On February 21, 2023, MACo Legislative Director Kevin Kinnally testified before the House Ways and Means Committee in support of HB 0592 – Property Tax – Agricultural Land and Improvements – Assessment with amendments. This bill would require an improvement on land that qualifies for an agricultural use assessment to be assessed as agricultural property under specified circumstances.
Currently, state law creates a special, statutory scheme for assessing land subject to active agricultural use. This exception sets the value of that land at a “use value” rather than its actual market value under highest and best use, specifically to “encourage farming activities to … maintain a readily available source of food and dairy products close to the metropolitan areas of the State.” (See Tax-Property, §8- 209(a)). HB 592 nominally seeks to extend this similar assessment dictate to improvements on agricultural land even when they support higher intensity uses with some nexus to agriculture.
From the MACo Testimony:
The extensive definition of activities under the bill, the thin connection between the activities and true active agriculture, and the impractical application of a land valuation to improvements, render the current bill language impossible to follow, giving rise to the enormous fiscal note. MACo has prepared alternative bill language (for ease of reading) attached to this testimony. Counties are willing to work with the Committee and the General Assembly to hone a balanced policy that assesses active agricultural land with its historic preference, reinforces that locally approved value-added agricultural activities should not jeopardize that status, and grants local governments clear tools to create tax incentives for commercial or other activities that are ancillary to active farmlands.
Many counties are interested in promoting agricultural tourism to support the agricultural industry. Agritourism can be a means to keeping farms profitable during times of low production, and it offers opportunities to highlight Maryland counties’ unique agricultural assets. However, the significant costs of this bill are simply untenable. For these reasons, MACo urges the Committee to issue a FAVORABLE WITH AMENDMENTS report on HB 592.
The Senate Budget and Taxation Committee will consider the bill’s cross-file, SB 0418, on February 22.
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