SF 111

as introduced - 90th Legislature (2017 - 2018) Posted on 03/02/2017 09:27am

A bill for an act
relating to taxation; property; providing for a study of valuing agricultural land
based on its production value; requiring a report; appropriating money.

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

Section 1. new text begin STUDY AND REPORT OF PRODUCTION BASED VALUE OF
AGRICULTURAL LAND.
new text end

new text begin (a) The commissioner of agriculture and the commissioner of revenue shall conduct a
study and prepare a report on the possibility of valuing agricultural land in the state for
property tax purposes based on the value of agricultural commodities produced minus the
cost of agricultural production.
new text end

new text begin (b) The study must, to the extent practicable under the appropriation and the time
available:
new text end

new text begin (1) assess the availability and accuracy of data sources necessary to determine the
productivity of agricultural land, the prices of agricultural commodities, and the costs of
production for all agricultural land across the state;
new text end

new text begin (2) analyze the potential impacts on other types of properties and on local governments
if the state were to adopt a system valuing agricultural land based on production value,
including the impacts of any changes in state aids;
new text end

new text begin (3) identify types of agricultural properties that are not directly used in agricultural
production, and propose approaches for valuing those properties within a production based
value system;
new text end

new text begin (4) assign values to agricultural land based on the best currently available data, and
compare the resulting values to valuations currently used for property tax purposes; to the
extent possible, analyze what that relationship would be in years other than the study year;
new text end

new text begin (5) analyze the potential volatility of land values under a production based value system
and propose approaches for reducing the effects of agricultural land value volatility on other
types of properties;
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new text begin (6) analyze the potential tax shifts between different types of agricultural properties
under a production based value system;
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new text begin (7) analyze and make recommendations for how a production based value system would
be administered in terms of the role of the Department of Revenue, county and local
assessors, and other agencies;
new text end

new text begin (8) analyze how appeals of assessments by property owners would be handled under a
production based value system;
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new text begin (9) analyze how a production based value system would affect the green acres and
metropolitan agricultural preserves programs;
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new text begin (10) identify other states that have adopted production based value systems and describe
how they have been implemented, with special emphasis upon neighboring states; and
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new text begin (11) identify possible alternative methods of valuing agricultural land in addition to
market value and production based agricultural land valuation.
new text end

new text begin (c) The commissioners must seek input from the dean of the University of Minnesota
College of Food, Agricultural, and Natural Resource Sciences in the design and
implementation of the study.
new text end

new text begin (d) The commissioners must request the involvement and participation of stakeholders
including groups representing assessors and groups representing agricultural property
owners.
new text end

new text begin (e) The study must be completed on or before February 1, 2019, and the report must be
provided to the chair and ranking minority members of the committees of the house of
representatives and senate having jurisdiction over taxes. The report must be filed as provided
in Minnesota Statutes, sections 3.195 and 3.197.
new text end

new text begin (f) $100,000 in fiscal year 2018 is appropriated from the general fund to the commissioner
of revenue for purposes of preparing the report under this section. This is a onetime
appropriation and is not added to the base.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end