Deferred tax laws tweaked, again (new law)

Two weeks shy of the typical May 1 deadline to enroll in the Green Acres and Rural Preserve tax relief programs, lawmakers extended the 2011 enrollment period and once again tweaked the programs because of unintended consequences resulting from 2008 and 2009 changes to the law.

Sponsored by Rep. Mike LeMieur (R-Little Falls) and Sen. Jeremy Miller (R-Winona), the new law was signed by Gov. Mark Dayton April 15, and was effective the next day. It applies to taxes payable beginning in 2012.

In 2008, legislators created a dual tax classification system for productive (2a) and non-productive (2b) agricultural land. Furthermore, the non-productive land was no longer allowed in the Green Acres program. Then in 2009, the Legislature created a new program called Rural Preserve for the non-productive land, which had tax benefits similar to Green Acres. In order for land to be enrolled in Rural Preserve, a farmer was required to develop a conservation plan for the land and to sign a covenant that the land would not be developed or farmed for a period of years. Property owners and county assessors explained problems with the revisions.

The law no longer requires farmers to develop a conservation plan or to sign a covenant agreement to enroll in Rural Preserve. Also, farmers who removed land from the Green Acres program as a result of 2008 and 2009 changes have until Aug. 1, 2011, to reapply for either program, instead of the usual May 1 annual enrollment deadline.

The law also requires that Rural Preserve land, of any size, be contiguous to property enrolled in Green Acres and under the same ownership. Previously, a minimum 10 acres was required.

An aerial photograph or satellite image of the property that clearly defines the land being enrolled is now required as part of the enrollment process. If a property owner wants to remove land from either program before the authorized date, three years of deferred taxes become due.

Interested parties will work toward an alternative method for determining the taxable value of enrolled agricultural land. A report is due by Feb. 15, 2012.

HF12*/ SF222/CH13