Minneslate Logo

SF2665 (Legislative Session 94 (2025-2026))

Entity-owned agricultural property shareholder limit increase

Related bill: HF2539

AI Generated Summary

Purpose of the Bill

This bill aims to modify existing tax laws concerning agricultural property owned by entities such as family farm corporations, joint farm ventures, limited liability companies, or partnerships. The changes focus on allowing more shareholders within these entities while ensuring they receive specific property tax classifications for their agricultural operations.

Main Provisions

  • Increase in Shareholder Limit: The bill proposes to increase the maximum number of shareholders, members, or partners from such entities from a previous limit to 12, provided they are related by blood or marriage.

  • Homestead Classification: Agricultural properties owned by these entities can be classified as class 1b or class 2a if it involves a homestead occupied by a shareholder, member, or partner who lives and actively farms the land.

  • Homestead Exemption Extension: Properties operated by these entities but owned by individual members, partners, or shareholders can still receive the homestead classification if the individual resides on and actively farms the property.

  • Location Proximity Clause: Nonhomestead agricultural properties owned by these entities may still receive favorable tax treatment if they are within four townships or cities from land owned and used as a homestead by an associated individual.

Significant Changes

  • Shareholder Increase: The bill revises the existing statute to allow more individuals to be part of the ownership structure, promoting flexibility and possible growth of agricultural businesses while maintaining familial relations among stakeholders.

  • Legal Possession Rights: It specifies that certain lease arrangements between owners and entities do not affect the eligibility for homestead classification, facilitating smoother management and operational arrangements within family-owned agricultural ventures.

Relevant Terms

  • Homestead exemption
  • Family farm corporation
  • Joint farm venture
  • Limited liability company (LLC)
  • Agricultural property tax classification
  • Shareholder limit increase

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 16, 2025SenateFloorActionIntroduction and first reading
March 16, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill revises definitions related to the classification of agricultural properties under section 273.124 subdivision 1.",
      "modified": [
        "Clarifies the qualifying relatives who are eligible for homestead status on agricultural properties."
      ]
    },
    "citation": "273.124",
    "subdivision": "subdivision 1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references definitions used for family farm corporations and partnerships under section 500.24.",
      "modified": [
        "Specifies the definitions applicable to the operation and ownership structure of family farms."
      ]
    },
    "citation": "500.24",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill references the definition of 'Limited liability company' under section 322C.0102 subdivision 12.",
      "modified": [
        "Incorporates existing definitions concerning the structure and formation of limited liability companies."
      ]
    },
    "citation": "322C.0102",
    "subdivision": "subdivision 12"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This bill modifies property classification rules under section 273.13.",
      "modified": [
        "Amends the classifications of properties eligible for homestead status and agricultural use."
      ]
    },
    "citation": "273.13",
    "subdivision": ""
  }
]

Sponsors