HF 12

1st Committee Engrossment - 87th Legislature (2011 - 2012) Posted on 03/19/2013 07:33pm

1.1A bill for an act

1.2relating to taxation; property; making changes to the green acres and rural
1.3preserve programs;amending Minnesota Statutes 2010, sections 273.111,
1.4subdivision 9, by adding a subdivision; 273.114, subdivisions 2, 5, 6; repealing
1.5Minnesota Statutes 2010, section 273.114, subdivision 1.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7    Section 1. Minnesota Statutes 2010, section 273.111, is amended by adding a
1.8subdivision to read:
1.9    Subd. 2a. Purpose. The legislature finds that it is in the interest of the state to
1.10encourage and preserve farms by mitigating the property tax impact of increasing land
1.11values due to nonagricultural economic forces.
1.12EFFECTIVE DATE.This section is effective the day following final enactment.

1.13    Sec. 2. Minnesota Statutes 2010, section 273.111, subdivision 9, is amended to read:
1.14    Subd. 9. Additional taxes. (a) Except as provided in paragraph (b), when real
1.15property which is being, or has been valued and assessed under this section no longer
1.16qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional
1.17taxes, in the amount equal to the difference between the taxes determined in accordance
1.18with subdivision 4, and the amount determined under subdivision 5. Provided, however,
1.19that the amount determined under subdivision 5 shall not be greater than it would have
1.20been had the actual bona fide sale price of the real property at an arm's-length transaction
1.21been used in lieu of the market value determined under subdivision 5. Such additional
1.22taxes shall be extended against the property on the tax list for the current year, provided,
1.23however, that no interest or penalties shall be levied on such additional taxes if timely
2.1paid, and provided further, that such additional taxes shall only be levied with respect to
2.2(1) the last three years that the said property has been valued and assessed under this
2.3section, for property originally enrolled on or before May 1, 2012, or (2) the last five years
2.4that the property has been valued and assessed under this section, for property originally
2.5enrolled after May 1, 2012.
2.6(b) Real property that has been valued and assessed under this section prior to
2.7May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is
2.8withdrawn from the program before August 16, 2010, is not subject to additional taxes
2.9under this subdivision or subdivision 3, paragraph (c). If additional taxes have been
2.10paid under this subdivision with respect to property described in this paragraph prior to
2.11April 3, 2009, the county must repay the property owner in the manner prescribed by the
2.12commissioner of revenue.
2.13EFFECTIVE DATE.This section is effective the day following final enactment.

2.14    Sec. 3. Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read:
2.15    Subd. 2. Requirements. Class 2a or 2b property that had been assessed properly
2.16enrolled under Minnesota Statutes 2006, section 273.111, or that is part of an agricultural
2.17homestead under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is
2.18entitled to valuation and tax deferment under this section if:
2.19(1) the land consists of at least ten acres, or is contiguous to at least ten acres of
2.20class 2a land under the same ownership;
2.21(2) a conservation assessment plan for the land must be prepared by an approved
2.22plan writer and implemented during the period in which the land is subject to valuation
2.23and deferment under this section;
2.24(3) the land must be enrolled for a minimum of eight years;
2.25(4) (2) there are no delinquent property taxes on the land; and
2.26(5) (3) the property is not also enrolled for valuation and deferment under section
2.27273.111 or 273.112, or chapter 290C or 473H.
2.28EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
2.29thereafter.

2.30    Sec. 4. Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read:
2.31    Subd. 5. Application and covenant agreement. (a) Application for deferment
2.32of taxes and assessment under this section shall be filed by May 1 of the year prior to
2.33the year in which the taxes are payable. Any application filed under this subdivision
3.1and granted shall continue in effect for subsequent years until the termination of the
3.2covenant agreement under paragraph (b) property is withdrawn or no longer qualifies. The
3.3application must be filed with the assessor of the taxing district in which the real property
3.4is located on the form prescribed by the commissioner of revenue. The assessor may
3.5require proof by affidavit or otherwise that the property qualifies under subdivision 2.
3.6    (b) The owner of the property must sign a covenant agreement that is filed with the
3.7county recorder and recorded in the county where the property is located. The covenant
3.8agreement must include all of the following:
3.9    (1) legal description of the area to which the covenant applies;
3.10    (2) name and address of the owner;
3.11    (3) a statement that the land described in the covenant must be kept as rural preserve
3.12land, which meets the requirements of subdivision 2, for the duration of the covenant;
3.13    (4) a statement that the landowner may terminate the covenant agreement by
3.14notifying the county assessor in writing three years in advance of the date of proposed
3.15termination, provided that the notice of intent to terminate may not be given at any time
3.16before the land has been subject to the covenant for a period of five years;
3.17    (5) a statement that the covenant is binding on the owner or the owner's successor or
3.18assigns and runs with the land; and
3.19    (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
3.20described in subdivision 2.
3.21(c) After a covenant under this section has been terminated, the land that had been
3.22subject to the covenant is ineligible for subsequent valuation under this section for a
3.23period of three years after the termination.
3.24EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
3.25thereafter.

3.26    Sec. 5. Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read:
3.27    Subd. 6. Additional taxes. Upon termination of a covenant agreement in
3.28subdivision 5, paragraph (b), the land to which the covenant applied When real property
3.29that is being or has been valued and assessed under this section no longer qualifies under
3.30subdivision 2, the portion no longer qualifying shall be subject to additional taxes in
3.31the amount equal to the difference between the taxes determined in accordance with
3.32subdivision 3 and the amount determined under subdivision 4, provided that the amount
3.33determined under subdivision 4 shall not be greater than it would have been had the actual
3.34bona fide sale price of the real property at an arm's-length transaction been used in lieu of
3.35the market value determined under subdivision 4. The additional taxes shall be extended
4.1against the property on the tax list for the current year, provided that no interest or penalties
4.2shall be levied on the additional taxes if timely paid and that the additional taxes shall only
4.3be levied with respect to the current year plus (1) two prior years that the property has
4.4been valued and assessed under this section, for property that had been enrolled under
4.5this section or section 273.111 on or before May 1, 2012, or (2) four prior years that the
4.6property had been valued and assessed under this section, for all other property.
4.7EFFECTIVE DATE.This section is effective for taxes payable in 2012 and
4.8thereafter.

4.9    Sec. 6. LAND REMOVED FROM PROGRAM.
4.10(a) Any class 2a land that had been properly enrolled in the Minnesota Agricultural
4.11Property Tax Law under Minnesota Statutes 2006, section 273.111, and that was removed
4.12from the program between May 21, 2008, and the effective date of this section must be
4.13reinstated to the program at the request of the owner provided that the request is made
4.14prior to September 1, 2011.
4.15(b) Any class 2b land that had been properly enrolled in the Minnesota Agricultural
4.16Property Tax Law under Minnesota Statutes, section 273.111, and that was removed from
4.17the program between May 21, 2008, and the effective date of this section, and that applies
4.18for enrollment in the rural preserve program under Minnesota Statutes, section 273.114,
4.19prior to September 1, 2011, shall be allowed to apply as if it had been enrolled under
4.20Minnesota Statutes, section 273.111, immediately prior to application for enrollment
4.21under Minnesota Statutes, section 273.114.
4.22(c) If additional taxes, as defined under Minnesota Statutes, section 273.111,
4.23subdivision 9, have been paid by a property owner prior to the effective date of this
4.24paragraph for property being enrolled or reenrolled under paragraph (a) or (b), the county
4.25must repay the property owner in the manner prescribed by the commissioner of revenue.
4.26EFFECTIVE DATE.Paragraphs (a) and (b) are effective for taxes payable in 2012
4.27and thereafter. Paragraph (c) is effective the day following final enactment.

4.28    Sec. 7. COVENANTS TERMINATED.
4.29Any covenants entered into in order to comply with the requirements of Minnesota
4.30Statutes 2010, section 273.114, subdivision 5, are terminated.
4.31EFFECTIVE DATE.This section is effective the day following final enactment.

4.32    Sec. 8. STUDY REQUIRED.
5.1The commissioner of revenue, in consultation with the Minnesota Association of
5.2Assessing Officers, the Department of Applied Economics at the University of Minnesota,
5.3and representatives of major farm groups within the state of Minnesota, must explore
5.4alternative methods for determining the taxable value of tillable and nontillable land
5.5enrolled in the green acres program under Minnesota Statutes, section 273.111, and the
5.6rural preserves program under Minnesota Statutes, section 273.114. The commissioner
5.7must make a report to the legislature by February 15, 2012, describing the methodologies
5.8intended to be used for assessment year 2012 and thereafter.
5.9EFFECTIVE DATE.This section is effective the day following final enactment.

5.10    Sec. 9. REPEALER.
5.11Minnesota Statutes 2010, section 273.114, subdivision 1, is repealed.
5.12EFFECTIVE DATE.This section is effective the day following final enactment.