Committee modifies Green Acres

Clearer rules and a more defined purpose for the Green Acres farm tax program will hopefully aid county assessors and help to preserve farmland for agricultural use, according to modifications approved by the House Agriculture and Rural Development Policy and Finance Committee Feb. 8.

Sponsored by Rep. Mike LeMieur (R-Little Falls), HF12 states that: “The legislature finds that it is in the interest of the state to encourage and preserve farms by mitigating the property tax impact of increasing land values due to nonagricultural economic forces.”

Perhaps more plainly put, land speculators need not apply, just so they can pay fewer taxes on farmland they intend to sell in a few years for a profit to non-agricultural developers, and then reinvest those profits in purchasing more farmland for the same reason in more rural areas of the state, said Committee Chairman Rod Hamilton (R-Mountain Lake).

Farmers voluntarily enroll in Green Acres to avoid paying higher property tax rates when untilled farmland (classified as rural preserve farmland) is assessed at a higher rate due to rising land values. Once enrolled, it cuts property taxes in half, or more in some cases. A minimum of 10 acres must be productive agricultural land used to grow an agricultural product for sale. Currently, when the land is transferred or sold, three years of the tax savings must be paid back.

Under the proposed changes, past enrollees or new applicants would be grandfathered in or have until May 1, 2012, to enroll under the condition that three years of tax savings must be paid back if they sell the land. Anyone who enrolls after that date would be required to pay back five years of tax savings when they sell or transfer the land.

Also, the requirement for a conservation assessment plan and a covenant agreement would go away, saving new enrollees money, but possibly costing existing participants about $50 if they want a “release of covenant” by their assessor.

Representatives of the Minnesota Farmers Union and the county assessors support the bill, which next goes to the House Taxes Committee next.

A companion, SF37, sponsored by Sen. Paul Gazelka (R-Brainerd), awaits action by the Senate Taxes Committee.