Brief (1)
Sub. for HB 2702 would amend a section of tax law dealing with the property tax exemption for farm machinery and equipment. Specifically, the bill would amend the definition of "farming and ranching operation" to include the planting, cultivating, and harvesting of nursery or greenhouse products, or both, for sale or resale. The bill also would amend the definition of the term "farm machinery and equipment" to include any greenhouse which is not permanently affixed to real estate and which is used for a "farming or ranching operation."
The bill also would clarify the property tax exemption which was passed by the 1999 Legislature for property used to produce electricity using alternate methods, as well as language passed by the 1999 Legislature pertaining to the public utility valuation statute.
Background
This bill was introduced at the request of Representative Weiland. At the hearing on the bill, several greenhouse owners told the Committee that this type of operation was an agricultural pursuit and that operators of greenhouses were forced to spend time and energy and expend money for legal fees to be granted the exemption which they thought they had always been entitled to receive. They expressed concern that the statutes were not being interpreted uniformly across the state. The proponents indicated that the original bill was intended to clarify and put into statute what had always been the legal interpretation of the intent of the law. There were no opponents to the bill.
The Senate Committee amended the bill to include clarification of two property tax statutes at the request of the Property Valuation Division of the Department of Revenue.
The fiscal note on the original bill indicates that the exemption of greenhouse farm machinery and equipment would lower the state property base in 72 counties approximately $951,000. The fiscal note states that this would lower local property tax revenues available to finance local schools by approximately $19,000 and result in increased expenditures from the State General Fund to offset the reduced revenues. The fiscal note also states that the State Building Fund would experience reduced revenues of approximately $1,500.
1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html