Joint Subcommittee Studying Agricultural and Forestal Districts

July 29, 1997, Richmond

HJR 468 (1997) would have created a joint subcommittee to "examine how well agricultural and forestal districts are achieving their purpose and determine whether legislative changes are required to increase the effectiveness of districts." Pursuant to directions from the Speaker of the House of Delegates, the resolution was not reported by the committee to which it was referred, but the chairmen of the House Counties, Cities and Towns and Agriculture Committees appointed committee members to undertake the study. The chairmen of the corresponding Senate committees were also requested to appoint members to form a joint subcommittee.

Existing Law

The Agricultural and Forestal Districts Act, enacted in 1977, provides a means by which any locality, upon landowner petition, can create agricultural and forestal districts. In such districts, land is eligible for land use taxation, and the locality and state agencies have a responsibility to protect agricultural and forestal land uses.

Landowners petition for the creation of a district by submitting an application to the local governing body, including maps and information regarding the size and location of each parcel of land proposed to be included in the district. The applicant(s) may propose conditions to the creation of the district, such as a requirement that no parcel in the district may be developed to a more intensive use without prior approval of the governing body. The proposed conditions, if accepted by the governing body, and any others that the governing body deems appropriate, are incorporated into the ordinance creating the district. No land may be included in a district without the approval of all of its owners.

Notice of the application must be published in a local newspaper, posted at five places within the district and mailed to adjacent property owners by the local planning commission. The application is then reviewed by the agricultural and forestal districts advisory committee, which consists of four landowners engaged in agricultural and forestal production, four other landowners in the locality, a member of the local governing body and the locality's chief property assessment officer or commissioner of revenue. The advisory committee must forward its recommendations to the planning commission within 30 days of receiving the application.

The planning commission then reviews the application and makes its recommendation within 30 days. It must hold a public hearing and publish a notice describing its recommendations and those of the advisory committee. The statute lists the factors that should be considered by the planning commission and advisory committee in considering applications: the agricultural and forestal significance of land within the district and in adjacent areas; the presence of any significant agricultural and forestal lands within or adjacent to the district that are not in agricultural or forestal production; the nature and extent of land uses other than active farming or forestry within and adjacent to the district; local developmental patterns and needs; the comprehensive plan and zoning regulations; and the environmental benefits of retaining the lands in the district for agricultural and forestal uses.

The local governing body must also hold a public hearing on the application, after which it may by ordinance create the district with any modifications or conditions it deems appropriate. The local governing body must act to create the district or reject the application within 180 days of receipt of the application. Parcels may be added to an existing district by the same process as that required for the creation of a district.

Districts are reviewed every four to ten years, as specified in the ordinance creating the district. As part of the review, a public meeting with the owners of land within the district must be held by the advisory committee or planning commission. Both make a recommendation as to whether the district should be continued, modified or terminated. The local governing body must hold a public hearing. In continuing the district, the local governing body may adopt conditions or a period before next review that differs from those established when the district was created. The locality may decide not to review the district at the specified time, but in doing so must decide when the next review will occur.

A landowner may withdraw his land from a district by filing written notice with the governing body during the review process. At any other time, a landowner may file a withdrawal request with the governing body. The request is subject to advisory committee and planning commission review, and a public hearing must be held. A denial of the landowner's request to withdraw land may be appealed to circuit court.

Land lying within an agricultural and forestal district that is used in agricultural or forestal production automatically qualifies for land use taxation, regardless of whether a land use taxation ordinance has been adopted by the locality. Land use taxation allows land to be appraised at its value for agricultural use rather than its fair market value. When land is removed from a district or the district is terminated, the owner must pay roll-back taxes for the difference between the tax that would have been paid on the land's fair market value and the special tax amount.

The act requires that the locality and state agencies consider the existence of the district in making decisions. The law also contains specific procedural requirements that apply when the Commonwealth or any political subdivision intends to acquire land or any interest in land within a district, or when a public service corporation intends to acquire an interest in land within a district for public utility facilities or advance a grant, loan, interest subsidy or other funds within a district for the construction of dwellings, commercial or industrial facilities, or water or sewer facilities to serve nonfarm structures. The agency or public service corporation must file a notice of intent with the local governing body at least 30 days prior to the proposed action. The notice must include a description of the reasons for the proposed action and an evaluation of alternatives that would not require action within the district.

If the local governing body "finds that the proposed action might have an unreasonably adverse effect upon either state or local policy," it must issue an order directing the agency or public service corporation to delay the proposed action for an additional 60 days. The local governing body must then hold a public hearing and report its decision "by the issuance of a final order" as to whether the proposed action "will have an adverse effect upon such state or local policy and whether such proposed action is necessary to provide service to the public in the most economical and practicable manner." This decision may be appealed to circuit court or, if the public service corporation is regulated by the State Corporation Commission, to the SCC.

Similar to the Agricultural and Forestal Districts Act is the Local Agricultural and Forestal Districts Act, which was enacted in 1982 and applies to four counties: Fairfax, Prince William, Albemarle and Loudoun. Those counties may create districts pursuant to either or both laws. An ordinance creating a district pursuant to the local act must prohibit the development of land in the district to a more intensive use. Agency and public service corporation acquisition of land is not subject to local review under the local act.

Local and State Agency Experiences with Districts

According to the Virginia Department of Agriculture and Consumer Services, 24 counties and one city have agricultural and forestal districts. The number of districts in each locality ranges from one to 36, and total district acreage in each locality ranges from 668 acres to over 86,000 acres. Counties with a large number of districts or total district acreage include Accomack, Fauquier, Albemarle, Loudoun, New Kent, Fairfax and Shenandoah Counties.

Speakers from Culpeper, Loudoun and Fairfax Counties and the Virginia Farm Bureau appeared before the subcommittee to discuss their experiences with districts. Among the speakers were an owner of district land, a member of an agricultural and forestal districts advisory committee, and a local planning staff member. Their comments reflected general support for the program and included several suggestions for improvement, including the following:

• The law could be strengthened if membership in an agricultural and forestal district were required for agriculturally related benefits, such as cost-share grants for the implementation of best management practices.
• There are too many requirements that must be completed within 30-day increments. It would be easier for localities to complete the application review process within 180 days if the time devoted to each individual step in the process could be determined on a case-by-case basis.
• Land use taxation should be available only to land that is in an agricultural and forestal district.
• Owners of district land should have an increased role in the process of reviewing state acquisitions of land in districts.
• Localities should be able to enforce the conditions contained in the district ordinance, either by forcing compliance or terminating the district.
• The law's advertising and publication requirements are more burdensome than necessary.

The Farm Bureau representative stated that, in general, agricultural and forestal districts are achieving the purpose for which they were designed. The group believes that individual problems experienced in different localities should continue to be addressed at the local level and that the program should continue to be flexible for both localities and farmers.

A representative of VDOT explained the agency's approach to projects that may affect land lying within a district. VDOT determines whether a district will be affected early in the planning process for each project. If it appears that a district will be involved, the locality is notified well before the deadline imposed by the law. VDOT attempts to avoid districts when possible and to minimize the impacts when avoiding the district is not possible. The VDOT representative noted that the review process for agency actions that affect districts can be controversial. As examples he cited the "Smart Road" project in Montgomery County and the widening of Route 3 in Culpeper County.

Next Meeting

The subcommittee's next meeting is scheduled for September 10 in House Room 1 in the State Capitol at 2:00 p.m. The subcommittee will hear from J. Paxton Marshall, Professor Emeritus of Agricultural Economics at Virginia Tech, who is widely considered to be an expert on agricultural and forestal districts. The subcommittee will also review the results of a survey sent at the request of the chairman to localities with districts.