A BILL TO BE ENTITLED
AN ACT to amend the farmland preservation enabling act to establish a category of enhanced voluntary agricultural districts that offers additional protection of farmland from nonfarm development and additional benefits for farmland when the owner of the farmland is willing to enter into an irrevocable conservation agreement for ten years or longer.
Whereas, North Carolina's 53,000 farms provide food, fiber, economic activity, wildlife habitat, natural resource protection, open spaces, cultural heritage, and fiscal savings to the citizens of the State; and
Whereas, a productive and stable agricultural sector is important to farm families, rural communities, local economies, and the State of North Carolina; and
Whereas, the Voluntary Agricultural Districts program is a popular, low cost, locally driven option that links farmers, elected officials, county staff, and the general public in understanding and supporting the needs of agriculture; and
Whereas, landowners are looking for a wider range of options to help them protect their farming operations from the potential impacts of nonfarm development and pass them along to future generations; and
Whereas, to expand the Farmland Preservation Enabling Act and to authorize counties and cities to establish a new category of agricultural district, an enhanced agricultural district, will provide counties and cities with a wider range of options to protect farmland from nonfarm development within their jurisdictions; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 106‑735 and G.S. 106‑736 is recodified as Part 1 of Article 61 of Chapter 106 of the General Statutes, to be entitled "General Provisions."
SECTION 2.  G.S. 106‑737 through G.S. 106‑743 is recodified as Part 2 of Article 61 of Chapter 106 of the General Statutes, to be entitled "Voluntary Agricultural Districts." 
SECTION 3.  G.S. 106‑744 is recodified as Part 4 of Article 61 of Chapter 106 of the General Statutes, to be entitled "Agricultural Conservation Easements."
SECTION 4.   Article 61 of Chapter 106 of the General Statutes is amended by adding a new Part to read:
"Part 3. Enhanced Voluntary Agricultural Districts.
"§ 106‑743A. Enhanced voluntary agricultural districts.
(a)	A county or a municipality may adopt an ordinance that provides all of the following:
(1)	The ordinance provides for the establishment of enhanced voluntary agricultural districts that initially consist of at least the number of contiguous acres of farmland that is qualifying farmland under G.S. 106‑737 or the number of qualifying farms deemed appropriate by the board of county commissioners.
(2)	The ordinance provides for the formation of these enhanced voluntary agricultural districts upon the execution of a conservation agreement by the landowners of the requisite acreage to sustain agriculture in the enhanced voluntary agricultural district.
(3)	The ordinance provides that the form of the agreement under subdivision (2) of this subsection must be reviewed and approved by an agricultural advisory board established under G.S. 106‑739 or some other governing board of the county or city that adopted the ordinance, and provides that the agreement must comply with G.S. 106‑743B.
(4)	The ordinance provides that each enhanced voluntary agricultural district must have a representative on the agricultural advisory board established under G.S. 106‑739.
(b)	The purpose of establishing an enhanced voluntary agricultural district is to provide a county or a city with the option of offering more protection for farmland from nonfarm development and additional benefits for farmland than are available under a voluntary agricultural district established under Part 2 of this Article when the owner of the farmland is willing to agree to the additional limitation imposed under G.S. 106‑743B. The county or city that adopted the ordinance may take any action it deems appropriate to encourage the formation of these districts and to further their purposes and objectives.
"§ 106‑743B.  Conservation agreements for farmland in enhanced voluntary agricultural districts; limitation.
When a landowner enters into a conservation agreement, as defined in G.S. 121‑35 and as provided for under G.S. 106‑743A(a)(2), with the county or the city that adopted the ordinance to establish an enhanced voluntary agricultural district, the farmland that is subject to the conservation agreement receives benefits under this Part for the duration of the conservation agreement only if the agreement is irrevocable for at least 10 years from the date the agreement is executed.
"§106‑743C.  Enhanced voluntary agricultural districts entitled to all benefits of voluntary agricultural districts.
All of the provisions of G.S. 106‑739 through G.S. 106‑741 and G.S. 106‑743 apply to an enhanced voluntary agricultural district under this Part, to an ordinance adopted under this Part, and to any person, entity, or farmland subject to this Part in the same manner as they apply under Part 2 of this Article.
"§ 106‑743D.  Enhanced voluntary agricultural districts; additional benefits.
(a)	Subject to G.S 153A‑340(b)(3) for swine farms, property that is subject to a conservation agreement under G.S. 106‑743B that remains in effect may receive up to twenty‑five percent of its gross sales from the sale of nonfarm products and still qualify as a bona fide farm that is exempt from zoning regulations under G.S. 153A‑340(b). For purposes of G.S. 153A‑340(b), the production of any nonfarm product that the Department of Agriculture and Consumer Services recognizes as a "Goodness Grows in North Carolina" product that is produced on a farm that is subject to a conservation agreement under G.S. 106‑743B is a bona fide farm purpose.
(b)	No city may extend its extraterritorial powers under Article 19 of Chapter 160A of the General Statutes into an enhanced voluntary agricultural district established under this Part.
(c)	In order to reduce the impact of nonfarm development on adjacent farms, a county that has established an enhanced voluntary agricultural district under this Part may modify its subdivision ordinance under G.S. 153A‑331 to provide that new adjoining nonfarm development is required to erect and maintain adequate buffers. A city that has established an enhanced voluntary agricultural district under this Part may modify its subdivision ordinance under G.S. 160A‑372 331 to provide that new adjoining nonfarm development is required to erect and maintain adequate buffers. As used in this subsection, 'buffer' includes fences, wells, vegetation, and any other buffer approved by the governing board of the county or city in its ordinance adopted under this Part.
(d)	A county that has established an enhanced voluntary agricultural district under this Part shall, in any comprehensive land use plan hereinafter adopted or amended by the county by ordinance under Article 18 of Chapter 153A of the General Statutes, address and provide for the needs of agricultural, horticultural, and forestry operations located in that county and shall provide that any other county ordinances thereafter adopted and decisions of local planning boards thereafter made are consistent with these needs. A city that has established an enhanced voluntary agricultural district under this Part shall, in any comprehensive land use plan hereinafter adopted by the city by ordinance under Article 19 of Chapter 160A of the General Statutes, address and provide for the needs of agricultural, horticultural, and forestry operations located in that city and shall provide that any other city ordinances thereafter adopted and decisions of local planning boards thereafter made are consistent with these needs.
(e)	A county or a city that has established an enhanced voluntary agricultural district under this Part may, pursuant to G.S. 106‑743E, waive utility assessments for farms until improvements on the property are connected to the utility.
(f)	When farmland is subject to a conservation agreement under G.S. 106‑743B that remains in effect, the person who farms that farmland is eligible under G.S. 143‑215.74(b) to receive a higher percentage of cost share funds under the Agriculture Cost Share Program under Part 9 of Article 21 of Chapter 143 of the General Statutes for funds to benefit that farmland.
(g)	Any State department, institution, or agency that awards grants to farmers is encouraged to give priority consideration to any farmer who farms farmland that is subject to a conservation agreement under G.S. 106‑743B that remains in effect.
"§ 106‑743E. Waiver of utility assessments.
(a)	In the ordinance establishing an enhanced voluntary agricultural district under this Part, a county or a city may provide that all assessments for utilities provided by either public or private entities operating the utility are held in abeyance, with or without interest, for farmland subject to a conservation agreement under G.S. 106‑743B that remains in effect until improvements on the farmland property are connected to the utility for which the assessment was made.
(b)	The ordinance may provide that, when the period of abeyance ends, the assessment is payable in accordance with the terms set out in the assessment resolution.
(c)	Statutes of limitations are suspended during the time that any assessment is held in abeyance under this section without interest.
(d)	If an ordinance is adopted by a county or a city under this section, then the assessment procedures followed under Article 9 of Chapter 153A or Article 10 of Chapter 160A of the General Statutes, respectively, shall conform to the terms of this ordinance with respect to qualifying farms that entered into conservation agreements while such ordinance was in effect.
(e)	Nothing in this section is intended to diminish the authority of counties or cities to hold assessments in abeyance under G.S 153A‑201 and G.S. 160A‑237."
SECTION 5. G.S  153A‑340(b)(2) reads as rewritten:
"(2)	Except as provided in G.S. 106‑743D for farms that are subject to a conservation agreement under G.S. 106‑743B that remains in effect, bona fide farm purposes include the production and activities relating or incidental to the production of crops, fruits, vegetables, ornamental and flowering plants, dairy, livestock, poultry, and all other forms of agricultural products having a domestic or foreign market. For purposes of this subdivision, the production of any nonfarm product that the Department of Agriculture and Consumer Services recognizes as a "Goodness Grows in North Carolina" product that is produced on a farm subject to a conservation agreement under G.S. 106‑743B is a bona fide farm purpose."
SECTION 6.  G.S. 160A‑360 is amended by adding a new subsection to read:
"(e1)	No city may hereafter extend its extraterritorial powers under this Article into any area for which the county at that time has adopted and is enforcing an ordinance that establishes an enhanced voluntary agricultural district established under Part 3 of Article 61 of Chapter 106 of the General Statutes."
SECTION 7.  G.S. 153A‑331 reads as rewritten:
"§ 153A‑331.  Contents and requirements of ordinance.
A subdivision control ordinance may provide for the orderly growth and development of the county; for the coordination of streets and highways within proposed subdivisions with existing or planned streets and highways and with other public facilities; for the dedication or reservation of recreation areas serving residents of the immediate neighborhood within the subdivision and of rights‑of‑way or easements for street and utility purposes including the dedication of rights‑of‑way pursuant to G.S. 136‑66.10 or G.S. 136‑66.11; and for the distribution of population and traffic in a manner that will avoid congestion and overcrowding and will create conditions essential to public health, safety, and the general welfare. The ordinance may include requirements that the final plat show sufficient data to determine readily and reproduce accurately on the ground the location, bearing, and length of every street and alley line, lot line, easement boundary line, and other property boundaries, including the radius and other data for curved property lines, to an appropriate accuracy and in conformity with good surveying practice. A subdivision control ordinance may provide that a developer may provide funds to the county whereby the county may acquire recreational land or areas to serve the development or subdivision, including the purchase of land which may be used to serve more than one subdivision or development within the immediate area.
The ordinance may provide that in lieu of required street construction, a developer may provide funds to be used for the development of roads to serve the occupants, residents, or invitees of the subdivision or development. All funds received by the county under this section shall be transferred to the municipality to be used solely for the development of roads, including design, land acquisition, and construction. Any municipality receiving funds from a county under this section is authorized to expend such funds outside its corporate limits for the purposes specified in the agreement between the municipality and the county. Any formula adopted to determine the amount of funds the developer is to pay in lieu of required street construction shall be based on the trips generated from the subdivision or development. The ordinance may require a combination of partial payment of funds and partial dedication of constructed streets when the governing body of the county determines that a combination is in the best interest of the citizens of the area to be served.
The ordinance may provide for the more orderly development of subdivisions by requiring the construction of community service facilities in accordance with county policies and standards, and, to assure compliance with these requirements, the ordinance may provide for the posting of bond or any other method that will offer guarantee of compliance.
The ordinance may provide for the reservation of school sites in accordance with comprehensive land use plans approved by the board of commissioners or the planning agency. For the authorization to reserve school sites to be effective, the board of commissioners or planning agency, before approving a comprehensive land use plan, shall determine jointly with the board of education with jurisdiction over the area the specific location and size of each school site to be reserved, and this information shall appear in the plan. Whenever a subdivision that includes part or all of a school site to be reserved  under the plan is submitted for approval, the board of commissioners or the planning agency shall immediately notify the board of education. That board shall promptly decide whether it still wishes the site to be reserved and shall notify the board of commissioners or planning agency of its decision. If the board of education does not wish the site to be reserved, no site may be reserved. If the board of education does wish the site to be reserved, the subdivision may not be approved without the reservation. The board of education must acquire the site within 18 months after the date the site is reserved, either by purchase or by exercise of the power of eminent domain. If the board of education has not purchased the site or begun proceedings to condemn the site within the 18 months, the subdivider may treat the land as freed of the reservation.
For a county that has adopted an ordinance establishing an enhanced voluntary agricultural district under Part 3 of Article 61 of Chapter 106 of the General Statutes, the subdivision ordinance under this section may provide that new adjoining nonfarm development is required to erect and maintain adequate buffers under G.S. 106‑743D(d) in order to reduce the impact of the nonfarm development on adjacent farms.
The ordinance may require that a plat be prepared, approved, and recorded pursuant to its provisions whenever a subdivision of land takes place."
SECTION 8.  G.S. 160A‑372 reads as rewritten:
"§ 160A‑372.  Contents and requirements of ordinance.
A subdivision control ordinance may provide for the orderly growth and development of the city; for the coordination of streets and highways within proposed subdivisions with existing or planned streets and highways and with other public facilities; for the dedication or reservation of recreation areas serving residents of the immediate neighborhood within the subdivision or, alternatively, for provision of funds to be used to acquire recreation areas serving residents of the development or subdivision or more than one subdivision or development within the immediate area, and rights‑of‑way or easements for street and utility purposes including the dedication of rights‑of‑way pursuant to G.S. 136‑66.10 or G.S. 136‑66.11; and for the distribution of population and traffic in a manner that will avoid congestion and overcrowding and will create conditions essential to public health, safety, and the general welfare. The ordinance may include requirements that the final plat show sufficient data to determine readily and reproduce accurately on the ground the location, bearing, and length of every street and alley line, lot line, easement boundary line, and other property boundaries, including the radius and other data for curved property lines, to an appropriate accuracy and in conformance with good surveying practice.
The ordinance may provide for the more orderly development of subdivisions by requiring the construction of community service facilities in accordance with municipal policies and standards and, to assure compliance with these requirements, the ordinance may provide for the posting of bond or any other method that will offer guarantee of compliance.
The ordinance may provide for the reservation of school sites in accordance with comprehensive land use plans approved by the council or the planning agency. In order for this authorization to become effective, before approving such plans the council or planning agency and the board of education with jurisdiction over the area shall jointly determine the specific location and size of any school sites to be reserved, which information shall appear in the comprehensive land use plan. Whenever a subdivision is submitted for approval which includes part or all of a school site to be reserved under the plan, the council or planning agency shall immediately notify the board of education and the board shall promptly decide whether it still wishes the site to be reserved. If the board of education does not wish to reserve the site, it shall so notify the council or planning agency and no site shall be reserved. If the board does wish to reserve the site, the subdivision shall not be approved without such reservation. The board of education shall then have 18 months beginning on the date of final approval of the subdivision within which to acquire the site by purchase or by initiating condemnation proceedings. If the board of education has not purchased or begun proceedings to condemn the site within 18 months, the subdivider may treat the land as freed of the reservation.
The ordinance may require that a plat be prepared, approved, and recorded pursuant to its provisions whenever any subdivision of land takes place.
The ordinance may provide that a developer may provide funds to the city whereby the city may acquire recreational land or areas to serve the development or subdivision, including the purchase of land which may be used to serve more than one subdivision or development within the immediate area. All funds received by the city pursuant to this paragraph shall be used only for the acquisition or development of recreation, park, or open space sites. Any formula enacted to determine the amount of funds that are to be provided under this paragraph shall be based on the value of the development or subdivision for property tax purposes. The ordinance may allow a combination or partial payment of funds and partial dedication of land when the governing body of the city determines that this combination is in the best interests of the citizens of the area to be served.
The ordinance may provide that in lieu of required street construction, a developer may be required to provide funds that the city may use for the construction of roads to serve the occupants, residents, or invitees of the subdivision or development and these funds may be used for roads which serve more than one subdivision or development within the area. All funds received by the city pursuant to this paragraph shall be used only for development of roads, including design, land acquisition, and construction. However, a city may undertake these activities in conjunction with the Department of Transportation under an agreement between the city and the Department of Transportation. Any formula adopted to determine the amount of funds the developer is to pay in lieu of required street construction shall be based on the trips generated from the subdivision or development. The ordinance may require a combination of partial payment of funds and partial dedication of constructed streets when the governing body of the city determines that a combination is in the best interests of the citizens of the area to be served.
For a city that has adopted an ordinance establishing an enhanced voluntary agricultural district under Part 3 of Article 61 of Chapter 106 of the General Statutes, the subdivision ordinance under this section may provide that new adjoining nonfarm development is required to erect and maintain adequate buffers under G.S. 106‑743D(d) in order to reduce the impact of the nonfarm development on adjacent farms."
SECTION 9.  G.S. 143‑215.74(b)(9) reads as rewritten:
(9)	When the applicant is either a limited‑resource farmer, a beginning farmer, or, when the farmland is located in an enhanced voluntary agricultural district and is subject to a conservation agreement under G.S. 106‑743B that remains in effect, the person who farms that farmland, State funding shall be limited to ninety percent (90%) of the average cost for each practice with the assisted farmer providing ten percent (10%) of the cost, which may include in‑kind support of the practice, with a maximum of one hundred thousand dollars ($100,000) per year to each applicant. The following definitions apply in this subdivision:
a.	Beginning farmer. – A farmer who has not operated a farm or who has operated a farm for not more than 10 years and who will materially and substantially participate in the operation of the farm.
a1.	Enhanced voluntary agricultural district. – A district established by a county or a city by ordinance under Part 3 of Article 61 of Chapter 106 of the General Statutes.
b.	Limited‑resource farmer. – A farmer with direct and indirect annual gross farm sales that do not exceed one hundred thousand dollars ($100,000) and with an adjusted household income in each of the previous two years that is at or below the greater of the county median household income, as determined by the United States Department of Housing and Urban Development, or two times the national poverty level based on the federal poverty guidelines established by the United States Department of Health and Human Services and revised each April 1.
c.	Materially and substantially participate.
1.	In the case of an individual, for the individual, including members of the immediate family of the individual, to provide substantial day‑to‑day labor and management of the farm, consistent with the practices in the county in which the farm is located.
2.	In the case of an entity, for all members of the entity, to participate in the operation of the farm, with some members providing management and some members providing labor and management necessary for day‑to‑day activities such that if the members did not provide the management and labor, the operation of the farm would be seriously impaired."
SECTION 10.  G.S. 106‑736, as recodified by Section 1 of this act, reads as rewritten:
"§ 106‑736.  Farmland preservation programs authorized.
A county or a city may by ordinance establish a farmland preservation program under this Article. The ordinance may authorize qualifying farms, as defined in G.S. 106‑737, to take advantage of one or more of the benefits authorized by the remaining sections of this Article."
SECTION 11.  G.S.106‑737, as recodified by Section 2 of this act, reads as rewritten: 
"§ 106‑737.  Qualifying farmland.
In order for farmland to qualify under Part 1 or Part 2 of this Article, it must be real property that:
(1)	Is participating in the farm present‑use‑value taxation program established by G.S. 105‑277.2 through 105‑277.7 or is otherwise determined by the county to meet all the qualifications of this program set forth in G.S. 105‑277.3;
(2)	Is certified by the Soil Conservation Service of the United States Department of Agriculture as being a farm on which at least two‑thirds of the land is composed of soils that (i) are best suited for providing food, seed, fiber, forage, timber, and oil seed crops, (ii) have good soil qualities, (iii) are favorable for all major crops common to the county where the land is located, (iv) have a favorable growing season, and (v) receive the available moisture needed to produce high yields an average of eight out of 10 years; or on which at least two‑thirds of the land has been actively used in agricultural, horticultural or forestry operations as defined in G.S. 105‑277.2(1), (2), and (3) during each of the five previous years, measured from the date on which the determination must be made as to whether the land in question qualifies;
(3)	Is managed in accordance with the Soil Conservation Service defined erosion control practices that are addressed to highly erodable land; and
(4)	Is the subject of a conservation agreement, as defined in G.S. 121‑35, between the county and the owner of such land that prohibits nonfarm use or development of such land for a period of at least 10 years, except for the creation of not more than three lots that meet applicable county zoning and subdivision regulations."
SECTION 12.  G.S. 106‑738, as recodified by Section 2 of this act, reads as rewritten:
"§ 106‑738.  Voluntary agricultural districts.
(a)	An ordinance adopted under this Part shall provide:
(1)	For the establishment of voluntary agricultural districts consisting initially of at least the number of contiguous acres of qualifying farmland or the number of qualifying farms deemed appropriate by the governing board of the county or city adopting the ordinance.
(2)	For the formation of such districts upon the execution by the owners of the requisite acreage of an agreement to sustain agriculture in the district;
(3)	That the form of this agreement must be reviewed and approved by an agricultural advisory board established under G.S. 106‑739 or some other county board or official;
(4)	That each such district have a representative on the agricultural advisory board established under G.S. 106‑739.
(b)	The purpose of such agricultural districts shall be to increase identity and pride in the agricultural community and its way of life and to increase protection from nuisance suits and other negative impacts on properly managed farms. The county or city that adopted an ordinance under this Part may take such action as it deems appropriate to encourage the formation of such districts and to further their purposes and objectives."
SECTION 13.  G.S. 106‑739, as recodified by Section 2 of this act, reads as rewritten: 
"§ 106‑739.  Agricultural advisory board.
An ordinance adopted under this Part or Part 3 of this Article shall provide for the establishment of an agricultural advisory board, organized and appointed as the county or city that adopted the ordinance shall deem appropriate. The county or city that adopted the ordinance may confer upon this advisory board authority to:
(1)	Review and make recommendations concerning the establishment and modification of agricultural districts;
(2)	Review and make recommendations concerning any ordinance or amendment adopted or proposed for adoption under this Part or Part 3 of this Article;
(3)	Hold public hearings on public projects likely to have an impact on agricultural operations, particularly if such projects involve condemnation of all or part of any qualifying farm;
(4)	Advise the governing board of the county or city that adopted the ordinance on projects, programs, or issues affecting the agricultural economy or way of life within the county;
(5)	Perform other related tasks or duties assigned by the governing board of the county or city that adopted the ordinance."
SECTION 14.  G.S. 106‑740, as recodified by Section 2 of this act, reads as rewritten:
"§ 106‑740.  Public hearings on condemnation of farmland.
An ordinance adopted under this Part or Part 3 of this Article may provide that no State or local public agency or governmental unit may formally initiate any action to condemn any interest in qualifying farmland within a voluntary agricultural district under this Part or an enhanced voluntary agricultural district under Part 3 of this Article until such agency has requested the local agricultural advisory board established under G.S. 106‑739 to hold a public hearing on the proposed condemnation.
(1)	Following a public hearing held pursuant to this section, the board shall prepare and submit written findings and a recommendation to the decision‑making body of the agency proposing acquisition.
(2)	The board designated to hold the hearing shall have 30 days after receiving a request under this section to hold the public hearing and submit its findings and recommendations to the agency.
(3)	The agency may not formally initiate a condemnation action while the proposed condemnation is properly before the advisory board within these time limitations."
SECTION 15.  G.S. 106‑742, as recodified by Section 2 of this act, reads as rewritten:
§ 106‑742.  Waiver of water and sewer assessments.
(a)	A county or a city that has adopted an ordinance under this Part may provide by ordinance that its water and sewer assessments be held in abeyance, with or without interest, for farms, whether inside or outside of a voluntary agricultural district, until improvements on such property are connected to the water or sewer system for which the assessment was made.
(b)	The ordinance may provide that, when the period of abeyance ends, the assessment is payable in accordance with the terms set out in the assessment resolution.
(c)	Statutes of limitations are suspended during the time that any  assessment is held in abeyance without interest.
(d)	If an ordinance is adopted under this section, then the assessment procedures followed under Article 9 of Chapter 153A of the General Statutes or Article 10 of Chapter 160A of the General Statutes, whichever applies, shall conform to the terms of this ordinance with respect to qualifying farms that entered into conservation agreements while such ordinance was in effect.
(e)	Nothing in this section is intended to diminish the authority of counties or cities to hold assessments in abeyance under G.S.  153A‑201 or G.S. 160A‑237."
SECTION 16.  G.S. 106‑743, as recodified by Section 2 of this act, reads as rewritten:
"§ 106‑743.  Local ordinances.
A county or a city adopting an ordinance under this Part or Part 3 of this Article may consult with the North Carolina Commissioner of Agriculture or his staff before adoption, and shall record the ordinance with the Commissioner's office after adoption. Thereafter, the county or city shall submit to the Commissioner at least once a year, a written report including the status, progress and activities of its farmland preservation program under this Part or Part 3 of this Article."
SECTION 17.  This act becomes is effective when it becomes law.