HF 3229

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; providing tax credit for land 
  1.3             donated for conservation purposes; providing for 
  1.4             property tax classification of certain unimproved land 
  1.5             bordering a lake; amending Minnesota Statutes 2001 
  1.6             Supplement, section 273.13, subdivision 23; proposing 
  1.7             coding for new law in Minnesota Statutes, chapter 290. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.10  273.13, subdivision 23, is amended to read: 
  1.11     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  1.12  land including any improvements that is homesteaded.  The market 
  1.13  value of the house and garage and immediately surrounding one 
  1.14  acre of land has the same class rates as class 1a property under 
  1.15  subdivision 22.  The value of the remaining land including 
  1.16  improvements up to and including $600,000 market value has a net 
  1.17  class rate of 0.55 percent of market value.  The remaining 
  1.18  property over $600,000 market value has a class rate of one 
  1.19  percent of market value. 
  1.20     (b) Class 2b property is (1) real estate, rural in 
  1.21  character and used exclusively for growing trees for timber, 
  1.22  lumber, and wood and wood products; (2) real estate that is not 
  1.23  improved with a structure and is used exclusively for growing 
  1.24  trees for timber, lumber, and wood and wood products, if the 
  1.25  owner has participated or is participating in a cost-sharing 
  1.26  program for afforestation, reforestation, or timber stand 
  2.1   improvement on that particular property, administered or 
  2.2   coordinated by the commissioner of natural resources; (3) real 
  2.3   estate that is nonhomestead agricultural land; or (4) a landing 
  2.4   area or public access area of a privately owned public use 
  2.5   airport.  Class 2b property has a net class rate of one percent 
  2.6   of market value. 
  2.7      (c) Agricultural land as used in this section means 
  2.8   contiguous acreage of ten acres or more, used during the 
  2.9   preceding year for agricultural purposes.  "Agricultural 
  2.10  purposes" as used in this section means the raising or 
  2.11  cultivation of agricultural products or enrollment in the 
  2.12  Reinvest in Minnesota program under sections 103F.501 to 
  2.13  103F.535 or the federal Conservation Reserve Program as 
  2.14  contained in Public Law Number 99-198.  Contiguous acreage on 
  2.15  the same parcel, or contiguous acreage on an immediately 
  2.16  adjacent parcel under the same ownership, may also qualify as 
  2.17  agricultural land, but only if it is pasture, timber, waste, 
  2.18  unusable wild land, or land included in state or federal farm 
  2.19  programs.  Agricultural classification for property shall be 
  2.20  determined excluding the house, garage, and immediately 
  2.21  surrounding one acre of land, and shall not be based upon the 
  2.22  market value of any residential structures on the parcel or 
  2.23  contiguous parcels under the same ownership. 
  2.24     (d) Real estate, excluding the house, garage, and 
  2.25  immediately surrounding one acre of land, of less than ten acres 
  2.26  which is exclusively and intensively used for raising or 
  2.27  cultivating agricultural products, shall be considered as 
  2.28  agricultural land.  
  2.29     Land shall be classified as agricultural even if all or a 
  2.30  portion of the agricultural use of that property is the leasing 
  2.31  to, or use by another person for agricultural purposes. 
  2.32     Classification under this subdivision is not determinative 
  2.33  for qualifying under section 273.111. 
  2.34     The property classification under this section supersedes, 
  2.35  for property tax purposes only, any locally administered 
  2.36  agricultural policies or land use restrictions that define 
  3.1   minimum or maximum farm acreage. 
  3.2      (e) The term "agricultural products" as used in this 
  3.3   subdivision includes production for sale of:  
  3.4      (1) livestock, dairy animals, dairy products, poultry and 
  3.5   poultry products, fur-bearing animals, horticultural and nursery 
  3.6   stock described in sections 18.44 to 18.61, fruit of all kinds, 
  3.7   vegetables, forage, grains, bees, and apiary products by the 
  3.8   owner; 
  3.9      (2) fish bred for sale and consumption if the fish breeding 
  3.10  occurs on land zoned for agricultural use; 
  3.11     (3) the commercial boarding of horses if the boarding is 
  3.12  done in conjunction with raising or cultivating agricultural 
  3.13  products as defined in clause (1); 
  3.14     (4) property which is owned and operated by nonprofit 
  3.15  organizations used for equestrian activities, excluding racing; 
  3.16     (5) game birds and waterfowl bred and raised for use on a 
  3.17  shooting preserve licensed under section 97A.115; 
  3.18     (6) insects primarily bred to be used as food for animals; 
  3.19     (7) trees, grown for sale as a crop, and not sold for 
  3.20  timber, lumber, wood, or wood products; and 
  3.21     (8) maple syrup taken from trees grown by a person licensed 
  3.22  by the Minnesota department of agriculture under chapter 28A as 
  3.23  a food processor. 
  3.24     (f) If a parcel used for agricultural purposes is also used 
  3.25  for commercial or industrial purposes, including but not limited 
  3.26  to:  
  3.27     (1) wholesale and retail sales; 
  3.28     (2) processing of raw agricultural products or other goods; 
  3.29     (3) warehousing or storage of processed goods; and 
  3.30     (4) office facilities for the support of the activities 
  3.31  enumerated in clauses (1), (2), and (3), 
  3.32  the assessor shall classify the part of the parcel used for 
  3.33  agricultural purposes as class 1b, 2a, or 2b, whichever is 
  3.34  appropriate, and the remainder in the class appropriate to its 
  3.35  use.  The grading, sorting, and packaging of raw agricultural 
  3.36  products for first sale is considered an agricultural purpose.  
  4.1   A greenhouse or other building where horticultural or nursery 
  4.2   products are grown that is also used for the conduct of retail 
  4.3   sales must be classified as agricultural if it is primarily used 
  4.4   for the growing of horticultural or nursery products from seed, 
  4.5   cuttings, or roots and occasionally as a showroom for the retail 
  4.6   sale of those products.  Use of a greenhouse or building only 
  4.7   for the display of already grown horticultural or nursery 
  4.8   products does not qualify as an agricultural purpose.  
  4.9      The assessor shall determine and list separately on the 
  4.10  records the market value of the homestead dwelling and the one 
  4.11  acre of land on which that dwelling is located.  If any farm 
  4.12  buildings or structures are located on this homesteaded acre of 
  4.13  land, their market value shall not be included in this separate 
  4.14  determination.  
  4.15     (g) To qualify for classification under paragraph (b), 
  4.16  clause (4), a privately owned public use airport must be 
  4.17  licensed as a public airport under section 360.018.  For 
  4.18  purposes of paragraph (b), clause (4), "landing area" means that 
  4.19  part of a privately owned public use airport properly cleared, 
  4.20  regularly maintained, and made available to the public for use 
  4.21  by aircraft and includes runways, taxiways, aprons, and sites 
  4.22  upon which are situated landing or navigational aids.  A landing 
  4.23  area also includes land underlying both the primary surface and 
  4.24  the approach surfaces that comply with all of the following:  
  4.25     (i) the land is properly cleared and regularly maintained 
  4.26  for the primary purposes of the landing, taking off, and taxiing 
  4.27  of aircraft; but that portion of the land that contains 
  4.28  facilities for servicing, repair, or maintenance of aircraft is 
  4.29  not included as a landing area; 
  4.30     (ii) the land is part of the airport property; and 
  4.31     (iii) the land is not used for commercial or residential 
  4.32  purposes. 
  4.33  The land contained in a landing area under paragraph (b), clause 
  4.34  (4), must be described and certified by the commissioner of 
  4.35  transportation.  The certification is effective until it is 
  4.36  modified, or until the airport or landing area no longer meets 
  5.1   the requirements of paragraph (b), clause (4).  For purposes of 
  5.2   paragraph (b), clause (4), "public access area" means property 
  5.3   used as an aircraft parking ramp, apron, or storage hangar, or 
  5.4   an arrival and departure building in connection with the airport.
  5.5      (h) Class 2c property consists of any parcel or contiguous 
  5.6   parcels of unimproved real estate, excluding agricultural land 
  5.7   classified under this subdivision that meets all the criteria in 
  5.8   clauses (1) to (5): 
  5.9      (1) the property consists of at least 200 contiguous feet 
  5.10  of unimproved real estate that borders a meandered lake as 
  5.11  defined in section 103G.005, subdivision 15, paragraph (a), 
  5.12  clause (3); 
  5.13     (2) the unimproved real estate is located within 400 feet 
  5.14  from the ordinary high water elevation of the public waters.  
  5.15  For purposes of this clause, "unimproved" means that the 
  5.16  property, or that portion of the property qualifying under this 
  5.17  paragraph, contains no structures, that there are no docks or 
  5.18  landings on its shoreline, and that the natural terrain and 
  5.19  vegetation has not been disturbed, or has been restored to 
  5.20  native vegetation; 
  5.21     (3) the property is either (i) the homestead of the owner, 
  5.22  the owner's spouse, or the owner or spouse's son or daughter, or 
  5.23  (ii) has been in possession of the owner, the owner's spouse, or 
  5.24  the owner or spouse's son or daughter for a period of at least 
  5.25  seven years prior to application for benefits under this 
  5.26  section; 
  5.27     (4) the owner files an application with the county assessor 
  5.28  by July 1 for classification under this paragraph for the 
  5.29  subsequent assessment year; and 
  5.30     (5) the owner of the property signs a covenant agreement 
  5.31  and files the covenant with the county assessor in the county 
  5.32  where the property is located.  The covenant agreement must 
  5.33  include all of the following: 
  5.34     (i) legal description of the area to which the covenant 
  5.35  applies; 
  5.36     (ii) name and address of the owner; 
  6.1      (iii) a statement that the land described in the covenant 
  6.2   must be kept as undeveloped land for the duration of the 
  6.3   covenant; 
  6.4      (iv) a statement that the landowner may initiate expiration 
  6.5   of the covenant agreement by notifying the county assessor, in 
  6.6   writing, with the date of expiration which must be at least 
  6.7   eight years from the date of the expiration notice; 
  6.8      (v) a statement that the covenant is binding on the owner 
  6.9   or owner's successor or assignee and runs with the land; and 
  6.10     (vi) a witnessed signature of the owner covenanting to keep 
  6.11  the land in its undeveloped state as it existed on the date the 
  6.12  covenant was signed. 
  6.13     Upon expiration of a covenant agreement in clause (5), the 
  6.14  property which is sold is subject to additional taxes.  The 
  6.15  amount of additional taxes due on the property equals the 
  6.16  difference between the taxes actually levied and the taxes that 
  6.17  would have been imposed if the property had been valued and 
  6.18  classified as if class 2c did not apply.  The additional taxes 
  6.19  must be extended against the property on the tax list for the 
  6.20  current year, provided, however, that no interest or penalties 
  6.21  shall be levied on the additional taxes if timely paid, and 
  6.22  provided further, that the additional taxes must only be levied 
  6.23  with respect to the last seven years that the property has been 
  6.24  valued and assessed under this section.  For purposes of this 
  6.25  subdivision, "timely paid" means paid within 60 days after 
  6.26  notification from the county that the property no longer 
  6.27  qualifies, or paid prior to the recording of the conveyance of 
  6.28  the property, whichever is earlier. 
  6.29     The tax imposed under this paragraph is a lien on the 
  6.30  property assessed to the same extent and for the same duration 
  6.31  as other real property taxes.  The tax must be extended by the 
  6.32  county auditor and, when payable, be collected and distributed 
  6.33  in the same manner provided by law for the collection and 
  6.34  distribution of other property taxes. 
  6.35     Class 2c has a class rate of 0.6 percent of market value. 
  6.36     Sec. 2.  [290.0676] [CREDIT FOR LAND DONATED FOR 
  7.1   CONSERVATION PURPOSES.] 
  7.2      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  7.3   section, the following terms have the meanings given. 
  7.4      (b) "Interest in real property" means fee title or 
  7.5   qualified real property interest as defined in section 170(h) of 
  7.6   the Internal Revenue Code and the United States Treasury 
  7.7   Regulations promulgated thereunder. 
  7.8      (c) "Fair market value" of an interest in real property 
  7.9   means the value as determined by a "qualified appraisal" 
  7.10  prepared by a "qualified appraiser" as those terms are defined 
  7.11  in United States Treasury Regulations, section 1.170A-13, as 
  7.12  amended through December 31, 2000.  If the taxpayer does not 
  7.13  obtain an appraisal, fair market value means the estimated 
  7.14  market value of the property as determined by the assessor for 
  7.15  property tax purposes. 
  7.16     (d) "Discount of the sale price" means the difference 
  7.17  between the fair market value of an interest in real property at 
  7.18  the time of sale and the sale price, if the price the property 
  7.19  is sold for is lower. 
  7.20     (e) "Conservation purposes" means the conservation purposes 
  7.21  as defined in section 170(h)(4)(A)(i), (ii), and (iii) of the 
  7.22  Internal Revenue Code. 
  7.23     Subd. 2.  [CREDIT ALLOWED.] A taxpayer who donates an 
  7.24  interest in real property in this state for conservation 
  7.25  purposes to a qualified organization described in subdivision 3, 
  7.26  paragraph (a), may take a credit against the tax imposed by this 
  7.27  chapter in an amount equal to 50 percent of the fair market 
  7.28  value of the interest in real property.  A taxpayer who sells an 
  7.29  interest in real property at a discount for conservation 
  7.30  purposes may take a credit against the tax imposed by this 
  7.31  chapter in an amount equal to 50 percent of the value of the 
  7.32  discount of the sale price in the interest in real property. 
  7.33     Subd. 3.  [QUALIFICATION.] (a) To qualify for a credit 
  7.34  under this section, the taxpayer must convey the interest in 
  7.35  real property to: 
  7.36     (1) the state of Minnesota, a political subdivision, a 
  8.1   local government conservation agency, or a special purpose unit 
  8.2   of government; or 
  8.3      (2) a private organization as provided in section 501(c) of 
  8.4   the Internal Revenue Code that: 
  8.5      (i) meets the requirements of section 170(h)(3) of the 
  8.6   Internal Revenue Code; and 
  8.7      (ii) is organized and operated for one of the conservation 
  8.8   purposes specified in section 170(h)(4)(A)(i), (ii), and (iii) 
  8.9   of the Internal Revenue Code.  
  8.10     (b) A taxpayer claiming the credit under this section shall 
  8.11  attach the following to the tax returns on which the credit is 
  8.12  claimed:  
  8.13     (1) a certificate of acceptance from an organization 
  8.14  described in paragraph (a) verifying that the organization has 
  8.15  accepted the contribution; and 
  8.16     (2) a copy of a qualified appraisal by a qualified 
  8.17  appraiser as those terms are defined in United States Treasury 
  8.18  Regulations, section 1.170A-13, as amended through December 31, 
  8.19  2000, or a copy of the most recent notice of estimated market 
  8.20  value provided by the assessor. 
  8.21     (c) A donation or sale at a discount price qualifies for a 
  8.22  credit under this section only if it is a charitable 
  8.23  contribution within the meaning of section 170 of the Internal 
  8.24  Revenue Code. 
  8.25     Subd. 4.  [LIMITATION; CARRYOVER.] (a) The credit for the 
  8.26  taxable year may not exceed the taxpayer's liability for tax 
  8.27  before the credit under this section or $100,000, whichever is 
  8.28  less. 
  8.29     (b) If the amount of the credit determined under this 
  8.30  section for any taxable year exceeds the limitation in paragraph 
  8.31  (a), the excess is a carryover to each of the five succeeding 
  8.32  taxable years.  All of the excess unused credit for the taxable 
  8.33  year must be carried first to the earliest of the taxable years 
  8.34  to which the credit may be carried and then to each successive 
  8.35  year to which the credit may be carried.  The unused credit that 
  8.36  may be added under this paragraph in any year may not exceed the 
  9.1   lesser of the taxpayer's liability for tax less the land 
  9.2   donation credit for the taxable year or $100,000. 
  9.3      Subd. 5.  [EXPIRATION.] The credit under this section 
  9.4   expires for contributions made after December 31, 2007.  
  9.5      Sec. 3.  [EFFECTIVE DATE.] 
  9.6      Section 1 is effective for the 2002 assessment and 
  9.7   thereafter, for taxes payable in 2003 and thereafter.  For taxes 
  9.8   payable in 2003, the date for filing an application with the 
  9.9   county assessor under section 1, paragraph (h), clause (4), is 
  9.10  September 1, 2002. 
  9.11     Section 2 is effective for contributions made after the day 
  9.12  following final enactment in taxable years beginning after 
  9.13  December 31, 2001.