HF 2220

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; establishing an aggregate
resource preservation property tax program; providing
a classification for property containing certain
unmined aggregate; amending Minnesota Statutes 2004,
section 273.13, subdivision 23; 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 Subdivision 1. new text end

new text begin Requirements. 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 2;
new text end

new text begin (3) the owner has filed a completed application for
deferment as specified in subdivision 2 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 2, clause (4).
new text end

new text begin Subd. 2. 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 6 are timely filed. The application must be filed
with the assessor of the county in which the real property is
located on the form 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), in the case of property
classified 2b, clause (5); or in the case of property classified
1a, 1b, 2a, and 2b, clauses (1) to (3), 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 aggregate commercial 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 4 allowing for the
cancellation of the covenant under certain conditions.
new text end

new text begin Subd. 3. 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 2, notwithstanding
sections 272.03, subdivision 8, and 273.11, qualifying land
described in subdivision 2 must be valued as if it were
agricultural property, using a per acre valuation equal to the
current year's 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. 4. new text end

new text begin Cancellation of covenant. new text end

new text begin The covenant required
under subdivision 2 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 5 are paid by the owner at the time of
cancellation; and
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 clause (2).
new text end

new text begin Subd. 5. 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 1, 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 3, 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.
new text end

new text begin 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 the additional taxes
if timely paid.
new text end

new text begin 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 6.
new text end

new text begin Subd. 6. 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 must 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 5 must not be imposed on the
acres that are actively being mined and have been removed from
the program under this section.
new text end

new text begin Copies of the original affidavit and 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. If the affidavits are not timely filed, the property
will lose its valuation deferment under this section, and
additional taxes must be imposed under subdivision 5.
new text end

new text begin Subd. 7. 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. 8. new text end

new text begin Continuation of tax treatment upon sale. new text end

new text begin When
real property qualifying under subdivision 1 is sold, additional
taxes must not be extended against the property if the property
continues to qualify under subdivision 1, 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 Subd. 9. 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 EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
levied in 2005, payable in 2006, and thereafter, except that for
the 2005 assessment year, the application date under subdivision
2 is September 1, 2005.
new text end

Sec. 2.

Minnesota Statutes 2004, 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 and including $600,000 market value has a net
class rate of 0.55 percent of market value. The remaining
property over $600,000 market value has a class rate of one
percent of market value.

(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 or 2b, under 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;
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 When any portion of the property classified under this
paragraph begins to be actively mined, the owner must file a
supplemental affidavit as required in section 273.1115,
subdivision 6. The acres actively being mined must be
classified under subdivision 24, in the next subsequent
assessment year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
levied in 2005, payable in 2006, and thereafter.
new text end