Municipal Action: Local Policies and Ordinances
TAX POLICIES AND PROGRAMS
Local taxes affect the profitability of all small businesses, including farms.
Property taxes can be onerous for farmers who own a significant amount of land, especially when that land is assessed at its potential use as developable land, rather than its current use as fields or woods. Fortunately, Maine has options that can help landowners reduce their property tax liability through its current use tax programs (Farmland, Open Space, Tree Growth) or the Voluntary Municipal Farm Support Program.
Maine’s Current Use Tax Programs
There are three current use programs that can help farmers have slightly different eligibility requirements and will result in different levels of tax savings for landowners.
The best fit for a farmland owner will depend on various factors specific to that owner’s property and future plans. A landowner may place some land in one program and other land in another program. Moreover, a landowner may move a piece of land from one program to another. However, if a landowner does not keep previously enrolled land in one of the programs, a penalty is assessed.
Any landowner with eligible land has the right to enroll in any of these programs. Applications are due to local tax assessors by April 1.
- Farmland Program
The landowner must have at least five contiguous acres, and the land must be used for agriculture or horticulture (although it can also include woodland or wasteland). The tract must generate at least $2,000 gross income from farming activities each year. This income can be derived by the owner or by a lessee. Enrolled land is assessed at its current use value, based on state guidelines for farmland.
- Open Space Program
The landowner may enroll a parcel preserved by a deed restriction that provides a public benefit, such as recreation or wildlife habitat. Enrolled land is assessed as its value as open space using state guidelines. If the land is preserved with a permanent easement and public access is provided, the tax reduction is generally 75 percent.
- Tree Growth Program
The landowner must have at least 10 acres of forested land commercially harvested, and must have a Forest Management and Harvest Plan. Enrolled land is assessed at a statewide rate for hardwood, softwood, and mixed wood stands. Unlike the Farmland and Open Space programs, the state reimburses municipalities for revenue lost as a result of Tree Growth Program enrollment.
Voluntary Municipal Farm Support Program
Recently enacted legislation provides an additional tool for communities wishing to support farming and protect farmland. Under State guidelines, a community can adopt a local program that lowers property taxes on participating farms (beyond the reduction available through current use taxation), which may be crucial to a local farm remaining in business. Farmers that receive these special tax breaks must place agricultural conservation easements on their land that remain in effect for at least 20 years. The effect of such easements is to boost the farm’s profitability, while the community protects farmland without having to raise capital to purchase easements.
For information about Maine’s Voluntary Municipal Farm Support Program (VMFSP), contact the Maine Department of Agriculture, Conservation and Forestry’s Farmland Protection Program.
Local food is making a big comeback in Maine and more people are interested in growing their own food, including people who live right in the heart of Maine’s cities and villages.
Small backyard gardens are becoming more common, as are homeowner and renters interested in raising a few chickens or goats for eggs, meat or milk. Having livestock, even small livestock, in a more densely developed area requires special considerations to avoid unpleasant impacts or neighborly disputes.
Several municipalities in Maine have recently revised their local ordinances to allow for backyard chickens or small livestock, so there are several examples and approaches a community can consider.
If your community is thinking about changing its local ordinances to allow in-town livestock, here are some things you should consider:
- Do you want to create categories of animal units (AU) by weight with examples or try to list every type of animal that may possibly show up (Note- one AU is typically 1000 pounds)
- How many animal units (or animals) are acceptable per acre or portion of an acre?
- Do you want to allow every species?
- How far should animal pens be from property lines? From neighboring houses? From the road?
- Your ordinance should include a requirement that any livestock owner follow the Maine Department of Agriculture’s Best Management Practices for that species
- Is a livestock or farm management plan required and if so, what are its components?
- Who enforces the ordinance provisions and what is the protocol for questions or complaints? If complaint is investigated and no violations noted, is there a limit to how long before another complaint by the same individual can be filed?
- Can an urban farmer sell their products or only grow for personal use? Is a low limit on sales (e.g., less than $2000 per year) acceptable? Are on-site sales ok? How will traffic or signage issues be addressed?
FARM BUSINESS-FRIENDLY ORDINANCES
More than most other businesses, a farm business is directly tied to the land; and thus a community’s land use ordinance can go a long way to either support farming or hinder it.
Agriculture in Maine has seen some significant changes in recent years, with trends towards smaller, more diversified and innovative operations. In many communities, existing municipal ordinances were created before these trends emerged. . As a result, many local ordinances do not accommodate the current needs of farmers.
Most communities have land use ordinances covering the following types of activities:
[Note: These activities may all be included in one consolidated land use ordinance, or may be separate ordinances]
- Building permits – typically with standards for setbacks and site specific considerations
- Site Plan Review – typically for commercial and industrial developments that may create significant impacts like traffic, noise, or stormwater run-off
- Subdivision of Land – the local process for approving the division of parcels into 3 or more lots within 5 years (based on State law)
- Zoning – allows different uses and activities in different areas of a municipality
However your community handles land use review, your ordinance provisions should be sufficiently flexible to allow farmers to grow and diversify their businesses, including pursuing season-extension strategies, renewable energy opportunities, direct marketing, value-added product development, and agri-tourism. Ideally, a land use ordinance will allow appropriate agricultural activities anywhere in the community
(see Urban Agriculture for activities appropriate for a downtown district or small village district).
A community can consider changing its local land use ordinances at any time. It is commonplace for a town to develop new ordinance language after updating its comprehensive plan, so that any new policies included in the plan are articulated in the ordinance. However, a community may consider ordinance changes at other times, so if your community’s land use ordinance is not doing all it can to support farms and help protect farmland, initiate a process to bring about change.
Below are some specific ideas your community can consider to help create a supportive regulatory environment for farming. Towns should consider the size, nature, seasonality, and impact of farm activities when establishing farm-related ordinance provisions.
Building Permit and Site Plan Review Considerations (links to examples below)
- Definitions – Using clear, consistent definitions throughout your land use ordinances is important so that everyone understands what rules apply to a specific land use activity.
- Setbacks – Consider reducing setbacks for certain farm structures from roads for the following reasons:
– Farmstands need easy access and visibility to be successful
– Requiring a large setback from the road can require a farmer to place a structure right smack in the middle of the best farm soils on a small farm property
- Buffering – Require new development on property adjacent to farms to locate new structures away from productive farmland so the farmer does not have to lose access to productive soils or pasture lands near property lines.
- Signage – Allow temporary or seasonal signs for farmstands or farmers markets without a permit.
- Structure size thresholds – Generous allowances for farm-related accessory structures can help farmers who need space for expansion – with consideration given to ensure that the scale is appropriate for the neighborhood.
- Agricultural exemptions – Some towns exempt agricultural activities from local site plan review, and certain agricultural structures like moveable greenhouses from building permit requirements.
- Land clearing – Make sure good farm soils outside of the shoreland zone can be cleared with limited municipal review, as state law already provides for environmental safeguards. (Land clearing is increasingly important to the future of farming, but as an added benefit, it sometimes also results in great views!
- Performance standards – Agricultural activities requiring municipal review should have appropriate standards for protecting water quality and quantity, ensuring safe access and egress, parking and traffic, protecting neighbors from unreasonable noise and odors – though these standards may be different than for other types of commercial or industrial operations.
- Housing – Housing for farm labor is critically important to some farms. A town may wish to adopt different standards for agricultural housing so that, for instance, having a second house or a bunkhouse on a farm does not trigger the need for multiple lots, or so that seasonal cabins can be used for farm apprentices.
- Retail sales of products – A land use ordinance should recognize that farm stands and pick-your-own operations are similar in some respects to other retail establishments, but differ in important ways. Direct farm retail is often seasonal and limited in scale, but some operations may generate significant customer volume for short periods. Other operations may offer a wider variety of products over a longer season.
- On-farm processing and energy production – Products like cheeses, jams and jellies, wines, sausages and other farm products are helping farmers capture more of the consumer dollar. Towns can facilitate the development of value-added products by allowing processing facilities by right (i.e., without requiring a permit) on farms, or by simplifying the application process for special permits. Towns can also develop separate guidelines for farm-based kitchens that provide limited and seasonal menu items, distinguishing them from large restaurant kitchens. Increasingly, wind turbines and solar units, as well as methane digesters (on dairy farms) are important sources of energy for farms. An ordinance could allow these uses by right when at least 50 percent of the energy production is used on-farm.
- Agri-tourism – Some farms are incorporating agri-tourism ventures, including tours and rides, restaurants and catering, and special events. Events of limited duration, such as hayrides, corn mazes and harvest festivals, can be important to farm profitability. Like on-farm processing, towns can enable these types of agricultural enterprises by allowing them by right. Other types of activities, like weddings, farm restaurants, or hosting workshops, should be accommodated with appropriate standards to protect the interests of neighbors.
- Non-farm uses – It is important to recognize that some farm families generate additional income through non-farm activities, such as leasing space for a cell tower or operating a machine repair shop or earth moving business. Such income diversification supplements the farming income or helps the farming operation survive temporary economic downturns. It is important that a local ordinance accommodate these activities.
Your community’s subdivision ordinance should allow rural land to divided and developed in creative ways that can lessen negative impacts on farmland. Some ideas to consider include:
- Flexible lot sizes and layouts to avoid carving up farms into large suburban-style lots
- Conservation subdivision design that retains the most important farm soils for farming
- Building envelopes designed to keep contiguous areas with good farm soils intact and free from structures
- Implementing a rural growth cap that slows the pace of non-farm development in areas rich in farm soils
- If your community has zoning other than shoreland zoning, make sure those areas of town with important farming soils are designated as rural or critical rural areas and are not targeted for growth.
- Encourage development in downtowns and villages by allowing higher densities in those places where your community wants development – and where it makes the most sense.
- Consider establishing an agricultural overlay district and then apply different ordinance standards in that zone. Agriculture districts are a zoning tool that may help mitigate problems between farms and non-farming neighbors, reduce the footprint or impact of new development on farmland, and identify priority agriculture areas in which certain zoning provisions are waived or instituted.
An agricultural overlay district are typically identified and delineated on the basis of productive agricultural soils and contiguous areas of active farms. In such a district, the underlying district requirements remain in effect, except as modified by the overlay zone.
Agriculture overlay districts are one way in which a town can allow additional agricultural related or compatible non-agricultural business uses by right (i.e., without requiring a permit). Provisions to conserve important farmland soils can also be included in the overlay district (see Conserving Important Farmland Soils)
Sign Provision Examples
PROTECTING IMPORTANT FARMLAND SOILS
Ensuring that Maine’s best farm soils are going to be available for future generations will be perhaps the most important legacy of our time.
Soils can be protected through a variety of mechanisms – some permanent and some temporary. There are many organizations and programs that can help communities identify ways to accomplish this essential task.
Agricultural Conservation Easements
Agricultural conservation easements provide the best means of protecting farmland in perpetuity. Well-crafted “ag easements” provide the landowner flexibility to ensure that the property can always be used for farming. Land protected with an easement remains in private ownership and is still subject to property taxes (though often at a lower assessed value).
Towns can benefit greatly from having farmland protected through agricultural conservation easements. Protected farmland will not only make it possible for farming to continue to support the local economy, but will also hold down future costs of community services while retaining open space and recreational opportunities.
Occasionally, a farmer or landowner without immediate plans to sell or development a property with good farm soils is willing to consider at “term easement” or non-permanent conservation easement – usually for 20 or 30 years. This protects the land for the near future, and allows a property owner to weigh options for the property for the long term. This type of easement is usually initiated by the property owner or a land conservation organization, and does not have an acquisition cost associated with it. In certain situations, a land trust may pay a landowner for a term easement to fend off an immediate development proposal that would affect an important farm. The Voluntary Municipal Farm Support Program described in the Tax Policies and Programs section of this website requires a term easement in exchange for the tax benefits.
Sometimes an important farm is purchased outright, or “in fee”, in order to protect it forever. Often this purchase is undertaken by a local land trust, and then the land trust leases the site to a farmer or hires a farm manager to operate the farm. Though it makes sense to promote leasing of suitable farmland that is already owned by towns or land trusts, Maine Farmland Trust generally discourages towns or land trusts from buying farmland specifically for the purpose of leasing that land back to farmers. For a variety of reasons, it generally makes much more sense for a town or land trust to place an easement on farmland (that then remains in private ownership) rather than owning the land and then leasing it.
If the owner of an important and vulnerable piece of farmland is not open to an easement but is willing to sell the property, a town or land trust may wish to consider buying the land, placing an easement on it, and then reselling the property as preserved farmland. Maine Farmland Trust uses its “Buy/Protect/Sell” program to do exactly that, and is always willing to partner with a town or local land trust on such a project.
Your local land use ordinance can include provisions that protect your community’s important farm soils without robbing property owners of their right to develop a property by using creative land use strategies such as conservation subdivision design or through an agricultural overlay district. These approaches protect important farm soils by encouraging or requiring that developers avoid the good soils when laying out lots or development areas. In the case of a subdivision, the good soils can be retained by the property owner, shared by the new residents for growing vegetables or raising livestock, or held by a local land trust and leased to a farmer.
RIGHT TO FARM PROVISIONS AND HELPING NEIGHBORS GET ALONG
The business of farming is often messy. Many non-farmers have learned to appreciate the sights, sounds and smells associated with farms – along with the slow speeds of tractors on local roads.
However, conflicts between farmers and non-farmers – especially neighbors – are not uncommon and can be costly to a farm business. Educating residents about agricultural practices and the State’s Right to Farm law can help minimize these conflicts – and find ways to mediate any conflicts that do arise to help avoid expensive legal battles.
The Maine Agriculture Protection Act (commonly known as the Right to Farm law) states that a farm, farm operation or agricultural composting operation may not be considered a public or private nuisance if it is in compliance with applicable state and federal laws, rules and regulations and conforms to best management practices, as determined by the commissioner. (Maine Revised Statutes Title 7, § 151-161).
A community can adopt affirmative policy statements about farming to let farmers, developers, and new residents know that the community values its farms and accepts the minor inconveniences (particularly noise and odors) associated with farming. Important Note: Your community’s legal advisors should review any local ordinance or policy before it is adopted — and the Maine Department of Agriculture, Conservation and Forestry must also review any ordinance related to agriculture prior to local adoption.
- Create a process for hearing and mediating disputes that arise between farmers and non-farming neighbors. Such a process could be developed or implemented by a town agricultural commission with input from other town boards.
- Put together an annual tour of local farms. Residents would learn directly from the farmers about their agricultural practices and why those practices are important to their business.
- Hold a town forum at which both farmers and non-farmers can share their thoughts and concerns about farming in town. Use a facilitator to help residents find constructive ways to address concerns.
- Educate local residents about farming in general and Maine’s Right to Farm law.
- Enact a local Right to Farm ordinance that affirms the town’s commitment to agriculture and identifies farming as an accepted and valued activity.