SF 2958

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; property; establishing an 
  1.3             aggregate resource preservation property tax program; 
  1.4             requiring a restrictive covenant on certain land; 
  1.5             providing a classification for property containing 
  1.6             certain unmined aggregate; providing definitions; 
  1.7             amending Minnesota Statutes 2003 Supplement, section 
  1.8             273.13, subdivision 23; proposing coding for new law 
  1.9             in Minnesota Statutes, chapter 273. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [273.1115] [MINNESOTA AGGREGATE RESOURCE 
  1.12  PRESERVATION PROPERTY TAX LAW.] 
  1.13     Subdivision 1.  [CITATION.] This section may be cited as 
  1.14  the "Minnesota Aggregate Resource Preservation Property Tax Law."
  1.15     Subd. 2.  [PUBLIC POLICY.] The present general system of ad 
  1.16  valorem property taxation in the state of Minnesota does not 
  1.17  provide an equitable basis for the taxation of certain real 
  1.18  property containing aggregate resources, and may result in 
  1.19  excessive taxes on the land prior to those resources being 
  1.20  used.  It is therefore declared to be the public policy of this 
  1.21  state that the public interest would best be served by imposing 
  1.22  tax burdens on properties containing the aggregate resource 
  1.23  based upon their current use and not on their potential 
  1.24  alternative or future use. 
  1.25     Subd. 3.  [REQUIREMENTS.] Real estate is entitled to 
  1.26  valuation under this section only if all of the following 
  1.27  requirements are met: 
  2.1      (1) the property is classified 1a, 1b, 2a, or 2b property 
  2.2   under section 273.13, subdivisions 22 and 23; 
  2.3      (2) the property is at least ten contiguous acres, when the 
  2.4   application is filed under subdivision 4; 
  2.5      (3) the owner has filed a completed application for 
  2.6   deferment as specified in subdivision 4 with the county assessor 
  2.7   in the county in which the property is located; 
  2.8      (4) there are no delinquent taxes on the property; and 
  2.9      (5) a covenant on the land restricts its use as provided in 
  2.10  subdivision 4, clause (4). 
  2.11     Subd. 4.  [APPLICATION.] Application for valuation 
  2.12  deferment under this section must be filed by May 1 of the 
  2.13  assessment year.  Any application filed and granted continues in 
  2.14  effect for subsequent years until the property no longer 
  2.15  qualifies, provided that supplemental affidavits under 
  2.16  subdivision 8 are timely filed.  The application must be filed 
  2.17  with the assessor of the county in which the real property is 
  2.18  located on such form as may be prescribed by the commissioner of 
  2.19  revenue.  The application must be executed and acknowledged in 
  2.20  the manner required by law to execute and acknowledge a deed and 
  2.21  must contain at least the following information and any other 
  2.22  information the commissioner deems necessary: 
  2.23     (1) the legal description of the area; 
  2.24     (2) the name and address of owner; 
  2.25     (3) a copy of the affidavit filed under section 273.13, 
  2.26  subdivision 23, paragraph (h), in the case of property 
  2.27  classified class 2b, clause (5); or in the case of property 
  2.28  classified 1a, 1b, 2a, and 2b, clauses (1) to (3), the 
  2.29  application must include a similar document with the same 
  2.30  information as contained in the affidavit under section 273.13, 
  2.31  subdivision 23, paragraph (h); and 
  2.32     (4) a statement of proof from the owner that the land 
  2.33  contains a restrictive covenant limiting its use for the 
  2.34  property's surface to that which exists on the date of the 
  2.35  application and limiting its future use to the preparation and 
  2.36  removal of the aggregate commercial deposit under its surface. 
  3.1      To qualify under this clause, the covenant must be binding 
  3.2   on the owner or the owner's successor or assignee, and run with 
  3.3   the land, except as provided in subdivision 6 allowing for the 
  3.4   cancellation of the covenant under certain conditions. 
  3.5      Subd. 5.  [DETERMINATION OF VALUE.] Upon timely application 
  3.6   by the owner as provided in subdivision 4, notwithstanding 
  3.7   sections 272.03, subdivision 8, and 273.11, the value of any 
  3.8   qualifying land described in subdivision 4 must be valued as if 
  3.9   it were agricultural property, using a per acre valuation equal 
  3.10  to the current year's per acre valuation of agricultural land in 
  3.11  the county.  The assessor shall not consider any additional 
  3.12  value resulting from potential alternative and future uses of 
  3.13  the property.  The buildings located on the land shall be valued 
  3.14  by the assessor in the normal manner. 
  3.15     Subd. 6.  [CANCELLATION OF COVENANT.] The covenant required 
  3.16  under subdivision 4 may be canceled in two ways:  
  3.17     (1) by the owner beginning with the next subsequent 
  3.18  assessment year provided that the additional taxes as determined 
  3.19  under subdivision 7 are paid by the owner at the time of 
  3.20  cancellation; and 
  3.21     (2) by the city or town in which the property is located 
  3.22  beginning with the next subsequent assessment year, if the city 
  3.23  council or town board: 
  3.24     (i) changes the conditional use of the property; 
  3.25     (ii) revokes the mining permit; or 
  3.26     (iii) changes the zoning to disallow mining.  
  3.27     No additional taxes are imposed on the property under this 
  3.28  clause. 
  3.29     Subd. 7.  [ADDITIONAL TAXES.] When real property which has 
  3.30  been valued and assessed under this section no longer qualifies, 
  3.31  the portion of the land classified under subdivision 3, clause 
  3.32  (1), is subject to additional taxes.  The additional tax amount 
  3.33  is determined by: 
  3.34     (1) computing the difference between (i) the current year's 
  3.35  taxes determined in accordance with subdivision 5, and (ii) an 
  3.36  amount as determined by the assessor based upon the property's 
  4.1   current year's estimated market value of like real estate at its 
  4.2   highest and best use and the appropriate local tax rate; and 
  4.3      (2) multiplying the amount determined in clause (1) by 
  4.4   five, or by the number of years the land was in the program 
  4.5   under this section, whichever is less.  
  4.6      The current year's estimated market value as determined by 
  4.7   the assessor must not exceed the market value that would result 
  4.8   if the property was sold in an arms-length transaction and must 
  4.9   not be greater than it would have been had the actual bona fide 
  4.10  sale price of the property been used in lieu of that market 
  4.11  value.  The additional taxes must be extended against the 
  4.12  property on the tax list for the current year, except that 
  4.13  interest or penalties must not be levied on such additional 
  4.14  taxes if timely paid. 
  4.15     The additional tax under this subdivision must not be 
  4.16  imposed on that portion of the property which has actively been 
  4.17  mined and has been removed from the program based upon the 
  4.18  supplemental affidavits filed under subdivision 8. 
  4.19     Subd. 8.  [SUPPLEMENTAL AFFIDAVITS; MINING ACTIVITY ON 
  4.20  LAND.] When any portion of the property begins to be actively 
  4.21  mined, the owner must file a supplemental affidavit within 60 
  4.22  days from the day any aggregate is removed stating the number of 
  4.23  acres of the property that is actively being mined.  The acres 
  4.24  actively being mined shall be (1) valued and classified under 
  4.25  section 273.13, subdivision 24, in the next subsequent 
  4.26  assessment year, and (2) removed from the aggregate resource 
  4.27  preservation property tax program under this section.  The 
  4.28  additional taxes under subdivision 7 must not be imposed on the 
  4.29  acres that are actively being mined and have been removed from 
  4.30  the program under this section. 
  4.31     Copies of the original affidavit and all supplemental 
  4.32  affidavits must be filed with the county assessor, the local 
  4.33  zoning administrator, and the Department of Natural Resources, 
  4.34  Division of Land and Minerals.  A supplemental affidavit must be 
  4.35  filed each time a subsequent portion of the property is actively 
  4.36  mined, provided that the minimum acreage change is five acres, 
  5.1   even if the actual mining activity constitutes less than five 
  5.2   acres.  Failure to file the affidavits timely shall result in 
  5.3   the property losing its valuation deferment under this section, 
  5.4   and additional taxes must be imposed as calculated under 
  5.5   subdivision 7. 
  5.6      Subd. 9.  [LIEN.] The additional tax imposed by this 
  5.7   section is a lien upon the property assessed to the same extent 
  5.8   and for the same duration as other taxes imposed upon property 
  5.9   within this state and, when collected, must be distributed in 
  5.10  the manner provided by law for the collection and distribution 
  5.11  of other property taxes. 
  5.12     Subd. 10.  [CONTINUATION OF TAX TREATMENT UPON SALE.] When 
  5.13  real property qualifying under subdivision 3 is sold, additional 
  5.14  taxes must not be extended against the property if the property 
  5.15  continues to qualify under subdivision 3, and the new owner 
  5.16  files an application with the assessor for continued deferment 
  5.17  within 30 days after the sale. 
  5.18     Subd. 11.  [DEFINITIONS.] For purposes of this section, 
  5.19  "commercial aggregate deposit" and "actively mined" have the 
  5.20  meanings given them in section 273.13, subdivision 23, paragraph 
  5.21  (h). 
  5.22     [EFFECTIVE DATE.] This section is effective beginning with 
  5.23  the 2004 assessment, for taxes payable in 2005 and thereafter, 
  5.24  except that for the 2004 assessment year, the application date 
  5.25  under subdivision 4 shall be July 1, 2004. 
  5.26     Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  5.27  273.13, subdivision 23, is amended to read: 
  5.28     Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
  5.29  land including any improvements that is homesteaded.  The market 
  5.30  value of the house and garage and immediately surrounding one 
  5.31  acre of land has the same class rates as class 1a property under 
  5.32  subdivision 22.  The value of the remaining land including 
  5.33  improvements up to and including $600,000 market value has a net 
  5.34  class rate of 0.55 percent of market value.  The remaining 
  5.35  property over $600,000 market value has a class rate of one 
  5.36  percent of market value. 
  6.1      (b) Class 2b property is (1) real estate, rural in 
  6.2   character and used exclusively for growing trees for timber, 
  6.3   lumber, and wood and wood products; (2) real estate that is not 
  6.4   improved with a structure and is used exclusively for growing 
  6.5   trees for timber, lumber, and wood and wood products, if the 
  6.6   owner has participated or is participating in a cost-sharing 
  6.7   program for afforestation, reforestation, or timber stand 
  6.8   improvement on that particular property, administered or 
  6.9   coordinated by the commissioner of natural resources; (3) real 
  6.10  estate that is nonhomestead agricultural land; or (4) a landing 
  6.11  area or public access area of a privately owned public use 
  6.12  airport; or (5) land with a commercial aggregate deposit that is 
  6.13  not actively being mined and is not otherwise classified as 
  6.14  class 2a or 2b, clauses (1) to (3).  Class 2b property has a net 
  6.15  class rate of one percent of market value. 
  6.16     (c) Agricultural land as used in this section means 
  6.17  contiguous acreage of ten acres or more, used during the 
  6.18  preceding year for agricultural purposes.  "Agricultural 
  6.19  purposes" as used in this section means the raising or 
  6.20  cultivation of agricultural products.  "Agricultural purposes" 
  6.21  also includes enrollment in the Reinvest in Minnesota program 
  6.22  under sections 103F.501 to 103F.535 or the federal Conservation 
  6.23  Reserve Program as contained in Public Law 99-198 if the 
  6.24  property was classified as agricultural (i) under this 
  6.25  subdivision for the assessment year 2002 or (ii) in the year 
  6.26  prior to its enrollment.  Contiguous acreage on the same parcel, 
  6.27  or contiguous acreage on an immediately adjacent parcel under 
  6.28  the same ownership, may also qualify as agricultural land, but 
  6.29  only if it is pasture, timber, waste, unusable wild land, or 
  6.30  land included in state or federal farm programs.  Agricultural 
  6.31  classification for property shall be determined excluding the 
  6.32  house, garage, and immediately surrounding one acre of land, and 
  6.33  shall not be based upon the market value of any residential 
  6.34  structures on the parcel or contiguous parcels under the same 
  6.35  ownership. 
  6.36     (d) Real estate, excluding the house, garage, and 
  7.1   immediately surrounding one acre of land, of less than ten acres 
  7.2   which is exclusively and intensively used for raising or 
  7.3   cultivating agricultural products, shall be considered as 
  7.4   agricultural land.  
  7.5      Land shall be classified as agricultural even if all or a 
  7.6   portion of the agricultural use of that property is the leasing 
  7.7   to, or use by another person for agricultural purposes. 
  7.8      Classification under this subdivision is not determinative 
  7.9   for qualifying under section 273.111. 
  7.10     The property classification under this section supersedes, 
  7.11  for property tax purposes only, any locally administered 
  7.12  agricultural policies or land use restrictions that define 
  7.13  minimum or maximum farm acreage. 
  7.14     (e) The term "agricultural products" as used in this 
  7.15  subdivision includes production for sale of:  
  7.16     (1) livestock, dairy animals, dairy products, poultry and 
  7.17  poultry products, fur-bearing animals, horticultural and nursery 
  7.18  stock, fruit of all kinds, vegetables, forage, grains, bees, and 
  7.19  apiary products by the owner; 
  7.20     (2) fish bred for sale and consumption if the fish breeding 
  7.21  occurs on land zoned for agricultural use; 
  7.22     (3) the commercial boarding of horses if the boarding is 
  7.23  done in conjunction with raising or cultivating agricultural 
  7.24  products as defined in clause (1); 
  7.25     (4) property which is owned and operated by nonprofit 
  7.26  organizations used for equestrian activities, excluding racing; 
  7.27     (5) game birds and waterfowl bred and raised for use on a 
  7.28  shooting preserve licensed under section 97A.115; 
  7.29     (6) insects primarily bred to be used as food for animals; 
  7.30     (7) trees, grown for sale as a crop, and not sold for 
  7.31  timber, lumber, wood, or wood products; and 
  7.32     (8) maple syrup taken from trees grown by a person licensed 
  7.33  by the Minnesota Department of Agriculture under chapter 28A as 
  7.34  a food processor. 
  7.35     (f) If a parcel used for agricultural purposes is also used 
  7.36  for commercial or industrial purposes, including but not limited 
  8.1   to:  
  8.2      (1) wholesale and retail sales; 
  8.3      (2) processing of raw agricultural products or other goods; 
  8.4      (3) warehousing or storage of processed goods; and 
  8.5      (4) office facilities for the support of the activities 
  8.6   enumerated in clauses (1), (2), and (3), 
  8.7   the assessor shall classify the part of the parcel used for 
  8.8   agricultural purposes as class 1b, 2a, or 2b, whichever is 
  8.9   appropriate, and the remainder in the class appropriate to its 
  8.10  use.  The grading, sorting, and packaging of raw agricultural 
  8.11  products for first sale is considered an agricultural purpose.  
  8.12  A greenhouse or other building where horticultural or nursery 
  8.13  products are grown that is also used for the conduct of retail 
  8.14  sales must be classified as agricultural if it is primarily used 
  8.15  for the growing of horticultural or nursery products from seed, 
  8.16  cuttings, or roots and occasionally as a showroom for the retail 
  8.17  sale of those products.  Use of a greenhouse or building only 
  8.18  for the display of already grown horticultural or nursery 
  8.19  products does not qualify as an agricultural purpose.  
  8.20     The assessor shall determine and list separately on the 
  8.21  records the market value of the homestead dwelling and the one 
  8.22  acre of land on which that dwelling is located.  If any farm 
  8.23  buildings or structures are located on this homesteaded acre of 
  8.24  land, their market value shall not be included in this separate 
  8.25  determination.  
  8.26     (g) To qualify for classification under paragraph (b), 
  8.27  clause (4), a privately owned public use airport must be 
  8.28  licensed as a public airport under section 360.018.  For 
  8.29  purposes of paragraph (b), clause (4), "landing area" means that 
  8.30  part of a privately owned public use airport properly cleared, 
  8.31  regularly maintained, and made available to the public for use 
  8.32  by aircraft and includes runways, taxiways, aprons, and sites 
  8.33  upon which are situated landing or navigational aids.  A landing 
  8.34  area also includes land underlying both the primary surface and 
  8.35  the approach surfaces that comply with all of the following:  
  8.36     (i) the land is properly cleared and regularly maintained 
  9.1   for the primary purposes of the landing, taking off, and taxiing 
  9.2   of aircraft; but that portion of the land that contains 
  9.3   facilities for servicing, repair, or maintenance of aircraft is 
  9.4   not included as a landing area; 
  9.5      (ii) the land is part of the airport property; and 
  9.6      (iii) the land is not used for commercial or residential 
  9.7   purposes. 
  9.8   The land contained in a landing area under paragraph (b), clause 
  9.9   (4), must be described and certified by the commissioner of 
  9.10  transportation.  The certification is effective until it is 
  9.11  modified, or until the airport or landing area no longer meets 
  9.12  the requirements of paragraph (b), clause (4).  For purposes of 
  9.13  paragraph (b), clause (4), "public access area" means property 
  9.14  used as an aircraft parking ramp, apron, or storage hangar, or 
  9.15  an arrival and departure building in connection with the airport.
  9.16     (h) To qualify for classification under paragraph (b), 
  9.17  clause (5), the property must be at least ten contiguous acres 
  9.18  in size and the owner of the property must record with the 
  9.19  county recorder of the county in which the property is located 
  9.20  an affidavit containing: 
  9.21     (1) a legal description of the property; 
  9.22     (2) a disclosure that the property contains a commercial 
  9.23  aggregate deposit that is not actively being mined; 
  9.24     (3) documentation that the conditional use under the county 
  9.25  or local zoning ordinance of this property is for mining; and 
  9.26     (4) documentation that a permit has been issued by the 
  9.27  local unit of government or the mining activity is allowed under 
  9.28  local ordinance.  The disclosure must include a statement from a 
  9.29  registered professional geologist, engineer, or soil scientist 
  9.30  delineating the deposit and certifying that it is a commercial 
  9.31  aggregate deposit.  
  9.32     For purposes of this section and section 273.1115, 
  9.33  "commercial aggregate deposit" means a deposit that will yield 
  9.34  crushed stone or sand and gravel that is suitable for use as a 
  9.35  construction aggregate; and "actively mined" means the removal 
  9.36  of top soil and overburden in preparation for excavation or 
 10.1   excavation of a commercial deposit. 
 10.2      (i) When any portion of the property under this subdivision 
 10.3   or section 273.13, subdivision 22, begins to be actively mined, 
 10.4   the owner must file a supplemental affidavit within 60 days from 
 10.5   the day any aggregate is removed stating the number of acres of 
 10.6   the property that is actively being mined.  The acres actively 
 10.7   being mined must be (1) valued and classified under section 
 10.8   273.13, subdivision 24, in the next subsequent assessment year, 
 10.9   and (2) removed from the aggregate resource preservation 
 10.10  property tax program under section 273.1115, if the land was 
 10.11  enrolled in that program.  Copies of the original affidavit and 
 10.12  all supplemental affidavits must be filed with the county 
 10.13  assessor, the local zoning administrator, and the Department of 
 10.14  Natural Resources, Division of Land and Minerals.  A 
 10.15  supplemental affidavit must be filed each time a subsequent 
 10.16  portion of the property is actively mined, provided that the 
 10.17  minimum acreage change is five acres, even if the actual mining 
 10.18  activity constitutes less than five acres.  
 10.19     [EFFECTIVE DATE.] This section is effective beginning with 
 10.20  the 2004 assessment year, for taxes payable in 2005 and 
 10.21  thereafter.