WILLMAR -- County assessors and farmers have been stewing about how to handle revisions to the state's Green Acres land preservation program.
A last-minute legislative change made this spring is creating extra work for assessors and has the potential to cost farmers more money in higher taxes.
What's more, the new law could actually end up increasing land development instead of preserving it because of new limitations to the type of land that can now be enrolled.
There were "unintended consequences" to the new legislation, said Rep. Al Juhnke, DFL-Willmar.
Juhnke said the Legislature will revisit the issue this winter and try to fix the problems that were created.
"Clearly there were some mistakes made," said Sen. Steve Dille, R-Dassel, who is confident the changes made in 2008 to the Green Acres law will be reversed when the session begins in January. "That's why we have to meet every year," he said with a laugh.
Dille said farmers, who were told they had to decide by Jan. 2 whether or not to stay in the program, should still meet that deadline. But he believes the Department of Revenue will allow them to change their minds after the Legislature takes action this winter.
When it was started in 1967, the Green Acres program was designed to give farmers a tax break on land that was being farmed but threatened by urban sprawl. Usually land that has development potential is taxed at a higher rate than farmland.
Green Acres helped farmers, who wanted to keep farming the land rather than develop it, by being taxed at the farmland rate. If the land was eventually sold for development, they would have to pay the difference between the lower and higher taxes to cover a three-year period.
The law was especially important for the metro area and near regional centers, such as St. Cloud, where some farmers would otherwise have been forced to sell their farmland for development because taxes would be too high.
It's a "good tool for maintaining open farmland," Juhnke said.
In Kandiyohi County, 40 farmers have land enrolled in Green Acres.
Originally, said Dille, if a farmer had 160 acres of tillable ag land and adjoining land that was non-productive, such as woods or land that was in a conservation program, the entire parcel could be put into Green Acres.
Now, only land that is actively being farmed is eligible.
"That's problematic because we don't want to see (the non-productive acres) taken out," Juhnke said.
Assessors have been given until Jan. 2 to determine which land is eligible and which isn't. It's a job that will be impossible for assessors to meet by the deadline, Dille said.
Farmers who were enrolled in the program before May 1 have the option to be grandfathered into the new program or opt out, according to Tim Falkum, Kandiyohi County assessor.
Those who are grandfathered in continue to have adjoining, non-productive land under the Green Acres tax rate as before.
If landowners opt out before Jan. 2, they'll get a tax bill next year to pay back the difference between the higher and lower tax rates to cover a three-year period.
But Falkum said even if a farmer opts to be grandfathered into the program, the land is subject to the restrictions of the new law. That means when the land changes hands -- even if it's handed down to children -- it is automatically removed from the Green Acres program. On top of that, when the ownership changes and the land is removed from Green Acres, the farmer must pay three years' worth of higher taxes for the productive land and seven years' worth of higher taxes for the non-productive land.
The payback of the taxes could force some farmers into bankruptcy or force them to sell the land, said Kandiyohi County Commissioner Harlan Madsen.
Juhnke said "as long as the use is similar," he think the Green Acres eligibility should remain if the land is transferred. "But it doesn't at this point," said Juhnke. "It's a correction we need to make."
Dille said if the 2008 law isn't changed, many farmers will sell their land for development because of the tax implications.
The changes have created a "large amount of additional work" for assessors and "a lot of confusion for the landowners," wrote Falkum in a memo to the Kandiyohi County Commissioners.
County boards from around the state have already asked their legislators to reverse the changes.
Kandiyohi County Commissioner Dennis Peterson said the new Green Acres law was the "most unpopular thing (the Legislature) did last year."
Dille said he not only wants to reverse the law but he wants to expand Green Acres so that non-farmers can put their woods or non-productive land into the program to help preserve open spaces in the state.