sale of biological control insects will be is considered agricultural income if the insects are supported solely from noxious weeds vegetation grown on the land indicated on the application.

(5) (d)  A a garden or produce farm must grow if the plants or and nursery stock in the ground to be considered agriculture if the provisions of (6) are met. Plants not grown in or nourished by the land are not considered agricultural production and the income generated by those plants is not considered agricultural income for the purposes of this rule are grown in and nourished by the land, and are managed using industry standard management practices, including weed and grass maintenance, fencing, and a watering system. Examples of ineligible plants include, but are not limited to, trees grown in self-contained pots or burlap bags placed in or on the ground and plants grown in flats located in a greenhouse.

(6) For valuation as agricultural land, the owner of land used as a garden or produce farm must provide proof that the garden or produce farm:

(a) is cultivated for weeds and grass; and

(b) is managed according to accepted husbandry practices, including necessary fencing and a watering system.

(7) (e)  The sale of a Christmas trees farm if will be considered agricultural income if the provisions of (8) are met.

(8) For valuation as agricultural land, the landowner of land must provides proof that all trees are:

(a) cultivated under accepted, proven husbandry industry-standard management practices; and

(b) sheared on a regular basis.

(9)  The property owner must include with the application documentation sufficient to prove that the property produces and the owner or the owner's agent markets at least $1,500 in gross annual income.

(10) (f)  A a fruit tree orchard will be considered agriculture if the provisions of (11) are met.

(11) For valuation as agricultural land, the landowner of land must provides proof that the orchard is maintained using accepted fruit tree husbandry industry-standard management practices including pest and disease control, wildlife control fencing, weed and grass maintenance, and a watering system.

(12) The property owner must include with the application documentation sufficient to prove that the orchard produces and the owner or the owner's agent markets at least $1,500 in gross annual income once the trees reach production maturity.

(13) (g)  A a vineyard shall be considered agriculture if the provisions of (14) are met.

(14) For valuation as agricultural land, if the landowner of land must prove provides proof that:

(a) the vineyard is maintained for using industry-standard management practices, including vine pruning, weeds and grass; maintenance, pest and disease control, and

(b) all vines are pruned; and

(c) the vineyard is maintained with accepted husbandry practices, including trellising and staking.

(4) As provided in 15-7-202, MCA, land used to grow, raise, or produce the agricultural products in (3)(e), (f), and (g) is eligible for a five-year provisional agricultural land classification. A landowner must submit an application for provisional agricultural land classification on a form provided by the department.

(15) (5)  Land qualifying under this rule used to grow, raise, or produce agricultural products provided in (3)(a) through (g) that qualifies for agricultural land classification is valued at the highest productivity level of non-irrigated continuously cropped farm land, as established by the department provided in ARM 42.20.681. 

 

AUTH:  15-1-201, MCA

IMP:  15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA

 

REASONABLE NECESSITY: The department proposes amending ARM 42.20.683, for the department to implement amendments to 15-7-202, MCA, made under Senate Bill 69 (SB 69) by the 2019 Montana Legislature. Section 15-7-202, MCA, generally provides eligibility criteria for valuation of land classified as agricultural. SB 69 revised agricultural classification laws providing provisional agricultural classification for certain orchards, vineyards, and Christmas tree farms. The department also proposes several amendments for consistency with current department practices and terminology, which have changed since the rule was created under MAR Notice No. 42-2-924 from the larger rule regarding agricultural land valuation for land totaling less than 160 acres found in ARM 42.20.620.

The department proposes amending the rule's catchphrase to reflect amended rule content and in compliance with ARM 1.2.214.  

The department proposes (1) which is necessary to clarify that specialty and unique crops are included under the broader term of "agricultural products" that are grown, raised, or produced for commercial purposes and defined as "agricultural" in 15-1-101, MCA. 

The department also proposes revising text in proposed (2) to identify the landowner as the applicant completing an agricultural land classification application and clarifies the necessity for meeting core agricultural land classification eligibility requirements with references to 15-1-101, MCA and ARM 42.20.620. These amendments are necessary for improved organization, incorporation of other authorizing or supporting authorities, and is intended to be easier to reference for the taxpayer. 

The department proposes reorganizing for consistency, and restating using more plain language, the list of specific requirements language in proposed (3)(a) through (g), which are currently provided in 11 rule sections.  Changes are necessary for improved organization of content since the agricultural products described in (3)(a) through (g) must all meet the classification requirements provided in ARM 42.20.620 and (2) in addition to the applicable, crop-specific requirements provided in (3). The department also proposes removing outdated subsubsection terminology in favor of "industry-standard management practices."  This is necessary to reflect that industry practices change over time and the department will not have to amend its rules for antiquated terminology.

In proposed (3)(d) the department restates the requirements for gardens, produce farms, and nurseries, which is necessary for brevity and increased clarity, following amendments to 15-7-202, MCA, in SB 69. The department also proposes to remove rule text from the last sentence regarding ineligible plants grown in flats located in greenhouses. This change is necessary because all plants grown in flats are ineligible for specialty crop classification; the location of the flats is irrelevant.

The department proposes (4) to identify the agricultural products grown, raised, or produced by the land in (3)(e), (f), and (g) that are now eligible for provisional agricultural land classification for five years to allow crops to reach salable maturity, as provided in the SB 69 amendments to 15-7-202, MCA.

Finally, the department proposes (5) to clarify that specialty and unique crops, including the agricultural products provided in (3)(a) through (g) that are grown, raised, or produced by the land are valued using the highest productivity level of non-irrigated continuously cropped farm land. This amendment is necessary for increased clarity and consistency with the rule's statutory authority.  The amendment is also necessary for internal consistency with ARM 42.20.681.

 

            4. Concerned persons may submit their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected] and must be received no later than 5:00 p.m., December 13, 2019.

 

5. Todd Olson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

6. The Department of Revenue maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. A written request may be mailed or delivered to the person in number 4 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

7. An electronic copy of this notice is available on the department's web site at www.mtrevenue.gov, or through the Secretary of State's web site at sosmt.gov/ARM/register.

 

8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by email on October 7, 2019 and on October 28, 2019.

 

9. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rule will not significantly and directly impact small businesses.

 

 

/s/ Todd Olson                                              /s/ Gene Walborn                                        

Todd Olson                                                   Gene Walborn

Rule Reviewer                                              Director of Revenue

 

Certified to the Secretary of State October 29, 2019.