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Senate finance members flag loophole risk in proposal to let donated crops qualify for current-use tax break
Summary
Committee members questioned a proposal to count donated farm crops (e.g., $2,000/year) toward 'current use' enrollment for parcels up to 25 acres, citing possible loopholes for prime land, uncertain fiscal impact on the general fund, and a plan to draft an amendment removing the donated-crop sections for further work.
The Senate Finance Committee on Wednesday scrutinized a proposal that would allow the "equivalent value" of donated farm crops to count toward qualification for current-use property tax treatment.
Kirby, legislative counsel, told the committee that current rules generally grant a presumption of agricultural use and make enrollment straightforward for parcels over 25 acres, while smaller parcels face more scrutiny and must meet one of several tests: the owner must be a farmer with farm income comprising 50% or more of household income, provide a written three-year lease to a farmer, or meet an annual gross-income test from farm-crop sales. The draft change under discussion would let donations of farm crops meet that annual-income test for parcels up to 25 acres.
Committee members raised practical examples to show how the change could play out. One member described a backyard gardener who might sell or donate produce at a local stand and asked whether the same activity could lead to substantially lower property assessments on otherwise developable lots; Kirby confirmed maps and annual applications are required and noted a three-of-five-year lookback would apply for the income test so continuous activity is checked.
Lawmakers also pressed the fiscal implications. A committee member and staff said the revenue effects are embedded in homestead and nonhomestead tax calculations and that a cumulative difference was discussed in prior sessions; the committee referenced an aggregate figure discussed in briefing but asked staff to provide clearer cost estimates before any further action.
Because members were concerned the donated-crops language could be used to enroll small but high-value parcels and materially change the tax base, the chair asked counsel to draft an amendment to strike the relevant sections (identified in committee discussion as sections five and six) and to circulate it for consideration. The committee agreed to delay sending the bill to the floor until those amendments are prepared and reviewed.
The committee did not vote on the substantive change at the meeting; staff were asked to deliver mapping and revenue data and to prepare the draft amendment for the committee to consider the following day.
