Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-0529.02 Bob Lackner x4350
HOUSE BILL 22-1301
House Committees Senate Committees
Transportation & Local Government
A BILL FOR AN ACT
C
ONCERNING THE TREATMENT OF CONTROLLED ENVIRONMENT101
AGRICULTURAL FACILITIES FOR PROPERTY TAX PURPOSES .102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
A "controlled environment agricultural facility" (CEA facility) is
a structure of not less than 1,000 square feet and related equipment and
appurtenances that combines engineering, horticultural science, and
computer management techniques to optimize hydroponic plant growing,
plant quality, and food production efficiency from the land's water for
human or livestock consumption. The primary purpose of growing crops
HOUSE SPONSORSHIP
Soper and Roberts, Holtorf, McLachlan, Pelton, Rich, Titone, Will
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. in a CEA facility is to obtain a monetary profit from the wholesale of
plant-based food for human or animal consumption.
Commencing January 1, 2023, for property tax purposes:
! The definition of "agricultural and livestock products"
includes crops grown within a CEA facility for human or
livestock consumption. "Agricultural and livestock
products" does not include marijuana and hemp, or any
other nonfood agricultural products.
! The definition of "agricultural equipment" includes any
personal property used in connection with the operation of
a CEA facility for planting, growing, and harvesting crops;
! The definition of "agricultural land" includes any land
underlying or integral to the operation of a CEA facility;
! "All other agricultural property" does not include a CEA
facility that has been in production for at least 2 years; and
! Agricultural equipment that is used in any CEA facility is
exempt from the levy and collection of property tax.
Under the bill, a CEA facility is valued for assessment purposes
based on the net operating income derived from the production and sale
of the crops grown within the facility and capitalized at the same rate as
irrigated agricultural land. The value so determined must be reduced by
25% to determine the actual value of the CEA facility for property tax
purposes.
If the primary 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 as other agricultural property.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 39-1-102, amend2
(1.1), (1.3) introductory portion, and (1.3)(b); and add (1.6)(a)(VI),3
(1.6)(b)(III), and (3.3) as follows:4
39-1-102. Definitions. As used in articles 1 to 13 of this title 39,5
unless the context otherwise requires:6
(1.1) "Agricultural and livestock products" means:7
(a) Plant or animal products in a raw or unprocessed state that are8
derived from the science and art of agriculture, regardless of the use of9
the product after its sale and regardless of the entity that purchases the10
HB22-1301-2- product. "Agriculture", for the purposes of this subsection (1.1), means1
farming, ranching, animal husbandry, and horticulture.2
(b) O
N AND AFTER JANUARY 1, 2023, FOR THE PURPOSES OF THIS3
SUBSECTION (1.1), "AGRICULTURAL AND LIVESTOCK PRODUCTS " INCLUDES4
CROPS GROWN WITHIN A CONTROLLED ENVIRONMENT AGRICULTURAL5
FACILITY FOR HUMAN OR LIVESTOCK CONSUMPTION . FOR THE PURPOSES6
OF THIS SUBSECTION (1.1)(b), "AGRICULTURAL AND LIVESTOCK7
PRODUCTS" DOES NOT INCLUDE MARIJUANA AND HEMP , AS DEFINED IN8
SECTION 44-10-103, OR ANY OTHER NONFOOD AGRICULTURAL PRODUCTS .9
(1.3) "Agricultural equipment which
THAT is used on the farm or10
ranch
OR IN A CEA FACILITY in the production of agricultural products":11
(b) Includes:12
(I) Any mechanical system used on the farm or ranch for the13
conveyance and storage of animal products in a raw or unprocessed state,14
regardless of whether or not such mechanical system is affixed to real15
property; and
16
(II) Silviculture personal property that is designed, adapted, and17
used for the planting, growing, maintenance, or harvesting of trees in a18
raw or unprocessed state;
AND19
(III) A
NY PERSONAL PROPERTY USED IN C ONNECTION WITH THE20
OPERATION OF A CONTROLLED ENVIRONMENT AGRICULTURAL FACILITY21
FOR PLANTING, GROWING, AND HARVESTING CROPS.22
(1.6) (a) "Agricultural land", whether used by the owner of the23
land or a lessee, means one of the following:24
(VI) A
NY LAND UNDERLYING OR INTEGRAL TO THE OPERATION OF25
A CEA FACILITY.26
(b) (III) O
N AND AFTER JANUARY 1, 2023, "ALL OTHER27
HB22-1301
-3- AGRICULTURAL PROPERTY " DOES NOT INCLUDE A CONTROLLED1
ENVIRONMENT AGRICULTURAL FACILITY THAT HAS BEEN IN PRODUCTION2
FOR AT LEAST TWO YEARS.3
(3.3) "C
ONTROLLED ENVIRONMENT AGRICULTURAL FACILITY " OR4
"CEA
FACILITY" MEANS A STRUCTURE OF NO LESS THAN ONE THOUSAND5
SQUARE FEET AND RELATED EQUIPMENT AND APPURTENANCES THAT6
COMBINES ENGINEERING, HORTICULTURAL SCIENCE, AND COMPUTERIZED7
MANAGEMENT TECHNIQUES TO OPTIMIZE HYDROPONIC PLANT GROWING ,8
PLANT QUALITY, AND FOOD PRODUCTION EFFICIENCY FROM THE LAND 'S9
WATER FOR HUMAN OR LIVESTOCK CONSUMPTION . THE PRIMARY PURPOSE10
OF GROWING CROPS IN A CEA FACILITY IS TO OBTAIN A MONETARY PROFIT11
FROM THE WHOLESALE OF PLANT -BASED FOOD FOR HUMAN OR LIVESTOCK12
CONSUMPTION.13
SECTION 2. In Colorado Revised Statutes, amend 39-3-122 as14
follows:15
39-3-122. Agricultural equipment used in production of16
agricultural products - CEA facilities - exemption. (1) Agricultural17
equipment which
THAT is used on any farm or ranch in the production of18
agricultural products shall be IS exempt from the levy and collection of19
property tax.20
(2) O
N AND AFTER JANUARY 1, 2023, AGRICULTURAL EQUIPMENT21
THAT IS USED IN ANY CEA FACILITY IS EXEMPT FROM THE LEVY AND22
COLLECTION OF PROPERTY TAX.23
SECTION 3. In Colorado Revised Statutes, add 39-5-134 as24
follows:25
39-5-134. Controlled environment agricultural facility -26
valuation - definition. (1) A
S USED IN THIS SECTION, "CONTROLLED27
HB22-1301
-4- ENVIRONMENT AGRICULTURAL FACILITY " OR "CEA FACILITY" HAS THE1
SAME MEANING AS SPECIFIED IN SECTION 39-1-102 (3.3).2
(2) A
CEA FACILITY IS VALUED FOR ASSESSMENT PURPOSES BASED3
ON THE NET OPERATING INCOME DERIVED FROM THE PRODUCTION AND4
SALE OF THE CROPS GROWN WITHIN THE FACILITY , AND CAPITALIZED AT5
THE SAME RATE AS IRRIGATED AGRICULTURAL LAND . THE VALUE SO6
DETERMINED MUST BE REDUCED BY TWENTY FIVE PERCENT TO DETERMINE7
THE ACTUAL VALUE OF THE CEA FACILITY FOR PROPERTY TAX PURPOSES.8
(3) I
F THE PRIMARY USE OF THE CEA FACILITY IS NOT THE9
GROWING OF CROPS FOR HUMAN OR LIVESTOCK CONSUMPTION , THEN THE10
PROPERTY IS CLASSIFIED AND VALUED FOR ASSESSMENT PURPOSES AS11
OTHER AGRICULTURAL PROPERTY .12
SECTION 4. Act subject to petition - effective date. This act13
takes effect at 12:01 a.m. on the day following the expiration of the14
ninety-day period after final adjournment of the general assembly; except15
that, if a referendum petition is filed pursuant to section 1 (3) of article V16
of the state constitution against this act or an item, section, or part of this17
act within such period, then the act, item, section, or part will not take18
effect unless approved by the people at the general election to be held in19
November 2022 and, in such case, will take effect on the date of the20
official declaration of the vote thereon by the governor.21
HB22-1301
-5-