Bill would allow very small "market" farms to qualify for agricultural homestead tax credit

House File 1522, carried by Representative Herr, would allow small market farmers cultivating less than 11 contiguous acres to qualify for the agricultural homestead (ag homestead) tax credit if they meet specified income tests or demonstrate market-farming activity.

Kelsey Zavedra, president of the Chisago County Farmers Union and a specialty-crop farmer, testified she operates a full-time farming business on five acres selling direct to consumers and said land access and property taxes are major challenges for beginning and young farmers. She told the Committee that intensive production on small parcels can be a viable business model but that current statute and assessor practice makes it difficult for such producers to be recognized for ag homestead treatment.

Representative Herr said the bill contains two alternative pathways to demonstrate eligibility (gross-income threshold and documentation of planned production for new farmers) to avoid awarding the credit to casual gardeners. Farmers-union and land-trust groups provided letters of support in the packet. Committee members asked about acreage minimums, how market farming is defined, and whether products such as meat sold in local markets would qualify. Testimony from Minnesota Farmers Union staff noted assessors already evaluate agricultural use and that the bill removes a minimum acreage requirement while retaining documentation and market-activity requirements to ensure the policy targets working farms.

Representative Herr renewed the motion to lay HF1522 over for possible inclusion in the 2025 omnibus tax bill; the motion carried by voice vote.