Update: 5/6/2009:  Florida 2009 Post-Legislative Update

The 2009 Legislature made no changes to the Florida Greenbelt law.

This update focuses primarily on legislation impacting or potentially impacting agricultural property assessment and taxation.  This summary includes our comments, insight, analysis, and questions.

The bills containing the limitations on storm water fees and assessments on bona fide agricultural operations did not make it through both houses.

The working waterfronts legislation failed, also; the houses could not agree on the final language.  Working waterfronts legislation is required by one of the Constitutional amendments passed in the November, 2008, general election 

FS 193.023 was amended to allow county property appraisers, where geographically suitable, to use image technology (aerial photography and satellite imagery) in lieu of physical inspection for the statutorily required 5-year property inspection cycle.  The change requires the Department of Revenue to establish minimum standards.  The effective date is 7/1/2009.  We believe issues with Greenbelt classification inspections, approvals, and appraisals will surface from lack of physical inspections.

FS 194.301 was amended to clarify existing law.  The change is effective for 2009 assessments.  In assessment challenges by a taxpayer, the property appraiser will retain the presumption of correctness, if the property appraiser proves the assessment by a preponderance of evidence.  The taxpayer may overcome the property appraiser’s presumption of correctness by a preponderance of evidence showing the assessment does not meet the legal criteria.

Additionally, in FS 194.301, if the challenge by the taxpayer is a Greenbelt classification status denial, there is no presumption of correctness; and, the taxpayer has the burden of proving by preponderance of evidence that the Greenbelt denial to the property is incorrect.

A bill with a proposed Constitutional amendment also passed.  This proposal will limit the annual increase in assessed value of certain no-homestead exempt properties to 5%, and provide additional homestead exemption to certain buyers.

The most anticipated tax related legislation for agricultural properties was the required implementing legislation for (Conservation Use) Amendment 4, approved by voters in the November, 2008, general election.  The Constitutional amendment required the Legislature to provide (1) for a tax exemption for properties used for and dedicated in perpetuity for conservation purposes, and (2) for a current use assessment for conservation use properties not dedicated in perpetuity.

The House bill (HB 7157), as it started and ended, did not contain any reference or provisions for conservation use land not dedicated in perpetuity.  Provisions for non-perpetual conservation use, as related by a House staff analyst, are already contained in FS 193.501.

The Senate bill (SB 2244) was rather long and contained provisions for both perpetual and non-perpetual conservation easements and agreements.  The House version passed both houses.  The Department of Revenue will prepare the associated rules.  No specific new provisions are made in FS 193.501 for the current use valuation of conservation use properties not encumbered by a perpetual agreement or easement.  We can only speculate at this time as to any new rules or requirements for these non-perpetual conservation use properties.  We have several questions of our own and from the public relating to conservation use land not dedicated into perpetuity.  We will stay in touch with the Department of Revenue on this subject and provide updates as the information is available.

HB 7157 created one new section in the statutes and amended several others.  The remainder of this update covers this statutory addition and the statutory changes.

The bill created FS 196.26 and applies only to real property dedicated in perpetuity for conservation purposes.  It defines “dedicated into perpetuity” as irrevocable and perpetual.  It defines “conservation purposes.”  It defines “conservation easement” as the property right provided in FS 704.06, which defines a “conservation easement” as perpetual.  The Senate version would have changed the definition to include perpetual or a specific period. 

The new law provides for a total property tax exemption for land dedicated in perpetuity for conservation purposes and used exclusively for conservation purposes.  It allows some income from the land for the purpose of maintenance (If specific limitations are not presented in the rules from the Department of Revenue, this could likely be a significant administrative issue).

A property tax exemption of 50% of the assessed value is provided for property dedicated into perpetuity for conservation purposes and used for allowable commercial uses, including agriculture.  Allowed commercial uses must follow established best management practices.  The issue here will be:  50% of what value?  Agricultural, if it is a Greenbelt property?  What if it is not Greenbelt property?  How will the assessments be determined?  Will a landowner apply for both Greenbelt and the Conservation Use assessment?  Several related questions come to mind.  Again, we will watch closely as the Department of Revenue prepares the rules.

Many parties will be surprised to see the provision for a partial assessment.  We advised many, and argued with many, over the last year that the Amendment 4 language was permissive, allowing for “an exemption” and not using the word “exempt.”  The terms are not equal. Terminology in the section of the Constitution providing for exemptions usually contains the word “exempt” for full exemption and “an exemption” can be either for full exemption or partial exemption, such as homestead.

The new statute provides for a 40-acre minimum, with certain exceptions, for conservation use classification, assessment, and exemption.  It also requires the conservation easement have baseline documentation.  Further, it provides for separate market value assessment for most buildings and curtilage on land with a conservation easement.

The statute provides the water management districts with third party enforcement if the easement holder does not enforce the easement terms.

FS 193.501 was amended to provide an application and appeal process for assessment of conservation easements.  It also was amended to provide for recapture for the preceding 10 years taxes plus 15% interest and a 50% penalty if land becomes ineligible for assessment as conservation land and the owner fails to notify the property appraiser.  This statute already contains provisions for payment of deferred tax liability in situations where the conservation easement is re-conveyed or released.  However, it does not appear to specifically cover recapture, penalties, etc., where the property owner properly notifies the property appraiser the land is no longer eligible for assessment as conservation land 

FS 196.011 was amended and provides for recapture for the preceding 10 years taxes plus 18% interest and a 100% penalty if land becomes ineligible for exemption as a conservation easement and the landowner fails to notify the property appraiser.  We have the same question here as we do with the new recapture provisions in FS 193.501.

FS 218.125 was amended to provide an offset, in fiscally constrained counties, for tax revenue lost from implementation of the constitutional amendments.