Prior to 1999, Georgia levied ad valorem taxes for some agricultural commodities, such as fruit and nut trees and livestock. Legislation passed in 1998 relieved small scale farmers of this additional burden. For other crops, such as ornamental trees and shrubs, the possibility of ad valorem taxation was eliminated.
The legislation is noteworthy not because of the tax impact- farmers will save about $2.5 million a year, or an average of less than $ 20,000 per Georgia county- but because it targets those tax cuts to a well defined "family farm" scale agriculture.
Though not originally written to include only family-owned farms, legislators agreed that a referendum specifically protecting family farms would have a greater chance of success. The legislation received unanimous support from Georgia legislators, with not a single dissenting vote cast in the General Assembly. The amendment then appeared on the Nov. 3 General Election ballot as Referendum A, which passed easily.
THE STATE OF GEORGIA
1997 Georgia H.B. 1350
Enacted April 20, 1998
A BILL TO BE ENTITLED AN ACT
Toamend Part 1 of Article 2 of Chapter 5 of Title 48 of the Official Code of Georgia Annotated, relating to exemptions from ad valorem taxation, so as to provide for an exemption for certain livestock; crops; fruit or nut bearing trees, bushes, or plants; annual and perennial plants; Christmas trees; and plants and trees grown in nurseries for transplantation elsewhere which are grown in this state and remain in the hands of a family owned qualified farm products producer; to provide for conditions and limitations; to consolidate such provisions with certain provisions regarding farm and harvested agricultural products; to repeal certain provisions regarding production; to provide for applicability; to provide for effective dates; to provide for a referendum, effective dates, and automatic repeal; to repeal conflicting laws; and for other purposes.
TEXT: BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1
Part1 of Article 2 of Chapter 5 of Title 48 of the Official Code of Georgia Annotated, relating to exemptions from ad valorem taxation, is amended by striking in its entirety paragraph (7) of Code Section 48-5-40, relating to definitions, which reads as follows:
"(7) ‘Production’ means:
(A)When applied to a laying hen, a period beginning at the time the laying hen comes into production at age six months rather than a period beginning when the laying hen is hatched; or
(B) When applied to a brood cow, a period of nine months from the time the brood cow is able to conceive at age 12 months rather than a period beginning when the brood cow is born."
SECTION 2
Saidpart is further amended by striking paragraph (10) of subsection (a) of Code Section 48-5-41, relating to exemptions from ad valorem taxation, and inserting in its place a new paragraph (10) to read as follows:
(10)[D> All farm products grown in this state and remaining in the hands of the producer during the one year beginning immediately after their production and harvested agricultural products which have a planting-to-harvest cycle of 12 months or less, which are customarily cured or aged for a period in excess of one year after harvesting and before manufacturing, and which are held in this state for manufacturing and processing purposes <D] [A> RESERVED <A] ;".
SECTION 3
Saidpart is further amended by adding a new Code section immediately following Code Section 48-5-41, to be designated Code Section 48-5-41.1, to read as follows:
48-5-41.1.
(a) As used in this Code section, the term:
(1)’Family owned farm entity’ means a family corporation, a family partnership, a family general partnership, a family limited partnership, a family limited corporation, or a family limited liability company all of the interest of which is owned by one or more natural or naturalized citizens related to each other within the fourth degree of civil reckoning. It shall include an estate of which the devisees or heirs are one or more natural or naturalized citizens related to each other within the fourth degree of civil reckoning. It shall include a trust of which the beneficiaries are one or more natural or naturalized citizens related to each other within the fourth degree of civil reckoning. Such family owned farm entity must have derived 80 percent or more of its gross income from bona fide agricultural uses within this state within the year immediately preceding the year in which the exemption provided by this Code section is sought.
(2) ‘Family owned qualified farm products producer’ means an individual or family owned farm entity primarily engaged in the direct cultivation of the soil, including soil removed from the land and placed in pots or containers, or operation of land for the production of qualified farm products. A family owned qualified farm products producer shall not include wholesalers, distributors, storage facility owners, manufacturers, processors, or other similar entities that primarily prepare qualified farm products for any intermediate or final market or that primarily operate to move or facilitate the movement of qualified farm products from a producer to any intermediate or final markets.
(3) ‘Farm products’means only those farm products eligible to qualify for exemption from ad valorem taxation pursuant to the former provisions of paragraph (10)of Code Section 48-5-41 as it existed prior to January 1, 1999.
(4)’Harvested agricultural products’ means only those harvested agricultural products eligible to qualify for exemption from ad valorem taxation pursuant to the former provisions of paragraph (10) of Code Section 48-5-41 as it existed prior to January 1, 1999.
(5) ‘Initial production’ means:
(A)When applied to a laying hen, a period beginning at the time the laying hen comes into production at age six months rather than a period beginning when the laying hen is hatched; or
(B) When applied to a brood cow, a period of nine months from the time the brood cow is able to conceive at age 12 months rather than a period beginning when the brood cow is born.
(6) ‘Producer’ means any entity that produces farm products.
(7)’Qualified farm products’ means livestock; crops; fruit or nut bearing trees, bushes, or plants; annual and perennial plants; Christmas trees; and plants and trees grown in nurseries for transplantation elsewhere. Qualified farm products shall not include standing timber.
(b) The following property shall be exempt from all ad valorem property taxes in this state:
(1)All farm products grown in this state and remaining in the hands of the producer during the one year beginning immediately after their initial production;
(2) Harvested agricultural products which have a planting-to-harvest cycle of 12 months or less, which are customarily cured or aged for a period in excess of one year after harvesting and before manufacturing, and which are held in this state for manufacturing and processing purposes; and
(3) All qualified farm products grown in this state:
(A) Remaining in the hands of a family owned qualified farm products producer;
(B)Still in their natural and unprocessed condition, unless processed solely for further use in the production of other qualified farm products; and
(C) Not held for direct retail sale by someone other than the original family owned qualified farm products producer."
SECTION 4
Unlessprohibited by the federal Voting Rights Act of 1965, as amended, the Secretary of State shall call and conduct an election as provided in this section for the purpose of submitting this Act to the electors of the State of Georgia for approval or rejection. The Secretary of State shall conduct that election on the date of the November, 1998, general election. The Secretary of State shall issue the call and conduct that election as provided by general law. The Secretary of State shall cause the date and purpose of the election to be published once a week for two weeks immediately preceding the date thereof in the official organ of each county in the state. The ballot shall have written or printed thereon the words:
"( ) YES ( ) NO Shall the Act be approved which exempts from ad valorem taxation livestock; crops; fruit or nut bearing trees, bushes, or plants; annual and perennial plants; Christmas trees; and plants and trees grown in nurseries for transplantation elsewhere so long as such items are grown in this state and remain in the hands of a family owned qualified farm products producer thereof?"
All persons desiring to vote for approval of the Act shall vote "Yes," and those persons desiring to vote for rejection of the Act shall vote "No." If more than one-half of the votes cast on such question are for approval of the Act, Sections 1, 2, and 3 of this Act shall become of full force and effect on January 1, 1999, and shall apply to all taxable years beginning on or after such date. If the Act is not so approved or if the election is not conducted as provided in this section, Sections 1, 2, and 3 of this Act shall not become effective and this Act shall be automatically repealed on the first day of January immediately following that election date.
SECTION 5
Exceptas provided in Section 4 of this Act, this Act shall become effective upon its approval by the Governor or upon its becoming law without such approval.
SECTION 6
All laws and parts of laws in conflict with this Act are repealed.
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