Bills Would Make It Easier for Small-Scale Farms to Sprout

Some lawmakers want to pass legislation this session that makes it easier for small farmers to get agriculture property tax exemptions.

By Kate GroetzingerMarch 2, 2017 9:30 am| , , ,

From KUT:

As farm-to-table food and restaurants have grown in popularity across the country, the idea of locally sourcing food has become especially popular in Austin. Farmers markets are popping up, and families are subscribing to community-supported agriculture programs (CSAs). Fueling this trend are small-scale farms in and around the city.

But as Austin spreads out and real estate prices go up, starting a small farm has become more expensive. Legislators are hoping to help small farmers by passing legislation this session that makes it easier for them to get agriculture property tax exemptions.

If you want to know what it takes to start a small farm near Austin, just ask Skip Connett of Green Gate Farms.

“This was our winter field for our CSA,” he says, gesturing to a soccer pitch-sized field covered in weeds and wildflowers. “We had arugula, kale, collards, cabbage, spinach – all the winter crops.”

This farm in Bastrop County is Connett’s second organic farm. He also operates one on 5 acres of leased land inside the Green Belt in Travis County. Four years ago, he decided to expand that operation by buying land in Bastrop.

“From February to April, you’re working 12-hour days, seven days a week, because you’re harvesting, you’re planting, you’re getting old stuff out, you’re getting your fields ready,” he says. “And then the same thing happens in the fall.”

Even though he runs a year-round farming operation and lives off his land, Connett ran into trouble when he applied for an agriculture exemption on his property taxes. His application was initially rejected based on the tax assessor’s decision that his farming wasn’t intensive enough.

“You can’t get more intense than what we do,” Connett says. “I protested three times in three years, and it was really frustrating to go through that process. Finally, I think they got it, or they just got tired of me coming in there.”

“Open-space land,” which qualifies for the agriculture exemption, is taxed at only 5 percent of its market value, according to the latest report from the Texas Comptroller’s Office. Rural land without the exemption is taxed at 80 percent of its market value. This meant Connett had to pay thousands of dollars in taxes a year on the land, while contesting its initial valuation. Once he did get the exemption, he said, his taxes dropped to hundreds of dollars a year.

Judith McGeary, who heads the Farm and Ranch Freedom Alliance, says small farmers can have trouble getting the exemption because tax assessors often don’t use adequate criteria when assessing organic and sustainable farming.

“Many of the counties just don’t know what to do with this burgeoning local foods movement,” she says. “So they don’t have any provision for mixed-vegetable farms, I mean, the sorts of farms that produce, you know, vegetables for CSAs or local farmers markets.”

McGeary has worked with State Rep. Eddie Rodriguez, D-Austin, who is the founder and chairman of the House Farm-to-Table Caucus, to draft legislation that would push tax assessors to come up with fair criteria to assess small, organic and sustainable farms. House Bill 231 amends the current language around agriculture valuation by adding “producing fruits and vegetables” to the definition of “agricultural use” and requires county tax assessors to come up with specific guidelines for judging the scale of organic and sustainable farms.

“If the policy behind an [agriculture] valuation is to promote farming then it shouldn’t matter how big your farm is,” Rodriguez said. “It’s really about making the rules fair for these farms.”

This is Rodriguez’s third attempt at passing the bill. In the past, opposition has come from those who claim amending the rules regarding agriculture valuation would make it too easy for landowners to obtain property tax exemptions by planting a few fruit trees or rows of flowers in their backyards. But Connett says the rule in its current form is already abused by rural property owners. He says he has neighbors who received agriculture valuation by buying cattle to put on their property, despite the fact that they aren’t living off ranching.

“The tax assessors understand animals,” McGeary said. “But they don’t really understand vegetable farming.”

In addition to the requirements for agriculture valuation, the time it takes for farmland to become eligible for the exemption is up for debate. As of now, landowners must prove that they have farmed their land for five out of the past seven years, or that they have made more than 50 percent of their income from farming for three years, before they are eligible for the tax exemption.

Senate Bill 330, filed this session, would shorten this waiting period to one year for veterans and farmers who are under the age of 35 when they apply. McGeary says the bill is the first of its kind to be filed in the House or Senate.

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