HF 12

2nd Engrossment - 87th Legislature (2011 - 2012) Posted on 03/07/2011 03:07pm

A bill for an act
relating to taxation; property; making changes to the green acres and rural
preserve programs; amending Minnesota Statutes 2010, sections 273.111,
subdivision 9, by adding a subdivision; 273.114, subdivisions 2, 5, 6; repealing
Minnesota Statutes 2010, section 273.114, subdivision 1.

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

Section 1.

Minnesota Statutes 2010, section 273.111, is amended by adding a
subdivision to read:

new text begin Subd. 2a. new text end

new text begin Purpose. new text end

new text begin The legislature finds that it is in the interest of the state to
encourage and preserve farms by mitigating the property tax impact of increasing land
values due to nonagricultural economic forces.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2010, section 273.111, subdivision 9, is amended to read:

Subd. 9.

Additional taxes.

(a) Except as provided in paragraph (b), when real
property which is being, or has been valued and assessed under this section no longer
qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional
taxes, in the amount equal to the difference between the taxes determined in accordance
with subdivision 4, and the amount determined under subdivision 5. Provided, however,
that the amount determined under subdivision 5 shall not be greater than it would have
been had the actual bona fide sale price of the real property at an arm's-length transaction
been used in lieu of the market value determined under subdivision 5. Such additional
taxes shall be extended against the property on the tax list for the current year, provided,
however, that no interest or penalties shall be levied on such additional taxes if timely
paid, and provided further, that such additional taxes shall only be levied with respect to
new text begin (1) new text end the last three years that the deleted text begin said deleted text end property has been valued and assessed under this
section new text begin , for property originally enrolled on or before May 1, 2012, or (2) the last five years
that the property has been valued and assessed under this section, for property originally
enrolled after May 1, 2012 new text end .

(b) Real property that has been valued and assessed under this section prior to
May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is
withdrawn from the program before August 16, 2010, is not subject to additional taxes
under this subdivision or subdivision 3, paragraph (c). If additional taxes have been
paid under this subdivision with respect to property described in this paragraph prior to
April 3, 2009, the county must repay the property owner in the manner prescribed by the
commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2010, section 273.114, subdivision 2, is amended to read:

Subd. 2.

Requirements.

Class deleted text begin 2a or deleted text end 2b property that had been deleted text begin assessed deleted text end new text begin properly
enrolled new text end under deleted text begin Minnesota Statutes 2006, deleted text end section 273.111 new text begin for taxes payable in 2008 new text end , or that
is part of an agricultural homestead under deleted text begin Minnesota Statutes, deleted text end section 273.13, subdivision
23, paragraph (a) new text begin , at least a portion of which is enrolled under section 273.111 new text end , is entitled
to valuation and tax deferment under this section if:

(1) the deleted text begin land consists of at least ten acres deleted text end new text begin property is contiguous to class 2a property
enrolled under section 273.111 under the same ownership new text end ;

deleted text begin (2) a conservation assessment plan for the land must be prepared by an approved
plan writer and implemented during the period in which the land is subject to valuation
and deferment under this section;
deleted text end

deleted text begin (3) the land must be enrolled for a minimum of eight years;
deleted text end

deleted text begin (4) deleted text end new text begin (2) new text end there are no delinquent property taxes on the land; and

deleted text begin (5) deleted text end new text begin (3) new text end the property is not also enrolled for valuation and deferment under section
273.111 or 273.112, or chapter 290C or 473H.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2010, section 273.114, subdivision 5, is amended to read:

Subd. 5.

Application deleted text begin and covenant agreement deleted text end .

deleted text begin (a) deleted text end Application for deferment
of taxes and assessment under this section shall be filed by May 1 of the year prior to
the year in which the taxes are payable. Any application filed under this subdivision
and granted shall continue in effect for subsequent years until the deleted text begin termination of the
covenant agreement under paragraph (b) deleted text end new text begin property is withdrawn or no longer qualifies new text end . The
application must be filed with the assessor of the taxing district in which the real property
is located on the form prescribed by the commissioner of revenue. deleted text begin The assessor may
require proof by affidavit or otherwise that the property qualifies under subdivision 2.
deleted text end

deleted text begin (b) The owner of the property must sign a covenant agreement that is filed with the
county recorder and recorded in the county where the property is located. The covenant
agreement must include all of the following:
deleted text end

deleted text begin (1) legal description of the area to which the covenant applies;
deleted text end

deleted text begin (2) name and address of the owner;
deleted text end

deleted text begin (3) a statement that the land described in the covenant must be kept as rural preserve
land, which meets the requirements of subdivision 2, for the duration of the covenant;
deleted text end

deleted text begin (4) a statement that the landowner may terminate the covenant agreement by
notifying the county assessor in writing three years in advance of the date of proposed
termination, provided that the notice of intent to terminate may not be given at any time
before the land has been subject to the covenant for a period of five years;
deleted text end

deleted text begin (5) a statement that the covenant is binding on the owner or the owner's successor or
assigns and runs with the land; and
deleted text end

deleted text begin (6) a witnessed signature of the owner, agreeing by covenant, to maintain the land as
described in subdivision 2.
deleted text end

deleted text begin (c) After a covenant under this section has been terminated, the land that had been
subject to the covenant is ineligible for subsequent valuation under this section for a
period of three years after the termination.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2010, section 273.114, subdivision 6, is amended to read:

Subd. 6.

Additional taxes.

deleted text begin Upon termination of a covenant agreement in
subdivision 5, paragraph (b), the land to which the covenant applied deleted text end new text begin When real property
that is being or has been valued and assessed under this section no longer qualifies under
subdivision 2, the portion no longer qualifying new text end shall be subject to additional taxes in
the amount equal to the difference between the taxes determined in accordance with
subdivision 3 and the amount determined under subdivision 4, provided that the amount
determined under subdivision 4 shall not be greater than it would have been had the actual
bona fide sale price of the real property at an arm's-length transaction been used in lieu of
the market value determined under subdivision 4. The additional taxes shall be extended
against the property on the tax list for the current year, provided that no interest or penalties
shall be levied on the additional taxes if timely paid and that the additional taxes shall only
be levied with respect to the current year plus new text begin (1) new text end two prior years that the property has
been valued and assessed under this section new text begin , for property that had been enrolled under
this section or section 273.111 on or before May 1, 2012, or (2) four prior years that the
property had been valued and assessed under this section, for all other property new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 6. new text begin LAND REMOVED FROM PROGRAM.
new text end

new text begin (a) Any class 2a land that had been properly enrolled in the Minnesota Agricultural
Property Tax Law under Minnesota Statutes 2006, section 273.111, and that was removed
from the program between May 21, 2008, and the effective date of this section must be
reinstated to the program at the request of the owner provided that the request is made
prior to September 1, 2011.
new text end

new text begin (b) Any class 2b land that had been properly enrolled in the Minnesota Agricultural
Property Tax Law under Minnesota Statutes, section 273.111, and that was removed from
the program between May 21, 2008, and the effective date of this section, and that applies
for enrollment in the rural preserve program under Minnesota Statutes, section 273.114,
prior to September 1, 2011, shall be allowed to apply as if it had been enrolled under
Minnesota Statutes, section 273.111, immediately prior to application for enrollment
under Minnesota Statutes, section 273.114.
new text end

new text begin (c) If additional taxes, as defined under Minnesota Statutes, section 273.111,
subdivision 9, have been paid by a property owner prior to the effective date of this
paragraph for property being enrolled or reenrolled under paragraph (a) or (b), the county
must repay the property owner in the manner prescribed by the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (b) are effective for taxes payable in 2012
and thereafter. Paragraph (c) is effective the day following final enactment.
new text end

Sec. 7. new text begin COVENANTS TERMINATED.
new text end

new text begin Any covenants entered into in order to comply with the requirements of Minnesota
Statutes 2010, section 273.114, subdivision 5, are terminated.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin STUDY REQUIRED.
new text end

new text begin The commissioner of revenue, in consultation with the Minnesota Association of
Assessing Officers, the Department of Applied Economics at the University of Minnesota,
and representatives of major farm groups within the state of Minnesota, must explore
alternative methods for determining the taxable value of tillable and nontillable land
enrolled in the green acres program under Minnesota Statutes, section 273.111, and the
rural preserves program under Minnesota Statutes, section 273.114. The commissioner
must make a report to the legislature by February 15, 2012, describing the methodologies
intended to be used for assessment year 2012 and thereafter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2010, section 273.114, subdivision 1, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end