SB 690 — Land use: farmland and open space; legal arrangements eligible for tax credits; expand. Amends sec. 36109 of 1994 PA 451 (MCL 324.36109). TIE BAR WITH: SB 0688'25, SB 0686'25, SB 0689'25, SB 0687'25, SB 0685'25

SB-690, As Passed House,Senate, December 16,2, 2025 SENATE BILL NO.

(1) An owner of farmland and related buildings subject to 1 or more development rights agreements under section 36104 or agricultural conservation easements or purchases of development rights under subpart 11 of part 21, section 36101(a), 36111b, or 36206, or sections 506 to 509 of the Michigan zoning TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 enabling act, 2006 PA 110, MCL 125.3506 to 125.3509, who is required or eligible to file a return as an individual or a claimant under the state income tax act may claim a credit against state income tax liability.

If the agreement or statement is not filed, the department of treasury TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 shall deny the credit.

(d) If a trust holds farmland and related buildings covered by TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 a development rights agreement and an individual is treated under subpart E of subchapter J of subchapter A of chapter 1 of subtitle A of the internal revenue code of 1986, 26 USC 671 to 679, as the owner of that portion of the trust that includes the farmland and related buildings, that individual is considered the owner of that property.

(2) An owner of farmland and related buildings subject to 1 or more development rights agreements under section 36104 or agricultural conservation easements or purchases of development rights under subpart 11 of part 21, section 36101(a), 36111b, or TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 36206, or sections 506 to 509 of the Michigan zoning enabling act, 2006 PA 110, MCL 125.3506 to 125.3509, to whom subsection (1) does not apply may claim a credit under the former single business tax act, 1975 PA 228, or the Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, 208.1519, for the amount by which the property taxes on the land and structures used in farming operations restricted by the development rights agreements, agricultural conservation easements, or purchases of development rights exceed 3.5% of the adjusted business income of the owner as defined in section 36 of the former single business tax act, 1975 PA 228, or the owner's business income tax base, of the owner as defined in section 201 of the Michigan business tax act, 2007 PA 36, MCL 208.1201, plus compensation to shareholders not included in adjusted business income or the business income tax base, excluding any deductions if taken under section 613 of the internal revenue code of 1986, 26 USC 613.

A participant may compare, during the contract period, the average of the most recent 3 years of TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 agricultural gross receipts to property taxes in the first year that the participant entered the program under the present contract in calculating the gross receipts qualification.

(5) If the allowable amount of the credit claimed exceeds the state income tax or the state business tax otherwise due for the TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 tax year or if there is no state income tax or the state business tax due for the tax year, the amount of the claim not used as an offset against the state income tax or the state business tax, after examination and review, shall be approved for payment to the claimant pursuant to 1941 PA 122, MCL 205.1 to 205.31.

A payment made to a claimant for a credit claimed under this part shall be issued by 1 or more warrants made out to the county treasurer in each county in which the claimant's property is TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 located and the claimant, unless the claimant specifies on the return that a copy of the receipt showing payment of the property taxes that became a lien in the year for which the credit is claimed, or that became a lien in the year before the year for which the credit is claimed, is attached to the income tax or business tax return filed by the claimant.

A subchapter S corporation claiming a credit as permitted by this subsection for taxes levied in 1988 through 1990 shall claim the credit by filing an amended return under the TMV S03726'25_SB690_APH_1S03726'25_SB690_APS_1 o2r87fsfzqj9 1 former single business tax act, 1975 PA 228.

(9) The department of agriculture and rural development shall maintain a record of each development rights agreement under section 36104 or agricultural conservation easement or purchase of development rights under subpart 11 of part 21, section 36101(a), 36111b, or 36206, or sections 506 to 509 of the Michigan zoning enabling act, 2006 PA 110, MCL 125.3506 to 125.3509, for which a credit is claimed as authorized by this subsection.

(10) A landowner shall submit a recorded copy of a permanent conservation easement to the department of agriculture and rural development by November 1 for the purposes of obtaining a tax credit under this section for the current tax year.

The submitted document must include the legal description of the land preserved TMV S03726'25_SB690_APH_1 o2r87f 1 in the conservation easement and TMV S03726'25_SB690_APS_1 sfzqj9 1 be accompanied by any application form required by the departmentdepartment. of agriculture and rural development.

If the department of agriculture and rural development finds that the applicant meets all applicable requirements, the department of agriculture and rural development shall issue to the landowner an acknowledgment of the permanent conservation easement.

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