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State officials, assessors and farmers debate widening agricultural tax classification to include poultry, pigs and other non‑grazing operations
Summary
State property tax officials and county assessors told a legislative review committee that Colorado's preferential agricultural assessment is tied to the land's "earning or productive capacity" as defined in the constitution and statute, while farmers and advocates urged careful expansion to cover pasture‑based poultry and pigs with guardrails to prevent unintended tax losses.
Property tax administrators, county assessors and farm advocates told a legislative review panel that Colorado's agricultural preferential assessment is rooted in the state constitution and statute and is applied by converting income from the land into value.
Joanne Groff, the property tax administrator, told the Water Resources and Agriculture Review Committee that the constitution requires valuation of agricultural land to rest on "consideration of the earning or productive capacity of that land" and that statute establishes a capitalization rate and procedural review. Kyle Hooper of the Division of Property Taxation explained the division's income‑based model for ranch valuation, which uses carrying‑capacity metrics (AUMs), published rental rates and a statutory capitalization factor (discussed in testimony as 13%) to convert net income into a per‑acre value.
County assessors reiterated a use‑based test for preferential assessment. Weld County Assessor Brenda Donas said assessors determine eligibility by whether the land is actually used as agricultural land; the preferential value applies only to land and not to residences or outbuildings, which remain assessed at market‑related rates. Eagle County Assessor Mark Chapin, representing the Assessors Association, said resort counties confront wide market‑to‑agricultural valuation gaps and urged clearer statutory parameters to reduce litigation.
Lawmakers asked about whether non‑grazing food production—for example, pasture‑raised poultry, pigs or beekeeping—should qualify for agricultural designation. Hooper and Groff warned of unintended consequences if the definition of "agriculture" is broadened without firm guardrails: small urban beekeepers or backyard hobbyists could claim preferential land valuation unless statutes or regulations include size, commercialization, animal handling, or licensure thresholds. Hooper and assessors suggested alternatives such as expanding targeted personal‑property exemptions (as was done for some greenhouse operations) or creating a new, narrowly defined classification for "feeding operations" that would be valued differently than grazing land.
Producers and advocates urged accommodation for beginning farmers and regenerative enterprises. Tyler Garrett of Rocky Mountain Farmers Union and Ayla Holly of Sisu Farms said pasture‑based poultry and pork operations can be genuinely land‑dependent and should be considered, but only with clear, enforceable criteria (licenses, demonstrated commercial scale, movement of birds on pasture) to prevent erosion of local school and service tax bases.
What happens next: assessors and the Division of Property Taxation said they are open to working with the Legislature on narrowly tailored statutory language and on valuation methods if a new classification is considered. Several legislators asked staff to return with draft options and to quantify fiscal impacts for different size and activity thresholds.
