General Assembly Passes Important Ag Land Preservation Funding Bill (SB 662)

With little time remaining on the last night of the 2008 Maryland General Assembly session, final approval was secured for Senate Bill 662, Agricultural Land Transfer Tax - Rates and Distribution of Revenue, sponsored by Senator Thomas “Mac” Middleton. In the end, SB 662 garnered broad bi-partisan support from both urban and rural legislators, but getting this bill over the finish line required the concerted effort of several agricultural organizations, land preservation groups, and, most especially, many young farmers and their advocates around State. The Maryland Department of Agriculture lent its support to this legislative effort too, and Governor Martin O’Malley has already announced that he plans to sign SB 662 into law.

Senate Bill 662, as amended, will impose a 25% surcharge on the existing agricultural land transfer tax with all of the new revenues collected going to support State-side rural land preservation efforts. Child lots of 2 acres or less will be exempt. (The ag transfer tax is only paid when farmland is taken out of agricultural use, and is typically paid by the buyer/developer.) Senate Bill 662 is expected to generate an additional $2-3 million for State agricultural land preservation programs during FY 2009, and in a robust economy the effect of SB 662 could generate has much as $6 million annually in new rural land preservation funding.

Amendments adopted to SB 662 late in the legislative session have the effect the tying the new revenues generated as a result of the surcharge authorized in SB 662 to funding the Next Generation Farmland Acquisition Program to be offered by MARBIDCO beginning this coming fall. The Next Generation Program is a strategically important program for the long-term viability of agriculture in Maryland, and it was authorized – but not funded – in the Agricultural Stewardship Act of 2006.

Maryland agriculture is nearing a potentially critical juncture. With an aging farmer population and skyrocketing real estate prices due to population increases and development pressure, it appears that much remaining farmland might be in danger of disappearing forever. The Young Farmers Advisory Board and other agricultural industry groups report that a major impediment to the future success of the next generation of farmers is their ability to purchase farmland at affordable prices. A partial solution to this problem is a reasonably well-financed and rapid response-type farmland easement purchase option program to help facilitate the transfer of farmland to a new generation of farmers. This new generation of agriculturalists would, in turn, help support the economies of rural communities, retain the rural working landscape, and sustain a critical mass for the agricultural industry activity in this State. An additional advantage of the Next Generation Program is that it would help permanently preserve considerable agricultural land from future development, thus providing significant open space and water/air quality benefits. As noted above, SB 662 provides important initial funding for the Next Generation Program.

Senate Bill 662 also dedicates $4 million to the MARBIDCO/MALPF Installment Purchase Agreements (IPA) Program with the flexibility for MALPF to be able to use these funds on a “leveraged” basis so that more easement purchases can be made sooner, and at a relatively lower cost. MARBIDCO will act as MALPF’s agent in facilitating the agricultural easement sale transactions through the purchase of U.S Treasury securities. However, there is no requirement that MALPF use these IPA funds in a leveraged fashion. In fact, because the IPA program is relatively new, it is anticipated that during the first couple of years a significant portion of the funds will be used on a “self-funded” basis, in effect acting as a supplement to the existing MARBIDCO/MALPF “self-funded” IPA program.

What are the anticipated benefits of SB 662?  In FY 2009 alone, the Next Generation Program itself will help preserve approximately 400 to 550 additional acres of agricultural land, as well as help 3-4 young farm families acquire their first farms. Over the next ten years, an estimated 50 to 75 young and beginning farmers will be helped in acquiring their first farm properties with just the new resources authorized by SB 662. In addition, MALPF, by working together with the counties and MARBIDCO, will be able to preserve another 1,500 to 2,000 additional acres of farmland next year as a result of SB 662. Finally, the cumulative benefits of SB 662 over time are expected to be very substantial -- both in terms of helping to sustain profitable agriculture in Maryland as well as by helping to preserve important rural working lands for the future benefit of all citizens.

USDA RURAL DEVELOPMENT INVITES APPLICATIONS FOR BUSINESS LOANS AND GRANTS

USDA Rural Development has recently invited applications for five programs to support businesses and small minority producers in rural areas.

        The five programs under which applications are being accepted are:

• Value Added Producer Grants Click for more info
• Rural Economic Development Loans
• Rural Business Opportunity Grants
• Rural Cooperative Development Grants
• Small Minority Producer Grants

Please visit www.rurdev.usda.gov/rd/nofas/index.html for more information.

Does your business need assistance with working capital and equipment purchases? 

MARBIDCO offers low-interest loans to qualified food and fiber producers!

The Rural Business Working Capital Loan Fund has been established by MARBIDCO to help meet the unique financing needs of Maryland’s rural businesses including farm, forestry and seafood operations.  This program, working in collaboration with USDA Rural Development and commercial lenders, makes available low-interest loans to qualified applicants for working capital and equipment purchases. The maximum loan amount is $50,000, and a commercial lender must provide a letter of referral.

Call MARBIDCO today to see if this or one of our other
rural business assistance programs can assist you!

MARBIDCO - (410) 267-6807

Click Here to go to the Application

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