SF 3565

as introduced - 90th Legislature (2017 - 2018) Posted on 03/20/2018 09:09am

A bill for an act
relating to property taxes; amending the agricultural homestead classification
requirements for business entities; amending Minnesota Statutes 2016, section
273.124, subdivision 8.

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

Section 1.

Minnesota Statutes 2016, 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 new text begin :
new text end

new text begin (1) new text end 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 deleted text begin . deleted text end new text begin ; or
new text end

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

new text begin (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, or limited liability company that is operating the farm;
new text end

new text begin (ii) each shareholder, member, or partner of the family farm corporation, joint family
farm venture, or limited liability company that is operating the farm is also a shareholder,
member, or partner of the family farm corporation, joint family farm venture, or limited
liability company that owns the land; and
new text end

new text begin (iii) a majority of the shareholders, members, or partners of each family farm corporation,
joint family farm venture, or limited liability company are persons or spouses of persons
who are related to each other within the third degree of kindred according to the rules of
civil law.
new text end

"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 12. "Limited liability company"
has the meaning contained in sections 322B.03, subdivision 28, or 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 assessments beginning in 2018.
new text end