Reduced valuation of farm home sites stalls

A bill that would reduce the valuation of land used for farm residences was bracketed at the request of the introducer March 29.

Current state law excludes land associated with buildings from being classified as agricultural or horticultural land. Under LB1037, introduced by Sen. Lydia Brasch of Bancroft, all land primarily used for agricultural or horticultural purposes would be classified as agricultural or horticultural land.

This would include farm sites and farm home sites that are within or adjacent to and in common ownership or management with other agricultural or horticultural land. Farm sites and farm home sites then would be valued at 75 percent of market value like other agricultural land, but the dwellings, buildings and other enclosed structures on the land would continue to be valued at 100 percent of their market value.

Brasch said the bill is intended to provide relief for farmers in counties where agricultural land values have increased rapidly in the past few years due to residential development in nearby suburban areas. The proposal would ensure that all land associated with farming would be valued as agricultural land, reducing valuation of farm home sites and giving farmers a measure of property tax relief, she said.

By reducing the amount of property taxes collected, the proposal would result in an increase in state aid to public schools by an estimated $1.25 million in fiscal year 2018-19 and again in FY2019-20.

Sen. Al Davis of Hyannis opposed the bill, saying that it would not provide significant property tax relief for all Nebraska farmers, only those in counties with suburban areas. The resulting increase in state aid to public schools mainly would go to districts in those same areas, he added.

“I want property tax relief more than anything—Nebraska needs it,” Davis said. “But this is not the way to go.”

After three hours of debate, Brasch filed a motion to bracket the bill until April 20, the last day of session. The Legislature obliged.

The bill is unlikely to be debated again this session.