SF 1754

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing alternative valuation for certain property;
classifying certain property; amending Minnesota Statutes 2006, section 273.13,
subdivision 23; proposing coding for new law in Minnesota Statutes, chapter 273.

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

Section 1.

new text begin [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
TAX LAW.
new text end

new text begin Subdivision 1. new text end

new text begin Requirements. new text end

new text begin Real estate is entitled to valuation under this section
only if all of the following requirements are met:
new text end

new text begin (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23;
new text end

new text begin (2) the property is at least ten contiguous acres, when the application is filed under
subdivision 2;
new text end

new text begin (3) the owner has filed a completed application for deferment as specified in
subdivision 2 with the county assessor in the county in which the property is located;
new text end

new text begin (4) there are no delinquent taxes on the property; and
new text end

new text begin (5) a covenant on the land restricts its use as provided in subdivision 2, clause (4).
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin Application for valuation deferment under this section
must be filed by May 1 of the assessment year. Any application filed and granted
continues in effect for subsequent years until the property no longer qualifies, provided
that supplemental affidavits under subdivision 6 are timely filed. The application must
be filed with the assessor of the county in which the real property is located on such
form as may be prescribed by the commissioner of revenue. The application must be
executed and acknowledged in the manner required by law to execute and acknowledge a
deed and must contain at least the following information and any other information the
commissioner deems necessary:
new text end

new text begin (1) the legal description of the area;
new text end

new text begin (2) the name and address of owner;
new text end

new text begin (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph (h),
in the case of property classified class 2b, clause (5); or in the case of property classified
1a, 1b, 2a, and 2b, clauses (1) to (3), the application must include a similar document with
the same information as contained in the affidavit under section 273.13, subdivision 23,
paragraph (h); and
new text end

new text begin (4) a statement of proof from the owner that the land contains a restrictive covenant
limiting its use for the property's surface to that which exists on the date of the application
and limiting its future use to the preparation and removal of the aggregate commercial
deposit under its surface.
new text end

new text begin To qualify under this clause, the covenant must be binding on the owner or the
owner's successor or assignee, and run with the land, except as provided in subdivision 4
allowing for the cancellation of the covenant under certain conditions.
new text end

new text begin Subd. 3. new text end

new text begin Determination of value. new text end

new text begin Upon timely application by the owner as
provided in subdivision 2, notwithstanding sections 272.03, subdivision 8, and 273.11,
the value of any qualifying land described in subdivision 2 must be valued as if it were
agricultural property, using a per acre valuation equal to the current year's per acre
valuation of agricultural land in the county. The assessor shall not consider any additional
value resulting from potential alternative and future uses of the property. The buildings
located on the land shall be valued by the assessor in the normal manner.
new text end

new text begin Subd. 4. new text end

new text begin Cancellation of covenant. new text end

new text begin The covenant required under subdivision
2 may be canceled in two ways:
new text end

new text begin (1) by the owner beginning with the next subsequent assessment year provided
that the additional taxes as determined under subdivision 5 are paid by the owner at the
time of cancellation; and
new text end

new text begin (2) by the city or town in which the property is located beginning with the next
subsequent assessment year, if the city council or town board:
new text end

new text begin (i) changes the conditional use of the property;
new text end

new text begin (ii) revokes the mining permit; or
new text end

new text begin (iii) changes the zoning to disallow mining.
new text end

new text begin No additional taxes are imposed on the property under this clause.
new text end

new text begin Subd. 4a. new text end

new text begin County termination. new text end

new text begin Within two years of the effective date of this
section, a county may, following notice and public hearing, terminate application of this
section in the county. The termination is effective upon adoption of a resolution of the
county board. A termination applies prospectively and does not affect property enrolled
under this section prior to the termination date. A county may reauthorize application of
this section by a resolution of the county board revoking the termination.
new text end

new text begin Subd. 5. new text end

new text begin Additional taxes. new text end

new text begin When real property which has been valued and assessed
under this section no longer qualifies, the portion of the land classified under subdivision
1, clause (1), is subject to additional taxes. The additional tax amount is determined by:
new text end

new text begin (1) computing the difference between (i) the current year's taxes determined in
accordance with subdivision 5, and (ii) an amount as determined by the assessor based
upon the property's current year's estimated market value of like real estate at its highest
and best use and the appropriate local tax rate; and
new text end

new text begin (2) multiplying the amount determined in clause (1) by the number of years the
land was in the program under this section.
new text end

new text begin The current year's estimated market value as determined by the assessor must not
exceed the market value that would result if the property was sold in an arms-length
transaction and must not be greater than it would have been had the actual bona fide sale
price of the property been used in lieu of that market value. The additional taxes must be
extended against the property on the tax list for the current year, except that interest or
penalties must not be levied on such additional taxes if timely paid.
new text end

new text begin The additional tax under this subdivision must not be imposed on that portion of the
property which has actively been mined and has been removed from the program based
upon the supplemental affidavits filed under subdivision 6.
new text end

new text begin Subd. 6. new text end

new text begin Supplemental affidavits; mining activity on land. new text end

new text begin When any portion
of the property begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined shall be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under this section. The additional taxes under subdivision 5 must not be imposed on
the acres that are actively being mined and have been removed from the program under
this section.
new text end

new text begin Copies of the original affidavit and all supplemental affidavits must be filed with the
county assessor, the local zoning administrator, and the Department of Natural Resources,
Division of Land and Minerals. A supplemental affidavit must be filed each time a
subsequent portion of the property is actively mined, provided that the minimum acreage
change is five acres, even if the actual mining activity constitutes less than five acres.
Failure to file the affidavits timely shall result in the property losing its valuation deferment
under this section, and additional taxes must be imposed as calculated under subdivision 5.
new text end

new text begin Subd. 7. new text end

new text begin Lien. new text end

new text begin The additional tax imposed by this section is a lien upon the property
assessed to the same extent and for the same duration as other taxes imposed upon
property within this state and, when collected, must be distributed in the manner provided
by law for the collection and distribution of other property taxes.
new text end

new text begin Subd. 8. new text end

new text begin Continuation of tax treatment upon sale. new text end

new text begin When real property qualifying
under subdivision 1 is sold, additional taxes must not be extended against the property
if the property continues to qualify under subdivision 1, and the new owner files an
application with the assessor for continued deferment within 30 days after the sale.
new text end

new text begin Subd. 9. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, "commercial aggregate deposit"
and "actively mined" have the meanings given them in section 273.13, subdivision 23,
paragraph (h).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2008, payable
in 2009, and thereafter, except that for the 2008 assessment year, the application date
under subdivision 4 shall be September 1, 2008, and subdivision 4a is effective the day
following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:

Subd. 23.

Class 2.

(a) Class 2a property is agricultural land including any
improvements that is homesteaded. The market value of the house and garage and
immediately surrounding one acre of land has the same class rates as class 1a property
under subdivision 22. The value of the remaining land including improvements up to
the first tier valuation limit of agricultural homestead property has a net class rate of
0.55 percent of market value. The remaining property over the first tier has a class rate
of one percent of market value. For purposes of this subdivision, the "first tier valuation
limit of agricultural homestead property" and "first tier" means the limit certified under
section 273.11, subdivision 23.

(b) Class 2b property is (1) real estate, rural in character and used exclusively for
growing trees for timber, lumber, and wood and wood products; (2) real estate that is not
improved with a structure and is used exclusively for growing trees for timber, lumber, and
wood and wood products, if the owner has participated or is participating in a cost-sharing
program for afforestation, reforestation, or timber stand improvement on that particular
property, administered or coordinated by the commissioner of natural resources; (3) real
estate that is nonhomestead agricultural land; deleted text begin or deleted text end (4) a landing area or public access area of
a privately owned public use airport new text begin ; or (5) land with a commercial aggregate deposit that
is not actively being mined and is not otherwise classified as class 2a or 2b, clauses (1) to
(3) new text end . Class 2b property has a net class rate of one percent of market value.

(c) Agricultural land as used in this section means contiguous acreage of ten acres or
more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
used in this section means the raising or cultivation of agricultural products. "Agricultural
purposes" also includes enrollment in the Reinvest in Minnesota program under sections
103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public
Law 99-198 if the property was classified as agricultural (i) under this subdivision for
the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
waste, unusable wild land, or land included in state or federal farm programs. Agricultural
classification for property shall be determined excluding the house, garage, and
immediately surrounding one acre of land, and shall not be based upon the market value of
any residential structures on the parcel or contiguous parcels under the same ownership.

(d) Real estate, excluding the house, garage, and immediately surrounding one acre
of land, of less than ten acres which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as agricultural land.

Land shall be classified as agricultural even if all or a portion of the agricultural use
of that property is the leasing to, or use by another person for agricultural purposes.

Classification under this subdivision is not determinative for qualifying under
section 273.111.

The property classification under this section supersedes, for property tax purposes
only, any locally administered agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(e) The term "agricultural products" as used in this subdivision includes production
for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with
raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood
products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

(f) If a parcel used for agricultural purposes is also used for commercial or industrial
purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.

(g) To qualify for classification under paragraph (b), clause (4), a privately owned
public use airport must be licensed as a public airport under section 360.018. For purposes
of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
airport properly cleared, regularly maintained, and made available to the public for use by
aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
or navigational aids. A landing area also includes land underlying both the primary surface
and the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under paragraph (b), clause (4), must be described
and certified by the commissioner of transportation. The certification is effective until
it is modified, or until the airport or landing area no longer meets the requirements of
paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
and departure building in connection with the airport.

new text begin (h) To qualify for classification under paragraph (b), clause (5), the property must be
at least ten contiguous acres in size and the owner of the property must record with the
county recorder of the county in which the property is located an affidavit containing:
new text end

new text begin (1) a legal description of the property;
new text end

new text begin (2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
new text end

new text begin (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
new text end

new text begin (4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
new text end

new text begin For purposes of this section and section , "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
new text end

new text begin (i) When any portion of the property under this subdivision or section new text begin 273.13,
subdivision 22 new text end , begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined must be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under section , if the land was enrolled in that program. Copies of the original
affidavit and all supplemental affidavits must be filed with the county assessor, the local
zoning administrator, and the Department of Natural Resources, Division of Land and
Minerals. A supplemental affidavit must be filed each time a subsequent portion of the
property is actively mined, provided that the minimum acreage change is five acres, even
if the actual mining activity constitutes less than five acres.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2008, payable
in 2009, and thereafter.
new text end