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Olympia news round-up

What’s going on in the state legislature this session

 


Preserving farmlands could mean more taxes

By Rebecca Gourley, WNPA News Service

A proposed change to a law aimed at preserving farmland and open space could result in higher taxes for some Washington property owners.

House Bill 2306 would expand a tax classification on land actively used for agriculture, timber production or undeveloped open space. While property tax is generally assessed on the Market value of a parcel, the state’s Open Space Taxation Act allows land to be taxed at a lower rate based on its current use, such as farming.

Under the current law, if a farming operation is 20 acres or more, the parcels must be contiguous in order to be eligible for the lower tax classification.

The bill proposes to take out the “contiguous” stipulation, opening up this tax classification to farms that have multiple parcels that total 20 acres or more but aren’t necessarily touching each other.

“It’s the preservation of farmland...that is my ultimate goal,” Rep. Kristine Lytton, D-Anacortes, the bill’s primary sponsor, said at a Jan. 21 hearing before the House Finance Committee.

Allen Rozema, executive director of Skagitonians to Preserve Farmland, says the bill could help preserve farmland and open space that is not currently eligible for the lower tax rate.

“This is an innovative and unique approach to keeping agriculture viable in Washington state,” he said. “This approach and similar approaches need to continue to be pursued by the Legislature. It helps to elevate the preservation of farming to the same level as our state’s other critical resources.”

Farming is an essential part of Washington’s economy.The Washington Department of Agriculture valued Washington’s agricultural production in 2012 at $9.89 billion, exceeding 2011 figures by 6 percent and setting a new record.

Lytton said the bill is aimed at preserving farms with small, non-contiguous parcels.

In Washington, the average farm size has decreased by about 12.5 percent from 2003 to 2012, but the number of farms has increased by about 7 percent in the same time period, says a report from the United States Department of Agriculture. The number of small farms is still increasing, Rozema said.

It’s hard to know how much of a tax shift could result from allowing more parcels to qualify for the lower tax rate, as there’s no estimate of exactly how much land could be eligible, says Yakima County Assessor Dave Cook.

Some county assessors are concerned that extending the current-use tax rate to more land could mean higher tax bills for other property owners.

Each county collects a specific amount of property-tax revenue, with the total amount spread across all taxable properties.

When some properties are assessed at a lower rate, the other properties in the taxing district must make up the difference. Depending on how much property is eligible to be assessed at the lower agricultural rate, the increase in property taxes paid by others in the district could be significant.

Cook says the legislation could result in a $70 million loss of assessed property value in Yakima County because more farmland would be assessed at its current use rather than Market value. Property owners with a decrease in assessed property value will likely pay less in taxes.

Lawmakers want to see revenue on hemp

Christopher Lopaze, WNPA News Service

Washington state farmers could soon be growing cannabis for use in a potentially profitable hemp industry.

Hemp is an illegal substance under federal law, but two separate state Senate bills would permit development of a hemp industry in the state, and require Washington State University to conduct a year-long study to research optimal growing conditions and feasibility of hemp in the region.

“There’s a huge unfulfilled Market, and Washington could be at the forefront,” said Sen. Bob Hasegawa, D-Seattle, sponsor of Senate Bill 5954.

Sen. Jeanne Kohl-Welles, D-Seattle, sponsor of Senate Bill 6214, said it doesn’t make sense to prohibit hemp production and force the United States to rely on exports of hemp products from countries, such as Canada, when Washington state farmers could be growing the crop.

Hemp is used to manufacture various products, including construction material, clothing, rope, food, bio-fuel and paper. More than 30 countries produce hemp, including China, Australia, Russia, England and France.

SB 5954 would let the state Department of Agriculture immediately start providing licenses to grow hemp, but SB 6214 would only allow licensing if the study determines a hemp industry would be profitable. Lawmakers now have to figure out how to reconcile the bills.

“If there’s the prospect of a crop that enhances the viability of agriculture in Washington state, of course we’re supportive of that,” said Mark Streuli, director of the Department of Agriculture, during testimony at the Senate Agriculture, Water and Rural Economic Development committee on Jan. 30.

Aimee Warner, a member of the Hemp Industry Association, said in testimony that it’s time to let farmers “re-energize” the state’s farming industry with hemp, but she had concerns with parts of the bills.  HIA is a national organization representing the interests of the hemp industry.

She said a crop has never been outlawed in the history of the United States based on a study that determines a crop is unprofitable. She said that  requirement is unnecessary.

“I’m confident that Washington state will be a leader,” she said.

John Novak, a medical marijuana user and Cannabis Action Coalition member, a group lobbying for the preservation of medical-marijuana users rights, said at the hearing that legalizing industrial hemp would do more to end the federal prohibitions on cannabis than either medical or recreational cannabis laws.

Hemp and marijuana are classified as Schedule I controlled substances under the Controlled Substances Act. Both are derived from Cannabis sativa, but hemp has lower levels of tetrahydrocannabinol, the psychoactive chemical responsible for the effects of smoking marijuana. Hemp is typically defined as cannabis with a THC content below 1 percent, usually about one-third of a percent.

Federal legislation bodes well for states interested in growing hemp.

One provision in the U.S. Agriculture Act of 2014 would grant permission for hemp research by universities or state agriculture agencies in states allowing the growth of hemp. The U.S. House passed the bill Jan. 29, and the U.S. Senate voted today to send it to President Obama, who is expected to sign it.

The Washington Farm Bureau, an advocacy group representing farmers’ interests at the local, state, and national level based in Washington state, has not yet taken a stance on hemp.

Like with the state implementation of Initiative 502, which legalized marijuana for personal use, federal law makes establishing a safe way to handle financial transactions for hemp a conundrum, Hasegawa said.

The senator is sponsoring Senate Bill 5955, which would create the financial infrastructure necessary to provide financial services for farmers growing hemp or marijuana, since banks are barred from handling these funds under federal law.

He said SB 5955 faces a “huge hurdle” to pass, but the only other alternative is a cash-based system, which is “totally irresponsible, because it puts the general public in harm’s way.”

The Department of Agriculture and WSU would need to raise an estimated $99,380 in private or public money to finance the study. The state Department of Agriculture would have to spend an estimated $850,000-$900,000 to cover program start-up costs, then between $750,000-$1.5 million per year for regulation costs, according to the fiscal note attached to the bills.

Kohl-Welles said it’s likely some form of a hemp industry bill will be passed out of the committee.

 

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