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Harford senator offers tax credit plan for farmers affected by new state septic law

Northern Harford County Sen. Barry Glassman has introduced Senate Bill 427, which would allow farmers a method to recoup lost value in their land resulting from two recently enacted state environmental mandates.

Glassman's bill attacks attempts to mitigate the economic effects of the 2012 Sustainable Growth and Agricultural Act, which impacts their ability to value their land for development, and a series of new nutrient management regulations adopted last year by the Maryland Department of Agriculture, which Glassman says impose potentially costly controls on manure spreading and livestock pasturing and watering.

Glassman, a Republican, opposed both mandates and noted the sustainability act was opposed by the Maryland Association of Counties and both were opposed by the Maryland Farm Bureau. He said Friday that his proposed tax credit is not unlike procedures that are available at the federal level to compensate farmers whose property is devalued because of new U.S. Department of Agriculture regulations.

SB 427 would set up a process under which farmers affected by the state mandates would be able to have a fair market value evaluation taken of their property prior to the impact of new regulations and one taken after the impact of completed regulations, within a five-year limit. The farmer could then use the diminution of value as a credit against state income taxes for that year, until the total amount of the credit is met.

Both valuations would have to be performed by licensed appraisers and would have to take into account any voluntary conservation or preservation easements on the property or other similar restrictions which also tend to lower farm market evaluations. In addition, the valuation would take into account "the likelihood that the property would be developed absent" the law and the regulations cited in the legislation.

"During the testimony in favor of both of these [mandates] the [state departments of planning and agriculture] indicated that farmers would see no diminution in value of their property and, in fact, that agricultural land values will continue to rise," Glassman said in a statement. "If that is the case, then I do not suspect that the legislature or department will have any objection to moving this legislation as a safety measure."

Glassman, who runs a small flock of sheep, also said he believes if Maryland continues to place new burdens on animal livestock production, "chicken, hog, beef and dairy operations are on a track towards extinction in Maryland."

Glassman said SB 427 has been endorsed by the Maryland Farm Bureau and has a bipartisan group of co-sponsors, including Democrats who sit on the Budget and Taxation Committee, which will hold a hearing on the bill on Feb. 20 at 1 p.m.

The Sustainable Growth and Agricultural Act, which limits development statewide in areas not served by public sewer service, is expected to curtail residential development in rural areas by about 40 percent, Glassman said Friday, citing estimates given by state planning officials when the bill was enacted last year. The measure has been dubbed the "septic law" by opponents and supporters alike.

"While the true impact remains to be seen, I still feel it could be substantial in Harford County where we have 1 to 10 zoning," Glassman said, referring to the county's agricultural zoning standard of one residential lot – or development right – for every 10 acres.

He also said the nutrient regulations, which require farmers to fence off streams within 10 feet of their banks to keep out livestock, will likewise devalue land. "You are talking about a lot of farmland in Harford County that will be taken out of use," he said. "You are going to be in a situation where it is a taking of someone's land, and at least the USDA has provisions to compensate people in those situations."

Glassman said there are also bills in this session of the General Assembly that will roll back or repeal the septic law, but he gives them little or no chance of passing.

And, while he said the state planners claim farmers have options to protect their land values by selling transferable development rights to landowners and developers in areas where sewer service is, Glassman says he's not convinced there are viable alternatives.

Noting that Harford officials have been talking about a transferable development rights program since Glassman was a county councilman in the early 1990s, the senator said, "I'm skeptical of TDRs. It sounds good, but I don't know how it will work. I'm also concerned about the economics. Something [like] this can drive up the cost of housing to the point where you won't have any new homes built."

"Last year, the planners said they didn't believe any farmland will depreciate because of the septic law, and maybe that will be the case in some jurisdictions like Montgomery County, but I have my concerns about the rest of the state," he continued. "This bill gives us a buffer against the potential consequences."

Glassman said neither the septic bill nor the nutrient regulations have reached the state where they are in effect, which would give affected landowners a window to have their properties appraised before the new mandates begin to directly impact them.

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