| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to taxation; property; increasing the shareholder limit for entity-owned |
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| 3 | 3 | | 1.3 agricultural property; amending Minnesota Statutes 2024, section 273.124, |
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| 4 | 4 | | 1.4 subdivision 8. |
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| 5 | 5 | | 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 6 | 6 | | 1.6 Section 1. Minnesota Statutes 2024, section 273.124, subdivision 8, is amended to read: |
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| 7 | 7 | | 1.7 Subd. 8.Homestead owned by or leased to family farm corporation, joint farm |
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| 8 | 8 | | 1.8venture, limited liability company, or partnership.(a) Each family farm corporation; |
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| 9 | 9 | | 1.9each joint family farm venture; and each limited liability company or partnership which |
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| 10 | 10 | | 1.10operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, paragraph |
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| 11 | 11 | | 1.11(b), or class 2a assessment for one homestead occupied by a shareholder, member, or partner |
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| 12 | 12 | | 1.12thereof who is residing on the land, and actively engaged in farming of the land owned by |
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| 13 | 13 | | 1.13the family farm corporation, joint family farm venture, limited liability company, or |
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| 14 | 14 | | 1.14partnership. Homestead treatment applies even if: |
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| 15 | 15 | | 1.15 (1) legal title to the property is in the name of the family farm corporation, joint family |
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| 16 | 16 | | 1.16farm venture, limited liability company, or partnership, and not in the name of the person |
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| 17 | 17 | | 1.17residing on it; or |
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| 18 | 18 | | 1.18 (2) the family farm is operated by a family farm corporation, joint family farm venture, |
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| 19 | 19 | | 1.19partnership, or limited liability company other than the family farm corporation, joint family |
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| 20 | 20 | | 1.20farm venture, partnership, or limited liability company that owns the land, provided that: |
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| 21 | 21 | | 1.21 (i) the shareholder, member, or partner residing on and actively engaged in farming the |
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| 22 | 22 | | 1.22land is a shareholder, member, or partner of the family farm corporation, joint family farm |
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| 23 | 23 | | 1.23venture, partnership, or limited liability company that is operating the farm; and |
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| 24 | 24 | | 1Section 1. |
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| 25 | 25 | | REVISOR MS/LJ 25-0247801/21/25 |
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| 26 | 26 | | State of Minnesota |
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| 27 | 27 | | This Document can be made available |
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| 28 | 28 | | in alternative formats upon request |
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| 29 | 29 | | HOUSE OF REPRESENTATIVES |
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| 30 | 30 | | H. F. No. 1700 |
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| 31 | 31 | | NINETY-FOURTH SESSION |
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| 32 | 32 | | Authored by Anderson, P. H.; Lawrence and Gander02/27/2025 |
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| 33 | 33 | | The bill was read for the first time and referred to the Committee on Taxes 2.1 (ii) more than half of the shareholders, members, or partners of each family farm |
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| 34 | 34 | | 2.2corporation, joint family farm venture, partnership, or limited liability company are persons |
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| 35 | 35 | | 2.3or spouses of persons who are a qualifying relative under section 273.124, subdivision 1, |
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| 36 | 36 | | 2.4paragraphs (c) and (d). |
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| 37 | 37 | | 2.5 "Family farm corporation," "family farm," and "partnership operating a family farm" |
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| 38 | 38 | | 2.6have the meanings given in section 500.24, except that the number of allowable shareholders, |
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| 39 | 39 | | 2.7members, or partners under this subdivision shall not exceed 12 20. "Limited liability |
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| 40 | 40 | | 2.8company" has the meaning contained in sections 322C.0102, subdivision 12, and 500.24, |
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| 41 | 41 | | 2.9subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means a cooperative |
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| 42 | 42 | | 2.10agreement among two or more farm enterprises authorized to operate a family farm under |
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| 43 | 43 | | 2.11section 500.24. |
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| 44 | 44 | | 2.12 (b) In addition to property specified in paragraph (a), any other residences owned by |
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| 45 | 45 | | 2.13family farm corporations, joint family farm ventures, limited liability companies, or |
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| 46 | 46 | | 2.14partnerships described in paragraph (a) which are located on agricultural land and occupied |
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| 47 | 47 | | 2.15as homesteads by its shareholders, members, or partners who are actively engaged in farming |
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| 48 | 48 | | 2.16on behalf of that corporation, joint farm venture, limited liability company, or partnership |
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| 49 | 49 | | 2.17must also be assessed as class 2a property or as class 1b property under section 273.13. |
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| 50 | 50 | | 2.18 (c) Agricultural property that is owned by a member, partner, or shareholder of a family |
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| 51 | 51 | | 2.19farm corporation or joint family farm venture, limited liability company operating a family |
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| 52 | 52 | | 2.20farm, or by a partnership operating a family farm and leased to the family farm corporation, |
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| 53 | 53 | | 2.21limited liability company, partnership, or joint farm venture, as defined in paragraph (a), is |
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| 54 | 54 | | 2.22eligible for classification as class 1b or class 2a under section 273.13, if the owner is actually |
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| 55 | 55 | | 2.23residing on the property, and is actually engaged in farming the land on behalf of that |
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| 56 | 56 | | 2.24corporation, joint farm venture, limited liability company, or partnership. This paragraph |
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| 57 | 57 | | 2.25applies without regard to any legal possession rights of the family farm corporation, joint |
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| 58 | 58 | | 2.26family farm venture, limited liability company, or partnership under the lease. |
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| 59 | 59 | | 2.27 (d) Nonhomestead agricultural property that is owned by a family farm corporation, |
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| 60 | 60 | | 2.28joint farm venture, limited liability company, or partnership; and located not farther than |
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| 61 | 61 | | 2.29four townships or cities, or combination thereof, from agricultural land that is owned, and |
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| 62 | 62 | | 2.30used for the purposes of a homestead by an individual who is a shareholder, member, or |
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| 63 | 63 | | 2.31partner of the corporation, venture, company, or partnership; is entitled to receive the first |
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| 64 | 64 | | 2.32tier homestead classification rate on any remaining market value in the first homestead class |
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| 65 | 65 | | 2.33tier that is in excess of the market value of the shareholder's, member's, or partner's class 2 |
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| 66 | 66 | | 2.34agricultural homestead property, if the owner, or someone acting on the owner's behalf |
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| 67 | 67 | | 2.35notifies the county assessor by July 1 that the property may be eligible under this paragraph |
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| 68 | 68 | | 2Section 1. |
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| 69 | 69 | | REVISOR MS/LJ 25-0247801/21/25 3.1for the current assessment year, for taxes payable in the following year. As used in this |
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| 70 | 70 | | 3.2paragraph, "agricultural property" means property classified as 2a under section 273.13, |
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| 71 | 71 | | 3.3along with any contiguous property classified as 2b under section 273.13, if the contiguous |
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| 72 | 72 | | 3.42a and 2b properties are under the same ownership. |
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| 73 | 73 | | 3.5 EFFECTIVE DATE.This section is effective for homestead applications in 2025 and |
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| 74 | 74 | | 3.6thereafter. |
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| 75 | 75 | | 3Section 1. |
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| 76 | 76 | | REVISOR MS/LJ 25-0247801/21/25 |
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