SF 1508

as introduced - 90th Legislature (2017 - 2018) Posted on 02/28/2017 09:36am

A bill for an act
relating to taxation; Sustainable Forest Incentive Act; modifying definitions,
eligibility requirements, and applications; providing for monitoring by the
Department of Natural Resources; modifying length of required covenant,
calculation of payment, and withdrawal procedures; providing for transfer of
ownership; modifying penalties for removal from program; appropriating money;
amending Minnesota Statutes 2016, sections 290C.01; 290C.02, subdivisions 1, 3, 6; 290C.03; 290C.04; 290C.05; 290C.055; 290C.07; 290C.08, subdivision 1; 290C.10; 290C.11; 290C.13, subdivision 6; Laws 2016, chapter 187, section 5; proposing coding for new law in Minnesota Statutes, chapter 290C; repealing Minnesota Statutes 2016, section 290C.02, subdivisions 5, 9.

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

Section 1.

Minnesota Statutes 2016, section 290C.01, is amended to read:

290C.01 PURPOSE.

It is the policy of this state to promote sustainable forest resource management on the
state's public and private lands. deleted text begin Recognizing that deleted text end new text begin The state's new text end private forests comprise
approximately one-half of the state forest land resources deleted text begin , that healthy and robust forest land
provides significant benefits to the state of Minnesota, and that ad deleted text end new text begin . These forests play a
critical role in protecting water quality and soil resources, and provide extensive wildlife
habitat, diverse recreational experiences, and significant forest products that support the
state's economy. Ad new text end valorem property taxes represent a significant annual cost that can
discourage long-term forest management investments new text begin . In order to foster silviculture
investments and retain these forests for their economic and ecological benefits new text end , this chapter,
hereafter referred to as the "Sustainable Forest Incentive Act," is enacted to encourage the
state's private forest landowners to make a long-term commitment to sustainable forest
management.

Sec. 2.

Minnesota Statutes 2016, section 290C.02, subdivision 1, is amended to read:

Subdivision 1.

Application.

When used in sections 290C.01 to deleted text begin 290C.11 deleted text end new text begin 290C.13 new text end , the
terms in this section have the meanings given them.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2016, section 290C.02, subdivision 3, is amended to read:

Subd. 3.

Claimant.

(a) "Claimant" means:

(1) a person, as that term is defined in section 290.01, subdivision 2, who owns forest
land in Minnesota and files an application authorized by the Sustainable Forest Incentive
Act;

(2) a purchaser or grantee if property enrolled in the program was sold or transferred
after the original application was filed and prior to the annual incentive payment being
made; or

(3) an owner of land previously covered by an auxiliary forest contract that automatically
qualifies for inclusion in the Sustainable Forest Incentive Act program pursuant to section
88.49, subdivision 9a, or 88.491, subdivision 2.

deleted text begin The purchaser or grantee must notify the commissioner in writing of the sale or transfer
of the property. deleted text end new text begin (b) new text end Owners of land that qualifies for inclusion pursuant to section 88.49,
subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing of the
expiration of the auxiliary forest contract or land trade with a governmental unit and submit
an application to the commissioner by deleted text begin August 15 deleted text end new text begin July 1 new text end in order to be eligible to receive a
payment by October 1 of that same year. For purposes of section 290C.11, claimant also
includes any person bound by the covenant required in section 290C.04.

deleted text begin (b) deleted text end new text begin (c) new text end No more than one claimant is entitled to a payment under this chapter with respect
to any tract, parcel, or piece of land enrolled under this chapter that has been assigned the
same parcel identification number. When enrolled forest land is owned by two or more
persons, the owners must determine between them which person is eligible to claim the
payments provided under sections 290C.01 to deleted text begin 290C.11 deleted text end new text begin 209C.13 new text end . In the case of property
sold or transferred, the former owner and the purchaser or grantee must determine between
them which person is eligible to claim the payments provided under sections 290C.01 to
deleted text begin 290C.11 deleted text end new text begin 209C.13 new text end . The owners, transferees, or grantees must notify the commissioner in
writing which person is eligible to claim the payments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications due
in 2018 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2016, section 290C.02, subdivision 6, is amended to read:

Subd. 6.

Forest land.

"Forest land" means land containing a minimum of 20 contiguous
acres for which the owner has implemented a forest management plan that was prepared or
updated within the past ten years by an approved plan writer. For purposes of this subdivision,
acres are considered to be contiguous even if they are separated by a road, waterway, railroad
track, or other similar intervening property. At least 50 percent of the contiguous acreage
must meet the definition of forest land in section 88.01, subdivision 7. For the purposes of
sections 290C.01 to deleted text begin 290C.11 deleted text end new text begin 209C.13 new text end , forest land does not include (i) land used for
residential or agricultural purposes, (ii) land enrolled in the reinvest in Minnesota program,
a state or federal conservation reserve or easement reserve program under sections 103F.501
to 103F.531, the Minnesota agricultural property tax law under section 273.111, or land
subject to agricultural land preservation controls or restrictions as defined in section 40A.02
or under the Metropolitan Agricultural Preserves Act under chapter 473H, (iii) deleted text begin land exceeding
60,000 acres that is subject to a single conservation easement funded under section 97A.056
or a comparable permanent easement conveyed to a governmental or nonprofit entity; (iv) deleted text end
any land that becomes subject to a conservation easement funded under section 97A.056
or a comparable permanent easement conveyed to a governmental or nonprofit entity after
May 30, 2013; or deleted text begin (v) deleted text end new text begin (iv) new text end land improved with a structure deleted text begin , deleted text end new text begin ; new text end pavement, new text begin other than a paved
trail under easement, lease, or terminable license to the state of Minnesota or a political
subdivision; new text end sewer deleted text begin , deleted text end new text begin ; new text end campsite deleted text begin , deleted text end new text begin ; new text end or any road, other than a township road, used for purposes
not prescribed in the forest management plan.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications made in 2018 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2016, section 290C.03, is amended to read:

290C.03 ELIGIBILITY REQUIREMENTS.

(a) Land may be enrolled in the sustainable forest incentive program under this chapter
if all of the following conditions are met:

(1) the land consists of at least 20 contiguous acres and at least 50 percent of the land
must meet the definition of forest land in section 88.01, subdivision 7, during the enrollment;

(2) a forest management plan for the land must be prepared by an approved plan writer
and implemented during the period in which the land is enrolled;

(3) timber harvesting and forest management guidelines must be used in conjunction
with any timber harvesting or forest management activities conducted on the land during
the period in which the land is enrolled;

(4) the land must be enrolled for a minimum of eight years;

(5) there are no delinquent property taxes on the land; deleted text begin and
deleted text end

(6) claimants enrolling more than 1,920 acres new text begin or enrolling any land that is subject to a
conservation easement funded under section 97A.056, or a comparable permanent easement
conveyed to a governmental or nonprofit entity new text end in the sustainable forest incentive program
must allow year-round, nonmotorized access to fish and wildlife resources and motorized
access on established and maintained roads and trails, unless the road or trail is temporarily
closed for safety, natural resource, or road damage reasons on enrolled land except within
one-fourth mile of a permanent dwelling or during periods of high fire hazard as determined
by the commissioner of natural resources deleted text begin . deleted text end new text begin ;
new text end

new text begin (7) the claimant has registered the forest management plan under clause (2) with the
commissioner of natural resources, who has determined that the land meets qualifications
for enrollment; and
new text end

new text begin (8) no portion of the parcel containing the enrolled land is classified as class 2c managed
forest land.
new text end

(b) Claimants required to allow access under paragraph (a), clause (6), do not by that
action:

(1) extend any assurance that the land is safe for any purpose;

(2) confer upon the person the legal status of an invitee or licensee to whom a duty of
care is owed; or

(3) assume responsibility for or incur liability for any injury to the person or property
caused by an act or omission of the person.

new text begin (c) The commissioner of natural resources shall annually provide county assessors
verification information regarding plan registration under paragraph (a), clause (7), on a
timely basis.
new text end

new text begin (d) A minimum of three acres must be excluded from enrolled land when the land is
improved with a structure that is not a minor, ancillary, and nonresidential structure.
new text end

new text begin (e) If land does not meet the definition of forest land in section 290C.02, subdivision 6,
because the land is:
new text end

new text begin (1) enrolled in a state or federal conservation reserve or easement program under sections
103F.501 to 103F.531;
new text end

new text begin (2) subject to the Minnesota agricultural property tax under section 273.111; or
new text end

new text begin (3) subject to agricultural land preservation controls or restrictions as defined in section
40A.02, or the Metropolitan Agricultural Preserves Act under chapter 473H, the entire tax
parcel that contains the land is not eligible to be enrolled in the program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications due
in 2018 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2016, section 290C.04, is amended to read:

290C.04 APPLICATIONS.

(a) A landowner may apply to enroll forest land for the sustainable forest incentive
program under this chapter. The claimant must complete, sign, and submit an application
to the commissioner by deleted text begin September 30 deleted text end new text begin October 31 new text end in order for the land to become eligible
beginning in the next year. The application shall be on a form prescribed by the deleted text begin commissioner
deleted text end new text begin commissioners of revenue and natural resources new text end and must include the information the
deleted text begin commissioner deems deleted text end new text begin commissioners deem new text end necessary. At a minimum, the application must
show the following information for the land and the claimant: (i) the claimant's Social
Security number or state or federal business tax registration number and date of birth, (ii)
the claimant's address, (iii) the claimant's signature, (iv) the county's parcel identification
numbers for the tax parcels that completely contain the claimant's forest land that is sought
to be enrolled, (v) the number of acres eligible for enrollment in the program, (vi) the
approved plan writer's signature and identification number, deleted text begin and deleted text end (vii) proof, in a form specified
by the commissioner, that the claimant has executed and acknowledged in the manner
required by law for a deed, and recorded, a covenant that the land is not and shall not be
developed in a manner inconsistent with the requirements and conditions of this chapter new text begin ,
and (viii) a registration number for the forest management plan, issued by the commissioner
of natural resources new text end . The covenant shall state in writing that the covenant is binding on the
claimant and the claimant's successor or assignee, and that it runs with the land for a period
of not less than eight years new text begin unless the claimant requests termination of the covenant after a
reduction in payments due to changes in the payment formula under section 290C.07 or as
a result of executive action, the amount of payment a claimant is eligible to receive under
section 290C.07 is reduced or limited new text end . The commissioner shall specify the form of the
covenant and provide copies upon request. The covenant must include a legal description
that encompasses all the forest land that the claimant wishes to enroll under this section or
the certificate of title number for that land if it is registered land. new text begin The commissioner of
natural resources shall record the area eligible for enrollment into the Sustainable Forest
Incentive Act as electronic geospatial data, as defined in section 16E.30, subdivision 10.
new text end

new text begin (b) The commissioner shall provide by electronic means data sufficient for the
commissioner of natural resources to determine whether the applicant qualifies for enrollment.
The commissioner must make the data available within 30 days of receipt of the application
filed by the claimant or by October 1, whichever is sooner. The commissioner of natural
resources must notify the commissioner whether the applicant qualifies for enrollment within
30 days of the data being available, and if the applicant qualifies for enrollment, the
commissioner of natural resources shall specify the number of qualifying acres per tax
parcel.
new text end

deleted text begin (b) In all cases, deleted text end new text begin (c) new text end The commissioner shall notify the claimant within 90 days after
receipt of a completed application that either the land has or has not been approved for
enrollment. A claimant whose application is denied may appeal the denial as provided in
section 290C.13.

deleted text begin (c) deleted text end new text begin (d) new text end Within 90 days after the denial of an application, or within 90 days after the final
resolution of any appeal related to the denial, the commissioner shall execute and
acknowledge a document releasing the land from the covenant required under this chapter.
The document must be mailed to the claimant and is entitled to be recorded.

deleted text begin (d) deleted text end new text begin (e) new text end The Social Security numbers collected from individuals under this section are
private data as provided in section 13.355. The federal business tax registration number and
date of birth data collected under this section are also private data on individuals or nonpublic
data, as defined in section 13.02, subdivisions 9 and 12, but may be shared with county
assessors for purposes of tax administration and with county treasurers for purposes of the
revenue recapture under chapter 270A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications due
in 2018 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2016, section 290C.05, is amended to read:

290C.05 ANNUAL CERTIFICATION new text begin AND MONITORING new text end .

new text begin (a) new text end On or before deleted text begin July 1 deleted text end new text begin May 15 new text end of each year, beginning with the year after the original
claimant has received an approved application, the commissioner shall send each claimant
enrolled under the sustainable forest incentive program a certification form. For purposes
of this section, the deleted text begin original deleted text end claimant is the deleted text begin person that filed the first application under section
290C.04 to enroll the land in the program deleted text end new text begin current property owner on record, or the person
designated by the owners in the case of multiple ownership new text end . The claimant must sign new text begin and
return new text end the certification deleted text begin , attesting deleted text end new text begin to the commissioner by July 1 of that same year, and (1)
attest new text end that the requirements and conditions for continued enrollment in the program are
currently being met, and deleted text begin must return the signed certification form to the commissioner by
August 15 of that same year deleted text end new text begin (2) provide a report in the form and manner determined by the
commissioner of natural resources describing the management practices that have been
carried out on the enrolled property during the prior year new text end . If the claimant does not return an
annual certification form by the due date, the provisions in section 290C.11 apply. new text begin The
commissioner of natural resources must verify that the claimant meets program requirements.
new text end

new text begin (b) The commissioner must provide the certification form and annual report described
in paragraph (a), clause (2), to the commissioner of natural resources by August 1.
new text end

new text begin (c) The commissioner of natural resources must conduct annual monitoring of a subset
of claimants, excluding land also enrolled in a conservation easement program. Claimants
will be selected for monitoring based on reported violations, annual certification, and random
selections. Monitoring will be conducted on ten percent of claimants as of July 1 of each
year. Monitoring may include, but is not limited to, a site visit by a Department of Natural
Resources or contracted forester. The commissioner of natural resources must develop a
monitoring form to record the monitoring data.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (b) are effective for certifications and
applications due in 2018 and thereafter. Paragraph (c) is effective July 1, 2019.
new text end

Sec. 8.

Minnesota Statutes 2016, section 290C.055, is amended to read:

290C.055 LENGTH OF COVENANT.

(a) deleted text begin The covenant remains in effect for a minimum of eight years. deleted text end new text begin Claimants enrolling
any land that is subject to a conservation easement funded under section 97A.056 or a
comparable permanent easement conveyed to a governmental or nonprofit entity must enroll
their land under a covenant with a minimum duration of eight years. All other claimants
may choose to enroll their land under a covenant with a minimum duration of eight, 20, or
50 years. new text end If deleted text begin land is removed deleted text end new text begin the claimant requests removal of land new text end from the program before
it has been enrolled for deleted text begin four years deleted text end new text begin one-half the number of years of the covenant's duration new text end ,
the covenant remains in effect for deleted text begin eight years deleted text end new text begin the entire duration of the covenant new text end from the
date recorded.

(b) If land that has been enrolled for deleted text begin four years deleted text end new text begin one-half the number of years of the
covenant's minimum duration new text end or more is removed from the program for any reason, there
is a waiting period before the covenant terminates. The covenant terminates on January 1
of the fifth new text begin , 11th, or 26th new text end calendar year new text begin for the eight-, 20-, or 50-year minimum covenant,
respectively, new text end that begins after the date that:

(1) the commissioner receives notification from the claimant that the claimant wishes
to remove the land from the program under section 290C.10; or

(2) the date that the land is removed from the program under section 290C.11.

(c) Notwithstanding the other provisions of this section, the covenant is terminated:

(1) at the same time that the land is removed from the program due to acquisition of title
or possession for a public purpose under section 290C.10; or

(2) at the request of the claimant deleted text begin after deleted text end new text begin (i) if there is new text end a reduction in payments due to
changes in the payment formula under section 290C.07 new text begin ; or (ii) if, as a result of executive
action, the amount of payment a claimant is eligible to receive under section 290C.07 is
reduced or limited new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications in
2018 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2016, section 290C.07, is amended to read:

290C.07 CALCULATION OF INCENTIVE PAYMENT.

new text begin (a) new text end An approved claimant under the sustainable forest incentive program is eligible to
receive an annual payment new text begin for each acre of enrolled land, excluding any acre improved with
a paved trail under easement, lease, or terminable license to the state of Minnesota or a
political subdivision new text end . The payment shall equal deleted text begin $7 per acre for each acre enrolled in the
sustainable forest incentive program. deleted text end new text begin a percentage of the property tax that would be paid
on the land determined by using the previous year's statewide average total tax rate for all
taxes levied within townships and unorganized territories, the estimated market value per
acre as calculated in section 290C.06, and a class rate of one percent as follows: (1) for
claimants enrolling land that is subject to a conservation easement funded under section
97A.056 or a comparable permanent easement conveyed to a governmental or nonprofit
entity before May 31, 2013, 25 percent; (2) for claimants enrolling land that is not subject
to a conservation easement under an eight-year covenant, 65 percent; (3) for claimants
enrolling land that is not subject to a conservation easement under a 20-year covenant, 90
percent; and (4) for claimants enrolling land that is not subject to a conservation easement
under a 50-year covenant, 115 percent.
new text end

new text begin (b) The calculated payment shall not be less than the payment received in 2017 and shall
not increase or decrease by more than ten percent relative to the payment received for the
previous year.
new text end

new text begin (c) In addition to the payments provided under this section, a claimant enrolling more
than 1,920 acres shall be allowed an additional payment per acre equal to the amount
prescribed in paragraph (a), clause (1), for all acres of enrolled land on which public access
is allowed, as required under section 290C.03, paragraph (a), clause (6), excluding any land
subject to a conservation easement funded under section 97A.056, or a permanent easement
conveyed to a governmental or nonprofit entity that is required to allow for public access
under section 290C.03, paragraph (a), clause (6).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for calculations made in 2018 and
thereafter.
new text end

Sec. 10.

Minnesota Statutes 2016, section 290C.08, subdivision 1, is amended to read:

Subdivision 1.

Annual payment.

An incentive payment for each acre of enrolled land
will be made annually to each claimant in the amount determined under section 290C.07.
new text begin By September 15 of each year, the commissioner of natural resources will certify to the
commissioner the eligibility of each claimant to receive a payment. new text end The incentive payment
shall be paid new text begin by the commissioner new text end on or before October 1 each year based on the certifications
due deleted text begin August 15 deleted text end new text begin July 1 new text end of that year. Interest at the annual rate determined under section
270C.40 shall be included with any incentive payment not paid by the later of October 1 of
the year the certification was due, or 45 days after the completed certification was returned
or filed if the commissioner accepts a certification filed after deleted text begin August 15 deleted text end new text begin July 1 new text end of the taxes
payable year as the resolution of an appeal.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications due
in 2018 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2016, section 290C.10, is amended to read:

290C.10 WITHDRAWAL PROCEDURES.

deleted text begin An approved claimant deleted text end new text begin (a) The current owner of land enrolled new text end under the sustainable forest
incentive program for a minimum of deleted text begin four years deleted text end new text begin one-half the number of years of the covenant's
minimum duration new text end may notify the commissioner of the intent to terminate enrollment. Within
90 days of receipt of notice to terminate enrollment, the commissioner shall inform the
claimant in writing, acknowledging receipt of this notice and indicating the effective date
of termination from the sustainable forest incentive program. Termination of enrollment in
the sustainable forest incentive program occurs on January 1 of the fifth new text begin , 11th, or 26th new text end
calendar year new text begin for the eight-, 20-, or 50-year respective minimum covenant new text end that begins after
receipt by the commissioner of the termination notice. After the commissioner issues an
effective date of termination, a claimant wishing to continue the land's enrollment in the
sustainable forest incentive program beyond the termination date must apply for enrollment
as prescribed in section 290C.04. A claimant who withdraws a parcel of land from this
program may not reenroll the parcel for a period of three years. Within 90 days after the
termination date, the commissioner shall execute and acknowledge a document releasing
the land from the covenant required under this chapter. The document must be mailed to
the claimant and is entitled to be recorded.

new text begin (b) Notwithstanding paragraph (a), on request of the claimant, new text end the commissioner may
allow early withdrawal from the Sustainable Forest Incentive Act without penalty when the
state of Minnesota, any local government unit, or any other entity which has the power of
eminent domain acquires title or possession to the land for a public purpose deleted text begin notwithstanding
the provisions of this section deleted text end . In the case of deleted text begin such deleted text end new text begin an eligible new text end acquisition new text begin under this paragraph new text end ,
the commissioner shall execute and acknowledge a document releasing the land acquired
by the state, local government unit, or other entity from the covenant.

new text begin (c) Notwithstanding paragraph (a), upon request of the claimant, the commissioner shall
allow early withdrawal from the Sustainable Forest Incentive Act without penalty when a
government or nonprofit entity acquires a permanent conservation easement on the enrolled
property and the conservation easement is at least as restrictive as the covenant required
under section 290C.04. The commissioner of natural resources must notify the commissioner
of lands acquired under this paragraph that are eligible for withdrawal. In the case of an
eligible easement acquisition under this paragraph, the commissioner shall execute and
acknowledge a document releasing the land subject to the easement from the covenant.
new text end

new text begin (d) Notwithstanding paragraph (a), upon request of the claimant, the commissioner shall
allow early withdrawal from the Sustainable Forest Incentive Act without penalty for land
that is subject to fee or easement acquisition or lease to the state of Minnesota or a political
subdivision of the state for the public purpose of a paved trail. The commissioner of natural
resources must notify the commissioner of lands acquired under this paragraph that are
eligible for withdrawal. In the case of an eligible fee or easement acquisition or lease under
this paragraph, the commissioner shall execute and acknowledge a document releasing the
land subject to fee or easement acquisition or lease by the state or political subdivision of
the state.
new text end

new text begin (e) new text end All other enrolled land must remain in the program.

new text begin EFFECTIVE DATE. new text end

new text begin The amendments to paragraphs (c) and (d) are effective the day
following final enactment. The amendments to paragraphs (a), (b), and (e) are effective for
notifications made in 2018 and thereafter.
new text end

Sec. 12.

new text begin [290C.101] TRANSFER OF OWNERSHIP.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "New owner" means a prospective purchaser or grantee.
new text end

new text begin (c) "Owner" means a grantor or seller.
new text end

new text begin Subd. 2. new text end

new text begin Notification to commissioner. new text end

new text begin (a) An owner must notify the commissioner if
the owner transfers any or all of the owner's land enrolled in the sustainable forest incentive
program to one or more new owners within 60 days of the transfer of title to the property.
The notification must include the legal descriptions of the transferred property, the tax parcel
numbers, and the name and address of the new owner. If transfer of ownership is a result
of the death of the claimant, the provisions of section 290C.12 shall apply.
new text end

new text begin (b) Upon notification, the commissioner shall inform the new owner of the restrictions
of the covenant required by section 290C.04 and the withdrawal procedures under section
290C.10. In order for the new owner to receive payments pursuant to this chapter, the new
owner must file an application and register a new forest management plan with the
commissioner of natural resources within two years from the date the title of the property
was transferred to remain eligible.
new text end

new text begin Subd. 3. new text end

new text begin Termination of enrollment. new text end

new text begin The commissioner will terminate enrollment
according to the procedure in section 290C.10 for failure of the new owner to register a
forest management plan within the time period in subdivision 2, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2017.
new text end

Sec. 13.

Minnesota Statutes 2016, section 290C.11, is amended to read:

290C.11 PENALTIES FOR REMOVAL.

(a) If the commissioner determines that land enrolled in the sustainable forest incentive
program is in violation of the conditions for enrollment as specified in section 290C.03, new text begin or
upon notification by the commissioner of natural resources that land enrolled is in violation
of the conditions for enrollment, new text end the commissioner shall notify the deleted text begin claimant deleted text end new text begin current owner
of the land new text end of the intent to remove deleted text begin all deleted text end new text begin the tax parcel of the new text end enrolled land new text begin where the violation
has occurred new text end from the sustainable forest incentive program. new text begin The penalties described under
paragraph (c) apply. new text end The deleted text begin claimant deleted text end new text begin current owner new text end has 60 days to appeal this determination
under the provisions of section 290C.13.

(b) If the commissioner determines the land is to be removed from the sustainable forest
incentive program new text begin due to the construction or addition of an improvement to the property new text end ,
the deleted text begin claimant deleted text end new text begin owner of the tax parcel that is in violation new text end is liable for payment to the
commissioner in the amount equal to new text begin : (1) new text end the payments deleted text begin received deleted text end new text begin issued related to the enrolled
tax parcel new text end under this chapter for the deleted text begin previous four-year period deleted text end new text begin number of years the land has
been bound by covenant, or half the covenant length, whichever is less new text end , plus interest new text begin ; and
(2) 25 percent of the estimated market value of the property as reclassified under section
273.13 due to the structure being on the tax parcel, as determined by the assessor new text end .

new text begin (c) If the commissioner of natural resources determines that the land is used for purposes
other than forestry purposes, the commissioner of natural resources shall notify the
commissioner of revenue, who shall notify the current owner of the tax parcel that is in
violation that the current owner is liable to the commissioner in an amount equal to: (1) the
payments issued related to the enrolled tax parcel under this chapter for the number of years
the land has been bound by covenant, or half the covenant length, whichever is less, plus
interest; and (2) 30 percent of the estimated market value as property reclassified under
section 273.13, due to the change in use, as determined by the assessor.
new text end

new text begin (d) new text end The claimant has 90 days to satisfy the payment for removal of land from the
sustainable forest incentive program under this section. If the penalty is not paid within the
90-day period under this paragraph, the commissioner shall certify the amount to the county
auditor for collection as a part of the general ad valorem real property taxes on the land in
the following taxes payable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications and applications due
in 2018 and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2016, section 290C.13, subdivision 6, is amended to read:

Subd. 6.

Determination of appeal.

On the basis of applicable law and available
information, the commissioner shall determine the validity, if any, in whole or in part, of
the appeal and notify the claimant of the decision. This notice must be in writing and contain
the basis for the determination. new text begin The commissioner shall consult with the commissioner of
natural resources when an appeal relates to the use of the property for forestry or nonforestry
purposes and for appeals related to forest management plans.
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

Sec. 15.

Laws 2016, chapter 187, section 5, the effective date, is amended to read:

EFFECTIVE DATE.

This section is effective for orders and notices dated after
deleted text begin September 30, 2015 deleted text end new text begin December 31, 2017 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from September 30, 2015.
new text end

Sec. 16. new text begin SUSTAINABLE FOREST INCENTIVE ACT; TRANSITION PROVISION.
new text end

new text begin (a) For lands enrolled in the Sustainable Forest Incentive Act on December 31, 2017,
the owner of enrolled lands may elect through May 15, 2019, and without penalty, to change
the length of a covenant, if eligible, under Minnesota Statutes, section 290C.055. The owner
of enrolled land must provide notice to the Department of Revenue of its intent to change
the length of its covenant.
new text end

new text begin (b) For lands enrolled in the Sustainable Forest Incentive Act on May 15, 2016, the
owner of enrolled land must comply with the changes made in the act by certifications due
in 2018, as required under Minnesota Statutes, section 290C.05.
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

Sec. 17. new text begin ADMINISTRATIVE APPROPRIATION.
new text end

new text begin $600,000 in fiscal year 2018 and $600,000 in fiscal year 2019 are appropriated from the
general fund to the commissioner of natural resources for administering Minnesota Statutes,
chapter 290C, and section 477A.19.
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

Sec. 18. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 290C.02, subdivisions 5 and 9, new text end new text begin are repealed.
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

APPENDIX

Repealed Minnesota Statutes: 17-2210

290C.02 DEFINITIONS.

Subd. 5.

Current use value.

"Current use value" means the statewide average annual income per acre, multiplied by 90 percent and divided by the capitalization rate determined under subdivision 9. The statewide net annual income shall be a weighted average based on the most recent data as of July 1 of the computation year on stumpage prices and annual tree growth rates and acreage by cover type provided by the Department of Natural Resources and the United States Department of Agriculture Forest Service North Central Research Station.

Subd. 9.

Capitalization rate.

By July 1 of each year, the commissioner shall determine a statewide capitalization rate for use under this chapter. The rate shall be the average annual effective interest rate for St. Paul on new loans under the Farm Credit Bank system calculated under section 2032A(e)(7)(A) of the Internal Revenue Code.