Tax Credit for Urban Agriculture Proposed in Maryland

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Urban agriculture is often stymied by the high cost of real estate and real property taxes.  To address this issue, on March 11th, 2010, Maryland House Delegate Anne Healey (D-Prince George’s County) introduced House Bill 1062, legislation authorizing local governments to give a five-year property tax credit for urban agricultural property.

To qualify for the credit, the property must be located in one of the state’s priority funding areas, a designation designed to promote smart growth. Priority funding areas are developed communities, with existing infrastructure, in which the State wishes to concentrate new investment as a way to combat sprawl and the negative environmental impacts of Greenfield development. Qualifying sites must also be between one-eighth of an acre and two acres and be used exclusively for urban agricultural purposes.

Recognizing that urban agriculture involves many different stages of food production, processing, distribution and consumption, the legislation allows numerous activities, beyond crop production, to count as urban agriculture. These include: environmental mitigation activities, including stormwater abatement and groundwater protection; community development activities, including  recreational activities, food donations, and food preparation and canning classes; economic development activities, including employment and training opportunities; direct sales to restaurants and institutions; and temporary produce stands used for the sale of produce raised on the premises.

The bill has a provisional sunset clause.  The tax credit can be ended after three years if local governments find that it is ineffective in promoting urban agriculture. If the credit is effective, the legislation allows it to be extended for an additional five years.