SENATE BILL REPORT

SB 5996

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background: The Open Spaces Taxation Act allows qualifying resource land to be valued at its current use rather than market value. The purpose of the program is to encourage retention of land in agricultural, forestry, or other approved open space uses. This is done by taxing the land according to its income producing capacity rather than on its value if converted to other uses. In exchange for a reduction in lower property valuations, the landowner must agree to keep the land in its current use for a period of ten years.

Parcels under 20 acres must show a gross income of at least $200 per acre from the sale of agricultural products in three of any five-year period. Parcels over 20 acres do not have a specific gross income requirement, but must be devoted primarily to the production of livestock or agricultural commodities for commercial purposes.

SSB 5359 was enacted in the 2011 legislative session. It clarified the meaning of the term "same ownership" for purposes of determining whether multiple contiguous parcels may be added together to total more than 20 acres. That legislation allowed multiple contiguous parcels that are managed as part of a single operation and owned by members of the same family to be added together to meet the 20 acre parcel size criteria.

The definition of family in SSB 5359 includes many typical family relationship terms, but not aunts, uncles, nieces, nephews, great-grandchildren, or great-grandparents.

Summary of Bill: Included in the definition of family are aunts, uncles, nieces, nephews, great-grandchildren, great-grandparents, and any other relative that is a lineal or collateral descendent of an individual who has held title to the property.

An application to a county assessor to request that land be valued according to its current use must be accompanied by a signed statement from each applicant, under penalty of perjury, that the land meets the definition of contiguous.

Staff Summary of Public Testimony: PRO: We have a farm that has been passed down to the fifth generation and the plan is to pass it down to the sixth generation. It is farmed as a single farming unit but the property ownership has been passed down and the relatives are getting spread further than cousins and grandchildren. This bill will help keep the farm in operation. Even if it is one farm, it is worth doing.

CON: County assessors are concerned with being able to administer the bill. They don't want to have to become experts in family genealogy and have concerns about how to determine whether everyone is a lineal or collateral decedent.