Farm Bureau members help advance bipartisan solution to farmland tax credit issue

Members of the Michigan Senate Natural Resources and Agriculture Committee this week unanimously approved a bipartisan package of bills aimed at clarifying confusion surrounding farmland enrolled in both the state’s Farmland and Open Space Preservation Program (commonly known as P.A. 116) and permanent conservation easements.

The legislation, Senate Bills 685-690, is sponsored by Sens. Sue Shink (D-Northfield), Kevin Daley (R-Lum), Sam Singh (D-East Lansing), John Cherry (D-Flint), Dan Lauwers (R-Brockway) and Roger Victory (R-Hudsonville).

If enacted, the bills would confirm that farmland enrolled in both programs remains eligible for the P.A. 116 income tax credit, restoring long-standing practice that was disrupted following a recent reinterpretation by the Michigan Department of Agriculture and Rural Development (MDARD) and the Department of Treasury.

In recent years, farmers have reported inconsistent experiences with the program including missing tax returns, unexpected back tax assessments, or incorrect payment amounts, following that change in interpretation.

“What we've begun to see throughout the state is a reconsideration of how P.A. 116 has been used for preservation tax credits,” said Sen. Sam Singh, who helped spearhead the legislation. “That change that has happened over the last couple of years has brought significant concern to a number of the local groups that have been doing preservation efforts throughout the state. That group, along with Farm Bureau, have been great partners as we worked with MDARD as well as Treasury, to see how we could resolve the situation.”

Sen. Sue Shink said the issue has created real financial stress for farmers.

“My constituents were suddenly faced with years of back taxes that the government decided to impose now, in spite of them believing that they were paying the right amount of taxes all along,” Shink said. “This seems inherently unfair to me, and with the profit margins on farming already so thin and other market pressures like tariffs hurting them, my constituents are rightly worried and upset.”

Farm Bureau members, conservation advocates voice support

Michigan Farm Bureau Legislative Counsel Rebecca Park testified in support of the legislation, joined by county Farm Bureau members Dennis Heffron (Kent), Tim Kruithoff (Kent), Don Oesterle (Ingham), Kirk Heinze (Ingham) and Steve Drake (Washtenaw). Members submitting cards in support of the legislation included Jeanine Igl (Ingham), Chris Korson (Northwest Michigan) and Kathryn Bradbury (Washtenaw). Many of the attendees were there to also represent local land preservation organizations.

Park underscored the urgency of passing the bills before the end of the year.

“It's my understanding that landowners have received notice from Treasury that if there aren't changes to their permanent easements, that they will not be eligible — very clearly — will not be eligible for the 2025 tax year for those P.A. 116 tax credits,” Park said during her testimony. “Making sure that we can move this package expeditiously is very important so that we can get this to the governor's desk for signature before the turn of the calendar year.

“The package before you really seeks to align current statute with those previous programmatic practices that the departments used.”

Kent County’s Tim Kruithoff shared how the uncertainty has already affected his farm and others.

“Now, we have had to use the P.A. 116 program before in the lean years; I prefer not to … that means you're making a good living,” Kruithoff said. “But there are years where it's pretty tight, and you need to utilize that program,” 

He went on to tell lawmakers about his years-long struggle to receive his tax returns after filing in 2023 and 2024, but not receiving a return, despite repeated attempts to contact the state Treasury Department, with no response. 

“Finally, late in 2025 we found out what was going on with them, why our tax returns were being held up,” Kruithoff said. “We did end up receiving our tax returns back this past fall, but going forward, having known that the P.A. 116 and the currently preserved farm programs may not work together, it may make people reconsider if they want to permanently preserve the farm.”

Kruithoff and others emphasized that if the issue isn’t resolved, farmers may be discouraged from keeping land in agricultural production and preservation.

To address those concerns, the legislation seeks to restore consistency, reaffirming that landowners in both programs remain eligible for tax credits while also providing certainty for new enrollees.

Support for the legislation also came from representatives of the Michigan Environmental Council, Heart of the Lakes, Ingham County Board of Commissioners, Leelanau Conservancy, Grand Traverse Regional Land Conservancy, Six Rivers Land Conservancy, Kent County Agricultural Preservation Fund Board, Clinton Conservation District, Ingham County Farmland and Open Space Preservation Board, and the City of Ann Arbor. 

Representatives from MDARD indicated they are neutral on the bill package.

The legislation now awaits action by the full Senate. A recording of the full committee hearing is available on the Michigan Senate website.