Colorado 2022 Regular Session

Colorado House Bill HB1301 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	Second Regular Session
	2	+	Seventy-third General Assembly
	3	+	STATE OF COLORADO
	4	+	REREVISED
	5	+	This Version Includes All Amendments
	6	+	Adopted in the Second House
	7	+	LLS NO. 22-0529.02 Bob Lackner x4350
1	8		HOUSE BILL 22-1301
2		-	BY REPRESENTATIVE(S) Soper and Roberts, Holtorf, McLachlan,
3		-	Pelton, Rich, Titone, Will, Bernett, Bockenfeld, Exum, Herod, Hooton,
4		-	Jodeh, Lindsay, Lontine, McCluskie, Young, Geitner, McCormick, Mullica,
5		-	Neville, Valdez D.;
6		-	also SENATOR(S) Donovan and Simpson, Buckner, Ginal, Gonzales,
7		-	Jaquez Lewis, Kolker, Moreno, Pettersen, Scott, Sonnenberg, Fenberg.
	9	+	House Committees Senate Committees
	10	+	Transportation & Local Government Finance
	11	+	A BILL FOR AN ACT
8	12		C
9		-	ONCERNING THE TREATMENT OF CONTROLLED ENVIRONMENT
10		-	AGRICULTURAL FACILITIES FOR PROPERTY TAX PURPOSES
11		-	.
12		-	Be it enacted by the General Assembly of the State of Colorado:
13		-	SECTION 1. In Colorado Revised Statutes, 39-1-102, amend (1.1),
14		-	(1.3) introductory portion, and (1.3)(b); and add (3.3) and (6.2) as follows:
15		-	39-1-102. Definitions. As used in articles 1 to 13 of this title 39,
16		-	unless the context otherwise requires:
17		-	(1.1) (a) "Agricultural and livestock products" means plant or
18		-	animal products in a raw or unprocessed state that are derived from the
19		-	science and art of agriculture, regardless of the use of the product after its
20		-	sale and regardless of the entity that purchases the product. "Agriculture",
21		-	NOTE: This bill has been prepared for the signatures of the appropriate legislative
22		-	officers and the Governor. To determine whether the Governor has signed the bill
23		-	or taken other action on it, please consult the legislative status sheet, the legislative
24		-	history, or the Session Laws.
25		-	________
26		-	Capital letters or bold & italic numbers indicate new material added to existing law; dashes
27		-	through words or numbers indicate deletions from existing law and such material is not part of
28		-	the act. for the purposes of this subsection (1.1), means farming, ranching, animal
29		-	husbandry, and horticulture.
30		-	(b) O
31		-	N AND AFTER JANUARY 1, 2023, FOR THE PURPOSES OF THIS
32		-	SUBSECTION
33		-	(1.1), "AGRICULTURAL AND LIVESTOCK PRODUCTS " INCLUDES
34		-	CROPS GROWN WITHIN A CONTROLLED ENVIRONMENT AGRICULTURAL
35		-	FACILITY IN A RAW OR UNPROCESSED STATE FOR HUMAN OR LIVESTOCK
36		-	CONSUMPTION
37		-	. FOR THE PURPOSES OF THIS SUBSECTION (1.1)(b),
38		-	"
39		-	AGRICULTURAL AND LIVESTOCK PRODUCTS " DOES NOT INCLUDE
40		-	MARIJUANA
41		-	, AS DEFINED IN SECTION 18-18-102 (18)(a), OR ANY OTHER
42		-	NONFOOD CROP AGRICULTURAL PRODUCTS
43		-	.
44		-	(1.3) "Agricultural equipment which
45		-	THAT is used on the farm or
	13	+	ONCERNING THE TREATMENT OF CONTROLLED ENVIRONMENT101
	14	+	AGRICULTURAL FACILITIES FOR PROPERTY TAX PURPOSES .102
	15	+	Bill Summary
	16	+	(Note: This summary applies to this bill as introduced and does
	17	+	not reflect any amendments that may be subsequently adopted. If this bill
	18	+	passes third reading in the house of introduction, a bill summary that
	19	+	applies to the reengrossed version of this bill will be available at
	20	+	http://leg.colorado.gov
	21	+	.)
	22	+	A "controlled environment agricultural facility" (CEA facility) is
	23	+	a structure of not less than 1,000 square feet and related equipment and
	24	+	appurtenances that combines engineering, horticultural science, and
	25	+	computer management techniques to optimize hydroponic plant growing,
	26	+	plant quality, and food production efficiency from the land's water for
	27	+	human or livestock consumption. The primary purpose of growing crops
	28	+	SENATE
	29	+	3rd Reading Unamended
	30	+	May 2, 2022
	31	+	SENATE
	32	+	Amended 2nd Reading
	33	+	April 29, 2022
	34	+	HOUSE
	35	+	3rd Reading Unamended
	36	+	April 18, 2022
	37	+	HOUSE
	38	+	Amended 2nd Reading
	39	+	April 14, 2022
	40	+	HOUSE SPONSORSHIP
	41	+	Soper and Roberts, Holtorf, McLachlan, Pelton, Rich, Titone, Will, Bernett, Bockenfeld,
	42	+	Exum, Herod, Hooton, Jodeh, Lindsay, Lontine, McCluskie, Young
	43	+	SENATE SPONSORSHIP
	44	+	Donovan and Simpson, Buckner, Fenberg, Ginal, Gonzales, Jaquez Lewis, Kolker,
	45	+	Moreno, Pettersen, Scott, Sonnenberg
	46	+	Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
	47	+	Capital letters or bold & italic numbers indicate new material to be added to existing statute.
	48	+	Dashes through the words indicate deletions from existing statute. in a CEA facility is to obtain a monetary profit from the wholesale of
	49	+	plant-based food for human or animal consumption.
	50	+	Commencing January 1, 2023, for property tax purposes:
	51	+	! The definition of "agricultural and livestock products"
	52	+	includes crops grown within a CEA facility for human or
	53	+	livestock consumption. "Agricultural and livestock
	54	+	products" does not include marijuana and hemp, or any
	55	+	other nonfood agricultural products.
	56	+	! The definition of "agricultural equipment" includes any
	57	+	personal property used in connection with the operation of
	58	+	a CEA facility for planting, growing, and harvesting crops;
	59	+	! The definition of "agricultural land" includes any land
	60	+	underlying or integral to the operation of a CEA facility;
	61	+	! "All other agricultural property" does not include a CEA
	62	+	facility that has been in production for at least 2 years; and
	63	+	! Agricultural equipment that is used in any CEA facility is
	64	+	exempt from the levy and collection of property tax.
	65	+	Under the bill, a CEA facility is valued for assessment purposes
	66	+	based on the net operating income derived from the production and sale
	67	+	of the crops grown within the facility and capitalized at the same rate as
	68	+	irrigated agricultural land. The value so determined must be reduced by
	69	+	25% to determine the actual value of the CEA facility for property tax
	70	+	purposes.
	71	+	If the primary use of the CEA facility is not the growing of crops
	72	+	for human or livestock consumption, then the property is classified and
	73	+	valued for assessment purposes as other agricultural property.
	74	+	Be it enacted by the General Assembly of the State of Colorado:1
	75	+	SECTION 1. In Colorado Revised Statutes, 39-1-102, amend2
	76	+	(1.1), (1.3) introductory portion, and (1.3)(b); and add
	77	+	(3.3) and (6.2) as3
	78	+	follows:4
	79	+	39-1-102. Definitions. As used in articles 1 to 13 of this title 39,5
	80	+	unless the context otherwise requires:6
	81	+	(1.1) (a) "Agricultural and livestock products" means plant or7
	82	+	animal products in a raw or unprocessed state that are derived from the8
	83	+	science and art of agriculture, regardless of the use of the product after its9
	84	+	sale and regardless of the entity that purchases the product. "Agriculture",10
	85	+	1301-2- for the purposes of this subsection (1.1), means farming, ranching, animal1
	86	+	husbandry, and horticulture.2
	87	+	(b) ON AND AFTER JANUARY 1, 2023, FOR THE PURPOSES OF THIS3
	88	+	SUBSECTION (1.1), "AGRICULTURAL AND LIVESTOCK PRODUCTS " INCLUDES4
	89	+	CROPS GROWN WITHIN A CONTROLLED ENVIRONMENT AGRICULTURAL5
	90	+	FACILITY IN A RAW OR UNPROCESSED STATE FOR HUMAN OR LIVESTOCK6
	91	+	CONSUMPTION. FOR THE PURPOSES OF THIS SUBSECTION (1.1)(b),7
	92	+	"AGRICULTURAL AND LIVESTOCK PRODUCTS" DOES NOT INCLUDE8
	93	+	MARIJUANA, AS DEFINED IN SECTION 18-18-102 (18)(a), OR ANY OTHER9
	94	+	NONFOOD CROP AGRICULTURAL PRODUCTS .10
	95	+	(1.3) "Agricultural equipment which THAT is used on the farm or11
46	96		ranch
47		-	OR IN A CEA FACILITY in the production of agricultural products":
48		-	(b) Includes:
49		-	(I) Any mechanical system used on the farm or ranch for ~~the~~
50		-	conveyance and storage of animal products in a raw or unprocessed state,
51		-	regardless of whether or not such mechanical system is affixed to ~~real~~
	97	+	OR IN A CEA FACILITY in the production of agricultural products":12
	98	+	(b) Includes:13
	99	+	(I) Any mechanical system used on the farm or ranch for the14
	100	+	conveyance and storage of animal products in a raw or unprocessed state,15
	101	+	regardless of whether or not such mechanical system is affixed to real16
52	102		property; and
53		-	(II) Silviculture personal property that is designed, adapted, and
54		-	used for the planting, growing, maintenance, or harvesting of trees in a raw
55		-	or unprocessed state;
56		-	AND
57		-	(III) ANY PERSONAL PROPERTY WITHIN A FACILITY , WHETHER
58		-	ATTACHED TO A BUILDING OR NOT
59		-	, THAT IS CAPABLE OF BEING REMOVED
60		-	FROM THE FACILITY
61		-	, AND IS USED IN DIRECT CONNECTION WITH THE
62		-	OPERATION OF A CONTROLLED ENVIRONMENT AGRICULTURAL FACILITY
63		-	,
64		-	WHICH FACILITY IS USED SOLELY FOR PLANTING, GROWING, OR HARVESTING
65		-	CROPS IN A RAW OR UNPROCESSED STATE
66		-	.
	103	+	17
	104	+	(II) Silviculture personal property that is designed, adapted, and18
	105	+	used for the planting, growing, maintenance, or harvesting of trees in a19
	106	+	raw or unprocessed state;
	107	+	AND20
	108	+	(III) ANY PERSONAL PROPERTY WITHIN A FACILITY, WHETHER21
	109	+	ATTACHED TO A BUILDING OR NOT, THAT IS CAPABLE OF BEING REMOVED22
	110	+	FROM THE FACILITY, AND IS USED IN DIRECT CONNECTION WITH THE23
	111	+	OPERATION OF A CONTROLLED ENVIRONMENT AGRICULTURAL FACILITY ,24
	112	+	WHICH FACILITY IS USED SOLELY FOR PLANTING, GROWING, OR25
	113	+	HARVESTING CROPS IN A RAW OR UNPROCESSED STATE . 26
67	114		(3.3) "C
68		-	ONTROLLED ENVIRONMENT AGRICULTURAL FACILITY " OR
69		-	"CEA FACILITY" MEANS A NONRESIDENTIAL STRUCTURE AND RELATED
70		-	EQUIPMENT AND APPURTENANCES THAT COMBINES ENGINEERING
71		-	,
72		-	HORTICULTURAL SCIENCE, AND COMPUTERIZED MANAGEMENT TECHNIQUES
73		-	TO OPTIMIZE HYDROPONICS
74		-	, PLANT QUALITY, AND FOOD PRODUCTION
75		-	EFFICIENCY FROM THE LAND
76		-	'S WATER FOR HUMAN OR LIVESTOCK
77		-	CONSUMPTION
78		-	. THE SOLE PURPOSE OF GROWING CROPS IN A CEA FACILITY
79		-	PAGE 2-HOUSE BILL 22-1301 IS TO OBTAIN A MONETARY PROFIT FROM THE WHOLESALE OF PLANT -BASED
80		-	FOOD FOR HUMAN OR LIVESTOCK CONSUMPTION
81		-	.
82		-	(6.2) "H
83		-	YDROPONICS" MEANS A SYSTEM IN WHICH WATER SOLUBLE
84		-	PRIMARY OR SECONDARY PLANT NUTRIENTS OR MICR ONUTRIENTS
85		-	, OR A
86		-	COMBINATION OF SUCH NUTRIENTS
87		-	, ARE PLACED IN INTIMATE CONTACT WITH
88		-	A PLANT
89		-	'S ROOT SYSTEM THAT IS BEING GROWN IN WATER OR AN INERT
90		-	SUPPORTIVE MEDIUM THAT SUPPLIES PHYSICAL SUPPORT FOR THE ROOTS
91		-	.
92		-	SECTION 2. In Colorado Revised Statutes, amend 39-3-122 as
93		-	follows:
94		-	39-3-122. Agricultural equipment used in production of
95		-	agricultural products - CEA facilities - exemption. (1) Agricultural
96		-	equipment which
97		-	THAT is used on any farm or ranch in the production of
98		-	agricultural products shall be IS exempt from the levy and collection of
99		-	property tax.
	115	+	ONTROLLED ENVIRONMENT AGRICULTURAL FACILITY " OR27
	116	+	1301
	117	+	-3- "CEA FACILITY" MEANS A NONRESIDENTIAL STRUCTURE AND RELATED1
	118	+	EQUIPMENT AND APPURTENANCES THAT COMBINES ENGINEERING ,2
	119	+	HORTICULTURAL SCIENCE , AND COMPUTERIZED MANAGEMENT3
	120	+	TECHNIQUES TO OPTIMIZE HYDROPONICS, PLANT QUALITY, AND FOOD4
	121	+	PRODUCTION EFFICIENCY FROM THE LAND 'S WATER FOR HUMAN OR5
	122	+	LIVESTOCK CONSUMPTION . THE SOLE PURPOSE OF GROWING CROPS IN A6
	123	+	CEA
	124	+	FACILITY IS TO OBTAIN A MONETARY PROFIT FROM THE WHOLESALE7
	125	+	OF PLANT-BASED FOOD FOR HUMAN OR LIVESTOCK CONSUMPTION .8 (6.2) "HYDROPONICS" MEANS A SYSTEM IN WHICH WATER SOLUBLE9
	126	+	PRIMARY OR SECONDARY PLANT NUTRIENTS OR MICRONUTRIENTS, OR A10
	127	+	COMBINATION OF SUCH NUTRIENTS, ARE PLACED IN INTIMATE CONTACT11
	128	+	WITH A PLANT'S ROOT SYSTEM THAT IS BEING GROWN IN WATER OR AN12
	129	+	INERT SUPPORTIVE MEDIUM THAT SUPPLIES PHYSICAL SUPPORT FOR THE13
	130	+	ROOTS.14
	131	+	SECTION 2. In Colorado Revised Statutes, amend 39-3-122 as15
	132	+	follows:16
	133	+	39-3-122. Agricultural equipment used in production of17
	134	+	agricultural products - CEA facilities - exemption. (1) Agricultural18
	135	+	equipment which THAT is used on any farm or ranch in the production of19
	136	+	agricultural products shall be IS exempt from the levy and collection of20
	137	+	property tax.21
100	138		(2) O
101	139		N AND AFTER JANUARY 1, 2023, BUT PRIOR TO JANUARY 2,
102		-	2028,
103		-	AGRICULTURAL EQUIPMENT THAT IS USED IN ANY CEA FACILITY IS
104		-	EXEMPT FROM THE LEVY AND COLLECTION OF PROPERTY TAX
105		-	.
106		-	SECTION 3. In Colorado Revised Statutes, add 39-5-134 as
107		-	follows:
108		-	39-5-134. Controlled environment agricultural facility -
109		-	valuation - affidavit - definition - repeal. (1) A
110		-	S USED IN THIS SECTION,
	140	+	22
	141	+	2028, AGRICULTURAL EQUIPMENT THAT IS USED IN ANY CEA FACILITY IS23
	142	+	EXEMPT FROM THE LEVY AND COLLECTION OF PROPERTY TAX .24
	143	+	SECTION 3. In Colorado Revised Statutes, add 39-5-134 as25
	144	+	follows:26
	145	+	39-5-134. Controlled environment agricultural facility -27
	146	+	1301
	147	+	-4- valuation - affidavit - definition - repeal. (1) AS USED IN THIS SECTION,1
111	148		"
112		-	CONTROLLED ENVIRONMENT AGRICULTURAL FACILITY " OR "CEA FACILITY"
113		-	HAS THE SAME MEANING AS SPECIFIED IN SECTION 39-1-102 (3.3).
114		-	(2) A
115		-	CEA FACILITY IS VALUED FOR ASSESSMENT PURPOSES AS ALL
116		-	OTHER AGRICULTURAL PROPERTY USING THE COST
117		-	, MARKET, AND INCOME
118		-	APPROACHES TO VALUE
119		-	.
	149	+	CONTROLLED ENVIRONMENT AGRICULTURAL FACILITY " OR "CEA2
	150	+	FACILITY" HAS THE SAME MEANING AS SPECIFIED IN SECTION 39-1-1023
	151	+	(3.3).4 (2) A CEA FACILITY IS VALUED FOR ASSESSMENT PURPOSES AS ALL5
	152	+	OTHER AGRICULTURAL PROPERTY USING THE COST, MARKET, AND INCOME6
	153	+	APPROACHES TO VALUE.7
120	154		(3) I
121		-	F THE SOLE USE OF THE CEA FACILITY IS NOT THE GROWING OF
122		-	CROPS FOR HUMAN OR LIVESTOCK CONSUMPTION
123		-	, THEN THE PROPERTY IS
124		-	CLASSIFIED AND VALUED FOR ASSESSMENT PURPOSES BASED ON ACTUAL
125		-	USE
126		-	.
127		-	(4) A
128		-	S PART OF THE PERSONAL DECLARATION THE OWNER OF A CEA
129		-	PAGE 3-HOUSE BILL 22-1301 FACILITY SIGNS AND RETURNS TO THE C OUNTY ASSESSOR PURSUANT TO
130		-	SECTIONS
131		-	39-5-107 AND 39-5-108, THE OWNER SHALL INCLUDE AN
132		-	AFFIDAVIT EXECUTED BY THE OWNER IN WHICH THE OWNER AFFIRMS THAT
133		-	THE
134		-	CEA FACILITY MEETS THE REQUIREMENTS OF SECTION 39-1-102 (3.3),
135		-	INCLUDING THE REQUIREMENTS THAT THE FACILITY OPTIMIZES HYDROPONICS
136		-	AND THAT THE SOLE PURPOSE OF THE
137		-	CEA FACILITY IS TO OBTAIN A
138		-	MONETARY PROFIT FROM THE WHOLESALE OF PLANT
139		-	-BASED FOOD FOR
140		-	HUMAN OR LIVESTOCK CONSUMPTION
141		-	. IF THE CROP GROWN IN THE CEA
142		-	FACILITY IS HEMP, THE OWNER MUST ALSO INCLUDE A COPY OF A LICENSE TO
143		-	VERIFY TO THE ASSESSOR THAT THE CROP IS NOT MARIJUANA
144		-	.
145		-	(5) N
146		-	OTWITHSTANDING ANY OTHER PROVISION OF LAW , A CEA
147		-	FACILITY SHALL NOT VIOLATE THE TERMS AND CONDITIONS OF ANY
148		-	APPLICABLE WATER COURT DECREE ISSUED PURSUANT TO ARTICLE
149		-	92 OF
150		-	TITLE
151		-	37 AND SHALL NOT MATERIALLY INJURE WATER RIGHTS OR
152		-	CONDITIONAL WATER RIGHTS GRANTED UNDER ARTICLE
153		-	92 OF TITLE 37.
	155	+	F THE
	156	+	SOLE USE OF THE CEA FACILITY IS NOT THE GROWING OF8
	157	+	CROPS FOR HUMAN OR LIVESTOCK CONSUMPTION , THEN THE PROPERTY IS9
	158	+	CLASSIFIED AND VALUED FOR ASSESSMENT PURPOSES BASED ON ACTUAL10
	159	+	USE.11
	160	+	(4) AS PART OF THE PERSONAL DECLARATION THE OWNER OF A12
	161	+	CEA FACILITY SIGNS AND RETURNS TO THE COUNTY ASSESSOR PURSUANT13
	162	+	TO SECTIONS 39-5-107 AND 39-5-108, THE OWNER SHALL INCLUDE AN14
	163	+	AFFIDAVIT EXECUTED BY THE OWNER IN WHICH THE OWNER AFFIRMS THAT15
	164	+	THE CEA FACILITY MEETS THE REQUIREMENTS OF SECTION 39-1-102 (3.3),16
	165	+	INCLUDING THE REQUIREMENTS THAT THE FACILITY OPTIMIZES17
	166	+	HYDROPONICS AND THAT THE SOLE PURPOSE OF THE CEA FACILITY IS TO18
	167	+	OBTAIN A MONETARY PROFIT FROM THE WHOLESALE OF PLANT-BASED19
	168	+	FOOD FOR HUMAN OR LIVESTOCK CONSUMPTION. IF THE CROP GROWN IN20
	169	+	THE CEA FACILITY IS HEMP, THE OWNER MUST ALSO INCLUDE A COPY OF21
	170	+	A LICENSE TO VERIFY TO THE ASSESSOR THAT THE CROP IS NOT22
	171	+	MARIJUANA.23
	172	+	(5) NOTWITHSTANDING ANY OTHER PROVISION OF LAW , A CEA24
	173	+	FACILITY SHALL NOT VIOLATE THE TERMS AND CONDITIONS OF ANY25
	174	+	APPLICABLE WATER COURT DECREE ISSUED PURSUANT TO ARTICLE 92 OF26
	175	+	TITLE 37 AND SHALL NOT MATERIALLY INJURE WATER RIGHTS OR27
	176	+	1301
	177	+	-5- CONDITIONAL WATER RIGHTS GRANTED UNDER ARTICLE 92 OF TITLE 37.1
154	178		(6) T
155	179		HIS SECTION IS REPEALED, EFFECTIVE JULY 1, 2029.
156		-	SECTION 4. Act subject to petition - effective date. This act
157		-	takes effect at 12:01 a.m. on the day following the expiration of the
158		-	ninety-day period after final adjournment of the general assembly; except
159		-	that, if a referendum petition is filed pursuant to section 1 (3) of article V
160		-	of the state constitution against this act or an item, section, or part of this act
161		-	within such period, then the act, item, section, or part will not take effect
162		-	unless approved by the people at the general election to be held in
163		-	PAGE 4-HOUSE BILL 22-1301 November 2022 and, in such case, will take effect on the date of the official
164		-	declaration of the vote thereon by the governor.
165		-	____________________________ ____________________________
166		-	Alec Garnett Steve Fenberg
167		-	SPEAKER OF THE HOUSE PRESIDENT OF
168		-	OF REPRESENTATIVES THE SENATE
169		-	____________________________ ____________________________
170		-	Robin Jones Cindi L. Markwell
171		-	CHIEF CLERK OF THE HOUSE SECRETARY OF
172		-	OF REPRESENTATIVES THE SENATE
173		-	APPROVED________________________________________
174		-	(Date and Time)
175		-	_________________________________________
176		-	Jared S. Polis
177		-	GOVERNOR OF THE STATE OF COLORADO
178		-	PAGE 5-HOUSE BILL 22-1301
	180	+	2
	181	+	SECTION 4. Act subject to petition - effective date. This act3
	182	+	takes effect at 12:01 a.m. on the day following the expiration of the4
	183	+	ninety-day period after final adjournment of the general assembly; except5
	184	+	that, if a referendum petition is filed pursuant to section 1 (3) of article V6
	185	+	of the state constitution against this act or an item, section, or part of this7
	186	+	act within such period, then the act, item, section, or part will not take8
	187	+	effect unless approved by the people at the general election to be held in9
	188	+	November 2022 and, in such case, will take effect on the date of the10
	189	+	official declaration of the vote thereon by the governor.11
	190	+	1301
	191	+	-6-