Property taxes; qualified relatives for special agricultural homestead expanded.

A bill for an act

relating to taxation; property; expanding qualified relatives for special agricultural

homestead; amending Minnesota Statutes 2024, section 273.124, subdivision 14.

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

Section 1.

Minnesota Statutes 2024, section 273.124, subdivision 14, is amended to read:

Subd. 14.

Agricultural homesteads; special provisions.

(a) Real estate of less than ten

acres that is the homestead of its owner must be classified as class 2a under section
273.13,

subdivision 23
, paragraph (a), if:

(1) the parcel on which the house is located is contiguous on at least two sides to (i)

agricultural land, (ii) land owned or administered by the United States Fish and Wildlife

Service, or (iii) land administered by the Department of Natural Resources on which in lieu

taxes are paid under sections
477A.11
to 477A.14 or section
477A.17
;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20

acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a

combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal to

at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall

remain classified as class 2a, irrespective of subsequent changes in the use of adjoining

properties, as long as the homestead remains under the same ownership, the owner owns a

noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use

value qualifies under clause (4). Homestead classification under this paragraph is limited

to property that qualified under this paragraph for the 1998 assessment.

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(b)(i)
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(b)(1)
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Agricultural property shall be classified as the owner's homestead, to the

same extent as other agricultural homestead property, if all of the following criteria are met:

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(1)
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(i)
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the agricultural property consists of at least 40 acres including undivided

government lots and correctional 40's;

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(2)
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(ii)
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the owner, the owner's spouse, or a
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grandparent,
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grandchild, child,
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stepchild,
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sibling,
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or
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uncle, aunt, nephew, niece,
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parent
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, or stepparent
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of the owner or of the owner's

spouse, is actively farming the agricultural property, either on the person's own behalf as

an individual or on behalf of a partnership operating a family farm, family farm corporation,

joint family farm venture, or limited liability company of which the person is a partner,

shareholder, or member;

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(3)
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(iii)
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both the owner of the agricultural property and the person who is actively farming

the agricultural property under
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clause (2)
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item (ii)
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, are Minnesota residents;

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(4)
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(iv)
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neither the owner nor the spouse of the owner claims another agricultural

homestead in Minnesota; and

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(5)
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(v)
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neither the owner nor the person actively farming the agricultural property lives

farther than four townships or cities, or a combination of four townships or cities, from the

agricultural property, except that if the owner or the owner's spouse is required to live in

employer-provided housing, the owner or owner's spouse, whichever is actively farming

the agricultural property, may live more than four townships or cities, or combination of

four townships or cities from the agricultural property.

The relationship under this paragraph may be either by blood or marriage.

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(ii)
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(2)
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Property containing the residence of an owner who owns qualified property under

clause
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(i)
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(1)
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shall be classified as part of the owner's agricultural homestead, if that property

is also used for noncommercial storage or drying of agricultural crops.

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(iii)
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(3)
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As used in this paragraph, "agricultural property" means class 2a property and

any class 2b property that is contiguous to and under the same ownership as the class 2a

property.

(c) Noncontiguous land shall be included as part of a homestead under section
273.13,

subdivision 23
, paragraph (a), only if the homestead is classified as class 2a and the detached

land is located in the same township or city, or not farther than four townships or cities or

combination thereof from the homestead. Any taxpayer of these noncontiguous lands must

notify the county assessor that the noncontiguous land is part of the taxpayer's homestead,

and, if the homestead is located in another county, the taxpayer must also notify the assessor

of the other county.

(d) Agricultural land used for purposes of a homestead and actively farmed by a person

holding a vested remainder interest in it must be classified as a homestead under section

273.13, subdivision 23
, paragraph (a). If agricultural land is classified class 2a, any other

dwellings on the land used for purposes of a homestead by persons holding vested remainder

interests who are actively engaged in farming the property, and up to one acre of the land

surrounding each homestead and reasonably necessary for the use of the dwelling as a home,

must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under section

273.13, subdivision 23
, paragraph (a), for the 1997 assessment shall remain classified as

agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural

homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or

Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the current

assessment year as existed for the 1997 assessment year and continue to be used for

agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles

of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997 floods,

and the owner furnishes the assessor any information deemed necessary by the assessor in

verifying the change in dwelling. Further notifications to the assessor are not required if the

property continues to meet all the requirements in this paragraph and any dwellings on the

agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under section

273.13, subdivision 23
, paragraph (a), for the 1998 assessment shall remain classified

agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural

homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur,

Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the current

assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of

one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29,

1998, tornado, and the owner furnishes the assessor any information deemed necessary by

the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the

owner must notify the assessor by December 1, 1998. Further notifications to the assessor

are not required if the property continues to meet all the requirements in this paragraph and

any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property of a family farm corporation, joint family farm venture, family

farm limited liability company, or partnership operating a family farm as described under

subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead

property, if all of the following criteria are met:

(1) the property consists of at least 40 acres including undivided government lots and

correctional 40's;

(2) a shareholder, member, or partner of that entity is actively farming the agricultural

property;

(3) that shareholder, member, or partner who is actively farming the agricultural property

is a Minnesota resident;

(4) neither that shareholder, member, or partner, nor the spouse of that shareholder,

member, or partner claims another agricultural homestead in Minnesota; and

(5) that shareholder, member, or partner does not live farther than four townships or

cities, or a combination of four townships or cities, from the agricultural property.

Homestead treatment applies under this paragraph even if:

(i) the shareholder, member, or partner of that entity is actively farming the agricultural

property on the shareholder's, member's, or partner's own behalf; or

(ii) the family farm is operated by a family farm corporation, joint family farm venture,

partnership, or limited liability company other than the family farm corporation, joint family

farm venture, partnership, or limited liability company that owns the land, provided that:

(A) the shareholder, member, or partner of the family farm corporation, joint family

farm venture, partnership, or limited liability company that owns the land who is actively

farming the land is a shareholder, member, or partner of the family farm corporation, joint

family farm venture, partnership, or limited liability company that is operating the farm;

and

(B) more than half of the shareholders, members, or partners of each family farm

corporation, joint family farm venture, partnership, or limited liability company are persons

or spouses of persons who are a qualifying relative under section
273.124, subdivision 1
,

paragraphs (c) and (d).

Homestead treatment applies under this paragraph for property leased to a family farm

corporation, joint farm venture, limited liability company, or partnership operating a family

farm if legal title to the property is in the name of an individual who is a member, shareholder,

or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an initial

full application must be submitted to the county assessor where the property is located.

Owners and the persons who are actively farming the property shall be required to complete

only a one-page abbreviated version of the application in each subsequent year provided

that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within the

four townships or city criteria and are Minnesota residents;

(3) the same operator of the agricultural property is listed with the Farm Service Agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program

since the initial application.

The owners and any persons who are actively farming the property must include the

appropriate Social Security numbers or individual taxpayer identification numbers, and sign

and date the application. If any of the specified information has changed since the full

application was filed, the owner must notify the assessor, and must complete a new

application to determine if the property continues to qualify for the special agricultural

homestead. The commissioner of revenue shall prepare a standard reapplication form for

use by the assessors.

(i) Agricultural land and buildings that were class 2a homestead property under section

273.13, subdivision 23
, paragraph (a), for the 2007 assessment shall remain classified

agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural

homestead as a result of damage caused by the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele,

Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the current

assessment year as existed for the 2007 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles of

one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the August 2007

floods, and the owner furnishes the assessor any information deemed necessary by the

assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the

owner must notify the assessor by December 1, 2008. Further notifications to the assessor

are not required if the property continues to meet all the requirements in this paragraph and

any dwellings on the agricultural land remain uninhabited.

(j) Agricultural land and buildings that were class 2a homestead property under section

273.13, subdivision 23
, paragraph (a), for the 2008 assessment shall remain classified as

agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural

homestead as a result of the March 2009 floods;

(2) the property is located in the county of Marshall;

(3) the agricultural land and buildings remain under the same ownership for the current

assessment year as existed for the 2008 assessment year and continue to be used for

agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles

of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 2009 floods,

and the owner furnishes the assessor any information deemed necessary by the assessor in

verifying the change in dwelling. Further notifications to the assessor are not required if the

property continues to meet all the requirements in this paragraph and any dwellings on the

agricultural land remain uninhabited.

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EFFECTIVE DATE.

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This section is effective beginning with assessment year 2027.

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