HF 4022

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing for an aggregate resource preservation property
tax; changing criminal penalties provision; amending Minnesota Statutes 2006,
sections 273.13, subdivision 23; 298.75, subdivisions 1, 2, 6, 7; proposing coding
for new law in Minnesota Statutes, chapter 273.

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

Section 1.

new text begin [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
TAX LAW.
new text end

new text begin Subd. 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, "commercial aggregate deposit"
and "actively mined" have the meanings given them in section 273.13, subdivision 23,
paragraph (h).
new text end

new text begin Subdivision 2. new text end

new text begin Requirement. new text end

new text begin Real estate is entitled to valuation under this section
only if all of the following requirements are met:
new text end

new text begin (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23;
new text end

new text begin (2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;
new text end

new text begin (3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;
new text end

new text begin (4) there are no delinquent taxes on the property; and
new text end

new text begin (5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin Application for valuation deferment under this section
must be filed by May 1 of the assessment year. Any application filed and granted
continues in effect for subsequent years until the property no longer qualifies, provided
that supplemental affidavits under subdivision 8 are timely filed. The application must
be filed with the assessor of the county in which the real property is located on such
form as may be prescribed by the commissioner of revenue. The application must be
executed and acknowledged in the manner required by law to execute and acknowledge a
deed and must contain at least the following information and any other information the
commissioner deems necessary:
new text end

new text begin (1) the legal description of the area;
new text end

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

new text begin (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph
(h), when property is classified as:
new text end

new text begin (i) 2b under section 273.13, subdivision 23, paragraph (b), clause (5);
new text end

new text begin (ii) 1b under section 273.13, subdivision 22, paragraph (b);
new text end

new text begin (iii) 2a under section 273.13, subdivision 23, paragraph (a); or
new text end

new text begin (iv) 2b under section 273.13, subdivision 23, paragraph (b), clauses (1) to (3).
new text end

new text begin The application must include a similar document with the same information as
contained in the affidavit under section 273.13, subdivision 23, paragraph (h); and
new text end

new text begin (4) a statement of proof from the owner that the land contains a restrictive covenant
limiting its use for the property's surface to that which exists on the date of the application
and limiting its future use to the preparation and removal of the commercial aggregate
deposit under its surface. To qualify under this clause, the covenant must be binding on
the owner or the owner's successor or assignee, and run with the land, except as provided
in subdivision 5 allowing for the cancellation of the covenant under certain conditions.
new text end

new text begin Subd. 4. new text end

new text begin Determination of value. new text end

new text begin Upon timely application by the owner as provided
in subdivision 3, notwithstanding sections 272.03, subdivision 8, and 273.11, the value of
any qualifying land described in subdivision 3 must be valued as if it were agricultural
property, using a per acre valuation equal to the current assessment year's average per acre
valuation of agricultural land in the county. The assessor shall not consider any additional
value resulting from potential alternative and future uses of the property. The buildings
located on the land shall be valued by the assessor in the normal manner.
new text end

new text begin Subd. 5. new text end

new text begin Cancellation of covenant. new text end

new text begin The covenant required under subdivision
3 may be canceled in two ways:
new text end

new text begin (1) by the owner beginning with the next subsequent assessment year provided
that the additional taxes as determined under subdivision 7 are paid by the owner at the
time of cancellation; or
new text end

new text begin (2) by the city or town in which the property is located beginning with the next
subsequent assessment year, if the city council or town board:
new text end

new text begin (i) changes the conditional use of the property;
new text end

new text begin (ii) revokes the mining permit; or
new text end

new text begin (iii) changes the zoning to disallow mining.
new text end

new text begin No additional taxes are imposed on the property under this clause.
new text end

new text begin Subd. 6. new text end

new text begin County termination. new text end

new text begin Within two years of the effective date of this section,
a county may, following notice and public hearing, terminate application of this section
in the county. The termination is effective upon adoption of a resolution of the county
board. A county has 60 days from receipt of the first application for enrollment under
this section to notify the applicant and any subsequent applicants of the county's intent
to begin the process of terminating application of this section in the county. The county
must act on the termination within six months. Upon termination by a vote of the county
board, all applications received prior to and during notification of intent to terminate shall
be deemed void. If the county board does not act on the termination within six months of
notification, all applications for valuation for deferment received shall be deemed eligible
for consideration to be enrolled under this section. Following this initial 60-day grace
period, a termination applies prospectively and does not affect property enrolled under this
section prior to the termination date. A county may reauthorize application of this section
by a resolution of the county board revoking the termination.
new text end

new text begin Subd. 7. new text end

new text begin Additional taxes. new text end

new text begin When real property which has been valued and assessed
under this section no longer qualifies, the portion of the land classified under subdivision
2, clause (1), is subject to additional taxes. The additional tax amount is determined by:
new text end

new text begin (1) computing the difference between (i) the current year's taxes determined in
accordance with subdivision 4, and (ii) an amount as determined by the assessor based
upon the property's current year's estimated market value of like real estate at its highest
and best use and the appropriate local tax rate; and
new text end

new text begin (2) multiplying the amount determined in clause (1) by the number of years the
land was in the program under this section. The current year's estimated market value as
determined by the assessor must not exceed the market value that would result if the
property was sold in an arms-length transaction and must not be greater than it would have
been had the actual bona fide sale price of the property been used in lieu of that market
value. The additional taxes must be extended against the property on the tax list for the
current year, except that interest or penalties must not be levied on these additional taxes if
timely paid. The additional tax under this subdivision must not be imposed on that portion
of the property which has actively been mined and has been removed from the program
based upon the supplemental affidavits filed under subdivision 8.
new text end

new text begin Subd. 8. new text end

new text begin Supplemental affidavits; mining activity on land. new text end

new text begin When any portion
of the property begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined shall be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under this section. The additional taxes under subdivision 7 must not be imposed on the
acres that are actively being mined and have been removed from the program under this
section. Copies of the original affidavit and all supplemental affidavits must be filed
with the county assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals. A supplemental affidavit must be filed each
time a subsequent portion of the property is actively mined, provided that the minimum
acreage change is five acres, even if the actual mining activity constitutes less than five
acres. Failure to file the affidavits timely shall result in the property losing its valuation
deferment under this section, and additional taxes must be imposed as calculated under
subdivision 7.
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 is a lien upon the property
assessed to the same extent and for the same duration as other taxes imposed upon
property within this state and, when collected, must be 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 Continuation of tax treatment upon sale. new text end

new text begin When real property qualifying
under subdivision 2 is sold, additional taxes must not be extended against the property
if the property continues to qualify under subdivision 2, and the new owner files an
application with the assessor for continued deferment within 30 days after the sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes assessed in 2009, payable
in 2010, and thereafter, except that for the 2009 assessment year, the application date
under subdivision 5 shall be September 1, 2009, and subdivision 6 is effective the day
following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:

Subd. 23.

Class 2.

(a) Class 2a property is agricultural land including any
improvements that is homesteaded. The market value of the house and garage and
immediately surrounding one acre of land has the same class rates as class 1a property
under subdivision 22. The value of the remaining land including improvements up to
the first tier valuation limit of agricultural homestead property has a net class rate of
0.55 percent of market value. The remaining property over the first tier has a class rate
of one percent of market value. For purposes of this subdivision, the "first tier valuation
limit of agricultural homestead property" and "first tier" means the limit certified under
section 273.11, subdivision 23.

(b) Class 2b property is (1) real estate, rural in character and used exclusively for
growing trees for timber, lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing trees for timber, lumber, and
wood and wood products, if the owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand improvement on that particular
property, administered or coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; deleted text begin or deleted text end (4) a landing area or public access area of a
privately owned public use airport new text begin ; or (5) land with a commercial aggregate deposit that is
not actively being mined and is not otherwise classified as class 2a under paragraph (a) or
2b, clauses (1) to (3) new text end . Class 2b property has a net class rate of one percent of market value.

(c) Agricultural land as used in this section means contiguous acreage of ten acres or
more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
used in this section means the raising or cultivation of agricultural products. "Agricultural
purposes" also includes enrollment in the Reinvest in Minnesota program under sections
103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public
Law 99-198 if the property was classified as agricultural (i) under this subdivision for
the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
waste, unusable wild land, or land included in state or federal farm programs. Agricultural
classification for property shall be determined excluding the house, garage, and
immediately surrounding one acre of land, and shall not be based upon the market value of
any residential structures on the parcel or contiguous parcels under the same ownership.

(d) Real estate, excluding the house, garage, and immediately surrounding one acre
of land, of less than ten acres which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as agricultural land.

Land shall be classified as agricultural even if all or a portion of the agricultural use
of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under
section 273.111.

The property classification under this section supersedes, for property tax purposes
only, any locally administered agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(e) The term "agricultural products" as used in this subdivision includes production
for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with
raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood
products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

(f) If a parcel used for agricultural purposes is also used for commercial or industrial
purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.

(g) To qualify for classification under paragraph (b), clause (4), a privately owned
public use airport must be licensed as a public airport under section 360.018. For purposes
of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
airport properly cleared, regularly maintained, and made available to the public for use by
aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
or navigational aids. A landing area also includes land underlying both the primary surface
and the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under paragraph (b), clause (4), must be described
and certified by the commissioner of transportation. The certification is effective until
it is modified, or until the airport or landing area no longer meets the requirements of
paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
and departure building in connection with the airport.

new text begin (h) To qualify for classification under paragraph (b), clause (5), the property must be
at least ten contiguous acres in size and the owner of the property must record with the
county recorder of the county in which the property is located an affidavit containing:
new text end

new text begin (1) a legal description of the property;
new text end

new text begin (2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
new text end

new text begin (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
new text end

new text begin (4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
new text end

new text begin For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
new text end

new text begin (i) When any portion of the property under this subdivision or subdivision 22 begins
to be actively mined, the owner must file a supplemental affidavit within 60 days from
the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.

(1) "Aggregate material" shall mean nonmetallic natural mineral aggregate including,
but not limited to sand, silica sand, gravel, crushed rock, limestone, granite, and borrow,
but only if the borrow is transported on a public road, street, or highway. Aggregate
material shall not include dimension stone and dimension granite. Aggregate material
must be measured or weighed after it has been extracted from the pit, quarry, or deposit.

(2) "Person" shall mean any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.

(3) "Operator" shall mean any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.

(4) "Extraction site" shall mean a pit, quarry, or deposit containing aggregate
material and any contiguous property to the pit, quarry, or deposit which is used by the
operator for stockpiling the aggregate material.

(5) "Importer" shall mean any person who buys aggregate material deleted text begin produced deleted text end new text begin
excavated new text end from a county not listed in paragraph (6) or another state and causes the
aggregate material to be imported into a county in this state which imposes a tax on
aggregate material.

(6) "County" shall mean the counties of Pope, Stearns, Benton, Sherburne, Carver,
Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
board has voted after a public hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.

(7) "Borrow" shall mean granular borrow, consisting of durable particles of gravel
and sand, crushed quarry or mine rock, crushed gravel or stone, or any combination
thereof, the ratio of the portion passing the (#200) sieve divided by the portion passing the
(1 inch) sieve may not exceed 20 percent by mass.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 4.

Minnesota Statutes 2006, section 298.75, subdivision 2, is amended to read:

Subd. 2.

Tax imposed.

new text begin (a) new text end A county new text begin that imposes the aggregate production tax new text end shall
impose upon every deleted text begin importer and deleted text end operator a production tax deleted text begin up to ten cents deleted text end new text begin of 21.5 cents new text end per
cubic yard or deleted text begin up to seven deleted text end new text begin 15 new text end cents per ton of aggregate material deleted text begin removed deleted text end new text begin excavated in the
county new text end except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall new text begin not new text end be imposed on aggregate material
deleted text begin produced deleted text end new text begin excavated new text end in the county deleted text begin when deleted text end new text begin until new text end the aggregate material is transported from
the extraction site or sold new text begin , whichever occurs first new text end . When aggregate material is stored in a
stockpile within the state of Minnesota and a public highway, road or street is not used
for transporting the aggregate material, the tax shall new text begin not new text end be imposed new text begin until new text end either when the
aggregate material is sold, or when it is transported from the stockpile site, or when it is
used from the stockpile, whichever occurs first.

new text begin (b) A county that imposes the aggregate production tax under paragraph (a) shall
impose upon every importer a production tax of 21.5 cents per cubic yard or 15 cents per
ton of aggregate material imported into the county. The tax shall be imposed when the
aggregate material is imported from the extraction site or sold. When imported aggregate
material is stored in a stockpile within the state of Minnesota and a public highway, road,
or street is not used for transporting the aggregate material, the tax shall be imposed either
when the aggregate material is sold, when it is transported from the stockpile site, or when
it is used from the stockpile, whichever occurs first. new text end The tax shall be imposed on an
importer when the aggregate material is imported into the county that imposes the tax.

new text begin (c) new text end If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.

new text begin (d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 5.

Minnesota Statutes 2006, section 298.75, subdivision 6, is amended to read:

Subd. 6.

Penalties; removal of aggregate if previous tax not paid; false report.

It is a misdemeanor for any operator or importer to remove aggregate material from a
pit, quarry, or deposit or for any importer to import aggregate material unless all taxes
due under this section for deleted text begin the deleted text end new text begin all new text end previous reporting deleted text begin period deleted text end new text begin periods new text end have been paid or
objections thereto have been filed pursuant to subdivision 4.

It is a misdemeanor for the operator or importer who is required to file a report to file
a false report with intent to evade the tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 6.

Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:

Subd. 7.

Proceeds of taxes.

new text begin (a) new text end All money collected as taxes under this section
shall be deposited in the county treasury and credited deleted text begin as follows, for expenditure by the
county board: deleted text end new text begin according to this subdivision.
new text end

new text begin (b) The county auditor may retain an annual administrative fee of up to five percent
of the total taxes collected in any year.
new text end

new text begin (c) The balance of the taxes, after any deduction under paragraph (b), shall be
credited as follows:
new text end

deleted text begin (a) Sixty deleted text end new text begin (1) 42.5 new text end percent to the county road and bridge fund for expenditure for the
maintenance, construction and reconstruction of roads, highways and bridges;

deleted text begin (b) Thirty deleted text end new text begin (2) 42.5 new text end percent to the deleted text begin road and bridge fund of those towns as determined
by the county board and to the deleted text end general fund deleted text begin or other designated fund of those cities as
determined by the county board deleted text end new text begin of the city or town in which the mine is located, or to the
county, if the mine is located in an unorganized town new text end , to be expended for maintenance,
construction and reconstruction of roads, highways and bridges; and

deleted text begin (c) Ten deleted text end new text begin (3) 15 new text end percent to a special reserve fund which is hereby established, for
expenditure for the restoration of abandoned pits, quarries, or deposits located deleted text begin upon public
and tax forfeited lands deleted text end within the county.

If there are no abandoned pits, quarries or deposits located deleted text begin upon public or tax
forfeited lands deleted text end within the county, this portion of the tax shall be deleted text begin deposited in the county
road and bridge fund for expenditure for the maintenance, construction and reconstruction
of roads, highways and bridges deleted text end new text begin used for any other unmet reclamation need or for
conservation or other environmental needs new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end