| 1 | 1 | | 1.1 A bill for an act |
|---|
| 2 | 2 | | 1.2 relating to taxation; property; clarifying eligibility for class 2c managed forest |
|---|
| 3 | 3 | | 1.3 lands classification; amending Minnesota Statutes 2024, section 273.13, subdivision |
|---|
| 4 | 4 | | 1.4 23. |
|---|
| 5 | 5 | | 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
|---|
| 6 | 6 | | 1.6 Section 1. Minnesota Statutes 2024, section 273.13, subdivision 23, is amended to read: |
|---|
| 7 | 7 | | 1.7 Subd. 23.Class 2.(a) An agricultural homestead consists of class 2a agricultural land |
|---|
| 8 | 8 | | 1.8that is homesteaded, along with any class 2b rural vacant land that is contiguous to the class |
|---|
| 9 | 9 | | 1.92a land under the same ownership. The market value of the house and garage and immediately |
|---|
| 10 | 10 | | 1.10surrounding one acre of land has the same classification rates as class 1a or 1b property |
|---|
| 11 | 11 | | 1.11under subdivision 22. The value of the remaining land including improvements up to the |
|---|
| 12 | 12 | | 1.12first tier valuation limit of agricultural homestead property has a classification rate of 0.5 |
|---|
| 13 | 13 | | 1.13percent of market value. The remaining property over the first tier has a classification rate |
|---|
| 14 | 14 | | 1.14of one percent of market value. For purposes of this subdivision, the "first tier valuation |
|---|
| 15 | 15 | | 1.15limit of agricultural homestead property" and "first tier" means the limit certified under |
|---|
| 16 | 16 | | 1.16section 273.11, subdivision 23. |
|---|
| 17 | 17 | | 1.17 (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that |
|---|
| 18 | 18 | | 1.18are agricultural land and buildings. Class 2a property has a classification rate of one percent |
|---|
| 19 | 19 | | 1.19of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a |
|---|
| 20 | 20 | | 1.20property must also include any property that would otherwise be classified as 2b, but is |
|---|
| 21 | 21 | | 1.21interspersed with class 2a property, including but not limited to sloughs, wooded wind |
|---|
| 22 | 22 | | 1.22shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, |
|---|
| 23 | 23 | | 1Section 1. |
|---|
| 24 | 24 | | REVISOR EB/NS 25-0038511/19/24 |
|---|
| 25 | 25 | | State of Minnesota |
|---|
| 26 | 26 | | This Document can be made available |
|---|
| 27 | 27 | | in alternative formats upon request |
|---|
| 28 | 28 | | HOUSE OF REPRESENTATIVES |
|---|
| 29 | 29 | | H. F. No. 2109 |
|---|
| 30 | 30 | | NINETY-FOURTH SESSION |
|---|
| 31 | 31 | | Authored by Warwas03/10/2025 |
|---|
| 32 | 32 | | The bill was read for the first time and referred to the Committee on Taxes 2.1and other similar land that is impractical for the assessor to value separately from the rest |
|---|
| 33 | 33 | | 2.2of the property or that is unlikely to be able to be sold separately from the rest of the property. |
|---|
| 34 | 34 | | 2.3 An assessor may classify the part of a parcel described in this subdivision that is used |
|---|
| 35 | 35 | | 2.4for agricultural purposes as class 2a and the remainder in the class appropriate to its use. |
|---|
| 36 | 36 | | 2.5 (c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that |
|---|
| 37 | 37 | | 2.6are unplatted real estate, rural in character and not used for agricultural purposes, including |
|---|
| 38 | 38 | | 2.7land used for growing trees for timber, lumber, and wood and wood products, that is not |
|---|
| 39 | 39 | | 2.8improved with a structure. The presence of a minor, ancillary nonresidential structure as |
|---|
| 40 | 40 | | 2.9defined by the commissioner of revenue does not disqualify the property from classification |
|---|
| 41 | 41 | | 2.10under this paragraph. Any parcel of 20 acres or more improved with a structure that is not |
|---|
| 42 | 42 | | 2.11a minor, ancillary nonresidential structure must be split-classified, and ten acres must be |
|---|
| 43 | 43 | | 2.12assigned to the split parcel containing the structure. If a parcel of 20 acres or more is enrolled |
|---|
| 44 | 44 | | 2.13in the sustainable forest management incentive program under chapter 290C, the number |
|---|
| 45 | 45 | | 2.14of acres assigned to the split parcel improved with a structure that is not a minor, ancillary |
|---|
| 46 | 46 | | 2.15nonresidential structure must equal three acres or the number of acres excluded from the |
|---|
| 47 | 47 | | 2.16sustainable forest incentive act covenant due to the structure, whichever is greater. Class |
|---|
| 48 | 48 | | 2.172b property has a classification rate of one percent of market value unless it is part of an |
|---|
| 49 | 49 | | 2.18agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d). |
|---|
| 50 | 50 | | 2.19 (d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 |
|---|
| 51 | 51 | | 2.20acres statewide per taxpayer that is being managed under a forest management plan that |
|---|
| 52 | 52 | | 2.21meets the requirements of chapter 290C, but that is not enrolled in the sustainable forest |
|---|
| 53 | 53 | | 2.22resource management incentive program. It has a classification rate of .65 percent, provided |
|---|
| 54 | 54 | | 2.23that the owner of the property must apply to the assessor in order for the property to initially |
|---|
| 55 | 55 | | 2.24qualify for the reduced rate and provide the information required by the assessor to verify |
|---|
| 56 | 56 | | 2.25that the property qualifies for the reduced rate. If the assessor receives the application and |
|---|
| 57 | 57 | | 2.26information before May 1 in an assessment year, the property qualifies beginning with that |
|---|
| 58 | 58 | | 2.27assessment year. If the assessor receives the application and information after April 30 in |
|---|
| 59 | 59 | | 2.28an assessment year, the property may not qualify until the next assessment year. The |
|---|
| 60 | 60 | | 2.29commissioner of natural resources must concur that the land is qualified. The commissioner |
|---|
| 61 | 61 | | 2.30of natural resources shall annually provide county assessors verification information on a |
|---|
| 62 | 62 | | 2.31timely basis. The presence of a minor, ancillary nonresidential structure as defined by the |
|---|
| 63 | 63 | | 2.32commissioner of revenue does not disqualify the property from classification under this |
|---|
| 64 | 64 | | 2.33paragraph. For purposes of this paragraph, "forest management plan" means a forest |
|---|
| 65 | 65 | | 2.34management plan, as defined in section 290C.02, subdivision 7, that is prepared by an |
|---|
| 66 | 66 | | 2.35approved plan writer, as defined in section 290C.02, subdivision 2. |
|---|
| 67 | 67 | | 2Section 1. |
|---|
| 68 | 68 | | REVISOR EB/NS 25-0038511/19/24 3.1 (e) Agricultural land as used in this section means: |
|---|
| 69 | 69 | | 3.2 (1) contiguous acreage of ten acres or more, used during the preceding year for |
|---|
| 70 | 70 | | 3.3agricultural purposes; or |
|---|
| 71 | 71 | | 3.4 (2) contiguous acreage used during the preceding year for an intensive livestock or |
|---|
| 72 | 72 | | 3.5poultry confinement operation, provided that land used only for pasturing or grazing does |
|---|
| 73 | 73 | | 3.6not qualify under this clause. |
|---|
| 74 | 74 | | 3.7 "Agricultural purposes" as used in this section means the raising, cultivation, drying, or |
|---|
| 75 | 75 | | 3.8storage of agricultural products for sale, or the storage of machinery or equipment used in |
|---|
| 76 | 76 | | 3.9support of agricultural production by the same farm entity. For a property to be classified |
|---|
| 77 | 77 | | 3.10as agricultural based only on the drying or storage of agricultural products, the products |
|---|
| 78 | 78 | | 3.11being dried or stored must have been produced by the same farm entity as the entity operating |
|---|
| 79 | 79 | | 3.12the drying or storage facility. "Agricultural purposes" also includes (i) enrollment in a local |
|---|
| 80 | 80 | | 3.13conservation program or the Reinvest in Minnesota program under sections 103F.501 to |
|---|
| 81 | 81 | | 3.14103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198 |
|---|
| 82 | 82 | | 3.15or a similar state or federal conservation program if the property was classified as agricultural |
|---|
| 83 | 83 | | 3.16(A) under this subdivision for taxes payable in 2003 because of its enrollment in a qualifying |
|---|
| 84 | 84 | | 3.17program and the land remains enrolled or (B) in the year prior to its enrollment, or (ii) use |
|---|
| 85 | 85 | | 3.18of land, not to exceed three acres, to provide environmental benefits such as buffer strips, |
|---|
| 86 | 86 | | 3.19old growth forest restoration or retention, or retention ponds to prevent soil erosion. For |
|---|
| 87 | 87 | | 3.20purposes of this section, a "local conservation program" means a program administered by |
|---|
| 88 | 88 | | 3.21a town, statutory or home rule charter city, or county, including a watershed district, water |
|---|
| 89 | 89 | | 3.22management organization, or soil and water conservation district, in which landowners |
|---|
| 90 | 90 | | 3.23voluntarily enroll land and receive incentive payments equal to at least $50 per acre in |
|---|
| 91 | 91 | | 3.24exchange for use or other restrictions placed on the land. In order for property to qualify |
|---|
| 92 | 92 | | 3.25under the local conservation program provision, a taxpayer must apply to the assessor by |
|---|
| 93 | 93 | | 3.26February 1 of the assessment year and must submit the information required by the assessor, |
|---|
| 94 | 94 | | 3.27including but not limited to a copy of the program requirements, the specific agreement |
|---|
| 95 | 95 | | 3.28between the land owner and the local agency, if applicable, and a map of the conservation |
|---|
| 96 | 96 | | 3.29area. Agricultural classification shall not be based upon the market value of any residential |
|---|
| 97 | 97 | | 3.30structures on the parcel or contiguous parcels under the same ownership. |
|---|
| 98 | 98 | | 3.31 "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous |
|---|
| 99 | 99 | | 3.32portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion |
|---|
| 100 | 100 | | 3.33of, a set of contiguous tax parcels under that section that are owned by the same person. |
|---|
| 101 | 101 | | 3.34 (f) Agricultural land under this section also includes: |
|---|
| 102 | 102 | | 3Section 1. |
|---|
| 103 | 103 | | REVISOR EB/NS 25-0038511/19/24 4.1 (1) contiguous acreage that is less than ten acres in size and exclusively used in the |
|---|
| 104 | 104 | | 4.2preceding year for raising or cultivating agricultural products; or |
|---|
| 105 | 105 | | 4.3 (2) contiguous acreage that contains a residence and is less than 11 acres in size, if the |
|---|
| 106 | 106 | | 4.4contiguous acreage exclusive of the house, garage, and surrounding one acre of land was |
|---|
| 107 | 107 | | 4.5used in the preceding year for one or more of the following three uses: |
|---|
| 108 | 108 | | 4.6 (i) for an intensive grain drying or storage operation, or for intensive machinery or |
|---|
| 109 | 109 | | 4.7equipment storage activities used to support agricultural activities on other parcels of property |
|---|
| 110 | 110 | | 4.8operated by the same farming entity; |
|---|
| 111 | 111 | | 4.9 (ii) as a nursery, provided that only those acres used intensively to produce nursery stock |
|---|
| 112 | 112 | | 4.10are considered agricultural land; or |
|---|
| 113 | 113 | | 4.11 (iii) for intensive market farming; for purposes of this paragraph, "market farming" |
|---|
| 114 | 114 | | 4.12means the cultivation of one or more fruits or vegetables or production of animal or other |
|---|
| 115 | 115 | | 4.13agricultural products for sale to local markets by the farmer or an organization with which |
|---|
| 116 | 116 | | 4.14the farmer is affiliated. |
|---|
| 117 | 117 | | 4.15 "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as |
|---|
| 118 | 118 | | 4.16described in section 272.193, or all of a set of contiguous tax parcels under that section that |
|---|
| 119 | 119 | | 4.17are owned by the same person. |
|---|
| 120 | 120 | | 4.18 (g) Land shall be classified as agricultural even if all or a portion of the agricultural use |
|---|
| 121 | 121 | | 4.19of that property is the leasing to, or use by another person for agricultural purposes. |
|---|
| 122 | 122 | | 4.20 Classification under this subdivision is not determinative for qualifying under section |
|---|
| 123 | 123 | | 4.21273.111. |
|---|
| 124 | 124 | | 4.22 (h) The property classification under this section supersedes, for property tax purposes |
|---|
| 125 | 125 | | 4.23only, any locally administered agricultural policies or land use restrictions that define |
|---|
| 126 | 126 | | 4.24minimum or maximum farm acreage. |
|---|
| 127 | 127 | | 4.25 (i) The term "agricultural products" as used in this subdivision includes production for |
|---|
| 128 | 128 | | 4.26sale of: |
|---|
| 129 | 129 | | 4.27 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing |
|---|
| 130 | 130 | | 4.28animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees, |
|---|
| 131 | 131 | | 4.29and apiary products by the owner; |
|---|
| 132 | 132 | | 4.30 (2) aquacultural products for sale and consumption, as defined under section 17.47, if |
|---|
| 133 | 133 | | 4.31the aquaculture occurs on land zoned for agricultural use; |
|---|
| 134 | 134 | | 4Section 1. |
|---|
| 135 | 135 | | REVISOR EB/NS 25-0038511/19/24 5.1 (3) the commercial boarding of horses, which may include related horse training and |
|---|
| 136 | 136 | | 5.2riding instruction, if the boarding is done on property that is also used for raising pasture |
|---|
| 137 | 137 | | 5.3to graze horses or raising or cultivating other agricultural products as defined in clause (1); |
|---|
| 138 | 138 | | 5.4 (4) property which is owned and operated by nonprofit organizations used for equestrian |
|---|
| 139 | 139 | | 5.5activities, excluding racing; |
|---|
| 140 | 140 | | 5.6 (5) game birds and waterfowl bred and raised (i) on a game farm licensed under section |
|---|
| 141 | 141 | | 5.797A.105, provided that the annual licensing report to the Department of Natural Resources, |
|---|
| 142 | 142 | | 5.8which must be submitted annually by March 30 to the assessor, indicates that at least 500 |
|---|
| 143 | 143 | | 5.9birds were raised or used for breeding stock on the property during the preceding year and |
|---|
| 144 | 144 | | 5.10that the owner provides a copy of the owner's most recent schedule F; or (ii) for use on a |
|---|
| 145 | 145 | | 5.11shooting preserve licensed under section 97A.115; |
|---|
| 146 | 146 | | 5.12 (6) insects primarily bred to be used as food for animals; |
|---|
| 147 | 147 | | 5.13 (7) trees, grown for sale as a crop, including short rotation woody crops, and not sold |
|---|
| 148 | 148 | | 5.14for timber, lumber, wood, or wood products; and |
|---|
| 149 | 149 | | 5.15 (8) maple syrup taken from trees grown by a person licensed by the Minnesota |
|---|
| 150 | 150 | | 5.16Department of Agriculture under chapter 28A as a food processor. |
|---|
| 151 | 151 | | 5.17 (j) If a parcel used for agricultural purposes is also used for commercial or industrial |
|---|
| 152 | 152 | | 5.18purposes, including but not limited to: |
|---|
| 153 | 153 | | 5.19 (1) wholesale and retail sales; |
|---|
| 154 | 154 | | 5.20 (2) processing of raw agricultural products or other goods; |
|---|
| 155 | 155 | | 5.21 (3) warehousing or storage of processed goods; and |
|---|
| 156 | 156 | | 5.22 (4) office facilities for the support of the activities enumerated in clauses (1), (2), and |
|---|
| 157 | 157 | | 5.23(3), the assessor shall classify the part of the parcel used for agricultural purposes as class |
|---|
| 158 | 158 | | 5.241b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use. |
|---|
| 159 | 159 | | 5.25The grading, sorting, and packaging of raw agricultural products for first sale is considered |
|---|
| 160 | 160 | | 5.26an agricultural purpose. A greenhouse or other building where horticultural or nursery |
|---|
| 161 | 161 | | 5.27products are grown that is also used for the conduct of retail sales must be classified as |
|---|
| 162 | 162 | | 5.28agricultural if it is primarily used for the growing of horticultural or nursery products from |
|---|
| 163 | 163 | | 5.29seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products. |
|---|
| 164 | 164 | | 5.30Use of a greenhouse or building only for the display of already grown horticultural or nursery |
|---|
| 165 | 165 | | 5.31products does not qualify as an agricultural purpose. |
|---|
| 166 | 166 | | 5Section 1. |
|---|
| 167 | 167 | | REVISOR EB/NS 25-0038511/19/24 6.1 (k) The assessor shall determine and list separately on the records the market value of |
|---|
| 168 | 168 | | 6.2the homestead dwelling and the one acre of land on which that dwelling is located. If any |
|---|
| 169 | 169 | | 6.3farm buildings or structures are located on this homesteaded acre of land, their market value |
|---|
| 170 | 170 | | 6.4shall not be included in this separate determination. |
|---|
| 171 | 171 | | 6.5 (l) Class 2d airport landing area consists of a landing area or public access area of a |
|---|
| 172 | 172 | | 6.6privately owned public use airport. It has a classification rate of one percent of market value. |
|---|
| 173 | 173 | | 6.7To qualify for classification under this paragraph, a privately owned public use airport must |
|---|
| 174 | 174 | | 6.8be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing |
|---|
| 175 | 175 | | 6.9area" means that part of a privately owned public use airport properly cleared, regularly |
|---|
| 176 | 176 | | 6.10maintained, and made available to the public for use by aircraft and includes runways, |
|---|
| 177 | 177 | | 6.11taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing |
|---|
| 178 | 178 | | 6.12area also includes land underlying both the primary surface and the approach surfaces that |
|---|
| 179 | 179 | | 6.13comply with all of the following: |
|---|
| 180 | 180 | | 6.14 (i) the land is properly cleared and regularly maintained for the primary purposes of the |
|---|
| 181 | 181 | | 6.15landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities |
|---|
| 182 | 182 | | 6.16for servicing, repair, or maintenance of aircraft is not included as a landing area; |
|---|
| 183 | 183 | | 6.17 (ii) the land is part of the airport property; and |
|---|
| 184 | 184 | | 6.18 (iii) the land is not used for commercial or residential purposes. |
|---|
| 185 | 185 | | 6.19The land contained in a landing area under this paragraph must be described and certified |
|---|
| 186 | 186 | | 6.20by the commissioner of transportation. The certification is effective until it is modified, or |
|---|
| 187 | 187 | | 6.21until the airport or landing area no longer meets the requirements of this paragraph. For |
|---|
| 188 | 188 | | 6.22purposes of this paragraph, "public access area" means property used as an aircraft parking |
|---|
| 189 | 189 | | 6.23ramp, apron, or storage hangar, or an arrival and departure building in connection with the |
|---|
| 190 | 190 | | 6.24airport. |
|---|
| 191 | 191 | | 6.25 (m) Class 2e consists of land with a commercial aggregate deposit that is not actively |
|---|
| 192 | 192 | | 6.26being mined and is not otherwise classified as class 2a or 2b, provided that the land is not |
|---|
| 193 | 193 | | 6.27located in a county that has elected to opt-out of the aggregate preservation program as |
|---|
| 194 | 194 | | 6.28provided in section 273.1115, subdivision 6. It has a classification rate of one percent of |
|---|
| 195 | 195 | | 6.29market value. To qualify for classification under this paragraph, the property must be at |
|---|
| 196 | 196 | | 6.30least ten contiguous acres in size and the owner of the property must record with the county |
|---|
| 197 | 197 | | 6.31recorder of the county in which the property is located an affidavit containing: |
|---|
| 198 | 198 | | 6.32 (1) a legal description of the property; |
|---|
| 199 | 199 | | 6Section 1. |
|---|
| 200 | 200 | | REVISOR EB/NS 25-0038511/19/24 7.1 (2) a disclosure that the property contains a commercial aggregate deposit that is not |
|---|
| 201 | 201 | | 7.2actively being mined but is present on the entire parcel enrolled; |
|---|
| 202 | 202 | | 7.3 (3) documentation that the conditional use under the county or local zoning ordinance |
|---|
| 203 | 203 | | 7.4of this property is for mining; and |
|---|
| 204 | 204 | | 7.5 (4) documentation that a permit has been issued by the local unit of government or the |
|---|
| 205 | 205 | | 7.6mining activity is allowed under local ordinance. The disclosure must include a statement |
|---|
| 206 | 206 | | 7.7from a registered professional geologist, engineer, or soil scientist delineating the deposit |
|---|
| 207 | 207 | | 7.8and certifying that it is a commercial aggregate deposit. |
|---|
| 208 | 208 | | 7.9 For purposes of this section and section 273.1115, "commercial aggregate deposit" |
|---|
| 209 | 209 | | 7.10means a deposit that will yield crushed stone or sand and gravel that is suitable for use as |
|---|
| 210 | 210 | | 7.11a construction aggregate; and "actively mined" means the removal of top soil and overburden |
|---|
| 211 | 211 | | 7.12in preparation for excavation or excavation of a commercial deposit. |
|---|
| 212 | 212 | | 7.13 (n) When any portion of the property under this subdivision or subdivision 22 begins to |
|---|
| 213 | 213 | | 7.14be actively mined, the owner must file a supplemental affidavit within 60 days from the |
|---|
| 214 | 214 | | 7.15day any aggregate is removed stating the number of acres of the property that is actively |
|---|
| 215 | 215 | | 7.16being mined. The acres actively being mined must be (1) valued and classified under |
|---|
| 216 | 216 | | 7.17subdivision 24 in the next subsequent assessment year, and (2) removed from the aggregate |
|---|
| 217 | 217 | | 7.18resource preservation property tax program under section 273.1115, if the land was enrolled |
|---|
| 218 | 218 | | 7.19in that program. Copies of the original affidavit and all supplemental affidavits must be |
|---|
| 219 | 219 | | 7.20filed with the county assessor, the local zoning administrator, and the Department of Natural |
|---|
| 220 | 220 | | 7.21Resources, Division of Land and Minerals. A supplemental affidavit must be filed each |
|---|
| 221 | 221 | | 7.22time a subsequent portion of the property is actively mined, provided that the minimum |
|---|
| 222 | 222 | | 7.23acreage change is five acres, even if the actual mining activity constitutes less than five |
|---|
| 223 | 223 | | 7.24acres. |
|---|
| 224 | 224 | | 7.25 (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are not |
|---|
| 225 | 225 | | 7.26rules and are exempt from the rulemaking provisions of chapter 14, and the provisions in |
|---|
| 226 | 226 | | 7.27section 14.386 concerning exempt rules do not apply. |
|---|
| 227 | 227 | | 7Section 1. |
|---|
| 228 | 228 | | REVISOR EB/NS 25-0038511/19/24 |
|---|