Rather, farmers have until Jan. 2 to declare an intent to withdraw or not from the program. They then have until summer to decide for sure. And they may not have to make that decision if the Legislature reforms the law.
Farmers are getting a break from the Department of Revenue.
Following an outcry across the state about changes to the Green Acres law, the Department of Revenue has issued a letter to counties stressing a few important facts.
First, farmers do not need to decide within one or two months whether they are pulling their property out of the program or not. They are asked to share their intent to do so or not with the county by Jan. 2. But this is not binding.
Second, if a landowner decides to leave his or her land in the Green Acres program, there will be no change in the property taxes on the land. That said, there could be some impact in the future if the property is sold or transferred.
Third, none of the changes will affect property taxes paid in 2009. However, taxpayers may be subject to additional taxes in November 2009 if they decide to withdraw some or all of their land from the Green Acres program.
New information
After visiting with Isanti County board members on Sept. 3 and listening to their concerns about the changes made to Green Acres, local state representative and farmer Rob Eastlund returned to the board on Wednesday, Sept. 17. He brought along with him a letter the Department of Revenue had just issued in response to the "misinformation" circulating throughout the state.
Like many other counties, Isanti County sent out a letter to taxpayers last week informing them about the changes to the Green Acres law. The letter was modeled off one written by the Department of Revenue (DOR). This letter was not clear, and the DOR acknowledged that in a follow-up letter on Sept. 12.
The biggest clarification regarded deadlines. Isanti County, along with several other neighboring counties, asked landowners to notify the assessor's office by Nov. 3 as to whether they intended to keep their land in the program or remove it.
This was done to allow the assessors time to begin calculating the change in taxes before the new year.
"This is no fault of the assessors because they were operating under a memo from the Department of Revenue that wasn't clear," said Eastlund. "The result was that there were things that happened that shouldn't have, and they are realizing that now."
He stressed that the only deadline that should have appeared in the letter was Jan. 2. And that date is a soft date. Under the law, no property owner has to make a final decision until next summer. Deferred taxes will be due Nov. 15, 2009.
Legislative changes
Under the changes approved by the state legislature earlier this year, a new class of property was created. This rural vacant land is defined as being undeveloped rural land that is not being used for agricultural production. At this point, rural vacant land will be taxed at the same rate as agricultural land, so it should not result in any changes in tax burdens. It will just be categorized and tracked separately for valuation purposes, according to a memo issued by the Minnesota House of Representatives Research Department.
Land that is classified as rural vacant land will no longer be allowed into the Green Acres program. This is also how land in government-sponsored conservation programs, such as RIM and CRP, is handled.
It is important to note that as long as property stays under its current ownership, it will be grandfathered into the Green Acres program. However, once it is removed, it will be subject to a seven-year payback, versus the three-year payback under the old law. Additionally, in the future, landowners will not be allowed to withdraw small tracts of rural vacant land in a "piecemeal" fashion, but will have to do all or none.
Landowners may opt to remove all their land in 2009 and then pay only the three-year penalty written into the old law.
Why reform the Green Acres law?
According to Eastlund, the main force driving the change to the Green Acres law was the fact that each county administered it differently.
A report issued in February 2008 by the Office of the Legislative Auditor found a fundamental problem with the law. It was created to protect agricultural landowners by ignoring other factors influencing the value of the property and tax the property based only on its "agricultural value."
But, according to the recent report issued by the House Research Department, a significant portion of the land in the program had little to no agricultural value. It was wooded or marshland, or in other ways unsuited for farms.
Eastlund asks governor to bring issue back before legislature
In addition to researching the issue in more depth, Representative Eastlund has also sent a letter to Governor Pawlenty.
"This Green Acres change has created more reaction among my constituents than any issue during my eight years in the Legislature," wrote Eastlund.
He asked the governor to use his executive authority to suspend implementation of the changes to the Green Acres law.
"The Department of Revenue has provided incorrect information to county assessors, and that information is being passed on to local farmers and landowners causing great concern. The reaction of many is anger and a feeling of being betrayed by the state of Minnesota," said Eastlund.
He told the Isanti County Board of Commissioners, "The governor is very open to recognizing this has implementation issues we didn't understand."
He encouraged the board to send their own letter to the governor's office.
Commissioner Kurt Daudt thinks they should take it a step farther. "We should not only do this ourselves, but we should ask other counties to barrage the governor's office with these." He also recommended soliciting the help and lobbying power of the Association of Minnesota Counties.
His fellow commissioners agreed with the action.
"This is a sleeping giant," said Eastlund. "I'm confident that there is going to be a pretty big outcry for change to this policy."
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