SB 689

Act
No. 72
Public
Acts of 2025
Approved
by the Governor
December
23, 2025
Filed
with the Secretary of State
December
23, 2025
EFFECTIVE
DATE:� December 23, 2025
state of michigan
103rd Legislature
Regular session of 2025
Introduced by Senators Lauwers, Singh, Daley, Shink and
Cherry
ENROLLED SENATE BILL No. 689
AN ACT to amend 1994 PA 451,
entitled �An act to protect the environment and natural resources of the state;
to codify, revise, consolidate, and classify laws relating to the environment
and natural resources of the state; to regulate the discharge of certain
substances into the environment; to regulate the use of certain lands, waters,
and other natural resources of the state; to protect the people�s right to hunt
and fish; to prescribe the powers and duties of certain state and local
agencies and officials; to provide for certain charges, fees, assessments, and
donations; to provide certain appropriations; to prescribe penalties and
provide remedies; and to repeal acts and parts of acts,� by amending section
36111 (MCL 324.36111), as amended by 2016 PA 265.
The People of the State of
Michigan enact:
Sec.
36111. (1) A development rights agreement expires at the expiration of the term
of the agreement unless renewed with the consent of the owner of the land. If
the owner of the land has complied with the requirements of this part regarding
development rights agreements, the owner is entitled to automatic renewal of
the agreement upon written request of the owner. A development rights agreement
may be renewed for a term of not less than 7 years. If a development
rights agreement is renewed, the state land use agency shall send a copy of the
renewal contract to the local governing body.
(2) A development rights agreement or a portion of the
farmland covered by a development rights agreement may be relinquished as
provided in this section and section 36111a. Farmland may be relinquished by
this state before a termination date contained in the instrument under either
of the following circumstances:
(a) If approved by the local governing body and the state
land use agency, land containing structures that were present before the
recording of the development rights agreement may be relinquished from the
agreement. Not more than 2 acres may be relinquished under this subdivision
unless additional land area is needed to encompass all of the buildings located
on the parcel, in which case not more than 5 acres may be relinquished. If the
size of the parcel proposed to be relinquished is less than that required by
local zoning, the parcel shall not be relinquished unless a variance is
obtained from the local zoning board of appeals to allow for the smaller parcel
size.
(b) If approved by the local governing body and the state
land use agency, land may be relinquished from the agreement for the
construction of a residence by an individual essential to the operation of the
farm as defined in section 36110(5). Not more than 2 acres may be relinquished
under this subdivision. If the size of the parcel proposed to be relinquished
is less than that required by local zoning, the parcel shall not be
relinquished unless a variance is obtained from the local zoning board of appeals
to allow for the smaller parcel size.
(3) Until April 1, 1997, if an owner who entered into or
renewed a development rights agreement before April 15, 1994 makes a
request, in writing, to the state land use agency, to terminate that
development rights agreement with respect to all or a portion of the farmland
covered by the agreement, the state land use agency shall approve the request
and relinquish that farmland from the development rights agreement. If farmland
is relinquished under this subsection, the state land use agency shall notify
the local governing body of the local unit of government in which the land is
located of the relinquishment.
(4) If the request for relinquishment of the development
rights agreement is approved, the state land use agency shall prepare an
instrument, subject to subsections (5) to (8), and shall forward the original
relinquishment instrument to the applicant. The applicant shall have the
relinquishment instrument recorded by the register of deeds in the county in
which the property is located. The applicant shall provide a copy of the
recorded relinquishment instrument to the department.
(5) If a development rights agreement or a portion of a
development rights agreement is to be relinquished pursuant to subsection (2)
or section 36111a, the state land use agency shall record a lien against the
property formerly subject to the development rights agreement for the total
amount of the allocated tax credit of the last 7 years, including the year
of termination, received by an owner under section 36109 and attributable to
the property formerly subject to the development rights agreement, plus interest
at the rate of 6% per annum simple interest from the time the credit was
received until the lien is placed on the property.
(6) If the property being relinquished from the development
rights agreement is less than all of the property subject to that development
rights agreement, the allocated tax credit for the development rights agreement
shall be multiplied by the property�s share of the taxable value of the
agreement. As used in this subsection:
(a) �The allocated tax credit� means the amount obtained by
multiplying the owner�s total farmland preservation credit claimed in that year
on all agreements by the quotient of the ad valorem property tax levied in that
year on property subject to the development rights agreement that included the
property being relinquished from the agreement divided by the total property
taxes levied on property subject to any development rights agreement and used
in determining the farmland preservation credit in that year.
(b) �The property�s share of the taxable value of the
agreement� means the quotient of the taxable value of the property being
relinquished from the agreement divided by the total taxable value of property
subject to the development rights agreement that included the property being
relinquished from the agreement. For years before 1995, taxable value means
assessed value.
(7) Thirty days before the recording of a lien under this
section, the state land use agency shall notify the owner of the farmland
subject to the development rights agreement of the amount of the lien,
including interest, if any. If the lien amount is paid before 30 days after the
owner is notified, the lien shall not be recorded. The lien may be paid and
discharged at any time and is payable to the state by the owner of record when
the land or any portion of it is sold by the owner of record, or if the land is
converted to a use prohibited by the former development rights agreement. The
lien shall be discharged upon renewal or reentry in a development rights
agreement, except that a subsequent lien shall not be less than the lien
discharged.
(8) Upon the termination of all or a portion of the
development rights agreement under subsection (3) or, subject to subsection
(14), the termination of a development rights agreement under subsection (1),
the state land use agency shall prepare and record a lien, if any, against the
property formerly subject to the development rights agreement for the total
amount of the allocated tax credit of the last 7 years, including the year of
termination, received by the owner under section 36109, attributable to the
property formerly subject to the development rights agreement. The lien shall
be without interest or penalty and is payable as provided in subsection (7).
However, if the development rights agreement was approved or rejected by the
local governing body under section 36104 on or after July 1, 2012 and is
terminated under subsection (1), the amount of the lien shall include interest
at the current monthly interest rate of 1 percentage point above the adjusted
prime rate per annum from the time the lien is recorded until it is paid. The
adjusted prime rate shall be determined as provided in section 23 of 1941 PA 122,
MCL 205.23.
(9) The state land use agency shall notify the department of
treasury of the termination of a development rights agreement.
(10) The unappropriated proceeds from lien payments made
under this part shall be forwarded to the state treasurer for deposit in the
agricultural preservation fund created in section 36202.
(11) Upon the relinquishment of all of the farmland under
section 36110(2) or a portion of the farmland under section 36110(3), the state
land use agency shall prepare and record a lien against the property formerly
subject to a development rights agreement in an amount calculated as follows:
(a) Establishing a term of years by multiplying 7 by a
fraction, the numerator of which is the number of years the farmland was under
the development rights agreement, including any extensions, and the denominator
of which is the number representing the term of years of that agreement,
including any extensions.
(b) The lien amount equals the total amount of the allocated
tax credit claimed attributable to that development rights agreement in the
immediately preceding term of years as determined in subdivision (a).
(12) When a lien is paid under this section, the state land
use agency shall prepare and record a discharge of lien with the register of
deeds in the county in which the land is located. The discharge of lien shall
specifically state that the lien has been paid in full, that the lien is
discharged, that the development rights agreement and accompanying contract are
terminated, and that the state has no further interest in the land under that
agreement.
(13) When farmland subject to a farmland development rights
agreement becomes subject to an agricultural conservation easement or purchase
of development rights under section 2140(a), 2141, 36101(a), 36111b, or 36206,
the farmland is automatically relinquished from the farmland development rights
agreement. Any remaining land that is not subject to the agricultural
conservation easement or purchase of development rights continues to be subject
to the farmland development rights agreement, regardless of the requirements of the definition of
farmland in section 36101, until the natural termination date of the farmland
development rights agreement. That date shall not be extended.
(14) If, upon expiration of the term of a farmland
development rights agreement, the farmland becomes subject to an agricultural
conservation easement or purchase of development rights under section 2140(a),
2141, 36101(a), 36111b, or 36206 or if a farmland development rights agreement
is automatically relinquished under subsection (13), the farmland is not
subject to a lien under this section.
Enacting
section 1. This amendatory act does not take effect unless all of the following
bills of the 103rd Legislature are enacted into law:
(a) Senate Bill No. 688.
(b) Senate Bill No. 690.
(c) Senate Bill No. 686.
(d) Senate Bill No. 687.
(e) Senate Bill No. 685.
This
act is ordered to take immediate effect.
Secretary of the Senate
Clerk of the House of
Representatives
Approved___________________________________________
____________________________________________________
Governor