This bill proposes an amendment to Minnesota Statutes 2024, section 273.124, subdivision 8, regarding the classification of agricultural homestead properties owned by family farm corporations, joint family farm ventures, limited liability companies, or partnerships.

Key Changes:

• Increase in Shareholder Limit: The bill raises the maximum number of allowable shareholders, members, or partners in such entities from 12 to 18.
• Homestead Classification: Entities that own agricultural land and operate family farms can still receive homestead (class 1b or class 2a) tax classification if a shareholder, member, or partner resides on and is actively engaged in farming the property.
• Expanded Homestead Benefits: Additional residences owned by qualifying farm entities, occupied by shareholders, members, or partners who actively farm, would also qualify for class 2a or class 1b property classification.
• Leased Agricultural Land: Agricultural property owned individually by a shareholder, member, or partner but leased to a qualifying farm entity can still receive homestead classification if the owner resides on and actively farms the land.
• First-Tier Classification for Nearby Non-Homestead Land: Non-homestead agricultural property owned by farm entities may receive the first-tier homestead tax rate if it is located within four townships or cities of the owner’s primary agricultural homestead.

This bill is aimed at increasing flexibility in farm ownership structures while ensuring favorable tax treatment for family farms and their operators.