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Questions persist about tax incentives for urban farmland

Lawmakers still must resolve conflict over growth boundaries

TRIBUNE FILE PHOTO: CHRISTOPHER ONSTOTT - Bryan Allan harvests winter vegetables at Zenger Farms. Tax relief for urban farmers has made progress, but issues still exist.SALEM — Legislation providing tax relief for urban farmers has progressed in the Oregon House, but concerns about unintended land-use effects continue to shadow the proposal.

House Bill 2723, which allows local governments to impose lower property taxes on urban farms, recently was referred for a vote on the House floor by a key legislative committee.

Despite voting 6-1 for a “do pass” recommendation, members of the House Committee on Rural Communities, Land Use and Water said questions still must be resolved about the impact of “agriculture incentive zones” on urban growth boundaries.

Under HB 2723, urban farmers in these zones would be subject to lower property tax rates as long as they use their properties for agriculture for five years.

The Oregon Home Builders Association is concerned that landowners who make such commitments will effectively exclude their properties from residential construction within cities.

The group wants local governments to consider the effect of agriculture incentive zones when deciding whether to expand their urban growth boundaries, but the Oregon Farm Bureau fears this will put development pressure on farmland in rural areas.

The bureau also wants lawmakers to impose a sunset on the program so that it eventually can be re-evaluated, said Katie Fast, OFB’s vice president of public policy. “We feel the need to have a check-back with the Legislature.”

Lawmakers have attempted to resolve the conflict with an amendment that specifies agriculture incentive zones are a factor in evaluating a city’s potential for future development.

However, state regulators think the provision may clash with other language in the bill that says these zones have no effect on a city’s inventory of buildable lands, said Rep. Brian Clem, D-Salem.

Rep. Mike McLane, R-Powell Butte, said he gave HB 2723 a “courtesy no” so that the bill would not appear to have unanimous support, thereby signaling to the Senate that revisions are still necessary.