Farm Exemption Bill Passes House

(Juneau) - The Alaska House of Representatives today passed House Bill 40 by Representative Shelley Hughes, R-Palmer. The bill creates opportunities for municipalities to reduce or eliminate taxes for qualifying food storage or processing structures, in turn facilitating the reduction of operational costs for farmers. It aims to encourage storage and production of food products without significantly diminishing taxes for local governments.

HB 40 provides an opportunity to strengthen the agricultural sector of our economy ...
~ Rep. Shelley Hughes

"HB 40 provides an opportunity to strengthen the agricultural sector of our economy while at the same time increasing access to locally grown food," Hughes said.

Rep. Hughes shares a laugh with members on the House Floor today after her first HB 40 measure passes.

Hughes pre-filed the bill before the start of session to address problems that the Alaska farming community faces in bringing their products to market and the impact on the food available for families in Alaska.

"I spoke with farmers at various meetings and heard that some farmers have had to dump food products or turn them under the soil, because after paying taxes on food storage buildings it wasn't worth harvesting or keeping the food," Hughes said. "Most of our produce spends seven-to-nine days traveling 1,800 miles by barge before we see it on our grocery shelves, whereas produce grown locally can be ready for purchase on the same or next day. Food eaten immediately after harvest has the greatest flavor, color and nutritional punch."

Those who qualify for a tax exemption under this bill would have to receive at least ten percent of their annual income from farming activities. In addition to food storage and processing buildings, dairy buildings and greenhouses could be exempt from taxation if they meet the requirements. A municipality may partially or fully exempt the property tax for a qualifying farm food storage or food processing structure or building. The bill does not mandate the tax exemption but would allow a municipality to consider the exemption.

HB 40 passed the House on a vote of 29-3 and will now be transmitted to the Senate for consideration.