<a id="pl.1.3"></a><var>1.3</var>preserve programs;amending Minnesota Statutes 2010, sections 273.111, <br/>
<a id="pl.1.4"></a><var>1.4</var>subdivision 9, by adding a subdivision; 273.114, subdivisions 2, 5, 6; repealing <br/>
<a id="pl.1.5"></a><var>1.5</var>Minnesota Statutes 2010, section 273.114, subdivision 1.<br/>
<a id="pl.1.6"></a><var>1.6</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.7"></a><var>1.7</var>    Section 1. Minnesota Statutes 2010, section 273.111, is amended by adding a <br/>
<a id="pl.1.8"></a><var>1.8</var>subdivision to read:<br/>
<a id="pl.1.9"></a><var>1.9</var>    Subd. 2a. <b>Purpose.</b> The legislature finds that it is in the interest of the state to <br/>
<a id="pl.1.10"></a><var>1.10</var>encourage and preserve farms by mitigating the property tax impact of increasing land <br/>
<a id="pl.1.11"></a><var>1.11</var>values due to nonagricultural economic forces.<br/>
<a id="pl.1.12"></a><var>1.12</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
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<a id="bill.0.2.0"></a><a id="pl.1.13"></a><var>1.13</var>    Sec. 2. Minnesota Statutes 2010, section 273.111, subdivision 9, is amended to read:<br/>
<a id="pl.1.14"></a><var>1.14</var>    Subd. 9. <b>Additional taxes.</b> (a) Except as provided in paragraph (b), when real <br/>
<a id="pl.1.15"></a><var>1.15</var>property which is being, or has been valued and assessed under this section no longer <br/>
<a id="pl.1.16"></a><var>1.16</var>qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional <br/>
<a id="pl.1.17"></a><var>1.17</var>taxes, in the amount equal to the difference between the taxes determined in accordance <br/>
<a id="pl.1.18"></a><var>1.18</var>with subdivision 4, and the amount determined under subdivision 5. Provided, however, <br/>
<a id="pl.1.19"></a><var>1.19</var>that the amount determined under subdivision 5 shall not be greater than it would have <br/>
<a id="pl.1.20"></a><var>1.20</var>been had the actual bona fide sale price of the real property at an arm's-length transaction <br/>
<a id="pl.1.21"></a><var>1.21</var>been used in lieu of the market value determined under subdivision 5. Such additional <br/>
<a id="pl.1.22"></a><var>1.22</var>taxes shall be extended against the property on the tax list for the current year, provided, <br/>
<a id="pl.1.23"></a><var>1.23</var>however, that no interest or penalties shall be levied on such additional taxes if timely <br/>
<a id="pl.2.1"></a><var>2.1</var>paid, and provided further, that such additional taxes shall only be levied with respect to <br/>
<a id="pl.2.2"></a><var>2.2</var>(1) the last three years that the said property has been valued and assessed under this <br/>
<a id="pl.2.3"></a><var>2.3</var>section, for property originally enrolled on or before May 1, 2012, or (2) the last five years <br/>
<a id="pl.2.4"></a><var>2.4</var>that the property has been valued and assessed under this section, for property originally <br/>
<a id="pl.2.5"></a><var>2.5</var>enrolled after May 1, 2012.<br/>
<a id="pl.2.6"></a><var>2.6</var>(b) Real property that has been valued and assessed under this section prior to <br/>
<a id="pl.2.7"></a><var>2.7</var>May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is <br/>
<a id="pl.2.8"></a><var>2.8</var>withdrawn from the program before August 16, 2010, is not subject to additional taxes <br/>
<a id="pl.2.9"></a><var>2.9</var>under this subdivision or subdivision 3, paragraph (c). If additional taxes have been <br/>
<a id="pl.2.10"></a><var>2.10</var>paid under this subdivision with respect to property described in this paragraph prior to <br/>
<a id="pl.2.11"></a><var>2.11</var>April 3, 2009, the county must repay the property owner in the manner prescribed by the <br/>
<a id="pl.2.12"></a><var>2.12</var>commissioner of revenue.<br/>
<a id="pl.2.13"></a><var>2.13</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.2.14"></a><var>2.14</var>    Sec. 3. Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read:<br/>
<a id="pl.2.15"></a><var>2.15</var>    Subd. 2. <b>Requirements.</b> Class 2a or 2b property that had been assessed properly <br/>
<a id="pl.2.16"></a><var>2.16</var>enrolled under Minnesota Statutes 2006, section 273.111, or that is part of an agricultural <br/>
<a id="pl.2.17"></a><var>2.17</var>homestead under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is <br/>
<a id="pl.2.18"></a><var>2.18</var>entitled to valuation and tax deferment under this section if:<br/>
<a id="pl.2.19"></a><var>2.19</var>(1) the land consists of at least ten acres, or is contiguous to at least ten acres of <br/>
<a id="pl.2.20"></a><var>2.20</var>class 2a land under the same ownership;<br/>
<a id="pl.2.21"></a><var>2.21</var>(2) a conservation assessment plan for the land must be prepared by an approved <br/>
<a id="pl.2.22"></a><var>2.22</var>plan writer and implemented during the period in which the land is subject to valuation <br/>
<a id="pl.2.23"></a><var>2.23</var>and deferment under this section;<br/>
<a id="pl.2.24"></a><var>2.24</var>(3) the land must be enrolled for a minimum of eight years;<br/>
<a id="pl.2.25"></a><var>2.25</var>(4) (2) there are no delinquent property taxes on the land; and<br/>
<a id="pl.2.26"></a><var>2.26</var>(5) (3) the property is not also enrolled for valuation and deferment under section <br/>
<a id="pl.2.27"></a><var>2.27</var>273.111 or 273.112, or chapter 290C or 473H.<br/>
<a id="pl.2.28"></a><var>2.28</var><b>EFFECTIVE DATE.</b>This section is effective for taxes payable in 2012 and <br/>
<a id="pl.2.29"></a><var>2.29</var>thereafter.<br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.2.30"></a><var>2.30</var>    Sec. 4. Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read:<br/>
<a id="pl.2.31"></a><var>2.31</var>    Subd. 5. <b>Application </b><b>and covenant agreement</b><b>.</b> (a) Application for deferment <br/>
<a id="pl.2.32"></a><var>2.32</var>of taxes and assessment under this section shall be filed by May 1 of the year prior to <br/>
<a id="pl.2.33"></a><var>2.33</var>the year in which the taxes are payable. Any application filed under this subdivision <br/>
<a id="pl.3.1"></a><var>3.1</var>and granted shall continue in effect for subsequent years until the termination of the <br/>
<a id="pl.3.2"></a><var>3.2</var>covenant agreement under paragraph (b) property is withdrawn or no longer qualifies. The <br/>
<a id="pl.3.3"></a><var>3.3</var>application must be filed with the assessor of the taxing district in which the real property <br/>
<a id="pl.3.4"></a><var>3.4</var>is located on the form prescribed by the commissioner of revenue. The assessor may <br/>
<a id="pl.3.5"></a><var>3.5</var>require proof by affidavit or otherwise that the property qualifies under subdivision 2.<br/>
<a id="pl.3.6"></a><var>3.6</var>    (b) The owner of the property must sign a covenant agreement that is filed with the <br/>
<a id="pl.3.7"></a><var>3.7</var>county recorder and recorded in the county where the property is located. The covenant <br/>
<a id="pl.3.8"></a><var>3.8</var>agreement must include all of the following:<br/>
<a id="pl.3.9"></a><var>3.9</var>    (1) legal description of the area to which the covenant applies;<br/>
<a id="pl.3.10"></a><var>3.10</var>    (2) name and address of the owner;<br/>
<a id="pl.3.11"></a><var>3.11</var>    (3) a statement that the land described in the covenant must be kept as rural preserve <br/>
<a id="pl.3.12"></a><var>3.12</var>land, which meets the requirements of subdivision 2, for the duration of the covenant;<br/>
<a id="pl.3.13"></a><var>3.13</var>    (4) a statement that the landowner may terminate the covenant agreement by <br/>
<a id="pl.3.14"></a><var>3.14</var>notifying the county assessor in writing three years in advance of the date of proposed <br/>
<a id="pl.3.15"></a><var>3.15</var>termination, provided that the notice of intent to terminate may not be given at any time <br/>
<a id="pl.3.16"></a><var>3.16</var>before the land has been subject to the covenant for a period of five years;<br/>
<a id="pl.3.17"></a><var>3.17</var>    (5) a statement that the covenant is binding on the owner or the owner's successor or <br/>
<a id="pl.3.18"></a><var>3.18</var>assigns and runs with the land; and<br/>
<a id="pl.3.19"></a><var>3.19</var>    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as <br/>
<a id="pl.3.20"></a><var>3.20</var>described in subdivision 2.<br/>
<a id="pl.3.21"></a><var>3.21</var>(c) After a covenant under this section has been terminated, the land that had been <br/>
<a id="pl.3.22"></a><var>3.22</var>subject to the covenant is ineligible for subsequent valuation under this section for a <br/>
<a id="pl.3.23"></a><var>3.23</var>period of three years after the termination.<br/>
<a id="pl.3.24"></a><var>3.24</var><b>EFFECTIVE DATE.</b>This section is effective for taxes payable in 2012 and <br/>
<a id="pl.3.25"></a><var>3.25</var>thereafter.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.3.26"></a><var>3.26</var>    Sec. 5. Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read:<br/>
<a id="pl.3.27"></a><var>3.27</var>    Subd. 6. <b>Additional taxes.</b> Upon termination of a covenant agreement in <br/>
<a id="pl.3.28"></a><var>3.28</var>subdivision 5, paragraph (b), the land to which the covenant applied When real property <br/>
<a id="pl.3.29"></a><var>3.29</var>that is being or has been valued and assessed under this section no longer qualifies under <br/>
<a id="pl.3.30"></a><var>3.30</var>subdivision 2, the portion no longer qualifying shall be subject to additional taxes in <br/>
<a id="pl.3.31"></a><var>3.31</var>the amount equal to the difference between the taxes determined in accordance with <br/>
<a id="pl.3.32"></a><var>3.32</var>subdivision 3 and the amount determined under subdivision 4, provided that the amount <br/>
<a id="pl.3.33"></a><var>3.33</var>determined under subdivision 4 shall not be greater than it would have been had the actual <br/>
<a id="pl.3.34"></a><var>3.34</var>bona fide sale price of the real property at an arm's-length transaction been used in lieu of <br/>
<a id="pl.3.35"></a><var>3.35</var>the market value determined under subdivision 4. The additional taxes shall be extended <br/>
<a id="pl.4.1"></a><var>4.1</var>against the property on the tax list for the current year, provided that no interest or penalties <br/>
<a id="pl.4.2"></a><var>4.2</var>shall be levied on the additional taxes if timely paid and that the additional taxes shall only <br/>
<a id="pl.4.3"></a><var>4.3</var>be levied with respect to the current year plus (1) two prior years that the property has <br/>
<a id="pl.4.4"></a><var>4.4</var>been valued and assessed under this section, for property that had been enrolled under <br/>
<a id="pl.4.5"></a><var>4.5</var>this section or section 273.111 on or before May 1, 2012, or (2) four prior years that the <br/>
<a id="pl.4.6"></a><var>4.6</var>property had been valued and assessed under this section, for all other property.<br/>
<a id="pl.4.7"></a><var>4.7</var><b>EFFECTIVE DATE.</b>This section is effective for taxes payable in 2012 and <br/>
<a id="pl.4.8"></a><var>4.8</var>thereafter.<br/>
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<a id="bill.0.6.0"></a><a id="pl.4.9"></a><var>4.9</var>    Sec. 6. <b>LAND REMOVED FROM PROGRAM.</b><br/>
<a id="pl.4.10"></a><var>4.10</var>(a) Any class 2a land that had been properly enrolled in the Minnesota Agricultural <br/>
<a id="pl.4.11"></a><var>4.11</var>Property Tax Law under Minnesota Statutes 2006, section 273.111, and that was removed <br/>
<a id="pl.4.12"></a><var>4.12</var>from the program between May 21, 2008, and the effective date of this section must be <br/>
<a id="pl.4.13"></a><var>4.13</var>reinstated to the program at the request of the owner provided that the request is made <br/>
<a id="pl.4.14"></a><var>4.14</var>prior to September 1, 2011.<br/>
<a id="pl.4.15"></a><var>4.15</var>(b) Any class 2b land that had been properly enrolled in the Minnesota Agricultural <br/>
<a id="pl.4.16"></a><var>4.16</var>Property Tax Law under Minnesota Statutes, section 273.111, and that was removed from <br/>
<a id="pl.4.17"></a><var>4.17</var>the program between May 21, 2008, and the effective date of this section, and that applies <br/>
<a id="pl.4.18"></a><var>4.18</var>for enrollment in the rural preserve program under Minnesota Statutes, section 273.114, <br/>
<a id="pl.4.19"></a><var>4.19</var>prior to September 1, 2011, shall be allowed to apply as if it had been enrolled under <br/>
<a id="pl.4.20"></a><var>4.20</var>Minnesota Statutes, section 273.111, immediately prior to application for enrollment <br/>
<a id="pl.4.21"></a><var>4.21</var>under Minnesota Statutes, section 273.114.<br/>
<a id="pl.4.22"></a><var>4.22</var>(c) If additional taxes, as defined under Minnesota Statutes, section 273.111, <br/>
<a id="pl.4.23"></a><var>4.23</var>subdivision 9, have been paid by a property owner prior to the effective date of this <br/>
<a id="pl.4.24"></a><var>4.24</var>paragraph for property being enrolled or reenrolled under paragraph (a) or (b), the county <br/>
<a id="pl.4.25"></a><var>4.25</var>must repay the property owner in the manner prescribed by the commissioner of revenue.<br/>
<a id="pl.4.26"></a><var>4.26</var><b>EFFECTIVE DATE.</b>Paragraphs (a) and (b) are effective for taxes payable in 2012 <br/>
<a id="pl.4.27"></a><var>4.27</var>and thereafter. Paragraph (c) is effective the day following final enactment.<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.4.28"></a><var>4.28</var>    Sec. 7. <b>COVENANTS TERMINATED.</b><br/>
<a id="pl.4.29"></a><var>4.29</var>Any covenants entered into in order to comply with the requirements of Minnesota <br/>
<a id="pl.4.30"></a><var>4.30</var>Statutes 2010, section 273.114, subdivision 5, are terminated.<br/>
<a id="pl.4.31"></a><var>4.31</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.0.8.0"></a><a id="pl.4.32"></a><var>4.32</var>    Sec. 8. <b>STUDY REQUIRED.</b><br/>
<a id="pl.5.1"></a><var>5.1</var>The commissioner of revenue, in consultation with the Minnesota Association of <br/>
<a id="pl.5.2"></a><var>5.2</var>Assessing Officers, the Department of Applied Economics at the University of Minnesota, <br/>
<a id="pl.5.3"></a><var>5.3</var>and representatives of major farm groups within the state of Minnesota, must explore <br/>
<a id="pl.5.4"></a><var>5.4</var>alternative methods for determining the taxable value of tillable and nontillable land <br/>
<a id="pl.5.5"></a><var>5.5</var>enrolled in the green acres program under Minnesota Statutes, section 273.111, and the <br/>
<a id="pl.5.6"></a><var>5.6</var>rural preserves program under Minnesota Statutes, section 273.114. The commissioner <br/>
<a id="pl.5.7"></a><var>5.7</var>must make a report to the legislature by February 15, 2012, describing the methodologies <br/>
<a id="pl.5.8"></a><var>5.8</var>intended to be used for assessment year 2012 and thereafter.<br/>
<a id="pl.5.9"></a><var>5.9</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>
<br/>
<a id="bill.0.9.0"></a><a id="pl.5.10"></a><var>5.10</var>    Sec. 9. <b> REPEALER.</b><br/>
<a id="pl.5.11"></a><var>5.11</var>Minnesota Statutes 2010, section 273.114, subdivision 1, is repealed.<br/>
<a id="pl.5.12"></a><var>5.12</var><b>EFFECTIVE DATE.</b>This section is effective the day following final enactment.<br/>