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
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.
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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;
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The definition of agricultural land includes any land underlying or integral to the operation of a CEA facility;
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All other agricultural property does not include a CEA facility that has been in production for at least 2 years; and
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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.
