Last year, the Legislature made some broad changes to the Green Acres Program, a property tax relief program for agricultural land in Min-nesota, and created a new rural vacant lands classification.
The changes were in res-ponse to a leg-islative auditor report that showed some inconsistencies in implementing the Green Acres Program throughout the state. The report also suggested there were some landowners collecting tax benefits on property that wasn't truly being used for agricultural purposes.
Since the law was passed last year, landowners have voiced concerns about unintended consequences some of those changes have had on agricultural land. For example, landowners have said the new law is hampering family transfers of land and that the tax penal-ties are too severe for land no longer qualifying for Green Acres treatment. There also have been concerns about classifications for non-conforming agricultural land being too stringent.
As a result of the previously mentioned concerns on last year's Green Acres bill, I have worked on compromise language this year that addresses those issues while still retaining the intended purpose of the tax relief program. The legislation I authored made many changes to last year's law, and that bill had two full committee hearings in the Agriculture and Environment Committees before ending up in the Taxes Committee.
Additionally, another senator introduced an idea to create a separate conservation program for some rural vacant lands that would no longer qualify for Green Acres. That bill also has had two full committee hearings this year.
On Thursday, I offered an amendment in Taxes Committee that combines these two bills that have had considerable discussion in the Legislature this year. The new proposal retains some of last year's needed changes but also addresses many of the issues that have been raised since that law took ef-fect. The bill passed and likely will see a vote on the Senate floor in the coming days.
The proposed Green Acres update will allow productive agricultural land over 10 acres to receive preferential tax treatment. Those with land no longer conforming to the agricultural classification will have four full years, until 2013, to withdraw their land from the program. At that time, only the three-year tax payback penalty that all Green Acres participants agreed to at the time of enroll-ment will apply. The seven-year payback period from the 2008 law has been eliminated. These landowners also may take advantage of a time per-iod until Jan. 1, 2010, in which they may withdraw their non-conforming land from Green Acres penalty-free.
Additionally, this bill ensures lands enrolled in the Reinvest in Minnesota or Conservation Reserve Programs again will be eligible for Green Acres treatment. Land transfers to a son or a daughter of the owner will not initiate re-enrollment, nor will the death of a spouse.
To further clarify and strengthen how non-conforming parcels should be valued, the new bill also states Class 2a agricultural property must include certain ancillary acreage such as ditches, and it adds ravines and rock piles to this list.
Finally, a new program is created for land that may no longer qualify for Green Acres: the Land Conservation Property Tax. The program would allow enrolled land to be valued the same as 2a agricultural property and receive much the same tax benefits as the Green Acres Program offers. Assessors are directed to not consider the influences of commercial, industrial, residential or seasonal residential property when determining the value of the property.
The program will be open to land of at least 10 acres and eligibility will require owners to develop a conservation management plan for the land. The land must be enrolled for a minimum of eight years and the owner must sign a covenant agreement with the county assessor. At the time of withdrawal, the same three-year tax payback that exists under Green Acres will apply, and participants must wait three years before parcels may be re-enrolled.
In summary, current Green Acres participants with productive agricultural land will continue to receive tax preferences. Those with non-conforming lands may continue to receive identical tax treatment for four years, and they will be eligible for similar tax treatment after that date under the new conservation program created with this bill.
Green Acres will continue to be directed at preserving agricultural land; the new program will help preserve the other important open lands in our state.
Rod Skoe, DFL-Clearbrook, is a member of the Minnesota Senate and vice chairman of the Senate Taxes Committee.