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Controlled Environmental Agricultural Facility As Agricultural Property

Concerning the treatment of controlled environment agricultural facilities for property tax purposes.
2022 Regular Session
Fiscal Policy & Taxes
Bill Summary

The act defines a "controlled environment agricultural facility" (CEA facility) as a nonresidential structure and related equipment and appurtenances that combines engineering, horticultural science, and computer management techniques to optimize hydroponics, plant quality, and food production efficiency from the land's water for human or livestock consumption. The sole purpose of growing crops in a CEA facility is to obtain a monetary profit from the wholesale of plant-based food for human or livestock consumption.

Commencing January 1, 2023, for property tax purposes:

  • The definition of "agricultural and livestock products" includes crops grown within a CEA facility in a raw or unprocessed state for human or livestock consumption excluding marijuana or any other nonfood crop agricultural products;
  • The definition of "agricultural equipment" that is used on the farm or ranch or in a CEA facility includes any personal property within a facility, whether attached to a building or not, that is capable of being removed from the facility, and is used in direct connection with the operation of a CEA facility, which facility is used solely for planting, growing, or harvesting crops in a raw or unprocessed state; and
  • On and after January 1, 2023, but prior to January 2, 2028, agricultural equipment that is used in any CEA facility is exempt from the levy and collection of property tax.

Under section 3 of the act, a CEA facility is valued for assessment purposes as all other agricultural property using the cost, market, and income approaches to value. If the sole use of the CEA facility is not the growing of crops for human or livestock consumption, then the property is classified and valued for assessment purposes based on actual use.

Under section 3, as part of the personal declaration that the owner of a CEA facility signs and returns to the county assessor, the act requires the owner to include an affidavit executed by the owner in which the owner affirms that the CEA facility meets the requirements for such a facility as specified in the act. If the crop grown in the CEA facility is hemp, the owner must also include a copy of a license to verify to the assessor that the crop is not marijuana . Section 3 is repealed, effective July 1, 2029.
(Note: This summary applies to this bill as enacted.)


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Bill Text

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The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details