Summary
The Oregon Supreme Court considered whether an administrative rule could prohibit consideration of profitability and gross farm income when determining whether land is agricultural land suitable for farm use under Goal 3. The court held that both factors may be considered under ORS 215.203(2)(a), and that the rule prohibiting their consideration was invalid. The court reversed and remanded the cases to the Land Use Board of Appeals for further proceedings.
Topics
Practice areas
Questions Presented
- Whether ORS 215.203(2)(a), as incorporated into Goal 3, permits consideration of profitability in determining whether land is suitable for farm use.
- Whether ORS 215.203(2)(a), as incorporated into Goal 3, permits consideration of gross farm income in determining whether land is suitable for farm use.
- Whether OAR XXX-XXX-XXXX(5), which prohibits consideration of profitability or gross farm income, is invalid because it conflicts with the statute and Goal 3.
Holdings
- A local government may consider profitability, including the monetary benefits or advantages that may be obtained from farm use and the associated costs or expenses, when determining whether land is suitable for farm use under Goal 3.
- A local government may consider actual or potential gross farm income, along with other relevant considerations, when determining whether land is suitable for farm use under Goal 3.
- OAR XXX-XXX-XXXX(5) is invalid because it precludes local governments from considering profitability or gross farm income in determining whether land is agricultural land because it is suitable for farm use under Goal 3.
Key quotations
“profit does not mean "gross income."” (342 Or. at 622)
“We therefore hold that, because Goal 3 provides that "farm use" is defined by ORS 215.203, which includes a definition of "farm use" as "the current employment of land for the primary purpose of obtaining a profit in money[, ]" LCDC may not preclude a local government making a land use decision from considering "profitability" or "gross farm income" in determining whether land is "agricultural land" because it is "suitable for farm use" under Goal 3.” (342 Or. at 623)
Factual background
Douglas County had designated the two disputed parcels for exclusive farm use and classified them as farm forest transitional. The landowners sought rezoning and comprehensive-plan changes to allow five-acre rural residential lots, asserting that the properties were not productive and could not be profitably used for farming or grazing. County experts concluded that the parcels had significant soil, terrain, irrigation, and productivity limitations, and the county relied in part on those conclusions in determining that the properties were not agricultural land under Goal 3.
Procedural history
Douglas County granted applications to change the comprehensive-plan and zoning designations of two parcels to permit five-acre rural residential lots. Friends of Douglas County and individuals, including Wetherell, appealed to LUBA, which remanded after concluding that the county improperly considered profitability and gross farm income. The Court of Appeals held that the administrative rule was invalid insofar as it prohibited consideration of gross farm income but upheld its prohibition on considering profitability. The Oregon Supreme Court granted review, reversed LUBA, affirmed the Court of Appeals in part, reversed it in part, and remanded to LUBA.
Remand instructions
LUBA must reconsider its decisions concerning the county's land-use determinations in light of the Supreme Court's conclusion that profitability and gross farm income may be considered and that OAR XXX-XXX-XXXX(5) is invalid to the extent it precludes such consideration.