Committee outlines abatement option in H.134 to allow limited agricultural land withdrawals for affordable housing

The Agriculture, Food Resiliency, & Forestry Committee reviewed a Legislative Council amendment to H.134 that would add a new abatement path to the land use change tax for certain enrolled agricultural land that is withdrawn and later developed for affordable housing.

Legislative Council attorney Kirby Keaton described the approach as an amendment to the existing abatement subsection (subsection g) so PVR would have authority to forgive the land use change tax when land withdrawn from use-value appraisal is later developed for qualifying affordable housing and meets a list of conditions. Keaton said abatement differs from an up-front exemption because it occurs at the point of development (when the tax becomes due) rather than before development occurs.

Key draft criteria discussed by the committee included: withdrawal of not more than 2 acres for the purpose of affordable housing (members suggested 1 acre as an alternative), a one-time-per-taxpayer limit on using the abatement (to prevent serial subdivision), frontage on an existing public road, development exclusively for qualifying residential purposes (options included homes priced at no more than 80% of the statewide median sales price for properties under six acres or long-term rentals), and location within or within one-half mile of a Tier 1A or Tier 1B area established under Title 10. The draft also included a density guideline phrased as "not less than one half unit per half acre," which was discussed as intended to ensure modest density when taking land out of current use.

Committee members debated multiple design choices. Some argued a 1-acre cap would be more practical for village-edge development; others said a 1- or 2-acre allowance would not, on its own, address the state's larger housing shortfall. Members asked for clarity on whether the amendment would override local zoning (staff said it should not) and whether PVR could administer density and proximity verifications. Fiscal and administrative questions included how proration of the land use change tax should be calculated (several members voiced support for reverting to a proration method rather than using updated lister valuations), and how to prevent unintended outcomes such as fragmenting parcels or allowing a large farm to avoid penalties by building a single house on many acres.

Direction from the committee included deleting ambiguous "fragmentation" language in the draft and asking Legislative Council to prepare two scenarios for a subsequent draft: (1) a tighter approach tied to Tier 1A/1B areas without an acreage cap but with residential-only use requirements, and (2) a broader, more permissive option outside Tier 1 areas with explicit acreage caps (1 or 2 acres) and other guardrails. Members also asked Legislative Council to incorporate language previously discussed about prorating and subdivision eligibility. Staff and members noted the committee should have a full membership present for a final straw poll or vote; the committee paused the discussion to reconvene later and directed staff to return with revised drafting options and clarifications about administration and enforcement.

Ending: The committee agreed to continue work on the amendment, asked Legislative Council to provide alternative drafts and administrative clarifications, and deferred any final vote until members had the revised drafts and a full committee quorum.