HF 5074

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/20/2024 11:23am

A bill for an act
relating to taxation; property; increasing the shareholder limit for entity-owned
agricultural homestead property; amending Minnesota Statutes 2022, section
273.124, subdivision 8.

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

Section 1.

Minnesota Statutes 2022, section 273.124, subdivision 8, is amended to read:

Subd. 8.

Homestead owned by or leased to family farm corporation, joint farm
venture, limited liability company, or partnership.

(a) Each family farm corporation;
each joint family farm venture; and each limited liability company or partnership which
operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, paragraph
(b), or class 2a assessment for one homestead occupied by a shareholder, member, or partner
thereof who is residing on the land, and actively engaged in farming of the land owned by
the family farm corporation, joint family farm venture, limited liability company, or
partnership. Homestead treatment applies even if:

(1) legal title to the property is in the name of the family farm corporation, joint family
farm venture, limited liability company, or partnership, and not in the name of the person
residing on it; or

(2) the family farm is operated by a family farm corporation, joint family farm venture,
partnership, or limited liability company other than the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land, provided that:

(i) the shareholder, member, or partner residing on and actively engaged in farming the
land is a shareholder, member, or partner of the family farm corporation, joint family farm
venture, partnership, or limited liability company that is operating the farm and;

(ii) more than half of the shareholders, members, or partners of each family farm
corporation, joint family farm venture, partnership, or limited liability company are persons
or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
paragraphs (c) and (d).

"Family farm corporation," "family farm," and "partnership operating a family farm"
have the meanings given in section 500.24, except that the number of allowable shareholders,
members, or partners under this subdivision shall not exceed deleted text begin 12 deleted text end new text begin 18 new text end . "Limited liability
company" has the meaning contained in sections 322C.0102, subdivision 12, and 500.24,
subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means a cooperative
agreement among two or more farm enterprises authorized to operate a family farm under
section 500.24.

(b) In addition to property specified in paragraph (a), any other residences owned by
family farm corporations, joint family farm ventures, limited liability companies, or
partnerships described in paragraph (a) which are located on agricultural land and occupied
as homesteads by its shareholders, members, or partners who are actively engaged in farming
on behalf of that corporation, joint farm venture, limited liability company, or partnership
must also be assessed as class 2a property or as class 1b property under section 273.13.

(c) Agricultural property that is owned by a member, partner, or shareholder of a family
farm corporation or joint family farm venture, limited liability company operating a family
farm, or by a partnership operating a family farm and leased to the family farm corporation,
limited liability company, partnership, or joint farm venture, as defined in paragraph (a), is
eligible for classification as class 1b or class 2a under section 273.13, if the owner is actually
residing on the property, and is actually engaged in farming the land on behalf of that
corporation, joint farm venture, limited liability company, or partnership. This paragraph
applies without regard to any legal possession rights of the family farm corporation, joint
family farm venture, limited liability company, or partnership under the lease.

(d) Nonhomestead agricultural property that is owned by a family farm corporation,
joint farm venture, limited liability company, or partnership; and located not farther than
four townships or cities, or combination thereof, from agricultural land that is owned, and
used for the purposes of a homestead by an individual who is a shareholder, member, or
partner of the corporation, venture, company, or partnership; is entitled to receive the first
tier homestead classification rate on any remaining market value in the first homestead class
tier that is in excess of the market value of the shareholder's, member's, or partner's class 2
agricultural homestead property, if the owner, or someone acting on the owner's behalf
notifies the county assessor by July 1 that the property may be eligible under this paragraph
for the current assessment year, for taxes payable in the following year. As used in this
paragraph, "agricultural property" means property classified as 2a under section 273.13,
along with any contiguous property classified as 2b under section 273.13, if the contiguous
2a and 2b properties are under the same ownership.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for homestead applications in 2024 and
thereafter.
new text end