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Assembly committee reviews ordinance to restore farm-structure tax exemption tied to Prop 2
Summary
An ordinance to add a farm-structure exemption to borough tax code was presented; staff and the assessor's office said it would restore the voter-approved Prop 2 exemption for structures used for food production, would require $2,500 in annual sales and IRS Schedule F, and staff supplied 2024 application counts and exempted values.
Assemblymember Kras presented an ordinance to add a new subsection T to FNSBC 8.04.060 to restore a farm-structure tax exemption consistent with Proposition 2 (approved by borough voters Oct. 3, 2023). Kras said state statute changes prompted the borough to update local code and that this ordinance would return an outright exemption for qualifying farm structures rather than a deferment.
Kras said the ordinance targets structures used exclusively for farming activity (growing, storage, processing of grains, fruits, vegetables, aquatic products, or sheltering livestock) and requires that the owner or lessee sell at least $2,500 of agricultural products in the tax year and file IRS Schedule F.
Deputy Assessor Ryan Danhauser provided program numbers and explained how state and local options have differed. He said that in tax year 2024 the borough received five applications for the optional structures exemption; one was incomplete and four were granted, together exempting $73,978 of farm-structure value. Danhauser also said that 47 properties used the state deferment program in the same tax year and that the state program applies a discounted valuation (he described an 80% discount example for farmland and structures).
Committee members asked whether the ordinance language simply mirrors state statute and whether the word 'exclusively' could create confusion. Assessor's office staff and the deputy assessor said the draft mirrors the statutory definitions and that structures not truly used for farming (for example, used mainly to store an RV) would not ordinarily qualify for the exemption.
Why it matters: restoring a structure-specific exemption changes tax liabilities for small farm operators and affects the borough tax base; members requested a follow-up estimate of the borough share of any foregone taxes and the number of properties affected under the state deferment program.
Next steps: staff said they would provide additional numbers and clarifications to the committee in a future meeting; no committee vote on final passage was recorded in this session.
