Harvesting the Sun: A Sustainable Approach for Florida's Greenbelt Law.

• Author: Olexa, Michael T.

In 2021, Florida dropped to 21st place for gross receipts of farms, its lowest rank since 1953. (1) The Sunshine State boasts a long history of supporting its farmers with legislation to slash costs and promote incentives. Included in this legislation is the Florida Greenbelt Law, (2) codified in F.S. [section]193.461, which helps farmers by lowering the tax burden on their land that is "used primarily for bona fide agricultural purposes." (3)

Farmers are turning apprehensively toward their John Deere 9RX 640's (4) after the price of diesel rose to $4.62 per gallon on January 30, 2023--up $2.07 from just three years before. (5) At the same time, the "Florida Electric Utility Retail Price is at a current level of 0.1258 USD/kWh," an increase of "11.92% from one year ago" in 2022. (6) As the agricultural industry is caught in the throes of these price hikes, its essential lifelines are limited in effect and availability. This article provides justification for a proposed amendment to F.S. [section]193.461 to clearly provide that the placement of solar facilities on a farmer's land to power its agricultural operations, will not, in itself, preclude an agricultural classification. (7) When carefully regulated, property used to generate solar electricity can align with Greenbelt's legislative purpose of supporting agricultural pursuits. Solar facilities are consistent with this purpose when they are scaled to that operation's needs, kept entirely separate from any outside electrical grid, are not disruptive of the agricultural activities on the land, and are used exclusively to power that operation. Less productive lands are ideal for solar siting as they will minimally disrupt productive agricultural activities. However, co-location of agricultural and solar production can serve as an alternative where all land on the property is sufficiently productive, or where siting on less productive land is not feasible. Restricting the size of solar facilities to match the demonstrated energy needs of the farm would ensure that agriculture remains the primary focus of the property. Preventing landowners from selling or otherwise distributing any electricity generated by these facilities would have the same effect. Ultimately, any electricity generated by solar facilities sited on agricultural land must be used exclusively for the farming operations conducted on that land. Empowering farmers to harvest the sun will give Florida's agricultural industry the competitive edge it needs for success on a national and international level.

Understanding Greenbelt

In 1959, the Florida Legislature passed House Bill 831, (8) an act commonly known today as Florida's Greenbelt Law. (9) Drafters prefaced the bill's substantive text with context for the legislation, highlighting especially that increased tax assessments on agricultural lands had forced "many persons to give up their livelihood" as farmers. (10) In response, legislators crafted a law that enabled farmers to lower the taxable value of their land. The original purpose of this law was to protect Florida's citizens and economy by serving "to perpetuate, and continue, and encourage agricultural pursuits." (11) Over 60 years later, Greenbelt is doing just that. (12)

Greenbelt's tax benefit is only awarded to lands that are classified by a county property appraiser as "agricultural." (13) To receive this classification, the land must be used primarily for a bona fide agricultural purpose--meaning a "good faith commercial agricultural use of the land." (14) Property appraisers may use various criteria in evaluating the use of land, including "[t]he length of time the land has been so used," "[w]hether the use has been continuous," and" [t]he income produced by the property. (15) The latter is known as the "income methodology approach." (16) Additionally, appraisers may also look to "other factors as may become applicable." (17) These factors are available for appraisers to turn to in their evaluation, but they are not requisite. The Florida Supreme Court has maintained that actual agricultural use is "the guidepost in classifying land." (18) As Florida's Fourth District Court of Appeal summarized in Gianolio v. Markham, 564 So. 2d 1131, 1133 (Fla. 4th DCA 1990), agricultural classification requires "that the actual physical use of the land is agricultural... [and] that such use is both 'primary' and 'bona fide.'"

The Proposed Amendment

The authors recommend that F.S. [section]193.461 should be amended to provide that the placement of solar facilities on property used for agricultural purposes will not, in itself, preclude an agricultural classification. (19)

The initial reaction to this proposal will likely beg the question, "What's the limit?" After all, stamping solar panels with the same seal of approval awarded to traditional farming applications seems facially incongruous with the purpose of the law. Moreover, the perceived economic policy implications of this modification may stoke greater skepticism. Landowners are incentivized to pursue agricultural classification by the promise of a lower tax burden. At the same time, government reliance on tax revenue encourages legislators to scrutinize proposals to broaden the statute.

Exploring the text of statutes and related judicial opinions highlights realities that justify amending Greenbelt with solar-inclusive language and, thus, provides guidance for developing limitations that would govern this modification.

Legislative Guidance

While Greenbelt was created to foster agricultural ventures such as cattle farms and citrus groves, the statute recognizes that every inch of land cannot feasibly be covered with cows or crops. From barns and greenhouses to sprinklers and livestock fans, nearly all farms rely on man-made structures for their operation.

Subsection (6)(c)(1) provides that "irrigation systems, including pumps and motors, physically attached to the land shall be considered a part of the average yields per acre and shall have no separately assessable contributory value" under the income methodology approach. (20) The codification of subparagraph (1) in 1999 by House Bill 1639 was the first instance of this distinction in the statute. (21) Other structures--specifically those used for litter containment, frost protection, and pest control--have since received the same protection through the addition of subparagraphs (2)-(4). (22) The use of "shall" in these subparagraphs delineates that appraisers cannot attribute a separate contributory value to these structures when assessing a property under the income methodology approach. (23)

In contrast, residences sited on agricultural land do not fall under Greenbelt's agricultural classification and are instead assessed separately under subsection (3)(d). (24) This exclusion applies only to "the portion of the property consisting of the residence and curtilage." (25) While residences are precluded from agricultural classification, this has no effect on classification of the property's remainder. (26) In the alternative, permanent residences assessed as homesteads can qualify for an exemption of $25,000, which can increase to a total of $50,000 if the assessed valuation is over $50,000. (27)

Unlike residences, solar facilities used to power agricultural operations are deeply similar to the structures listed in (6)(c)(1)-(4) in that they provide a strictly utility-based benefit. For example, solar power and diesel motors alike can power irrigation systems, yet solar facilities are oddly considered tangible personal property beyond the scope of Greenbelt's protection. Instead, [section]196.182(1) offers an 80% exemption from ad valorem taxation for solar devices "installed on real property on or after January 1, 2018," (28) while [section] 193.624(2)(b) provides the same exemption when "determining the assessed value of real property used... [f]or nonresidential purposes." (29)

The inconsistency in valuation is only part of the problem--the greater issue is the lack of explicit support in Greenbelt for solar facilities. In fact, [section]193.461 supports an inference against the use of solar facilities on a farm. Unlike subsection (3)(b)(1), which grants property appraisers the discretion to determine whether the land in question is being used for bona fide agricultural purposes based on apparent factors, subsection (4) requires appraisers to reclassify lands as nonagricultural where the land has been "diverted from an agricultural to a nonagricultural use," or where the land is "no longer being utilized for agricultural purposes." (30) Without the specific, inclusive language enjoyed by irrigation systems and litter containment structures, appraisers may view solar facilities as an abandonment of a property's agricultural use.

This interpretation, under the right circumstances, would present a striking contradiction. A solar facility scaled to accommodate the energy needs of an agricultural operation would be no more disruptive to the land's use than would the "pumps and motors" powering the irrigation systems accepted under (6)(c)(1). (31) In fact, some companies sell solar-powered pump irrigation systems, which could be used to help farmers break away from the expensive diesel engines many Florida farms use to power their irrigation...