Oregon bill would strip farm tax break for land tied to illegal cannabis grows

Senator David Brock Smith told the House Committee on Revenue on June 11 that Senate Bill 347A, which passed the Senate unanimously, aims to disincentivize illegal cannabis operations by removing the farm-use special assessment from farmland where an owner receives a final civil penalty or conviction for illegal cultivation.

"Literally, and in many cases, bags of cash are coming in, cartels are coming in, they're taking over, farmland," Senator David Brock Smith said, adding that illegal grows in parts of southern Oregon have involved "human trafficking" and damage to land and water access. He described the bill as "one tool" to push back against large numbers of illegal grows in Josephine and Jackson counties.

Douglas County Commissioner Chris Boyce, who said the concept originated in Douglas County, told the committee that landowners had been offered cash to lease property and later found out illegal cannabis was being produced there. He said the proposal would remove tax incentives that otherwise make farmland more profitable to lease or use for illegal production and that the bill includes an affirmative defense for landowners who lacked knowledge or who reported illegal activity to law enforcement.

Lauren Kinsey of the Oregon Farm Bureau said SB 347A would disqualify farmland from the farm-use special assessment for 10 years after a final order of civil penalty or a judgment of conviction tied to illegal marijuana growing. She said the special assessment is "a valuable tool to support the viability of local farms and ranches" and that the bill provides an exception for owners who "lacked knowledge or took action to alert law enforcement."

Amanda Metzler, past chair of a county cannabis advisory panel and an OLCC licensee, also expressed support, saying the bill "adds one more tool in the toolbox for illegal cannabis enforcement" and "fixes that loophole."

Committee members asked clarifying questions about how legal commercial grows are distinguished from illegal operations. Commissioner Boyce explained that counties could "opt in" to allow commercial grows and that Douglas County voted not to permit commercial operations in unincorporated areas, making such grows there illegal without the state's permitting process.

Chair Nathanson closed the public hearing after the panel's testimony; no committee vote on the bill occurred at the meeting. The public hearing record includes testimony from the bill sponsor, local officials, agricultural representatives and a regulated-industry participant.