HF 2436

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

A bill for an act
relating to property taxation; providing that
agricultural land will be valued based on production
value for property tax purposes; appropriating money;
amending Minnesota Statutes 2004, sections 127A.48,
subdivision 3; 273.111, subdivision 4; 473H.10,
subdivision 2; proposing coding for new law in chapter
273.

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

Section 1.

Minnesota Statutes 2004, 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 2007 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2004, 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,
except that in no case shall its value be less than its taxable
value for assessment year 2006, taxes payable in 2007, if the
property was valued and taxed under this section in that year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment
year 2007, taxes payable in 2008, and thereafter.
new text end

Sec. 3.

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 such times
and locations as it deems 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, 2007, 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 will be 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 2006 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, 2005.
new text end

Sec. 4.

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, 2000, 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, (ii) its acquisition value determined under
subdivision 2, or (iii) its taxable market value for assessment
year 2006.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment
year 2007, taxes payable in 2008, and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2004, 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, except that in no case shall its
value be less than its value for assessment year 2006, taxes
payable in 2007, if the property was valued and taxed under this
section in that year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment
year 2007, taxes payable in 2008, and thereafter.
new text end