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HF1700 (Legislative Session 94 (2025-2026))

Shareholder limit for entity-owned agricultural property increased.

Related bill: SF776

AI Generated Summary

This Minnesota House bill, H.F. No. 1700, seeks to amend Minnesota Statutes 2024, section 273.124, subdivision 8, regarding property taxation for family farm corporations, joint family farm ventures, limited liability companies (LLCs), and partnerships that operate family farms.

Key Provisions:

  1. Increased Shareholder Limit:

    • The bill proposes raising the maximum number of allowable shareholders, members, or partners in such entities from 12 to 20.

  2. Homestead Classification for Agricultural Properties:

    • Properties owned or leased by family farm corporations, joint farm ventures, LLCs, or partnerships where a shareholder, member, or partner resides on the land and is actively engaged in farming will continue to qualify for homestead classification (Class 1b or 2a).

  3. Extended Homestead Classification:

    • Additional residences on agricultural land owned by these farming entities and occupied by active farming shareholders, members, or partners will also qualify for homestead classification (Class 2a or 1b).

  4. Leased Agricultural Property Eligibility:

    • Agricultural land owned by a shareholder, member, or partner but leased to the family farm corporation, LLC, partnership, or joint farm venture can still receive homestead classification (Class 1b or 2a) if the owner resides on the land and engages in farming.

  5. First-Tier Homestead Classification for Nearby Non-Homestead Properties:

    • Non-homestead agricultural property of a family farm entity, located within four townships or cities of a qualifying homestead, may receive the first-tier homestead classification rate if appropriately declared to the county assessor by July 1.

Purpose & Impact:

  • Supports larger farming operations by allowing an increase in shareholders or members in family farm entities.
  • Ensures agricultural property tax benefits for actively farmed lands.
  • Encourages continuity of family-owned farming businesses while maintaining favorable property tax classifications.

This bill was introduced by Representatives Anderson, P. H. Lawrence, and Gander and was referred to the Committee on Taxes for further review.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 26, 2025HouseFloorActionIntroduction and first reading, referred toTaxes
February 26, 2025HouseFloorActionIntroduction and first reading, referred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "Modification to shareholder limit for entity-owned agricultural property."
      ],
      "removed": [
        ""
      ],
      "summary": "This bill amends the eligibility and classification of homesteads owned by family farm corporations and related entities under section 273.124, subdivision 8.",
      "modified": [
        "Adjusts language regarding eligibility for homestead classification based on family relationships and business structure."
      ]
    },
    "citation": "273.124",
    "subdivision": "subdivision 8"
  },
  {
    "analysis": {
      "added": [
        ""
      ],
      "removed": [
        ""
      ],
      "summary": "This bill references classification rates under section 273.13.",
      "modified": [
        "Refers to class 1b and class 2a homestead property classifications."
      ]
    },
    "citation": "273.13",
    "subdivision": ""
  }
]

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