HF2654

Purpose of the Bill

The main purpose of this bill is to modify the definition of agricultural products for classifying property as Class 2 agricultural property in Minnesota. This change aims to provide clarity regarding what qualifies as agricultural use and how these properties are assessed for tax purposes.

Main Provisions

• Class 2 Agricultural Homestead Definition: The bill clarifies the types of lands and buildings that are considered as Class 2a property, including agricultural land, homesteads, and rural vacant lands that are contiguous under the same ownership.
• Classification Rates:
  • Class 2a agricultural homestead properties enjoy a classification rate of 0.5% for the first tier of valuation and 1% for values exceeding this tier.
  • Class 2b rural vacant lands and other non-residential agricultural lands generally have a 1% classification rate.
• Agricultural Purposes: The bill specifies what constitutes “agricultural purposes” (e.g., cultivation, raising livestock, storage of agricultural products) and establishes guidelines for qualifying lands used for intensive agricultural operations and conservation programs.
• Property Size and Usage: The bill outlines the conditions under which smaller contiguous parcels used for specific agricultural operations can still be classified as agricultural land.

Significant Changes to Existing Law

• Expanded Definition of Agricultural Products: The bill expands the definition to include livestock, aquaculture, nursery operations, market farming, and the boarding of horses under certain conditions. It also includes activities like greenhouse operations primarily used for growing plants.
• Addition of Managed Forest Land: The bill specifies how managed forest land could be classified under a different subclass (Class 2c) which provides a reduced classification rate, given that the land is under a forest management plan.
• Inclusion of Non-traditional Agricultural Activities: The bill includes several non-traditional agricultural activities as agricultural uses, such as commercial boarding of horses, production of maple syrup, and raising specific animals like game birds.

Relevant Terms

agricultural products, agricultural homestead, Class 2a, Class 2b, rural vacant land, classification rate, agricultural purposes, conservation program, managed forest land, aquaculture, boarding of horses, greenhouse operations, maple syrup, commercial aggregate deposit.