SF 391

Introduction - 86th Legislature (2009 - 2010)

Posted on 02/09/2010 02:12 a.m.

A bill for an act
relating to taxation; modifying green acres provisions; amending Minnesota
Statutes 2008, section 273.111, subdivisions 2, 3, 4, 11; repealing Minnesota
Statutes 2008, section 273.111, subdivision 3a.

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

Section 1.

Minnesota Statutes 2008, section 273.111, subdivision 2, is amended to read:

Subd. 2.

Public policy.

The present general system of ad valorem property taxation
in the state of Minnesota does not provide an equitable basis for the taxation of certain
agricultural real property and has resulted in inadequate taxes on some lands and excessive
taxes on others. Therefore, it is hereby declared to be the public policy of this state that
the public interest would best be served by equalizing tax burdens upon agricultural
property within this state through appropriate taxing measures new text begin and by encouraging the
preservation of agricultural land new text end .

Sec. 2.

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

Subd. 3.

Requirements.

(a) Real estate consisting of ten acres or more or a nursery
or greenhouse, and qualifying for classification as class 2a under section 273.13, shall be
entitled to valuation and tax deferment under this section if it is primarily devoted to
agricultural use, and either:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of deleted text begin an individual who is part of an entity described in paragraph
(b), clause (1), (2), or (3) deleted text end new text begin a shareholder in a family farm corporation as defined in section
500.24, notwithstanding the fact that legal title to the real estate may be held in the name
of the family farm corporation new text end ; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on the
parcel or parcels, provided that only the acres used to produce nursery stock qualify
for treatment under this section.

(b) Valuation of real estate under this section is limited to parcels owned by
individuals except for:

(1) a family farm deleted text begin entity or authorized farm entity regulated deleted text end new text begin corporation organized
new text end under section 500.24; new text begin and new text end

(2) deleted text begin a poultry entity other than a limited liability entity in which the majority of the
members, partners, or shareholders are related and at least one of the members, partners,
or shareholders either resides on the land or actively operates the land; and
deleted text end

deleted text begin (3) deleted text end corporations that derive 80 percent or more of their gross receipts from the
wholesale or retail sale of horticultural or nursery stock.

The terms in this paragraph have the meanings given in section 500.24, where
applicable.

new text begin (c) Real property qualifying under this subdivision shall be considered to be in
agricultural use provided that annually:
new text end

new text begin (1) at least 33-1/3 percent of the total family income of the owner is derived
therefrom, or the total production income including rental from the property is $300 plus
$10 per tillable acre; and
new text end

new text begin (2) it is devoted to the production for sale of agricultural products as defined in
section 273.13, subdivision 23, paragraph (e).
new text end

new text begin Slough, wasteland, and woodland contiguous to or surrounded by land that is entitled
to valuation and tax deferment under this section is considered to be in agricultural use if
under the same ownership and management.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end Land that previously qualified for tax deferment under this section and no
longer qualifies because it is not primarily used for agricultural purposes but would
otherwise qualify under Minnesota Statutes 2006, section 273.111, subdivision 3, for a
period of at least three years will not be required to make payment of the previously
deferred taxes, notwithstanding the provisions of subdivision 9. Sale of the land prior to
the expiration of the three-year period requires payment of deferred taxes as follows: sale
in the year the land no longer qualifies requires payment of the current year's deferred
taxes plus payment of deferred taxes for the two prior years; sale during the second year
the land no longer qualifies requires payment of the current year's deferred taxes plus
payment of the deferred taxes for the prior year; and sale during the third year the land
no longer qualifies requires payment of the current year's deferred taxes. Deferred taxes
shall be paid even if the land qualifies pursuant to subdivision 11a. When such property is
sold or no longer qualifies under this paragraph, or at the end of the three-year period,
whichever comes first, all deferred special assessments plus interest are 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 are payable within 90 days. The
provisions of section 429.061, subdivision 2, apply to the collection of these installments.
Penalties are not imposed on any such special assessments if timely paid.

deleted text begin (d) deleted text end new text begin (e) new text end 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 state or federal conservation program deleted text begin does not qualify deleted text end new text begin qualifies
new text end for valuation and assessment deferral under this section. deleted text begin This paragraph applies to land
that has not qualified under this section for taxes payable in 2009 or previous years.
deleted text end

Sec. 3.

Minnesota Statutes 2008, section 273.111, subdivision 4, is amended to read:

Subd. 4.

Determination of value.

deleted text begin (a) deleted text end The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11.
Furthermore, the assessor shall not consider any added values resulting from
nonagricultural factors. In order to account for the presence of nonagricultural influences
that may affect the value of agricultural land, the commissioner of revenue shall develop a
fair and uniform method of determining agricultural values for each county in the state
that are consistent with this subdivision. The commissioner shall annually assign the
resulting values to each county, and these values shall be used as the basis for determining
the agricultural value for all properties in the county qualifying for tax deferment under
this section.

deleted text begin (b) In the case of property qualifying for tax deferment only under subdivision 3a,
the value shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the current
assessment year divided by the total taxable market value of all property in the county
for assessment year 2008.
deleted text end

Sec. 4.

Minnesota Statutes 2008, section 273.111, subdivision 11, is amended to read:

Subd. 11.

Special local assessments.

The payment of special local assessments
levied after June 1, 1967, 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 deleted text begin or 3a deleted text end or is transferred to an agricultural preserve under sections 473H.02
to 473H.17. 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 deleted text begin or 3a deleted text end , 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.

Sec. 5. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 273.111, subdivision 3a, new text end new text begin is repealed.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective for taxes payable in 2010 and thereafter.
new text end