By Scout Nelson
Minnesota lawmakers are exploring a new approach to promote clean water on farmland through financial incentives. A recently introduced bill aims to offer a property tax credit of $5 per acre to agricultural landowners who participate in the Minnesota Agricultural Water Quality Certification Program.
The bill, sponsored by Representative Steven Jacob, targets land classified as either agricultural or rural vacant. To qualify, the property must be enrolled in the certification program and located within eight Southeastern Minnesota counties: Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Wabasha, or Winona.
This credit would apply only to net tax capacity-based property taxes and would be the final credit used when calculating a landowner's net property tax. Funding for this credit would come from the state's Clean Water Fund, which sparked some debate among legislators.
Representative Aisha Gomez expressed concern over using the Clean Water Fund for property tax refunds, calling it an unusual method. She also pointed out that agricultural land already benefits from some of the state’s lowest property tax rates. In response, Jacob defended the initiative, saying it directly supports efforts to improve water quality on farmland.
Brad Jordahl Redlin, a representative from the Department of Agriculture, believes the tax credit could motivate more farmers to enroll in the program. He highlighted existing progress in water quality improvements made by the certification initiative.
The Minnesota Department of Revenue estimates that around 221,000 acres and 280 producers would be eligible under this proposal. It also projects a reduction of approximately $1.1 million from the Clean Water Fund in fiscal year 2027, and about $1.2 million annually in the following two years. Additionally, the state’s General Fund could see a small increase of $40,000 yearly due to income tax interactions.
The certification program itself is voluntary and provides landowners with support to implement practices that protect water quality. Once certified, landowners are considered in compliance with any future water-related regulations for up to 10 years.
This bill now awaits further review by the House Legacy Finance Committee.
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Categories: Minnesota, Government & Policy