Comment: Rural Subdivisions and the Agricultural Exemption to Iowa County Zoning after Lang v. Linn County

by Gary Taylor

This article originally appeared in the Legal Briefs section of the May “The Iowa County” magazine.

Iowa Code 335.2 states that county zoning cannot be enforced against “land, farm houses, farm barns, farm outbuildings or other buildings or structures which are primarily adapted, by reason of nature and area, for use for agricultural purposes, while so used.” This agricultural exemption has been the subject of court cases throughout the years focusing on what constitutes a “use for agricultural purposes.”  Despite the lessons provided by these cases, county officials still wrestle with many unanswered questions about the interpretation of section 335.2. One of the most vexing issues has been rural acreages and large-lot rural subdivisions.  Is the owner of a five-acre residence who has a job in the nearby city qualified for the exemption if he raises an acre or two of crops or a few head of livestock?

On March 29 the Iowa Supreme Court decided Lang v. Linn County Board of Adjustment, in which the Court reviewed two separate decisions by the county to deny exemptions for two separate parcels: a 6.52-acre parcel that included the Langs’ residence, and a 43.3-acre parcel with 2 houses.  While the case does not definitively answer the exemption question for every rural acreage, it does provide several helpful guidelines for county officials going forward.

The Court began by pointing out the differences between the language of section 335.2 as it appears today, and as it was prior to amendments made in 1963.  The differences were critical to the Court’s reasoning.  Prior to 1963 the statute was concerned with land, farm houses and buildings “which are adapted, by reason of nature and area, for use for agricultural purposes as a primary means of livelihood, while so used.” Thus, prior to 1963 the statute did not contain the word “primarily,” (“primarily adapted”) but did tie the exemption to use for agricultural purposes “as a primary means of livelihood” for the landowner.

In the Court’s view, the addition of the word “primarily” allows county zoning authorities to consider “the relative size, value, and construction date of the house compared to the scope, value, and duration of the claimed agricultural activities,” and deny the exemption when the agricultural activities “are basically a sideline designed to obtain an agricultural zoning exemption for the owners’ residence.”  For the Langs’ residence on 6.52-acres, the Court determined that it was a “a residential tail wagging a farmland dog and that the property as a whole was not primarily dedicated to agriculture.” Although the Langs claimed in their exemption filing to be producing trees, raspberries, blackberries, asparagus, apples, grapes, and tomatoes, they provided no records of production or sales. Photographs indicated that the asparagus, grape vines and raspberry bushes, at least, were wild and in a wooded thicket. The Court did not believe that “the legislature intended to allow a homeowner to avoid county zoning requirements simply by having a tomato patch in his or her backyard.”

The Langs also claimed that the county improperly applied a minimum acreage test and flunked the Langs’ 6.52-acre parcel simply because it was too small.  Previous cases have held that a county cannot use parcel size as the sole measure for determining whether a parcel is primarily adapted for agriculture; however, in Lang the Court affirmed that parcel size can be one of the factors considered when making the determination, stating that “if size were not relevant, then nothing could prevent a developer from obtaining a zoning exemption for an entire development subdivided into half-acre lots so long as some agricultural product were planted in the development and tended by the homeowners.”

Because the Linn County Zoning Ordinance prohibits more than one dwelling on a single undivided parcel of land, the Langs sought an exemption for a second house built on a 43.3-acre tract, claiming that the occupant (the Langs’ son) would be performing farming tasks on the property.  The county did not dispute that the 43.3 acres should be considered agricultural, but disagreed that the second house was “primarily adapted” for agriculture since the son had a regular day job, and that he would be spending only 2 1/2-hours per day at most on farming activities.  The Court sided with the county, stating that “it is appropriate for the county to ask how much time the tenants of the house spend on farming activities. Otherwise, a farmer could erect multiple homes and avoid county zoning simply by assigning nominal farm tasks to an occupant of each home.” Implicit in the Court’s reasoning is that although a landowner no longer must show that the property is his “primary means of livelihood,” the landowner must be able to closely tie the activities of the person occupying the house to the agricultural production taking place on the property.

The Court concluded with a common-sense observation of how misapplying the exemption to rural acreages has the potential to cause problems in the future: “When a house has been erected by taking advantage of an agricultural exemption, but then is later sold to a person who is not engaged in agriculture, the house becomes a nonconforming use, which limits the new owner’s ability to modify or, if necessary, to rebuild the house.”

Linn County’s denial of ag exemption upheld by Iowa Supreme Court. Subtitle: “A residential tail wagging a farmland dog”

by Gary Taylor

Lang v. Linn County Board of Adjustment
(Iowa Supreme Court, March 29, 2013)

The Court of Appeals case from which this appeal originated is here.  The Supreme Court provided an extensive set of facts that gives readers a more complete picture of the situation.  Space does not permit a complete review here, other than to say that the facts illustrate Lang’s creative attempts to gain an ag exemption for several parcels with houses he developed subsequent to his subdivision of his original 49-acre tract.  The reader is strongly urged to review the Supreme Court opinion for a detailed factual background.

Supreme Court’s legal analysis.  The Supreme Court began by pointing out the differences between the statutory language of the ag exemption as it was originally adopted, and as it appears today.

Iowa Code 335.2 Prior to 1963:

No regulation or ordinance adopted under the provisions of this act shall be construed to apply to land, farm houses, farm barns, farm outbuildings or other buildings, structures, or erections which are adapted, by reason of nature and area, for use for agricultural purposes as a primary means of livelihood, while so used.

Today (after 1963):

Except to the extent required to implement section 335.27, no ordinance adopted under this chapter applies to land, farm houses, farm barns, farm outbuildings or other buildings or structures which are primarily adapted, by reason of nature and area, for use for agricultural purposes, while so used.

The amendment put the focus of the exemption on whether the “land, farm houses, farm barns, farm outbuildings or other buildings or structures” are “primarily adapted” for the asserted agricultural purpose, when considering the “nature and area.”  It turned the focus away from the use of the property as a “primary means of livelihood” for the landowner.  Thus the amount of income generated for the landowner by agricultural activities, as a percentage of the landowner’s total income, is no longer the focus.

However, the legislature at the same time added the requirement that the property be “primarily” adapted to agricultural use. In our view, this authorizes the county to deny the farmhouse exemption when the record, as here, indicates that the agricultural activities are basically a sideline designed to obtain an agricultural zoning exemption for the owners’ residence. The Board was entitled to look at the relative size, value, and construction date of the house compared to the scope, value, and duration of the claimed agricultural activities. For example, we do not believe the legislature intended to allow a homeowner to avoid county zoning requirements simply by having a tomato patch in his or her backyard….[We believe]  that the “primarily adapted” test allows county zoning authorities to consider the overall importance and underlying purpose of the agricultural activities in question.

“In our view, the Zoning Board of Adjustment (ZBA) could reasonably conclude that the Langs’ large, manorial residence on the 6.52 acres was a residential tail wagging a farmland dog and that the property as a whole was not primarily dedicated to agriculture. Although the Langs had recently planted small trees, they could not be expected to mature for many years and could be viewed as having an aesthetic purpose. Photographs indicated that the other claimed farming activities were not substantial in scope, even relative to the size of the parcel. The Langs presented no evidence of actual production, beyond the bare claims they made in their application for an agricultural exemption.”  The Lang’s claimed that the county improperly applied a minimum acreage test and flunked the Langs’ primary residence on a 6.52-acre parcel simply because it was not big enough; however the Supreme Court disagreed, noting that the “zoning administrator’s report, the recording of the 2004 ZBA hearing, and the ZBA’s 2-2 decision all indicate that the county did not summarily reject the application based on parcel size.  This is not to say that the size of the parcel should not be a consideration.  “If size were not relevant, then nothing could prevent a developer from obtaining a zoning exemption for an entire development subdivided into half-acre lots so long as some agricultural product were planted in the development and tended by the homeowners.”

Because the Linn County Zoning Ordinance prohibits more than one dwelling on a single undivided parcel of land, the Langs sought an agricultural exemption for a second house built on a 43.3-acre tract of land.  The second house was occupied by Langs’ son.  The Court observed that “regardless of the status of the land, Iowa Code 335.2 anticipates that a county may consider whether a specific building or structure [on the land] is primarily adapted for use for agricultural purposes.”   The Court found that substantial evidence existed to support the ZBA’s finding that the second house under the son’s tenancy would not be “primarily adapted” for agricultural purposes.  Referencing an Ohio Court of Appeals case, the Court stated that “When landowners build an additional house on their land, rent it out, and then want to claim it as another exempt farmhouse, it is appropriate for the county to ask how much time the tenants of the house spend on farming activities. Otherwise, a farmer could erect multiple homes and avoid county zoning simply by assigning nominal farm tasks to an occupant of each home.”

The Court concluded by observing that “the Langs’ construction of various homes on what began as one property had the potential to cause problems for third parties down the road. When a house has been erected by taking advantage of an agricultural exemption, but then is later sold to a person who is not engaged in agriculture, as occurred in this case with respect to [one of the houses on a subdivided parcel], the house becomes a nonconforming use, which limits the new owner’s ability to modify or, if necessary, to rebuild the house.

Two houses on acreages in Linn County do not qualify for ag. exemption to county zoning

by Gary Taylor

Lang, et al., v. Linn County Board of Adjustment
(Iowa Court of Appeals, April 25, 2012)

The agricultural exemption to county zoning in Iowa – Iowa Code 335.2 – reads in part:

Except to the extent required to implement section 335.27, no ordinance adopted under this chapter applies to land, farm houses, farm barns, farm outbuildings or other buildings or structures which are primarily adapted, by reason of nature and area, for use for agricultural purposes, while so used.

This case is a consolidation of two cases, both involving houses built in the late 1990s on separate parcels (one parcel of 6.52 acres, the other approximately 35 acres) that were originally part of a larger 49-acre parcel.  After addressing the standard the court uses to review decisions by boards of adjustment (“A board’s action must be upheld if supported by any competent and substantial evidence.”) the court got to the substantive facts of the case.

House 1 – The Lang House.  House 1 was occupied by the Langs, and sits on 6.52 acres.  The Langs argued their activities of living in the house and growing trees, berries, asparagus, grapes, apples, tomatoes, and farm fish, as well as participating in government farm programs, qualified as “agricultural purposes” under the statute for both the house and the land.  The court noted that the only proof the Langs offered of an agricultural purpose—defined in prior caselaw as “the art or science of cultivating the ground, harvesting of crops and rearing and management of livestock”—was their assertion through an agricultural exemption sheet on which they listed the following activities as “commercial production”:

1. Trees, 4 to 5 acres, 80% for commercial production
2. Raspberries, 0.1 acres, 10% for commercial production
3. Blackberries, 0.1 acres, 10% for commercial production
4. Asparagus, Apples, 1.0 acres, 75% for commercial production
5. Grapes, tomatoes, 0.2 acres, 15% for commercial production

The Langs did not offer any additional evidence to support “commercial production,” such as tax returns or other financial records.  They argued that the Linn County Zoning Board of Adjustment (ZBA) improperly applied a “minimum acreage test” for the land, and since the legislature removed the “primary means of livelihood test” from the statute in 1963 the only question the ZBA should be asking is whether the Langs were “engaged in agriculture.”  In response the court simply stated that it did not read the ZBA’s findings to apply a minimum acreage test. The court also

Recognizing that Iowa case law has not defined the term “farm house” for purposes of the exemption, the court cited with approval a 1997 Attorney General opinion stating that a “farm house” is one in which the occupants, “are engaged in agriculture on the land where the house [is] located.”

While we appreciate that the Langs have participated in land conservation and tree planting projects, as well as growing some fruits and vegetables, the Langs failed to demonstrate to the ZBA those activities were sufficient to prove they were using House 1 and the 6.52-acre parcel for agricultural purposes. Similarly, although the Langs’ property has some of the attributes that a small farm or small agricultural enterprise may have, the Langs simply did not demonstrate that they cultivated the ground, harvested crops, or reared and managed livestock to an extent warranting an agricultural exemption …. Without that showing, they could not substantiate that House 1 and the 6.52-acre parcel were “primarily adapted, by reason of nature and area, for use for agricultural purposes.  We recognize that small-scale agricultural production should not be discouraged. However, at some point a line has to be drawn to determine what qualifies under the statute as “agricultural use” and what is more akin to a rural acreage. The Board, after considering all of the evidence submitted by the Langs, drew that line and determined House 1 and the 6.52-acre parcel were not used for “agricultural purposes” under the statute.

House 2 – The Tenant House.  House 2 was originally intended for use by the Langs’ son, so he could assist with farm operations after completing college. When the Langs’ son did not occupy the house, the Langs decided they would rent it to other tenants.  The Tiernans (the original tenants) kept work logs of their activities related to the acreage.  The logs showed that over a 21-month period the tenants averaged at most 3.7 hours per day toward caring for the land, trees, and fish production, and 2.6 hours per day if tasks not clearly related to these activities were removed.  The court affirmed that under the statue, the key consideration is whether House 2 and the land are “primarily adapted, by reason of nature and area, for use for agricultural purposes.” The Langs argued that the ZBA applied the language in such a way that it amounted to the “primary means of livelihood” test, which the legislature removed in 1963. The court disagreed, noting that the ZBA considered, among other things, the amount of time devoted to the performance of the work duties and that the ZBA was looking at whether the tenants were “primarily engaged” in agriculture, not whether their primary livelihood was being made from agricultural activities on the land. Because the facts provided a basis for the ZBA’s decision, the court refused to overturn the decision.

Justice Tabor issued a dissenting opinion, disagreeing first with the majority’s characterization of the case as one that simply requires finding substantial evidence to support the ZBA’s decision.  She instead would look at the district court’s interpretation of the ag exemption, which the court of appeals is not required to give deference.  She viewed statements from the Linn County Zoning Administrator – that “the county has honored the exemption for years and now the property is reduced to a 6-acre tract with a pond and some berries” – as an implicit application of a minimum acreage test which the ZBA followed.  She noted that in a June 8, 2004 contempt ruling, Judge Newmeister found that Daryl Lang “carries on two agricultural purposes on the parcel he owns in Linn County. He grows trees and he has a fish farm,” and thus the focus of the ZBA’s analysis should have been “whether the Langs’ use of their property had changed since the county recognized the original forty-eight-acre tract as falling under the agricultural exemption.”  She went on to observe:

The majority decision gives a nod to smaller farms, recognizing that “small-scale agriculture should not be discouraged.” The decision goes on to say that some line drawing must be done between what qualifies as an “agricultural use” and “what is more akin to a rural acreage.” I agree that the size of the acreage is a relevant factor in determining whether the property is used for agricultural purposes, but I disagree that a board of adjustment can draw an arbitrary line that parcels of less than ten acres cannot be “primarily adapted” for agricultural purposes. Now that the conventional view of Iowa agriculture as the production of corn, soybeans, cattle, and hogs is being challenged by the emergence of Community Supported Agriculture involving smaller farms growing fruits, vegetables, and livestock, it is critical that county boards of adjustment do not employ a litmus test for the number of acres necessary to qualify for an agricultural exemption….Had the board applied the proper legal test, it is likely that the crops listed on the Langs’ agricultural exemption information sheet would have satisfied the statute’s requirement that the land be “primarily adapted” for agricultural purposes.

Manufacturer’s wastewater lagoon not entitled to agricultural exemption from Sioux County zoning

by Gary Taylor

Kramer et al. and Sioux Pharm, Inc. v. Sioux County, Iowa
(Iowa Court of Appeals, November 24, 2010)

Plaintiff Sioux Pharm, Inc. manufactures chondroitin sulfate through an extraction process using cow tracheas, pig and chicken parts, and corn. This process produces 15,000 to 18,000 gallons of industrial wastewater daily at Sioux Pharm’s manufacturing facility. The wastewater is described as a “filtered food-grade bovine protein solution.” The city of Sioux Center will not accept the wastewater into its municipal treatment facility, and so in 2003 Sioux Pharm began construction, without prior approval from Sioux County or the Iowa Department of Natural Resources (DNR), of an earthen wastewater storage lagoon located on farmland in rural Sioux County owned by plaintiff Carol J. Kramer, as trustee of her revocable trust.

In April 2004, the DNR approved the wastewater storage lagoon as built, and issued Sioux Pharm a permit, but stated that “any product going to the proposed lagoon is truly waste.” The lagoon is an uncovered earthen pit that holds a total of 859,000 gallons of “high-strength organic” wastewater.  Plaintiff Dr. Allan Kramer farms the land owned by the Carol J. Kramer trust, and he periodically purchases wastewater from Sioux Pharm and applies it to nine application sites at the rate the DNR authorizes.. The wastewater contains nutrients that have some benefit to crops. Although Sioux Pharm has a commercial fertilizer manufacturer/dealer license, it is not authorized to sell wastewater after it has been stored in the lagoon, as once the wastewater is placed into the lagoon it becomes contaminated with bacteria.

Under the Sioux County zoning ordinance, “treatment facilities in an Agricultural District require a Special Exception Use permit.” Although the DNR approved both Sioux Pharm’s construction (after the fact) and use of the lagoon, Sioux Pharm had not obtained a special exception use permit from Sioux County Board of Adjustment. Upon receipt of multiple complaints about the lagoon and the odor emitting from it, the Sioux County Zoning Administrator determined that the lagoon was being operated without a special use permit. In January and March 2008, the zoning administrator provided Sioux Pharm with written notices that its construction and use of the lagoon was in violation of the zoning ordinance. Sioux Pharm met with the Sioux County Planning and Zoning Commission at its April 2008 meeting and represented to the commission that the wastewater stored in the lagoon was a “filtered food-grade bovine protein solution.” After the meeting, Sioux Pharm applied for a permit for a “non-farm” use involving “industrial wastewater.” In August 2008, the Board granted Sioux Pharm a temporary special exception use permit “for construction of an earthen wastewater lagoon used for storage of industrial wastewater from the Sioux Pharm plant in Sioux Center, Iowa.” The temporary permit was subject to several conditions, and expired on June 1, 2009 at which time the application was to be reviewed for extension or expiration by the Board of Adjustment.

The Board held a meeting on May 27, 2009 and reviewed recommendations of the Planning and Zoning Commission with regard to the status of the temporary permit. The Board determined Sioux Pharm had failed to meet the conditions imposed by the temporary permit and declined to extend the permit. The temporary permit expired on June 1, 2009, but Sioux Pharm continued to transport wastewater to the lagoon daily, despite the expiration of the temporary permit. On June 1, 2009, Sioux Pharm filed suit in district court, premised upon establishing that the use of the wastewater storage lagoon was “primarily adapted for use for agricultural purposes” under the language of Iowa Code 335.2 and was therefore exempt from Sioux County zoning regulations.  The district court entered judgment in favor of the county, concluding substantial evidence supported the Board’s finding that Sioux Pharm’s storage lagoon did not meet the agricultural exemption.  The district court specifically stated:

“The storage lagoon was built by Sioux Pharm, Inc., not the landowner. Sioux Pharm, Inc. is a manufacturer who is not involved in agriculture. Even though Sioux Pharm, Inc. calls its wastewater ‘fertilizer,’ it has never registered the wastewater as a fertilizer or soil conditioner with the Iowa Department of Agriculture and has not complied with regulations for the storage of liquid fertilizer. It has obtained a fertilizer license but is not in the business of storing or selling fertilizers or soil conditioners. It is not in the business of raising crops or livestock. Sioux Pharm, Inc., is a pharmaceutical manufacturer.”

On appeal to the Iowa Court of Appeals, Sioux Pharm argued that Sioux County Board of Adjustment and the district court erroneously interpreted Iowa Code 335.2.  In making its case Sioux Pharm drew an analogy between its wastewater lagoon and the hog waste lagoon determined to be part of an agricultural operation in the 1993 Iowa Supreme Court case, DeCoster v. Franklin County.  In that case the Supreme Court determined that the storage and disposal of hog waste from a holding basin was a part of the agricultural function, reasoning that it would be incongruous to exempt hog confinement buildings from county regulation and at the same time subject the waste storage basin adjoining those buildings to county regulation.  The Court of Appeals, however, found the factual distinction between the DeCoster case and the present case “fatal to Sioux Pharm’s claim.”

“In DeCoster, the storage basin was constructed to store the waste that was the by-product of the livestock raised in hog confinement facilities located on the plaintiff’s farm. In this case, the lagoon was constructed to store the wastewater that is the by-product of Sioux Pharm’s industrial manufacturing facility located in Sioux Center…. Although the wastewater is eventually used to fertilize the land farmed by Dr. Kramer, the fact remains that the primary purpose and functional aspect of the lagoon is to store Sioux Pharm’s industrial wastewater.”

Accordingly, the Court of Appeals found that the Sioux Pharm waste lagoon was not exempt from the regulations of the Sioux County zoning ordinance.

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