No penalty for taking farm tax breaks despite not farming (09-02-2010)

It's a high priority of the San Juan County council to revise the public benefit rating system for the Farm/Agricultural Conservation System. This program will give owners of property that may one day potentially be used for farming to receive at least a 30% break on their taxes.

One county Council member has an application pending for his land to be enlisted in this program. The council directed the Planning Commission to review an ordinance revising the present rating system, even though the commission had soundly turned down a similar one earlier this summer.

The Planning Commission prefers a overhaul of the entire Current Use program which gives up to 70 percent tax breaks to property owners. The council decided not to make that a priority during this year.

The tax breaks, which go to owners of large parcels, do not affect the county's tax revenue, they only affect who pays. The taxes are shifted to other property owners who have to pay the taxes those in the Current Use program don't pay.

In 2007, county Assessor Charles Zalmanek sent out a questionnaire to property owners enrolled in the Farm/Ag Current Use program which requires them to be actively farming. They were to documentthey met the requirements. They must earn a certain amount a year from farming.

In a report, Zalmanek states: This questionnaire revealed widespread problems of compliance with this program.

The Council was flooded with email and calls from irate property owners. Sixteen, who admitted they hadn't been actively farming, signed up to transfer into the Farm/Ag Conservation Program. One of the owners is Council member Gene Knapp.

When it was discovered the program "virtually" did not allow a way to acquire enough points (30) to qualify, the applications were placed on hold until the benefit rating points could be changed.

The new ordinance will give 30 points to every property owner with 5 or more acres applying for the program as long as they have soil which qualifies. The Planning Commission insisted a condition be added in - the property must be subdividable. Since one of the purposes of the program is to prevent property from being divided up and used for residences, it made sense to the commissioners to add the requirement.

Civil Deputy Prosecutor Karen Vedder reminded them such a requirement eliminates all 5-acre parcels. The commissioners indicated they were aware of that.

As to the 16 property owners who admitted they were enjoying tax breaks to which they were not entitled, since they have asked to transfer to another Current Use program they are not subject to the penalties for misusing the program. The penalty is up to seven years back taxes, plus 12 percent interest and a 20 percent penalty.

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