OPINION: Green Acres is the place to be
I'm going to start right off with some phrases here to help you decide whether or not you want to read this: "Green Acres"; "Productive vs. nonproductive"; "Agricultural homestead tax rates"; "Conservation Reserve Program"; "Green Acres eligibility"; "10 acres in production"; "Linked back to ag homestead tax classification"; "Contiguous."
There. If these phrases don't mean anything to you, reading the rest of this might be pretty boring. Maybe, though, you know someone who does live on rural property. If you do, and want to know more about something than they do (probably, judging from the amount of disinformation out there), please continue.
About 40 years ago, the Minnesota state legislature passed the original Green Acres legislation. It was aimed then at protecting farmers with farm land that wasn't all tillable around the Twin Cities that was exposed to metropolitan expansion. Let's say you owned a dairy farm there with some wooded nonproductive parcels on it. In order to protect the farmer and keep him in business, this Green Acres classification of tax rates was created to keep taxes low on those woods, at the agricultural tax rate of 0.5 percent.
No one ever invented a tax law that someone else couldn't find a loophole to take advantage of, so suddenly, since pasture is considered to by definition be productive agriculturally, everyone with a horse and some grassy field was a farmer and was eligible for a tax break on their land, and thus pursued that lower tax percentage.
The legislature just plugged that hole by defining a couple of terms. First, you have to almost always have an agricultural homestead qualification. Second, you must have at least 10 acres in production, and your pet horse back there mowing the lawn behind your house is not considered ag production. Third, cows in a pasture are considered ag production., and 10 acres or more of pasture land contiguous to your ag homestead keeps you at the lower rate.
But maybe you are a farm, got the ag homestead qualification, but own acres across or down the road, which means it doesn't touch your home place, but is within four townships (or cities) (that means it is contiguous) of your homestead: For you to continue to have that land classified as "productive agriculturally," 10 acres or more of it must be "in production." That means either tilled, or pastured with livestock that isn't horses. It cannot have been pastured two years ago, or 20; it has to be actively pastured right now, or actively tilled right now. If it is active agriculturally, it is linked back to your homestead tax classification.
This "contiguous" term is now important, because say you own 160 contiguous acres and a hunk of it borders on a lake (or an expanding metropolis), and is worth big bucks, and hence might be taxed at the big-buck rate. You, with your ag homestead tax classification, will not have this taxed at a higher rate. Not contiguous? A Green Acres eligibility will tax it at the lower agricultural value, if (this is a big "if") there is at least 10 productive acres there. Got some pasture that hasn't been used in years, and is contiguous? It's linked back to your lower ag rate. (These smaller parcels will have a different tax classification number, but that doesn't matter. That's just a description category.) Some woods back there in the corner of your ag homestead? It's linked back. Wait. Don't forget: You must have 10 acres in some production category on that property, like tilled, or pastured, meaning productive agriculturally on that parcel or contiguous to it.
But maybe you own 20 acres in the country, and you live in town. You're not ag homestead, so your property tax rates are not ag homestead, and are instead taxed at 1.0 percent. It wouldn't qualify for two reasons. It's not contiguous, and you're not ag homestead. It doesn't matter if it's in CRP, or whatever.
If you planted land to prairie grasses, or trees, or some Conservation Reserve Planting, (CRP) or Reinvest in Minnesota (RIM), that land is, if it is contiguous, linked back to your ag homestead tax classification, and taxed at that rate. Otherwise, in most other situations, CRP and RIM under the new 2008 law will not be eligible for a Green Acres classification.
With the new 2008 rework on the Green Acres law, previous enrollments in Green Acres of CRP or RIM will be grandfathered in; new CRP or new RIM will not. But, there are payback implications on that land if it is withdrawn for any reason.
There has been a huge reaction to all this, due in part to an article in a Twin Cities newspaper, and due in part to the recent legislative effort to clarify some of this, but mostly due to farm people panicking.
I know. I was one of those. Only with telephone calls to my state legislator, to my state forester, and my county assessor (Otter Tail: Robert Moe), did I manage to finally understand some of this.
But still, I probably don't understand all of it. "People shouldn't hesitate to call us; tax classifications can be confusing," said Moe. That, oh boy, is an understatement.
It wasn't until I did that some of this became clear. There are lots of other complicating factors that I either didn't cover, or covered badly. With any questions, call:
Robert E. Moe, Otter Tail County Assessor
505 Fir Ave. West
Fergus Falls, MN 56537-1364
Direct line: 218-998-8017