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HF1423 (Legislative Session 94 (2025-2026))

Property tax; shareholder limit for entity-owned agricultural homestead property increased.

Related bill: SF755

AI Generated Summary

This bill proposes an amendment to Minnesota Statutes 2024, section 273.124, subdivision 8, concerning property tax classification for agricultural homesteads owned by entities such as family farm corporations, joint family farm ventures, partnerships, and limited liability companies.

Key Provisions:

  1. Increase in Shareholder Limit:

    • The maximum number of allowable shareholders, members, or partners in these farming entities is proposed to be increased from 12 to 18.

  2. Homestead Property Classification:

    • Entities that operate family farms and meet the ownership and farming engagement requirements can qualify for class 1b or class 2a property tax assessments.
    • Homestead status applies even if the legal title to the property is held by the entity rather than the resident farmer.
    • Additional residences on agricultural land, owned by the entity and occupied by shareholder-members engaged in farming, also qualify for homestead classification.

  3. Leased Agricultural Property:

    • Agricultural land owned by a member, partner, or shareholder and leased to the family farm entity remains eligible for class 1b or class 2a assessment if the owner resides on and actively farms the land.

  4. Nonhomestead Agricultural Property:

    • Nonhomestead agricultural land owned by an eligible farming entity within a defined distance from a homestead property may receive the first-tier homestead tax rate on any property value in excess of the individual farmer’s homestead value.

This bill aims to support family farms by expanding eligibility for agricultural homestead tax benefits and allowing more shareholders within farming entities.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 23, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Increases the allowable number of shareholders, members, or partners from 12 to 18."
      ],
      "removed": [],
      "summary": "The bill modifies the qualifications for agricultural homestead classification related to ownership by family farm corporations and similar entities.",
      "modified": [
        "Clarifies conditions under which agricultural property owned by specific family farm entities can qualify for class 1b or class 2a classifications."
      ]
    },
    "citation": "273.124"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill references property classification under section 273.13 in relation to farm corporations and partnerships.",
      "modified": [
        "Clarifies classification as class 1b or class 2a for properties owned by certain family farm entities."
      ]
    },
    "citation": "273.13"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides definitions relevant to the operation of family farm corporations and entities.",
      "modified": [
        "Amends the definition of allowable shareholders or members."
      ]
    },
    "citation": "500.24"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides definitions applicable to limited liability companies in the context of farming operations.",
      "modified": [
        "Clarifies the definition of limited liability company with respect to family farm operations."
      ]
    },
    "citation": "322C.0102"
  }
]

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