Friends of Douglas County v. Douglas County

Where a ranch leases the subject property and adjacent properties for grazing, and where the adjacent properties are in capability classes I-IV/I-VI, the subject property is both within and adjacent to a “farm unit,” and is therefore “agricultural land” under OAR 660-033-0020(1)(b), even where the lease is not in writing, the owner of the subject property receives “de minimis” compensation from the ranch, the ranch does not object to an application to amend the subject property’s comprehensive plan designation and rezone the subject property for residential uses, and the subject property adds “no significant economic value to grazing operations on the adjacent properties.”

The 47-acre subject property and 160 acres of adjacent property are used for rotational grazing under a lease with a nearby ranch. The adjacent properties contain soil in capability classes I-IV. Intervenors applied to amend the subject property’s comprehensive plan designation from Agricultural to Rural Residential-5 Acre and to rezone the property from Farm Grazing to Rural Residential-5 Acre. The county approved the application and this appeal followed.

Under Statewide Planning Goal 3 (Agricultural Lands), “[a]gricultural lands shall be preserved and maintained for farm use.” Under OAR 660-033-0020(1)(a), which was adopted to implement Goal 3, “[a]gricultural land” includes “[l]ands classified . . . as predominantly Class I-IV soils” and “[l]and in other soil classes that is suitable for farm use.” In addition, under OAR 660-033-0020(1)(b), “[l]and in capability classes other than I-IV[] that is adjacent to or intermingled with lands in capability classes I-IV[] within a farm unit, shall be inventoried as agricultural lands even though this land may not be cropped or grazed.” Under OAR 150-308-1010(2)(a), which relates to tax assessment based on “farm use,” a “farm unit” is “a farming enterprise which includes all parcels being farmed by a single operator, whether the operator owns or leases the farmland.” Because intervenors’ lease with the ranch is not in writing, because intervenors receive “de minimis” compensation from the ranch, because the owner of the ranch did not object to the application even though they had objected to similar applications for other properties, and because a report submitted by intervenor concludes the subject property adds “no significant economic value to grazing operations on adjacent properties,” the county concluded the subject property was not within a “farm unit” and was therefore not “agricultural land.”

In the second assignment of error, petitioners argue the county misconstrued OAR 660-033-0020(1)(b) and that, because the ranch’s grazing operation includes the adjacent properties as well as the subject property, the subject property is not only adjacent to a farm unit but included within the farm unit. Intervenors respond that the county correctly concluded that, because intervenors’ lease with the ranch is not in writing, and because intervenors receive minimal compensation from the ranch, the subject property is “not integral” to the ranch operation. Assuming, without deciding, that the definition of “farm unit” at OAR 150-308-1010(2)(a) applies, LUBA agrees with petitioners that, because the ranch leases land for grazing, the ranch is a “farm unit.” In turn, because the subject property is grazed as part of the ranch operation, and because the adjacent properties are in capability classes I-IV and also grazed as part of the ranch operation, the subject property is both within and adjacent to a “farm unit,” and is therefore “agricultural land” under OAR 660-033-0020(1)(b). The second assignment of error is sustained, and the county’s decision is REVERSED.