Changes to the Green Acres Program and Options for Current and Former Enrollees

The following information is an overview of the changes made to Green Acres during the 2009, 2010, and 2011 legislative sessions and a brief review of the options available to property owners.

Overview:

  • The purpose of the Green Acres program was clarified when the 2011 Legislature amended M.S. 273.111 by adding subdivision 2a that says, “… it is in the interest of the state to encourage and preserve farms by mitigating the property tax impact of increasing land values due to non-agricultural economic forces.”
  • The Green Acres and Rural Preserve programs are similar to each other, working together to provide a valuation and tax deferral for land subject to non-agricultural influences.
  • The Green Acres program is specifically for property classified as 2a agricultural land.
  • The Rural Preserve program is only for property classified as 2b rural vacant land.
  • The program requirements for Green Acres remain unchanged, but the newly revised program requirements for Rural Preserve require a land owner to either have an agricultural homestead and have adjacent 2a agricultural land enrolled in Green Acres or have 2b rural vacant land that was properly enrolled in Green Acres for taxes payable in 2008 and have adjacent 2a agricultural land enrolled in the Green Acres program.  The Rural Preserve program no longer requires the land to be subject to a covenant with a minimum eight-year commitment, and the land owner is not required to have a conservation assessment plan developed for the land.
  • The 2011 changes may affect a land owner’s class 2a agricultural land and class 2b rural vacant land that may have been or is currently enrolled in Green Acres.

2b Rural Vacant Land:

  • The 2b rural vacant land classification established for the 2009 assessment has been kept for land that is not used for agricultural production, including woodland, sloughs, and other land types that are unsuitable for farming.
  • The law describes certain acreage as 2a agricultural land if it is impractical to separate from the surrounding productive land and unlikely to be sold separately from the rest of the property.  Some examples include sloughs, wind breaks, ditches, ravines, rock piles, and land subject to a setback requirement.

Payback Provisions:

  • The maximum payback on any type of land is three years of deferred taxes.
  • The law recognizes that certain transfers of property (resulting from the removal of a name due to death or divorce, the addition of a new name because of marriage, a transfer to a child or children, the organization or reorganization of a family farm entity  where all owners maintain the same beneficial interests both before and after the organizational change, and the placement of a property into a trust whereby the owners of the property are the grantors and maintain the same beneficiary interests before and after the creation of the trust) do not constitute a change in ownership for Green Acres and Rural Preserve qualification purposes.  Thus, these transfers do not require the payback of deferred taxes, but will require reapplication by the new owner(s).
  • A three-year payback is required on all land that is voluntarily withdrawn from Green Acres.
  • A three-year payback will be required on all “grandfathered” class 2b rural vacant that is not enrolled in the Rural Preserve program prior to May 1, 2013 or put into a qualifying agricultural use before January 2, 2013.
  • If class 2a acres were withdrawn from Green Acres at any time since May 21, 2008 or if class 2b acres were withdrawn after August 16, 2010, and deferred taxes were paid, then those taxes will be repaid to land owners if they re-enroll in Green Acres or enroll in Rural Preserve on or before August 1, 2011. 

Land Enrolled in State or Federal Conservation Programs:

  • The law identifies land enrolled in temporary conservation easements as being eligible for Green Acres.  In other words, land owners enrolled in Reinvest in Minnesota (RIM), the Conservation Reserve Program, or any other state or federal conservation program will receive the tax benefits of the Green Acres program.

Option for Former Green Acres Enrollees with Class 2a Agricultural Land:

  • Land owners who withdrew class 2a agricultural land from Green Acres at any time since May 21, 2008, may apply for re-enrollment in Green Acres until August 1, 2011 to be eligible for taxes payable in 2012 and beyond. 

Option for Former Green Acres Enrollees with Class 2b Rural Vacant Land:

  • Land owners who withdrew properly enrolled class 2b rural vacant land from Green Acres at any time since May 21, 2008, may enroll those acres into Rural Preserve until August 1, 2011 to qualify for the value and tax deferment for taxes payable next year and the years going forward.

Options for Current Green Acres Enrollees with Class 2b Rural Vacant Land:

  • Land owners having class 2b rural vacant land that is currently grandfathered in Green Acres can begin enrolling this land into the Rural Preserve program starting with the 2011 assessment.  This land can be moved into the Rural Preserve program at any time prior to May 1, 2013 without having to pay deferred taxes.  The first application deadline was extended from May 1st to August 1st for taxes payable in 2012.  Future assessment years will have a deadline of May 1st.
  • Land owners can put their class 2b rural vacant land to a qualifying agricultural use.  They will need to notify the assessor of this change in use before January 1, 2013 so that a determination can be made regarding the reclassification of the land as class 2a agricultural land and whether or not the Green Acres requirements have been met.
  • Land owners can enroll their class 2b rural vacant land in the class 2c Managed Forest Land program that was created in 2008.  However, this land will be valued at its full market value and a three-year payback on deferred taxes will be required.  The lower tax classification rate assigned to this property type will only benefit properties classified as agricultural non-homestead or agricultural homestead with a taxable market value the closely approximates its estimated market value or exceeds its 1st tier homestead taxable market value limit.
  • Land owners can choose to do nothing.  This option will require the assessor to remove any class 2b rural vacant land that remains in Green Acres for the 2013 assessment.  This land will be valued at its full estimated market value and a three-year payback on deferred taxes will be required.