By Ivan Raconteur
WRIGHT COUNTY, MN Recent changes to the Green Acres program have caused confusion among landowners, and to combat this confusion, Wright County Assessor Greg Kramber sent out a mailing last week to explain the changes and the options that are available to landowners.
Kramber said the latest changes restore some segments back to their pre-2008 status, and while he is happy that these changes are going in what he considers the right direction, he would rather that the changes had not been made in the first place.
“The complexity of the tax system has been compounded greatly,” Kramber said.
He explained that the Green Acres program is important to Wright County because it has been one of the fastest-growing counties in the state, and growth creates demand for housing and increases land values.
The landscape of Wright County is also a factor. Kramber said there are 298 lakes and three rivers in the county, and 13 percent of the properties in the county are touching water, which affects property values.
The Green Acres program was established in 1967 to balance the tax burdens of landowners across the county.
“For us, it really did work well,” Kramber said of the Green Acres program.
“Without Green Acres, there are parcels where taxes would exceed what the property could earn in rent,” Kramber said.
The mailing Kramber sent to Wright County landowners last week includes an explanation of the changes to the program and options for enrollees.
The 2b rural vacant land classification has been kept for land that is not used for agricultural production, including woodland, slough, and other land types that are not suitable for farming.
Land is classified as 2a agricultural land if it is impractical to separate from the surrounding productive land and very unlikely to be sold separately from the rest of the property.
Examples include small sloughs, wind breaks, ditches, ravines, rock piles, and land subject to a setback requirement.
Payback provisions have also changed.
The seven-year payback requirement on class 2b land has been repealed. The maximum payback on any type of land is now three years of deferred taxes.
The new law also clarifies that certain transfers, such as transfer to a child or children or removal of a name due to death or divorce, no longer constitute a change of ownership for Green Acres qualification purposes.
Property owners have until May 1, 2010 to withdraw their class 2b rural vacant land from the Green Acres program with no payback on deferred taxes. After that date, a three-year payback will be required on all class 2b land that is withdrawn from the Green Acres program and not enrolled in the Rural Reserve program.
The new Rural Reserve program offers similar tax benefits if property owners agree to manage their land in accordance with a conservation plan for 10 years.
To qualify, the land must be at least 10 acres and part of an agricultural homestead.
The conservation plan must be approved by the soil and water conservation district, a 10-year covenant must be recorded with the county recorder, and a copy must be submitted with the application for deferral to the county assessor.
When the covenant is terminated, property owners will have to pay back deferred taxes for three years.
Kramber encourages property owners to read the information included in the mailing before calling his office.
If property owners still have questions after reading the material, Kramber said he and is staff will be happy to answer questions.
Kramber estimated that last year, after changes were made to the Green Acres program, his office spent 800 to 1,000 hours answering questions about the changes.
Another change was the addition of class 2c managed forest land.
To qualify, a property owner must have at least 20 acres of forested land, and have a forest management plan that is registered with the DNR and is less than 10 years old.
This change differs from the Sustainable Forest Incentive Act, but Kramber said that act applies primarily to property in the northern part of the state.
Although these programs provide some relief for taxpayers, Kramber said the changes have “cost a tremendous amount of time and money, and a lot of frustration on the part of taxpayers.”
“We want a tax system that is easy for the taxpayer to understand, easy to explain, and easy to administer,” Kramber said. “These programs do not meet that goal.”
Kramber pointed to the position statement for the 2009 legislative session adopted by the executive board of the Minnesota Association of Assessing Officers (MAAO), of which he is a regional director, which states: “The MAAO supports efforts to make the classification system more understandable by the continued consolidation of existing classes and avoiding the creation of new classes.”
The statement explains that the MAAO supports this policy because it is easier for taxpayers to understand, streamlines administration costs to local governments, and because the tiered classification system increases complexity and produces unexpected property tax consequences.
More information about Green Acres and related items is available by accessing the Wright County Assessor’s home page, www.co.wright.mn.us/departments/assessor/ and clicking on the “announcements/news releases” button on the right side of the page.