SB4044 104TH GENERAL ASSEMBLY

LRB104 17650 BDA 31081 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB4044

Introduced 2/6/2026, by Sen. David Koehler

SYNOPSIS AS INTRODUCED:

New Act
30 ILCS 105/5.1036 new

Creates the Agricultural Land Conservation Act. Provides that, beginning on January 1, 2027, a Farmland Conversion Fee of $275 per acre shall be paid by the buyer or lessee of a transaction for any agricultural land that will be removed from production for the specific purpose of developing an industrial park, a commercial area, a single-family or multi-family dwelling or for being put to any other use that removes the agricultural land from production. Provides that the fee shall be collected by the Department of Agricultural. Provides for the creation of the Farmland Conversion Fee Fund as a special fund in the State Treasury. Provides that all Farmland Conversion Fees collected by the Department of Agriculture shall be contributed to the Fund. Further provides that moneys in the Fund may be exclusively used for the following purposes: (i) supporting education and programs that support healthy soil clean water, and climate-smart agricultural practices; (ii) supporting operations funding for soil and water conservation districts; (iii) covering costs associated with administering the Act; (iv) any other purposes that the Department of Agriculture determines are consistent with the purposes of the Act. Provides that, before expending moneys for any other purposes, the Department of Agriculture shall, subject to the availability of moneys in the Fund, ensure that during each State fiscal year, $10,000,000 is distributed to soil and water conservation districts, for the purpose of supporting their operations funding. Provides that $500,000 shall be distributed to the Department of Agriculture for the purposes of collecting fees and administering the program created under the Act. Provides for penalties. Effective immediately.

A BILL FOR

AN ACT concerning agriculture.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Agricultural Land Conservation Act.

Section 5. Findings and intent. The General Assembly hereby reiterates the legislative findings and statement of intent set forth in Section 2 of the Farmland Preservation Act and further finds that:

(1) According to a 2024 report published by the Department of Agriculture at the University of Illinois at Urbana-Champaign, midwestern states lost over 1.5 million acres of agricultural land to development between 2001 and 2021, with the highest losses occurring in Illinois.

(2) Each year in Illinois, thousands of acres of agricultural land are rezoned and developed into industrial, commercial, and residential areas.

(3) Soil and water conservation districts are units of local government, but they lack taxing authority.

(4) Soil and water conservation district employees serve as the critical infrastructure in every county in Illinois, administering vital State and federal conservation programs. They are on the front lines of addressing pressing environmental challenges, including improving water quality, enhancing soil health, and building resilience to the increasingly severe impacts of climate change. Their work is foundational to achieving environmental goals, and their presence on the ground ensures that these efforts reach the necessary scale.

(5) Unstable or intermittent funding threatens to undermine the capacity of soil and water conservation districts to deliver programs that support farmers, landowners, and communities across the State. Without adequate staffing, Illinois risks losing the ability to put federal funds earmarked for conservation and climate resilience onto the ground in Illinois. Moreover, it puts at risk the progress made in addressing water quality issues, mitigating flooding, and improving soil sustainability.

Section 10. Agricultural land; defined. In this Act, "agricultural land" means land that is intensively used and managed for the production of food and fiber. "Agricultural land" includes cropland; hay land; pastures, including native pastures and rangeland; orchards; vineyards; areas that support wetland crops; other lands used to support the production of livestock; and small tree farms.

Section 15. Farmland Conversion Fee Fund. The Farmland Conversion Fee Fund is created as a special fund in the State treasury. Revenue generated from the Farmland Conversion Fees imposed under Section 20 shall be collected by the Department of Agriculture and deposited into the Farmland Conversion Fee Fund. Moneys in the Farmland Conversion Fee Fund may be expended and distributed by the Department of Agriculture exclusively for the following purposes:

(1) supporting education and programs that support healthy soil, clean water, and climate-smart agricultural practices;

(2) supporting operations funding for soil and water conservation districts;

(3) covering costs associated with administering the Act; and

(4) any other purpose that the Department of Agriculture determines is consistent with the purposes and intent of this Act.

Before expending moneys for any other purpose, the Department of Agriculture shall, subject to the availability of moneys in the Fund, ensure that during each State fiscal year:(i) $500,000 is distributed to the Department of Agriculture for the collection of fees and the administration of the program; (ii) at least $10,000,000 is distributed to soil and water conservation districts in the State for the purposes of paragraph (2). Any remainder may be expended by the Department of Agriculture for the purposes enumerated in this Section.

Beginning in State fiscal year 2027, the amounts described in items (i) and (ii) shall be annually increased by the annual unadjusted percentage increase (but not less than zero) in the consumer price index-u for the 12 months ending with the September preceding each November 1, including all previous adjustments. In this Section, "consumer price index-u" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100.

Section 20. Farmland Conversion Fees.

(a) Beginning January 1, 2027, a Farmland Conversion Fee shall be paid by the buyer or lessee in a transaction for any agricultural land that will be removed from production for the specific purpose of developing an industrial park, a commercial area, or a single-family or multiple-family dwelling or for being put to any other use that removes the agricultural land from production. This Farmland Conversion Fee shall apply to agricultural land that is leased or purchased. This Farmland Conversion Fee shall be remitted to the Department of Agriculture, in accordance with rules adopted by the Department, within 30 days of the purchase or lease of the agricultural land by the buyer or lessee. The fee under this Section shall be $275 per acre.

(b) Revenue from Farmland Conversion Fees shall be collected by the Department of Agriculture and deposited into the Farmland Conversion Fee Fund.

(c) Conversion of agricultural land that will be removed from production is exempt from the Farmland Conversion Fee if it is removed from production for the personal use of a farmer or landowner or if it is one or more of the following types of agricultural land conversion:

(1) any conversion of land in which the primary function of the converted area supports agricultural infrastructure, such as livestock operations or grain elevators;

(2) any conversion of land done by a State agency;

(3) any conversion of land done for the creation of high-voltage transmission systems;

(4) any conversion of land whose primary purpose is the establishment of conservation practices; or

(5) any conversion of land for the development of renewable energy providers, limited to wind and solar projects only.

(d) The Department of Agriculture shall adopt rules to implement this Section.

Section 25. Enforcement. The Attorney General, in conjunction with the Department of Agriculture shall enforce this Act. Any person who fails to pay a Farmland Conversion Fee shall be subjected to a penalty equivalent to 3 times the Farmland Conversion Fee due, plus interest calculated at a rate equal to the yield on 26-week United States Treasury bills most recently auctioned prior to the date of the determination of the repayment obligation to the Department of Agriculture.

Section 90. The State Finance Act is amended by adding Section 5.1036 as follows:

(30 ILCS 105/5.1036 new)

Sec. 5.1036. The Farmland Conversion Fee Fund.

Section 99. Effective date. This Act takes effect upon becoming law.