S.F. No. 2, as introduced - 87th Legislative Session (2011-2012) Posted on Jan 07, 2011
1.2relating to taxation; property; restoring green acres and agricultural classifications
1.3to pre-2008 status;amending Minnesota Statutes 2010, sections 273.111,
1.4subdivisions 3, 11a; 273.13, subdivision 23; repealing Minnesota Statutes 2010,
1.5sections 273.1108; 273.111, subdivisions 3a, 4, 8, 9, 9a, 11; 273.114; 273.1384,
1.6subdivision 2; Laws 2008, chapter 366, article 6, section 52.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2010, section 273.111, subdivision 3, is amended to read:
1.9 Subd. 3. Requirements. (a) Real estate consisting of ten acres or more or a nursery
1.10or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section
1.12devoted to agricultural use, and meets the qualifications of subdivision 6, and either:
1.13 (1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
1.14owner or is real estate which is farmed with the real estate which contains the homestead
1.16 (2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
1.17or any combination thereof, for a period of at least seven years prior to application for
1.18benefits under the provisions of this section, or is real estate which is farmed with the
1.19real estate which qualifies under this clause and is within four townships or cities or
1.20combination thereof from the qualifying real estate; or
1.21 (3) is the homestead of an individual who is part of an entity described in paragraph
1.22(b), clause (1), (2), or (3); or
1.23 (4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
1.24partnership, or corporation which also owns the nursery or greenhouse operations on the
2.1parcel or parcels, provided that only the acres used to produce nursery stock qualify
2.2for treatment under this section.
2.3 (b) Valuation of real estate under this section is limited to parcels owned by
2.4individuals except for:
2.5 (1) a family farm entity or authorized farm entity regulated under section
2.6 (2) an entity, not regulated under section
2.7members, partners, or shareholders are related and at least one of the members, partners,
2.8or shareholders either resides on the land or actively operates the land; and
2.9 (3) corporations that derive 80 percent or more of their gross receipts from the
2.10wholesale or retail sale of horticultural or nursery stock.
2.11 The terms in this paragraph have the meanings given in section
2.13 (c) Land that previously qualified for tax deferment under this section and no longer
2.14qualifies because it is not primarily used for agricultural purposes but would otherwise
2.16for a period of at least three years will not be required to make payment of the previously
2.17deferred taxes, notwithstanding the provisions of subdivision 9. Sale of the land prior to
2.18the expiration of the three-year period requires payment of deferred taxes as follows: sale
2.19in the year the land no longer qualifies requires payment of the current year's deferred
2.20taxes plus payment of deferred taxes for the two prior years; sale during the second year
2.21the land no longer qualifies requires payment of the current year's deferred taxes plus
2.22payment of the deferred taxes for the prior year; and sale during the third year the land
2.23no longer qualifies requires payment of the current year's deferred taxes. Deferred taxes
2.24shall be paid even if the land qualifies pursuant to subdivision 11a. When such property is
2.25sold or no longer qualifies under this paragraph, or at the end of the three-year period,
2.26whichever comes first, all deferred special assessments plus interest are payable in equal
2.27installments spread over the time remaining until the last maturity date of the bonds issued
2.28to finance the improvement for which the assessments were levied. If the bonds have
2.29matured, the deferred special assessments plus interest are payable within 90 days. The
2.30provisions of section
2.31Penalties are not imposed on any such special assessments if timely paid.
2.32 (d) Land that is enrolled in the reinvest in Minnesota program under sections
2.34Law 99-198, or a similar state or federal conservation program qualifies for valuation and
2.35assessment deferral under this section if it was in agricultural use before enrollment
3.3EFFECTIVE DATE.This section is effective for assessment year 2011 and
3.4thereafter, for taxes payable in 2012 and thereafter.
3.5 Sec. 2. Minnesota Statutes 2010, section 273.111, subdivision 11a, is amended to read:
3.6 Subd. 11a. Continuation of tax treatment upon sale or other event. (a) When
3.7real property qualifying under
3.8additional taxes or deferred special assessments plus interest shall be extended against the
3.9property provided the property continues to qualify pursuant to
3.103 and 6, and provided the new owner files an application for continued deferment within
3.1130 days after the sale or transfer.
3.12For purposes of meeting the income requirements of subdivision 6, the property
3.13purchased shall be considered in conjunction with other qualifying property owned by
3.15(b) The following transfers do not constitute a change of ownership of property
3.16qualifying under subdivision 3:
3.17(1) death of a property owner when a surviving owner retains ownership of the
3.19(2) divorce of a married couple when one of the spouses retains ownership of the
3.21(3) marriage of a single property owner when that owner retains ownership of the
3.22property in whole or in part thereafter;
3.23(4) organization into or reorganization of a farm entity ownership under section
3.25organizational changes; and
3.26(5) placement of the property in trust provided that the individual owners of the
3.27property are the grantors of the trust and they maintain the same beneficial interest both
3.28before and after placement of the property in trust.
3.29EFFECTIVE DATE.This section is effective for assessment year 2011 and
3.30thereafter, for taxes payable in 2012 and thereafter.
3.31 Sec. 3. Minnesota Statutes 2010, section 273.13, subdivision 23, is amended to read:
3.32 Subd. 23. Class 2. (a)
4.3immediately surrounding one acre of land has the same class rates as class 1a or 1b
4.4property under subdivision 22. The value of the remaining land including improvements
4.5up to the first tier valuation limit of agricultural homestead property has a net class rate
4.6of 0.5 percent of market value. The remaining property over the first tier has a class rate
4.7of one percent of market value. For purposes of this subdivision, the "first tier valuation
4.8limit of agricultural homestead property" and "first tier" means the limit certified under
4.24wood and wood products
4.25used exclusively for growing trees for timber, lumber, and wood and wood products, if
4.26the owner has participated or is participating in a cost-sharing program for afforestation,
4.27reforestation, or timber stand improvement on that particular property, administered
4.28or coordinated by the commissioner of natural resources; or (3) real estate that is
4.29nonhomestead agricultural land.
4.34has a net class rate of one percent of market value unless it
5.21,920 acres statewide per taxpayer that is being managed under a forest management plan
5.3that meets the requirements of chapter 290C, but is not enrolled in the sustainable forest
5.4resource management incentive program. It has a class rate of .65 percent, provided that
5.5the owner of the property must apply to the assessor in order for the property to initially
5.6qualify for the reduced rate and provide the information required by the assessor to verify
5.7that the property qualifies for the reduced rate. If the assessor receives the application
5.8and information before May 1 in an assessment year, the property qualifies beginning
5.9with that assessment year. If the assessor receives the application and information after
5.10April 30 in an assessment year, the property may not qualify until the next assessment
5.11year. The commissioner of natural resources must concur that the land is qualified. The
5.12commissioner of natural resources shall annually provide county assessors verification
5.13information on a timely basis. The presence of a minor, ancillary nonresidential structure
5.14as defined by the commissioner of revenue does not disqualify the property from
5.15classification under this paragraph.
5.17acres or more, used during the preceding year for agricultural purposes. "Agricultural
5.18purposes" as used in this section means the raising, cultivation, drying, or storage of
5.19agricultural products for sale, or the storage of machinery or equipment used in support
5.20of agricultural production by the same farm entity. For a property to be classified as
5.21agricultural based only on the drying or storage of agricultural products, the products
5.22being dried or stored must have been produced by the same farm entity as the entity
5.23operating the drying or storage facility. "Agricultural purposes" also includes enrollment
5.24in the Reinvest in Minnesota program under sections
5.25Conservation Reserve Program as contained in Public Law 99-198 or a similar state
5.26or federal conservation program if the property was classified as agricultural (i) under
5.27this subdivision for the assessment year 2002 or (ii) in the year prior to its enrollment.
5.28Contiguous acreage on the same parcel, or contiguous acreage on an immediately adjacent
5.29parcel under the same ownership, may also qualify as agricultural land, but only if it
5.30is pasture, timber, waste, unusable wild land, or land included in state or federal farm
5.31programs. Agricultural classification for property shall be determined excluding the
5.32house, garage, and immediately surrounding one acre of land, and shall not be based
5.33upon the market value of any residential structures on the parcel or contiguous parcels
5.34under the same ownership.
5.36raising or cultivating agricultural products, shall be considered as agricultural land. To
6.1qualify under this paragraph, property that includes a residential structure must be used
6.2intensively for one of the following purposes:
6.3 (i) for drying or storage of grain or storage of machinery or equipment used to
6.4support agricultural activities on other parcels of property operated by the same farming
6.6 (ii) as a nursery, provided that only those acres used to produce nursery stock are
6.7considered agricultural land;
6.8 (iii) for livestock or poultry confinement, provided that land that is used only for
6.9pasturing and grazing does not qualify; or
6.10 (iv) for market farming; for purposes of this paragraph, "market farming" means the
6.11cultivation of one or more fruits or vegetables or production of animal or other agricultural
6.12products for sale to local markets by the farmer or an organization with which the farmer
6.15use of that property is the leasing to, or use by another person for agricultural purposes.
6.16 Classification under this subdivision is not determinative for qualifying under
6.19purposes only, any locally administered agricultural policies or land use restrictions that
6.20define minimum or maximum farm acreage.
6.22production for sale of:
6.23 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
6.24animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
6.25bees, and apiary products by the owner;
6.26 (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
6.27for agricultural use;
6.28 (3) the commercial boarding of horses, which may include related horse training and
6.29riding instruction, if the boarding is done on property that is also used for raising pasture
6.30to graze horses or raising or cultivating other agricultural products as defined in clause (1);
6.31 (4) property which is owned and operated by nonprofit organizations used for
6.32equestrian activities, excluding racing;
6.33 (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
6.35 (6) insects primarily bred to be used as food for animals;
7.1 (7) trees, grown for sale as a crop, including short rotation woody crops, and not
7.2sold for timber, lumber, wood, or wood products; and
7.3 (8) maple syrup taken from trees grown by a person licensed by the Minnesota
7.4Department of Agriculture under chapter 28A as a food processor.
7.6industrial purposes, including but not limited to:
7.7 (1) wholesale and retail sales;
7.8 (2) processing of raw agricultural products or other goods;
7.9 (3) warehousing or storage of processed goods; and
7.10 (4) office facilities for the support of the activities enumerated in clauses (1), (2),
7.12the assessor shall classify the part of the parcel used for agricultural purposes as class
7.131b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
7.14use. The grading, sorting, and packaging of raw agricultural products for first sale is
7.15considered an agricultural purpose. A greenhouse or other building where horticultural
7.16or nursery products are grown that is also used for the conduct of retail sales must be
7.17classified as agricultural if it is primarily used for the growing of horticultural or nursery
7.18products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
7.19those products. Use of a greenhouse or building only for the display of already grown
7.20horticultural or nursery products does not qualify as an agricultural purpose.
7.22value of the homestead dwelling and the one acre of land on which that dwelling is
7.23located. If any farm buildings or structures are located on this homesteaded acre of land,
7.24their market value shall not be included in this separate determination.
7.26of a privately owned public use airport. It has a class rate of one percent of market value.
7.27To qualify for classification under this paragraph, a privately owned public use airport
7.28must be licensed as a public airport under section
7.29"landing area" means that part of a privately owned public use airport properly cleared,
7.30regularly maintained, and made available to the public for use by aircraft and includes
7.31runways, taxiways, aprons, and sites upon which are situated landing or navigational aids.
7.32A landing area also includes land underlying both the primary surface and the approach
7.33surfaces that comply with all of the following:
7.34 (i) the land is properly cleared and regularly maintained for the primary purposes of
7.35the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
7.36facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
8.1 (ii) the land is part of the airport property; and
8.2 (iii) the land is not used for commercial or residential purposes.
8.3The land contained in a landing area under this paragraph must be described and certified
8.4by the commissioner of transportation. The certification is effective until it is modified,
8.5or until the airport or landing area no longer meets the requirements of this paragraph.
8.6For purposes of this paragraph, "public access area" means property used as an aircraft
8.7parking ramp, apron, or storage hangar, or an arrival and departure building in connection
8.8with the airport.
8.10actively being mined and is not otherwise classified as class 2a or 2b, provided that the
8.11land is not located in a county that has elected to opt-out of the aggregate preservation
8.12program as provided in section
8.13of market value. To qualify for classification under this paragraph, the property must be
8.14at least ten contiguous acres in size and the owner of the property must record with the
8.15county recorder of the county in which the property is located an affidavit containing:
8.16 (1) a legal description of the property;
8.17 (2) a disclosure that the property contains a commercial aggregate deposit that is not
8.18actively being mined but is present on the entire parcel enrolled;
8.19 (3) documentation that the conditional use under the county or local zoning
8.20ordinance of this property is for mining; and
8.21 (4) documentation that a permit has been issued by the local unit of government
8.22or the mining activity is allowed under local ordinance. The disclosure must include a
8.23statement from a registered professional geologist, engineer, or soil scientist delineating
8.24the deposit and certifying that it is a commercial aggregate deposit.
8.25 For purposes of this section and section
8.26means a deposit that will yield crushed stone or sand and gravel that is suitable for use
8.27as a construction aggregate; and "actively mined" means the removal of top soil and
8.28overburden in preparation for excavation or excavation of a commercial deposit.
8.30begins to be actively mined, the owner must file a supplemental affidavit within 60 days
8.31from the day any aggregate is removed stating the number of acres of the property that is
8.32actively being mined. The acres actively being mined must be (1) valued and classified
8.33under subdivision 24 in the next subsequent assessment year, and (2) removed from the
8.34aggregate resource preservation property tax program under section
8.35land was enrolled in that program. Copies of the original affidavit and all supplemental
8.36affidavits must be filed with the county assessor, the local zoning administrator, and the
9.1Department of Natural Resources, Division of Land and Minerals. A supplemental
9.2affidavit must be filed each time a subsequent portion of the property is actively mined,
9.3provided that the minimum acreage change is five acres, even if the actual mining activity
9.4constitutes less than five acres.
9.7provisions of chapter 14, and the provisions in section
9.8do not apply.
9.9EFFECTIVE DATE.This section is effective for assessment year 2011 and
9.10thereafter, for taxes payable in 2012 and thereafter.
9.11 Sec. 4. LAND REMOVED FROM PROGRAM.
9.12(a) Any land that had been enrolled in the Minnesota Agricultural Property Tax
9.13Law under Minnesota Statutes 2006, section 273.111, and that was removed from the
9.14program between May 21, 2008, and the effective date of this section, must be reinstated
9.15to the program at the request of the owner provided that the eligibility requirements under
9.16Minnesota Statutes 2006, section 273.111, subdivisions 3 and 6, are met.
9.17(b) If additional taxes have been paid by a property owner prior to the effective
9.18date of this section with respect to property described in paragraph (a), as a result of the
9.19property being removed from the program authorized under Minnesota Statutes 2006,
9.20section 273.111, the county must repay the property owner in the manner prescribed
9.21by the commissioner of revenue.
9.22EFFECTIVE DATE.This section is effective the day following final enactment.
9.23 Sec. 5. REVISOR'S INSTRUCTION.
9.24The revisor of statutes shall correct internal cross-references to sections that are
9.25affected by the relettering in section 3.
9.26 Sec. 6. REPEALER, REENACTMENT, AND REVIVAL.
9.27(a) Minnesota Statutes 2010, sections 273.1108; 273.111, subdivisions 3a, 4, 8, 9,
9.289a, and 11; 273.114; and 273.1384, subdivision 2, are repealed.
9.29(b) Minnesota Statutes 2006, section 273.111, subdivisions 4, 8, 9, and 11; and
9.30273.1384, subdivision 2, are reenacted.
10.1(c) Laws 2008, chapter 366, article 6, section 52, paragraph (c), is repealed, and
10.2pursuant to Minnesota Statutes, section 645.36, Minnesota Statutes 2006, section 273.111,
10.3subdivision 6, is revived.
10.4EFFECTIVE DATE.This section is effective for assessment year 2011 and
10.5thereafter, for taxes payable in 2012 and thereafter.