County Assessors and some in the Utah Legislature have concerns with parcels of land that quality under the Farmland Assessment Act, commonly known as “Greenbelt,” because specific parcels are used for dual purposes – ski resort, agritourism, solar farms, wildlife hunting preserves, etc. They claim specific greenbelt parcels are not “primarily” used for agricultural purposes, thus should not qualify for greenbelt status. This potentially means that any farmer who happens to get more revenue from an oil well or from hunting leases, etc., than he does from farming may lose his greenbelt status on the farmland.
Every state has enacted legislation that provides tax incentives for land owners who maintain lands as “open space.” The Utah Legislature provided for those incentives when it passed the Farmland Assessment Act in 1969.
Qualifying agricultural property is assessed and taxed based upon its productive capability instead of the prevailing market value. Specifically, land values are individualized for each county and are based upon agricultural production, income and expenses for that county. Productive values are established by the Utah Tax Commission with the assistance of a five-member Farmland Assessment Advisory Committee and Utah State University. In general, qualifying agricultural property must exceed five acres, be “actively devoted to agriculture” and meet production requirements set forth by the Utah Tax Commission. Some exceptions apply.
The intent of the FAA was to avoid taxing property at such rates associated with high market values as to make it impossible for farmers to continue to own and farm their property. Without a greenbelt amendment, farmers on the urban fringe are often forced to sell land to potential developers which in many cases results in the land standing idle and becoming a nuisance with weeds and other unsightly situations due to neglect.
In a 1989 Utah Supreme Court Ruling (Salt Lake County v. Kennecott Corporation, No. 3870368), the Court ruled that to be eligible for Farmland Assessment Act, it makes no difference whether agricultural use is the primary or secondary use of a land parcel. As long as other uses do not hinder or exclude the agricultural use, a parcel may receive Farmland Assessment Act assessment.
Under Representative McCay (R-Riverton) and Senator Henderson (R-Spanish Fork) leadership, as Co-Chairs of the Interim Revenue and Tax Interim Committee, this issue was addressed several times during the 2016 interim hearings. Several Committee members have taken interest in this issue and seek to sponsor 2017 legislation to remedy the perceived problem.
For questions please contact Sterling Brown sterling.brown@fbfs.com 801-233-3004
