SF 286

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:12am

A bill for an act
relating to the taxation of agricultural property; modifying the Minnesota
agricultural property tax law; amending Minnesota Statutes 2008, section
273.111, subdivisions 3, 3a.

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

Section 1.

Minnesota Statutes 2008, 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 deleted text begin use deleted text end new text begin purposes, as defined in section 273.13, subdivision 23 new text end , 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) a poultry entity other than a limited liability entity 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.

deleted text begin (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 does not qualify for
valuation and assessment deferral under this section. This paragraph applies to land that
has not qualified under this section for taxes payable in 2009 or previous years.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2008, section 273.111, subdivision 3a, is amended to read:

Subd. 3a.

Property new text begin that new text end no longer deleted text begin eligible for deferment deleted text end new text begin qualifies as agricultural
under 2008 law changes new text end .

deleted text begin (a) deleted text end Real estate receiving the tax deferment under this section
for assessment year 2008, but that deleted text begin does not qualify for the 2009 assessment year due to
changes in qualification requirements under Laws 2008, chapter 366, deleted text end new text begin is not classified as
class 2a in a subsequent assessment year, new text end shall continue to qualify deleted text begin until any part of the
land is sold, transferred, or subdivided deleted text end , provided that the property continues to meet the
requirements of Minnesota Statutes 2006, section 273.111, subdivision 3.

deleted text begin (b) When property assessed under this subdivision is withdrawn from the program or
becomes ineligible, the property shall be subject to additional taxes, in the amount equal
to the average difference between the taxes determined in accordance with subdivision
4, and the amount determined under subdivision 5, for the current year and the two
preceding years, multiplied by (1) three, in the case of class 2a property under section
273.13, subdivision 23, or any property withdrawn before January 2, 2009, or (2) seven, in
the case of property withdrawn after January 2, 2009, that is not class 2a property. The
number of years used as the multiplier must not exceed the number of years during which
the property was subject to this section. The amount determined under subdivision 5 shall
not be greater than it would have been had the actual bona fide sale price of the real
property at an arm's-length transaction been used in lieu of the market value determined
under subdivision 5. The additional taxes shall be extended against the property on the
tax list for the current year, provided that no interest or penalties shall be levied on the
additional taxes if timely paid.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end