HF 12

1st Unofficial Engrossment - 87th Legislature (2011 - 2012) Posted on 03/29/2011 06:33pm

1.1A bill for an act

1.2relating to taxation; modifying the Minnesota rural preserve property tax
1.3program;amending Minnesota Statutes 2010, section 273.114, subdivisions 2, 5,
1.46; repealing Minnesota Statutes 2010, section 273.114, subdivision 1.
1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6    Section 1. Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read:
1.7    Subd. 2. Requirements. Class 2a or 2b property that had been assessed properly
1.8classified under Minnesota Statutes 2006, section 273.111, or that is part of an agricultural
1.9homestead under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is
1.10entitled to valuation and tax deferment under this section if:
1.11(1) the land consists of at least ten acres;
1.12(2) a conservation assessment plan for the land must be prepared by an approved
1.13plan writer and implemented during the period in which the land is subject to valuation
1.14and deferment under this section;
1.15(3) the land must be enrolled for a minimum of eight years;
1.16(4) (2) there are no delinquent property taxes on the land; and
1.17(5) (3) the property is not also enrolled for valuation and deferment under section
1.18273.111 or 273.112, or chapter 290C or 473H.
1.19EFFECTIVE DATE.This section is effective the day following final enactment.

1.20    Sec. 2. Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read:
1.21    Subd. 5. Application and covenant agreement. (a) Application for deferment
1.22of taxes and assessment under this section shall be filed by May 1 of the year prior to
1.23the year in which the taxes are payable. Any application filed under this subdivision
2.1and granted shall continue in effect for subsequent years until the termination of the
2.2covenant agreement under paragraph (b) property is withdrawn or no longer qualifies. The
2.3application must be filed with the assessor of the taxing district in which the real property
2.4is located on the form prescribed by the commissioner of revenue. Each application must
2.5include the most recent available aerial photograph or satellite image of the property
2.6provided by the Farm Service Agency of the United States Department of Agriculture or
2.7by the county geospatial information systems service that clearly delineates the land
2.8that is to be enrolled. The application form must contain a statement setting forth the
2.9consequences to the property owner of termination of qualification of property under the
2.10rural preserve program, together with a recommendation that land that is likely to be
2.11changed to a nonqualifying use during the period of enrollment should not be included in
2.12the application. The assessor may require proof by affidavit or otherwise that the property
2.13qualifies under subdivision 2.
2.14    (b) The owner of the property must sign a covenant agreement that is filed with the
2.15county recorder and recorded in the county where the property is located. The covenant
2.16agreement must include all of the following:
2.17    (1) legal description of the area to which the covenant applies;
2.18    (2) name and address of the owner;
2.19    (3) a statement that the land described in the covenant must be kept as rural preserve
2.20land, which meets the requirements of subdivision 2, for the duration of the covenant;
2.21    (4) a statement that the landowner may terminate the covenant agreement by
2.22notifying the county assessor in writing three years in advance of the date of proposed
2.23termination, provided that the notice of intent to terminate may not be given at any time
2.24before the land has been subject to the covenant for a period of five years;
2.25    (5) a statement that the covenant is binding on the owner or the owner's successor or
2.26assigns and runs with the land; and
2.27    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
2.28described in subdivision 2.
2.29(c) After a covenant under this section has been terminated, the land that had been
2.30subject to the covenant is ineligible for subsequent valuation under this section for a
2.31period of three years after the termination.
2.32EFFECTIVE DATE.This section is effective the day following final enactment.

2.33    Sec. 3. Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read:
2.34    Subd. 6. Additional taxes. Upon termination of a covenant agreement in
2.35subdivision 5, paragraph (b), the land to which the covenant applied When real property
3.1which is being, or has been valued and assessed under this section no longer qualifies
3.2under subdivision 2, the portion no longer qualifying shall be subject to additional taxes
3.3in the amount equal to the difference between the taxes determined in accordance with
3.4subdivision 3 and the amount determined under subdivision 4, provided that the amount
3.5determined under subdivision 4 shall not be greater than it would have been had the
3.6actual bona fide sale price of the real property at an arm's-length transaction been used in
3.7lieu of the market value determined under subdivision 4. The additional taxes shall be
3.8extended against the property on the tax list for the current year, provided that no interest
3.9or penalties shall be levied on the additional taxes if timely paid and that the additional
3.10taxes shall only be levied with respect to the current year plus two prior years that the
3.11property has been valued and assessed under this section.
3.12EFFECTIVE DATE.This section is effective the day following final enactment.

3.13    Sec. 4. REPEALER.
3.14Minnesota Statutes 2010, section 273.114, subdivision 1, is repealed.
3.15EFFECTIVE DATE.This section is effective the day following final enactment.