HF 4401

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/28/2024 04:35pm

A bill for an act
relating to taxation; property; modifying the requirements for green acres tax
deferment; amending Minnesota Statutes 2022, section 273.111, subdivisions 3,
8, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2022, section 273.111, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the following terms have the
meanings given:
new text end

new text begin (1) "southeast karst region" means Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted,
Wabasha, or Winona County; and
new text end

new text begin (2) "nutrient management plan" means a site-specific plan to meet plant needs while
minimizing nutrient loss to the environment by determining the proper source, method, rate,
and timing for each application of fertilizer, soil amendment, manure, or other source of
plant nutrients.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2025.
new text end

Sec. 2.

Minnesota Statutes 2022, section 273.111, subdivision 3, is amended to read:

Subd. 3.

Requirements.

(a) Real estate consisting of ten acres or more or a nursery or
greenhouse, and qualifying for classification as class 2a under section 273.13, shall be
entitled to valuation and tax deferment under this section if it is primarily devoted to
agricultural use, and either:

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the owner
or is real estate which is farmed with the real estate which contains the homestead property;
or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling, or
any combination thereof, for a period of at least seven years prior to application for benefits
under the provisions of this section, or is real estate which is farmed with the real estate
which qualifies under this clause and is within four townships or cities or combination
thereof from the qualifying real estate; or

(3) is the homestead of an individual who is part of an entity described in paragraph (b),
clause (1), (2), or (3); or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on the
parcel or parcels, provided that only the acres used to produce nursery stock qualify for
treatment under this section.

(b) Valuation of real estate under this section is limited to parcels owned by individuals
except for:

(1) a family farm entity or authorized farm entity regulated under section 500.24;

(2) an entity, not regulated under section 500.24, in which the majority of the members,
partners, or shareholders are related and at least one of the members, partners, or shareholders
either resides on the land or actively operates the land; and

(3) corporations that derive 80 percent or more of their gross receipts from the wholesale
or retail sale of horticultural or nursery stock.

The terms in this paragraph have the meanings given in section 500.24, where applicable.

(c) Land that previously qualified for tax deferment under this section and no longer
qualifies because it is not primarily used for agricultural purposes but would otherwise
qualify under Minnesota Statutes 2006, section 273.111, subdivision 3, for a period of at
least three years will not be required to make payment of the previously deferred taxes,
notwithstanding the provisions of subdivision 9. Sale of the land prior to the expiration of
the three-year period requires payment of deferred taxes as follows: sale in the year the land
no longer qualifies requires payment of the current year's deferred taxes plus payment of
deferred taxes for the two prior years; sale during the second year the land no longer qualifies
requires payment of the current year's deferred taxes plus payment of the deferred taxes for
the prior year; and sale during the third year the land no longer qualifies requires payment
of the current year's deferred taxes. Deferred taxes shall be paid even if the land qualifies
pursuant to subdivision 11a. When such property is sold or no longer qualifies under this
paragraph, or at the end of the three-year period, whichever comes first, all deferred special
assessments plus interest are payable in equal installments spread over the time remaining
until the last maturity date of the bonds issued to finance the improvement for which the
assessments were levied. If the bonds have matured, the deferred special assessments plus
interest are payable within 90 days. The provisions of section 429.061, subdivision 2, apply
to the collection of these installments. Penalties are not imposed on any such special
assessments if timely paid.

(d) Land that is enrolled in the reinvest in Minnesota program under sections 103F.501
to 103F.535, the federal Conservation Reserve Program as contained in Public Law 99-198,
or a similar state or federal conservation program qualifies for valuation and assessment
deferral under this section if it was in agricultural use before enrollment and, provided that,
in the case of land enrolled in the reinvest in Minnesota program, it is not subject to a
perpetual easement.

new text begin (e) To qualify for tax deferment under this section after January 1, 2026, land that is
located in the southeast karst region must have a nutrient management plan. The board of
each soil and water conservation district located in the southeast karst region must annually
certify any notifications of nutrient management plans received under subdivision 8 to the
county assessor by May 1. Certifications of nutrient management plans continue in effect
for subsequent years until the property no longer qualifies for deferment under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2025.
new text end

Sec. 3.

Minnesota Statutes 2022, section 273.111, subdivision 8, is amended to read:

Subd. 8.

Application.

new text begin (a) new 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 hereunder and granted shall continue in effect for subsequent years
until the property no longer qualifies. 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. The assessor may require proof by affidavit or otherwise that the
property qualifies under subdivision 3 and may require the applicant to provide a copy of
the appropriate schedule or form showing farm income that is attested to by the applicant
as having been included in the most recently filed federal income tax return of the applicant.

new text begin (b) Owners of land located in the southeast karst region who file an application for
deferment of taxes and assessment under this section must notify the board of the soil and
water conservation district with jurisdiction over the area in which the land is located that
the land has a current nutrient management plan. The owner must submit that plan to the
board by April 1 in the year prior to the year in which the taxes are payable. Any nutrient
management plan submitted under this paragraph is in effect for subsequent years until the
property no longer qualifies or until the nutrient management plan changes. The owner must
notify the board of any changes to the nutrient management plan, including if the land no
longer has a nutrient management plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2025.
new text end