HF 681

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

A bill for an act
relating to property tax; excluding agricultural property from the tax base
for school bonded debt levies; providing for valuation of agricultural land
based on production value for property tax purposes; appropriating money;
amending Minnesota Statutes 2006, sections 123B.53, subdivision 5; 126C.01,
by adding subdivisions; 127A.48, subdivision 3; 273.111, subdivision 4; 275.08,
subdivision 1b; 473H.10, subdivision 2; 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 2006, section 123B.53, subdivision 5, is amended to read:

Subd. 5.

Equalized debt service levy.

(a) The equalized debt service levy of a
district equals the sum of the first tier equalized debt service levy and the second tier
equalized debt service levy.

(b) A district's first tier equalized debt service levy equals the district's first tier debt
service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted new text begin school capital new text end net tax capacity of
the district for the year before the year the levy is certified by the adjusted pupil units in
the district for the school year ending in the year prior to the year the levy is certified; to

(2) $3,200.

(c) A district's second tier equalized debt service levy equals the district's second tier
debt service equalization revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted new text begin school capital new text end net tax capacity of
the district for the year before the year the levy is certified by the adjusted pupil units in
the district for the school year ending in the year prior to the year the levy is certified; to

(2) $8,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin School capital net tax capacity. new text end

new text begin "School capital net tax capacity"
means the net tax capacity as otherwise defined under section 273.13, excluding the tax
capacity attributable to agricultural land and buildings or timberland under class 2a or
2b. This exclusion does not apply to the house, garage, and one acre of an agricultural
homestead under class 2a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2006, section 126C.01, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Adjusted school capital net tax capacity. new text end

new text begin "Adjusted school capital net
tax capacity" means the school capital net tax capacity defined under subdivision 2a as
adjusted by the commissioner of revenue under section 127A.48.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 127A.48, subdivision 3, is amended to read:

Subd. 3.

Agricultural lands.

deleted text begin For purposes of determining deleted text end The adjusted net tax
capacity of agricultural lands deleted text begin for the calculation of adjusted net tax capacities, the market
value of agricultural lands must be the price for which the property would sell in an
arm's-length transaction deleted text end new text begin valued under section 273.114 shall be equal to the net tax capacity new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2006, section 273.111, subdivision 4, is amended to read:

Subd. 4.

Determination of value.

new text begin Notwithstanding sections 272.03, subdivision
8, and 273.11, new 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 deleted text begin notwithstanding
sections 272.03, subdivision 8, and 273.11. In determining the value for ad valorem tax
purposes, the assessor shall use sales data for agricultural lands located outside the seven
metropolitan counties having similar soil types, number of degree days, and other similar
agricultural characteristics. Furthermore, the assessor shall not consider any added values
resulting from nonagricultural factors deleted text end new text begin under section 273.114, subdivision 1 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, taxes
payable in 2010, and thereafter.
new text end

Sec. 6.

new text begin [273.113] PRODUCTION VALUE OF AGRICULTURAL LAND.
new text end

new text begin Subdivision 1. new text end

new text begin State Board of Agricultural Land Valuation. new text end

new text begin The State Board of
Agricultural Land Valuation is hereby created. The board shall consist of the commissioner
of revenue, the commissioner of agriculture, and the dean of the University of Minnesota
College of Agricultural, Food and Environmental Sciences. The commissioner of revenue
shall serve as chairperson of the board. The board shall meet at the times and locations it
considers necessary.
new text end

new text begin Subd. 2. new text end

new text begin Valuation system based on agricultural productivity. new text end

new text begin (a) By January
1, 2009, the board shall develop a system for valuing agricultural land throughout the
state based on the productive capacity of the land, current agricultural commodity prices,
current costs of inputs to agricultural production, and a reasonable return on investment.
The system shall make use of data and other information it deems valid and necessary to
produce a valuation schedule that fairly values agricultural land for its production value
throughout the state. The board may provide for the development of productivity measures
that it deems necessary due to the inadequacy of existing measures, either statewide or
in certain areas within the state where current data is not adequate. At its discretion, the
board may choose to limit its scope to the valuation of tillable land only.
new text end

new text begin (b) The valuation system must be developed in consultation with county assessors,
who are responsible for implementing the system within their respective counties.
new text end

new text begin (c) Once the board has adopted a preliminary system for valuing agricultural land
across the state based on productivity, it must conduct at least four public hearings
throughout the state to educate the public about the system and to gather public input
about the valuation of agricultural property.
new text end

new text begin Subd. 3. new text end

new text begin Appropriation. new text end

new text begin $....... is appropriated to the board in fiscal year 2008 to
implement the provisions of this section. All or a portion of that amount may be carried
over to the succeeding fiscal year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 7.

new text begin [273.114] VALUATION OF AGRICULTURAL PROPERTY.
new text end

new text begin Subdivision 1. new text end

new text begin Production value. new text end

new text begin Each year, the assessor shall assign each parcel of
agricultural property a production value based on the agricultural productivity valuation
system developed under section 273.113. The assessor shall separately estimate the value
of any structures and of land not included in the productivity valuation system and add
that value to the value of the lands that are included in the productivity valuation system.
new text end

new text begin Subd. 2. new text end

new text begin Acquisition value. new text end

new text begin Each year, the assessor shall determine an agricultural
property's acquisition value as the acquisition price of the property at the time of the most
recent sale or transfer. Properties that have not been transferred since January 1, 2002,
shall be considered to have an acquisition value of $0.
new text end

new text begin Subd. 3. new text end

new text begin Taxable value. new text end

new text begin Notwithstanding the provisions of section 273.11,
subdivision 1, the assessor shall annually determine the taxable value for each parcel
of agricultural property as the greater of: (i) its production value determined under
subdivision 1, or (ii) its acquisition value determined under subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, taxes
payable in 2010, and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2006, section 275.08, subdivision 1b, is amended to read:

Subd. 1b.

Computation of tax rates.

new text begin (a) new text end The amounts certified to be levied against
net tax capacity under section 275.07 by an individual local government unit shall be
divided by the total net tax capacity of all taxable properties within the local government
unit's taxing jurisdiction. The resulting ratio, the local government's local tax rate,
multiplied by each property's net tax capacity shall be each property's net tax capacity tax
for that local government unit before reduction by any credits.

new text begin (b) Any amount certified to the county auditor to be levied against school capital
net tax capacity shall be divided by the total school capital net tax capacity of all taxable
properties within the school district. The resulting ratio, the school district's school
capital tax rate, multiplied by each property's school capital net tax capacity shall be
each property's school capital tax before reduction by any credits. For the purposes of
this subdivision, "school capital net tax capacity" means the value as defined in section
126C.01, subdivision 2a.
new text end

new text begin (c) new text end Any amount certified to the county auditor to be levied against market value shall
be divided by the total referendum market value of all taxable properties within the taxing
district. The resulting ratio, the taxing district's new referendum tax rate, multiplied by
each property's referendum market value shall be each property's new referendum tax
before reduction by any credits. For the purposes of this subdivision, "referendum market
value" means the market value as defined in section 126C.01, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2008 and
thereafter.
new text end

Sec. 9.

Minnesota Statutes 2006, section 473H.10, subdivision 2, is amended to read:

Subd. 2.

No nonagricultural factors.

new text begin Notwithstanding sections 272.03, subdivision
8, and 273.11, new text end all land classified agricultural and in agricultural use, exclusive of buildings,
shall be valued solely with reference to its appropriate agricultural classification and value deleted text begin ,
notwithstanding sections 272.03, subdivision 8, and 273.11. In determining the value for
ad valorem tax purposes the assessor shall not consider any added values resulting from
nonagricultural factors deleted text end new text begin under section 273.114, subdivision 1 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, taxes
payable in 2010, and thereafter.
new text end