Illegal cannabis could disqualify Oregon farmland from tax break

Published 12:45 pm Saturday, January 21, 2023

Oregon landowners who willfully “turn a blind eye” to illegal marijuana growing on their farms would lose property tax breaks under a bill meant to discourage unregulated plantings.

To help preserve farmland, state law reduces the tax burden on properties dedicated to agriculture by assessing them at a lower value.

House Bill 2253 would disqualify land from this special assessment if a criminal conviction or civil penalty for “illegal growing of crops” is imposed on the owner, with some exceptions.

The bill means to diminish the incentive for landowners to knowingly disregard illicit uses of their property, said Rep. Ken Helm, D-Beaverton, during a Jan. 19 legislative hearing.

“It’s willing ignorance, looking the other way, that adds to the problem,” Helm said.

Cannabis is unlawfully produced at thousands of sites in rural Southern Oregon each year but HB 2253 intends to make landowners think twice about overlooking illegal grows in exchange for cartel payments, said Sen. David Brock Smith, R-Port Orford.

“If you do this, there will be serious consequences in the future,” he said.

Though recreational marijuana was legalized by Oregon voters in a 2014 ballot initiative, the state continues to face serious problems with unregulated production of the crop for the black market.

In recent years, lawmakers have been overhauling marijuana and hemp statutes while beefing up enforcement due to complaints about organized crime, forced labor, environmental damage and unauthorized water use, among other problems.

Though drug cartels from outside the state and country have commonly been blamed for the problem, it’s suspected that at least some plantings occur with the tacit cooperation of local residents.

“The intent of this bill is to discourage landowners from allowing these illegal operations where they’re not allowed,” said Chris Boice, a Douglas County commissioner.

Rep. David Brock Smith, R-Port Orford, emphasized that HB 2253 does not apply to licensed marijuana and hemp crops, which are undermined by illicit growers who circumvent regulations to benefit from an uneven playing field.

“All these illegal operations are causing serious concerns about the viability of the legal cannabis industry in this state,” he said.

Under HB 2253, landowners won’t be penalized if they “reasonably lacked knowledge” about the unlawful crop or notified law enforcement “as soon as practicable” after finding out. While the bill is aimed at illegal marijuana, it applies to any crop grown in violation of state or local law.

The property tax consequences only occur once the landowner has obtained “due process” in the underlying criminal or civil proceedings, said Scott Winkels, lobbyist for the League of Oregon Cities.

Previous cannabis reforms haven’t sufficiently tackled the problem of landowners who benefit by allowing others to grow illicit crops on their property, he said. “This is an area where we are deficient in our tools.”

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