SB 344 Explained: Maryland Extends Agricultural Use Benefits for Community Solar Projects

This is not a substitute for legal advice.  See this link here for the site’s reposting policy.

Maryland has taken another step towards supporting dual-use agricultural and solar energy production on farmland. Signed into law earlier this year by Governor Moore, Senate Bill 344 (SB 344) extends key agricultural use tax assessments to landowners participating in community solar projects that incorporate in agriculture into the site.  At the same time, the law creates a new process that gives landowners and developers clearer answers on the assessment before construction even begins.

The state had previously allowed land involved in agrivoltaics and community solar to be taxed at an agricultural use tax assessment rather than a higher rate. The original legislation allowing for this tax incentive stated that community solar projects utilizing this system must be approved by the Public Service Commission by the end of 2025. However, SB 344 will allow more projects to qualify, extending the approval deadline to December 31, 2030. In Maryland, farmland is taxed on its productive value, the agricultural use assessment, rather than its market value, meaning that utilizing agrivoltaics for property developed for community solar will allow the landowner and community solar developer to lower their tax bills.

The bill also makes beneficial changes to the formal process, allowing applications to be submitted to the State Department of Assessment and Taxation (SDAT) before construction begins. Community solar developers will now be able to obtain a ruling on whether the land qualifies for the agricultural use tax assessment rate before breaking ground. The certainty this bill brings creates benefits to both landowners and developers. The written determination will allow landowners to make a knowledgeable decision on whether it is in their best interest to move forward as planned, negotiate different terms with the tax situation in mind, redesign the project, or walk away from the deal. Developers may also benefit, as they can now design the project from the beginning to meet the agrivoltaics requirements, rather than making later modifications.

The requirements for submitting a pre-construction application include parcel identification and site plans, an agrivoltaics plan detailing which farming activities will coincide with the solar panels, a construction schedule and expected in-service date, and proof of authority to control the site. SDAT will respond within 90 days of submission, either approving, denying, or requesting more information. The farming requirement is enforceable, and SDAT retains the right to rescind the approval for any of the following reasons: the project as built differs significantly from what was described in the application, the operator fails to notify SDAT when construction is finished, the farming activity is not actually being maintained, or the applicant provided false information.

This law will take effect on June 1^st of this year and will apply to tax years starting after June 30^th of this year. This law gives landowners a clearer picture of the full picture when entering into a solar development agreement and advances the state’s push toward dual-use agriculture and energy production projects.