HF 99

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:33am

A bill for an act
relating to taxation; creating the Minnesota Land Conservation Property Tax
Law; amending Minnesota Statutes 2008, section 273.111, subdivision 3a;
proposing coding for new law in Minnesota Statutes, chapter 273.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 273.111, subdivision 3a, is amended to
read:

Subd. 3a.

Property no longer eligible for deferment.

(a) Real estate receiving
the tax deferment under this section for assessment year 2008, but that does not qualify
for the 2009 assessment year due to changes in qualification requirements under Laws
2008, chapter 366, shall continue to qualify until any part of the land is sold, transferred,
or subdivided, provided that the property continues to meet the requirements of Minnesota
Statutes 2006, section 273.111, subdivision 3.

(b) When property assessed under this subdivision is withdrawn from the program or
becomes ineligible, the property shall be subject to additional taxes, in the amount equal
to the average difference between the taxes determined in accordance with subdivision
4, and the amount determined under subdivision 5, for the current year and the two
preceding years, multiplied by (1) three, in the case of class 2a property under section
273.13, subdivision 23, or any property withdrawn before January 2, 2009, or (2) seven, in
the case of property withdrawn after January 2, 2009, that is not class 2a property. The
number of years used as the multiplier must not exceed the number of years during which
the property was subject to this section. The amount determined under subdivision 5 shall
not be greater than it would have been had the actual bona fide sale price of the real
property at an arm's-length transaction been used in lieu of the market value determined
under subdivision 5. The additional taxes shall be extended against the property on the
tax list for the current year, provided that no interest or penalties shall be levied on the
additional taxes if timely paid.

new text begin (c) When property assessed under this subdivision is withdrawn from the program
and enrolls in the land conservation property tax law program under section 273.113, the
property is not subject to the additional taxes required under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [273.114] LAND CONSERVATION PROPERTY TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Citation. new text end

new text begin This section may be cited as the "Minnesota Land
Conservation Property Tax Law."
new text end

new text begin Subd. 2. new text end

new text begin Public policy. new text end

new text begin The purpose of this section is to encourage the conservation
of the natural, scenic, or open space value of real property in this state for the benefit
of current citizens and future generations and to encourage the conservation of land in
accordance with the Minnesota Statewide Conservation and Preservation Plan. The
present general system of ad valorem property taxation in the state of Minnesota does not
provide an equitable basis for the taxation of land being conserved for long-term use and
enjoyment. Therefore, it is hereby declared that the public policy of this state would
be best served by reducing the tax burdens upon certain land within this state through
appropriate taxing measures to encourage its conservation.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin (a) In this section, the terms defined in this subdivision have
the meanings given them.
new text end

new text begin (b) "Conservation" means retaining, protecting, or restoring the natural, scenic,
or open-space values of real property, assuring their availability for recreational or
open-space use, protecting natural resources, maintaining or enhancing air or water
quality, or conducting reforestation efforts as defined in section 89.001, subdivision 11.
new text end

new text begin (c) "Natural area lands" means lands that are in their natural state and serve the
primary purpose of conserving:
new text end

new text begin (1) significant ecological communities;
new text end

new text begin (2) undisturbed habitats and disturbed habitats that are actively being restored of a
diverse array of wildlife and plant species; and
new text end

new text begin (3) the functions of natural systems, including sloughs and wetlands that provide
hydrolic, carbon sequestering, and other public benefits.
new text end

new text begin (d) "Cultivated agricultural land" means land which is currently being used or
formerly was used to raise agricultural crops, including organic farming, is capable of use
for that purpose or is plowed, fallow, or contains harvested crop residue or is current or
former pasture land.
new text end

new text begin Subd. 4. new text end

new text begin Requirements. new text end

new text begin Unimproved real estate primarily used for the conservation
of natural area lands or cultivated agricultural land, or is land that is enrolled in the reinvest
in Minnesota program under sections 103F.501 to 103F.535, the federal Conservation
Reserve Program as contained in Public Law 99-198, or a similar local, state, or federal
conservation program, shall be entitled to valuation and tax deferment under this section.
Real estate may not be enrolled for valuation or deferment under this section and section
273.111, 273.112, or 273.117 concurrently. Land that is required to be undeveloped under
a local setback ordinance does not qualify for valuation and deferment under this section.
new text end

new text begin Subd. 5. new text end

new text begin Determination of value. new text end

new text begin (a) The value of any real estate that qualifies
under subdivision 4 shall upon timely application by the owner, in the manner provided
in subdivision 7, be determined solely with reference to its current use, notwithstanding
sections 272.03, subdivision 8, and 273.11. The house and garage, if any, and the
immediately surrounding one acre of land and a minor, ancillary nonresidential structure,
if any, shall be valued according to their appropriate use. In determining the value for
ad valorem tax purposes, the assessor shall not consider the presence of commercial,
industrial, residential, or seasonal recreational land use influences that may affect the
value of real estate defined in subdivision 3.
new text end

new text begin (b) The commissioner of revenue shall develop a fair and uniform method of
determining real estate values for each county in the state that are consistent with this
section. The commissioner shall annually assign the resulting values to each county, and
these values shall be used as the basis for determining the value for all properties in the
county qualifying for tax deferment under this section.
new text end

new text begin Subd. 6. new text end

new text begin Separate determination of market value and tax. new text end

new text begin The assessor shall
make a separate determination of the market value of the real estate based on its highest
and best use. The tax based upon that value and the appropriate local tax rate applicable to
the property in the taxing district shall be recorded on the property assessment records.
new text end

new text begin Subd. 7. new text end

new text begin Application and covenant agreement. new text end

new text begin (a) Application for deferment
of taxes and assessment under this section shall be filed by May 1 of the year prior to
the year in which the taxes are payable. Any application filed under this subdivision
and granted shall continue in effect for subsequent years until the termination of the
covenant agreement under paragraph (b). The application must be filed with the assessor
of the taxing district in which the real property is located on the form prescribed by the
commissioner of revenue. The assessor may require proof of affidavit or otherwise that
the property qualifies under subdivision 4.
new text end

new text begin (b) The owner of the property must sign a covenant agreement that is filed with the
county assessor and recorded in the county where the property is located. The covenant
agreement must include all of the following:
new text end

new text begin (1) legal description of the area to which the covenant applies;
new text end

new text begin (2) name and address of the owner;
new text end

new text begin (3) a statement that the land described in the covenant must be kept as conservation
land, which meets the requirements of subdivision 4, for the duration of the covenant;
new text end

new text begin (4) a statement that the landowner may terminate the covenant agreement by
notifying the county assessor in writing seven years in advance of the date of proposed
termination;
new text end

new text begin (5) a statement that the covenant is binding on the owner or the owner's successor or
assigns and runs with the land; and
new text end

new text begin (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
described in subdivision 4.
new text end

new text begin Subd. 8. new text end

new text begin Additional taxes. new text end

new text begin Upon termination of a covenant agreement in
subdivision 7, paragraph (b), the land to which the covenant applied shall be subject to
additional taxes in the amount equal to the difference between the taxes determined in
accordance with subdivision 5 and the amount determined under subdivision 6, provided
that the amount determined under subdivision 6 shall not be greater than it would have
been had the actual bona fide sale price of the real property at an arm's-length transaction
been used in lieu of the market value determined under subdivision 6. The additional taxes
shall be extended against the property on the tax list for the current year, provided that
no interest or penalties shall be levied on the additional taxes if timely paid and that the
additional taxes shall only be levied with respect to the last three years that the property
has been valued and assessed under this section.
new text end

new text begin Subd. 9. new text end

new text begin Lien. new text end

new text begin The additional tax imposed by this section shall be a lien upon the
property assessed to the same extent and for the same duration as other taxes imposed on
the property in this state. The tax shall be annually extended by the county auditor and if
and when payable shall be collected and distributed in the manner provided by law for the
collection and distribution of other property taxes.
new text end

new text begin Subd. 10. new text end

new text begin Special local assessments. new text end

new text begin The payment of special local assessments
levied after June 1, 2009, for improvements made to any real property described in
subdivision 3 together with the interest thereon shall, on timely application as provided
in subdivision 8, be deferred as long as such property meets the conditions contained in
subdivision 3. If special assessments against the property have been deferred pursuant to
this subdivision, the governmental unit shall file with the county recorder in the county
in which the property is located a certificate containing the legal description of the
affected property and of the amount deferred. When such property no longer qualifies
under subdivision 3, all deferred special assessments plus interest shall be payable in
equal installments spread over the time remaining until the last maturity date of the bonds
issued to finance the improvement for which the assessments were levied. If the bonds
have matured, the deferred special assessments plus interest shall be payable within 90
days. The provisions of section 429.061, subdivision 2, apply to the collection of these
installments. Penalty shall not be levied on any such special assessments if timely paid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for deferred taxes payable in 2010
and thereafter, except that for the 2009 assessment year, the application deadline in
subdivision 7 is extended to September 1.
new text end