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Minnesota lawmakers targeted so-called abuse of the Green Acres program — which lowers property taxes on some rural land — by passing a measure in 2008 intended to shift rural woodlands and pasture lands out of the program.
One local farmer said the changes, which will affect more than 1,000 landowners and about 100,000 acres in Winona County, defeat the purpose of a program originally intended to keep farmland out of the hands of developers.
State lawmakers adopted the Green Acres program more than three decades ago to shelter farmers — particularly on the fringe of the suburban Twin Cities — from paying the same property taxes as developers. But state auditors in February said the program wasn’t working as intended; they said developers and landowners who buy rural land for recreational use were enrolling land into Green Acres as a tax-avoidance scheme.
Lawmakers responded by passing a measure that allows landowners to keep enrolling “productive” land in Green Acres but stopped enrollment of “nonproductive” land in the program by May 1.
The legislation also takes aim at nonproductive lands currently enrolled in Green Acres and forces landowners to decide soon whether to immediately withdraw those lands or keep them enrolled in the program.
By Jan. 2, landowners must choose to either grandfather nonproductive lands to retain the Green Acres status, or withdraw the nonproductive land from Green Acres and pay three years of back taxes by Nov. 15, 2009. If they choose to grandfather the land but later sell it for any reason, they’ll owe seven years of back taxes equal to what they would have paid if the land hadn’t been in Green Acres.
Winona County Assessor Steve Hacken stressed that county leaders didn’t enact the changes and said some landowners view the payback provisions as particularly onerous.
“The payback provisions don’t seem to be in the spirit of the way these people signed up” for Green Acres, Hacken said.
Bob Marg, president of the Winona County Farm Bureau, said the changes will put many landowners to a no-win decision on whether to keep their land enrolled in the program and pay back taxes on it now or later. He suspects many farmers will withdraw their nonproductive land from Green Acres and sell it to the highest bidder.
“It’s going to make some (difficult) decisions for farmers,” Marg said.
Mark Sommerhauser may be reached at (507) 453-3514 or at msommerhauser@winonadailynews.com.
GREEN ACRES QUESTION AND ANSWER
Q: What provisions in the new law would force me to pay back taxes?
A: If you immediately withdraw your “nonproductive” land from Green Acres, you’ll pay three years of back taxes equal to the difference between the Green Acres tax rate and the standard rate. If you keep the nonproductive land in Green Acres but later sell it — for any reason — you’ll be required to pay seven years of back taxes.
Q: What will it cost to withdraw my land?
A: To withdraw woodlands from Green Acres, a three-year payback will cost you between $21 and $45 per acre, County Assessor Steve Hacken said.
Q: What’s the difference between productive and nonproductive, and who decides it?
A: Hacken said tillable land will clearly qualify as productive, but it gets trickier talking about non-tillable land, which is roughly half the land in Winona County. Woodland won’t qualify as productive, even if you harvest timber, he said. Pasture land could be classified either way, depending largely on whether it’s used to graze livestock, Hacken said. County assessors will make the final call on what’s productive and what’s not, he said.
Q: Can I enroll any new lands in Green Acres?
A: Only if the county assessor deems them productive. The cutoff for enrolling new nonproductive lands into the program was May 1.
