Bill Unveiled Wednesday by Senate Taxes Chair Ann Rest Addresses Challenges Facing Farmers. Rural Communities
St. Paul, Minn. – Senate Agriculture Committee Chair Aric Putnam (DFL-St. Cloud) and Senate Majority Leader Erin Murphy (DFL-St. Paul) said the Senate Tax bill unveiled Wednesday recognizes the modern reality of farming, making tax policy changes that ensure small family farms can pass on their livelihoods to the next generation, and opening new opportunities for Minnesota’s producers.
The tax measure, introduced by Senate Taxes Committee Chair Ann Rest (DFL-New Hope), includes agriculture provisions from both Republicans and Democrats and was taken up committee Thursday and will later be taken up by the full Senate.
“The Senate DFL tax bill understands the challenges and talents of Minnesota’s modern farmer,” said Senator Putnam, who also serves on the Senate Taxes Committee. “It will help new farmers farm, and it will open up new market opportunities to help rural Minnesota thrive into the future. It will help our producers get food to the people who need it, and it will help us all have access to safe and healthy food. This tax bill is good for agriculture.”
“By expanding demand for Minnesota farm products and helping more Minnesotans get into farming, the Senate tax bill will help farmers and rural communities alike,” said Majority Leader Murphy. “Senator Rest and Senator Putnam have listened to producers across the state and have worked effectively to ensure this tax bill will help them succeed. And when farmers succeed, the rural economy does too.”
“We thank the Senate and its work to support agriculture through this bill,” said Dan Glessing, President of Minnesota Farm Bureau Federation. “Items in this legislation help preserve family farms while also bringing the next generation of farmers into the fold. It also recognizes the environmental stewardship of farmers and ranchers, and further opens up opportunities for the production of sustainable fuels made from crops grown right here in Minnesota.”
“This is a strong, forward-looking bill that prioritizes the needs of family farmers,” said Gary Wertish, President of Minnesota Farmers Union. “From expanding agriculture homestead to small-scale farmers, to piloting a new Ag Water Quality Tax Credit, to funding our Soil and Water Conservation Districts, to Sustainable Aviation Fuel—it’s clear that this committee was listening to our members when they came to testify throughout session. In particular, I want to highlight Senator Putnam’s work to lift the cap on funding for Minnesota’s Beginning Farmer Tax Credit so that no young farmer is turned away from using this program.”
Tax Bill Expands Future Agriculture Opportunities
The Senators said the Tax bill has several provisions to expand opportunities for Minnesota producers, including:
- Sustainable Aviation Fuel tax credit – The tax bill will make Minnesota a leader in production of sustainable aviation fuel (SAF) by expanding the nation-leading tax credit to increase SAF-production opportunities across the state. They said the increased production of SAF in Minnesota will open up new markets for farm products and will create new Minnesota jobs as production facilities come online. The tax bill includes $15 million over the next four years to expand the current Sustainable Aviation Fuel (SAF) tax credit.
- Beginning Farmer Tax Credit cap elimination – The bill includes Sen. Putnam’s provision to eliminate the $4 million-per-year cap on the Beginning Farmer Tax credits and makes other adjustments so more farmers and people who want to get into farming can take advantage of the credit.
- Expanding Agricultural Homestead eligibility status: the changes reflect the more modern realities of family farms, making it easier to maintain homestead status, which lowers property taxes.
- Market farming agricultural land: This bill expands the definition of “market farming” so that small farmers, who have found new ways to grow farm products on smaller tracts of land, can qualify for “agricultural status” and lower property taxes.
- Floriculture added to definition of agriculture: Adds “floriculture” – the business of growing flowers – to the definition of agriculture for purposes of property tax classification.
- Agriculture Water Quality Credit: New property tax credit of $5/acre for ag and rural vacant land in Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Wabasha, or Winona County if it is certified under the Agricultural Water Quality Certification Program. This is aimed at rewarding farmers taking steps to reduce nitrate contamination in the Karst region.
- Grazing property: Allows a property tax exemption for land owned by a non profit conservation organization that is leased or loaned to another party for grazing activities. This helps livestock farmers take advantage of available grazing land, ahd helps the nonprofits use livestock to restore prairies and grasslands.
- State Fair Improvements: The bill increases the bonding limit for the State Agricultural Society from $30 million to $50 million to make capital improvements to structures that need it.
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Vice Chair of the Higher Education Committee. He serves on the Jobs and Economic Development Committee and Taxes Committee.
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