Omnibus Tax Bill - Property Tax Relief and More
Minnesota Farm Bureau strongly supported passage of the Omnibus Tax Bill and worked throughout the session to have the following important provisions included. Unfortunately, despite strong support from both the House and Senate, the bill was pocket vetoed by the Governor at the end of session. Efforts are ongoing to pass the bill during a potential special session.
• Property Taxes
Agricultural property tax relief would have provided a 40 percent property tax credit on the portion of agricultural property taxes going to school debt bonds. The tax credit would have provided $90.6 million in tax relief for the next biennium. Although pocket vetoed by the Governor, this legislation passed out of the Minnesota House of Representatives and Senate with 86% support demonstrating that your contacts and personal stories made a difference. Property eligible for the 40 percent agricultural property tax credit includes all class 2a, 2b and 2c properties (other than the property consisting of the house, garage and one acre of an agricultural homestead). Class 2a property is agricultural land consisting of parcels of property that are agricultural land and buildings. Class 2b property is rural vacant lands. Class 2c property is managed as forest lands more than 20 acres and less than 1,920 acres.
• Estate Taxes
MFBF worked to address unintended consequences which surfaced with existing circumstances for farm estates. One example was estates who lost their agricultural property classification without any change in operations, causing a claw-back for additional estate taxes. This correction is retroactive for estates of persons who died after June 30, 2011.
The tax bill also included a provision to assist with funding for local water/drainage authorities, counties or watershed districts, aimed at helping them carry out the responsibilities for implementing the buffer law. Without such financial help, there were concerns that local authorities would turn to Board of Water and Soil Resources (BWSR) to carry out the implementation process from the state level.
Corrections to Fix State Buffer Law
MFBF supported the bills in both the Senate and House, testifying before several committees in each body to express support for the clarified language. Under the changes to the buffer law:
• 50 foot average perennial vegetated buffers (30 foot minimum) will be required on public waters which are on the public waters inventory list. The deadline for landowners to implement this requirement is November 1, 2017.
• 16.5 foot perennial vegetated buffers will be required on public drainage ditches, established under the state’s drainage law (103 E). The deadline for landowners to implement this requirement, when the ditch has not had a redetermination of benefits completed is November 1, 2018. Language that state agencies were using to expand the buffer mandate to private drainage ditches, “within the benefited area of public drainage systems” was deleted from the 2015 law.
• Compensation for buffers along pubic ditches, through the process of redetermination of benefits, was clarified in order to establish the basis of value to be land use prior to being planted to a buffer or implementation of an alternative practice.
• Language for alternative practices was strengthened to expand on the opportunities for something other than perennial buffers that meet the comparable protection standard for a specific waterway. While alternative practices are still linked to the Natural Resources Conservation Service (NRCS) Field Office Technical Guide or practices approved by the Board of Water and Soil Resources (BWSR), the law provides for practices that include retention ponds or alternative practices which “prevent overland flow to the water resources.”
• The starting point for measuring the 16.5 foot buffer along ditches was changed in the 2015 law to match the language in state drainage law (103E.021). This provision incorporates the ability to begin measurement outward from the edge of the constructed channel.
• A more workable timetable for incorporating “other waters” into local water management plans was provided by the new 2016 language. Local water authorities are granted the ability to work in consultation with local Soil and Water Conservation Districts (SWCDs) as the SWCDs prepare their report of what other watercourses (not covered by the state mandate) are included in the local water management plan. Receipt of this list, on or before July 1, 2017, from the local SWCD does not require an immediate local plan amendment (as long as certain requirements of notification are carried out) until the regularly
scheduled update of the water plan.
• Provisions also provide a clearer understanding of authority to strengthen the ability for county or watershed districts to exercise jurisdiction. Questionable status in the 2015 law was viewed as an unwanted liability for local units of government, making it more likely that they would opt out and allow BWSR to take greater control.
Omnibus Agricultural Policy Bill