Tax break for former farms is in the works

There’s a difference between a working farm and a piece of property that – although not a working farm – has all the right stuff, such as rich soils, to be farmed sometime in the future.

The San Juan County Council agreed Sept. 28 it would take another step in considering regulatory changes that would make it possible for land owners to receive a break on their annual property tax bill in either case. Those with a working farm already enjoy such a tax break, if they meet the criteria of “farm and agricultural land” as spelled out under state law.

Enacted by the Legislature in 1970, the Open Space Taxation Act allows property owner to have their open space, farm and agricultural, and timberlands valued at its “current use” rather than its “highest and best use.” The act states that it is in the best interest of the state to maintain and conserve adequate open space for the production of food, fiber and forest crops, and to assure the use and enjoyment of natural resources and scenic beauty.

At the council’s request, the Planning Commission agreed earlier this summer to reconsider its decision to reject making revisions to the county’s so-called “public benefit rating system” in order to allow those who own land that could someday be farmed to qualify for a potential tax break through the county’s so-called “current-use” tax programs. The commission, as part of a Aug. 20 public hearing, determined only properties with proper soils, which are 5 acres or more and can be sub-divided should be allowed to apply for a tax break under a section of the county’s current-use open-space program known as “farm and agricultural conservation land.”

Without those changes, it’s rare for either former or future farmland to earn enough points – 30 points is the minimum – under that public benefit rating system so as to qualify for a tax break in an open-space program. In fact, as many as 17 local property owners, including Councilman Gene Knapp, Orcas East, will likely lose their tax breaks unless the rating system is retooled and those properties, the majority of which were former farms, shift into the farm conservation category.

In an earlier interview, Assessor Charles Zalmanek, whose department oversees the “working” farm program, said those tax breaks may well terminate at the end of the year.

In addition, the proposed changes endorsed by the planning commission would require the owner of property in the farm and agricultural conservation program to put the property back into agricultural production within seven years or place a conservation easement on it, in order to keep its current-use status.

“I think the real concern on the part of the planning commission is that if it’s written too broadly that the number of properties that would qualify would be limitless,” Deputy Civil Prosecutor Karen Vedder said.

Vedder added that members of the planning commission struggled as well with the idea of how to push property owners to get land back into agricultural production and that those who don’t should not get a tax break forever.

The changes backed by the planning commission were considered last week by the council in what’s now known as its “first touch” on any new legislative proposal. Those changes will be incorporated into a draft ordinance which will be back before the council as part of its “second touch,” and, should it agree to proceed further, the draft will then return for possible approval at a public hearing.