HF 1797

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing a reduced class rate
for certain property bordering public waters; amending
Minnesota Statutes 2004, section 273.13, subdivision
23.

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

Section 1.

Minnesota Statutes 2004, section 273.13,
subdivision 23, is amended to read:

Subd. 23.

Class 2.

(a) Class 2a property is agricultural
land including any improvements that is homesteaded. The market
value of the house and garage and immediately surrounding one
acre of land has the same class rates as class 1a property under
subdivision 22. The value of the remaining land including
improvements up to and including $600,000 market value has a net
class rate of 0.55 percent of market value. The remaining
property over $600,000 market value has a class rate of one
percent of market value.

(b) Class 2b property is (1) real estate, rural in
character and used exclusively for growing trees for timber,
lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing
trees for timber, lumber, and wood and wood products, if the
owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand
improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; or (4) a landing
area or public access area of a privately owned public use
airport. Class 2b property has a net class rate of one percent
of market value.

(c) Agricultural land as used in this section means
contiguous acreage of ten acres or more, used during the
preceding year for agricultural purposes. "Agricultural
purposes" as used in this section means the raising or
cultivation of agricultural products. "Agricultural purposes"
also includes enrollment in the Reinvest in Minnesota program
under sections 103F.501 to 103F.535 or the federal Conservation
Reserve Program as contained in Public Law 99-198 if the
property was classified as agricultural (i) under this
subdivision for the assessment year 2002 or (ii) in the year
prior to its enrollment. Contiguous acreage on the same parcel,
or contiguous acreage on an immediately adjacent parcel under
the same ownership, may also qualify as agricultural land, but
only if it is pasture, timber, waste, unusable wild land, or
land included in state or federal farm programs. Agricultural
classification for property shall be determined excluding the
house, garage, and immediately surrounding one acre of land, and
shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same
ownership.

(d) Real estate, excluding the house, garage, and
immediately surrounding one acre of land, of less than ten acres
which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as
agricultural land.

Land shall be classified as agricultural even if all or a
portion of the agricultural use of that property is the leasing
to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative
for qualifying under section 273.111.

The property classification under this section supersedes,
for property tax purposes only, any locally administered
agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(e) The term "agricultural products" as used in this
subdivision includes production for sale of:

(1) livestock, dairy animals, dairy products, poultry and
poultry products, fur-bearing animals, horticultural and nursery
stock, fruit of all kinds, vegetables, forage, grains, bees, and
apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding
occurs on land zoned for agricultural use;

(3) the commercial boarding of horses if the boarding is
done in conjunction with raising or cultivating agricultural
products as defined in clause (1);

(4) property which is owned and operated by nonprofit
organizations used for equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a
shooting preserve licensed under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for
timber, lumber, wood, or wood products; and

(8) maple syrup taken from trees grown by a person licensed
by the Minnesota Department of Agriculture under chapter 28A as
a food processor.

(f) If a parcel used for agricultural purposes is also used
for commercial or industrial purposes, including but not limited
to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities
enumerated in clauses (1), (2), and (3),

the assessor shall classify the part of the parcel used for
agricultural purposes as class 1b, 2a, or 2b, whichever is
appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural
products for first sale is considered an agricultural purpose.
A greenhouse or other building where horticultural or nursery
products are grown that is also used for the conduct of retail
sales must be classified as agricultural if it is primarily used
for the growing of horticultural or nursery products from seed,
cuttings, or roots and occasionally as a showroom for the retail
sale of those products. Use of a greenhouse or building only
for the display of already grown horticultural or nursery
products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the
records the market value of the homestead dwelling and the one
acre of land on which that dwelling is located. If any farm
buildings or structures are located on this homesteaded acre of
land, their market value shall not be included in this separate
determination.

(g) To qualify for classification under paragraph (b),
clause (4), a privately owned public use airport must be
licensed as a public airport under section 360.018. For
purposes of paragraph (b), clause (4), "landing area" means that
part of a privately owned public use airport properly cleared,
regularly maintained, and made available to the public for use
by aircraft and includes runways, taxiways, aprons, and sites
upon which are situated landing or navigational aids. A landing
area also includes land underlying both the primary surface and
the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained
for the primary purposes of the landing, taking off, and taxiing
of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is
not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential
purposes.

The land contained in a landing area under paragraph (b), clause
(4), must be described and certified by the commissioner of
transportation. The certification is effective until it is
modified, or until the airport or landing area no longer meets
the requirements of paragraph (b), clause (4). For purposes of
paragraph (b), clause (4), "public access area" means property
used as an aircraft parking ramp, apron, or storage hangar, or
an arrival and departure building in connection with the airport.

new text begin (h) Class 2c property consists of any parcel or contiguous
parcels of unimproved real estate, excluding agricultural land
classified under this subdivision, that meets all the criteria
in clauses (1) to (5):
new text end

new text begin (1) the property consists of at least 200 contiguous feet
of unimproved shoreline on water basin with a shoreland
classification as defined in section 103G.005, subdivision 15,
paragraph (a), clause (1);
new text end

new text begin (2) the unimproved shoreline is located within 400 feet
from the ordinary high water elevation of the water basin. For
purposes of this clause, "unimproved" means that the property,
or that portion of the property qualifying under this paragraph,
contains no structures, that there are no docks or landings on
its shoreline, and that the natural terrain and vegetation has
not been disturbed or has been restored;
new text end

new text begin (3) the property is either (i) the homestead of the owner,
or (ii) has been in possession of the owner, the owner's spouse,
or the owner's or spouse's son or daughter for a period of at
least seven years prior to application for benefits under this
section;
new text end

new text begin (4) the owner files an application with the county assessor
by July 1 for classification under this paragraph for the
subsequent assessment year; and
new text end

new text begin (5) the owner of the property signs a covenant agreement
that is filed with the county assessor and recorded in the
county where the property is located. The covenant agreement
must include all of the following:
new text end

new text begin (i) legal description of the area to which the covenant
applies;
new text end

new text begin (ii) name and address of the owner;
new text end

new text begin (iii) a statement that the land described in the covenant
must be kept as undeveloped land for the duration of the
covenant;
new text end

new text begin (iv) a statement that the landowner may terminate the
covenant agreement by notifying the county assessor in writing
eight years in advance of the date of proposed termination;
new text end

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

new text begin (vi) a witnessed signature of the owner covenanting to keep
the land in its undeveloped state as it existed on the date the
covenant was signed.
new text end

new text begin Upon termination of a covenant agreement in clause (5), the
property is subject to additional taxes. The amount of
additional taxes due on the property equals the difference
between the taxes actually levied and the taxes that would have
been imposed if the property had been valued and classified as
if class 2c did not apply. The additional taxes must be
extended against the property on the tax list for the current
year. No interest or penalties may be levied on the additional
taxes if timely paid, and the additional taxes must be levied
only with respect to the last seven years that the property was
valued and assessed under this paragraph. For purposes of this
paragraph, "timely paid" means paid (A) within 60 days after
notification from the county that the property no longer
qualifies, or (B) prior to the recording of the conveyance of
the property, whichever is earlier.
new text end

new text begin The tax imposed under this paragraph is a lien on the
property assessed to the same extent and for the same duration
as other real property taxes. The tax must be extended by the
county auditor and, when payable, be collected and distributed
in the same manner provided by law for the collection and
distribution of other property taxes.
new text end

new text begin Class 2c has a class rate of 0.6 percent of market value.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2005
assessment and thereafter, for taxes payable in 2006 and
thereafter. For taxes payable in 2006, the date for filing an
application with the county assessor under paragraph (h), clause
(4), is September 1, 2005.
new text end