The Michigan Senate this week approved a bipartisan, seven-bill package aimed at restoring clarity and stability to farmland enrolled in both the state’s Farmland and Open Space Preservation Program (P.A. 116) and permanent conservation easements.
Passing unanimously, the legislative fix comes after months of uncertainty triggered by a reinterpretation at the Michigan Department of Agriculture and Rural Development and the Department of Treasury that resulted in delayed tax returns, surprise back-tax assessments, and conflicting guidance for farmers.
Michigan Farm Bureau — long committed to safeguarding the state’s agricultural land — became a central voice in the issue after county Farm Bureau members began contacting the organization and elected officials with concerns. Those early calls prompted Farm Bureau and lawmakers to look more closely at what was happening, ultimately revealing that a long-standing program practice had been upended without clear communication to affected landowners.
The package also includes a bill that would increase the annual administrative spending cap for the Agricultural Preservation Fund that supports program operations. Senate Bills 685–690 and 699, 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), now move to the House for further consideration.
Singh highlighted the widespread concern created by the reinterpretation during testimony at a November committee hearing:
“What we've begun to see throughout the state is a reconsideration of how P.A. 116 has been used for preservation tax credits. That change has brought significant concern to the local groups doing preservation efforts. Those partners, along with Farm Bureau, were instrumental as we worked with MDARD and Treasury to resolve the situation.”
Shink emphasized the real financial strain on farmers in her district.
“My constituents were suddenly faced with years of back taxes the government decided to impose, despite them believing they were paying the right amount all along,” she said.
“With profit margins already so thin, this uncertainty was inherently unfair.”
Farm Bureau applauds the action
Michigan Farm Bureau Legislative Counsel Rebecca Park said farmers’ early engagement was critical to moving the legislation quickly.
“Our members raised the alarm months ago, and their grassroots advocacy ensured this issue couldn’t be ignored,” Park said. “The Senate’s action restores clarity for landowners, strengthens Michigan’s preservation infrastructure, and keeps our farmland preservation tools functioning as intended.”
County Farm Bureau members, including Dennis Heffron and Tim Kruithoff of Kent County, had previously testified about the practical and financial impacts of the reinterpretation. Kruithoff shared how multiple years of delayed tax returns created hardship and could discourage future participation in preservation programs.
“There are years where it’s pretty tight, and you need to utilize that program,” Kruithoff told lawmakers. “If P.A. 116 and preservation programs can’t work together, some people may rethink permanently preserving their farm.”
What the bills do
If enacted, the seven-bill package would:
- Reaffirm eligibility for the P.A. 116 income tax credit for farmland enrolled in both preservation programs.
- Restore program consistency, preventing back-tax assessments and ensuring accurate credit amounts.
- Provide certainty to existing contract holders and future enrollees.
- Strengthen the Agricultural Preservation Fund by increasing its administrative spending cap.
The package now moves to the Michigan House of Representatives for further consideration.