SF 1365

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to real property; amending property appraisals requirements for
Department of Transportation; reducing market value for certain properties;
amending Minnesota Statutes 2006, sections 117.036, subdivisions 2, 3, by
adding a subdivision; 273.11, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 117.036, is amended by adding a
subdivision to read:

new text begin Subd. 1b. new text end

new text begin Department of Transportation appraisal. new text end

new text begin (a) If any publicly available
final report, final project plan, or other final document produced by the Department of
Transportation identifies property proposed to be acquired for a transportation project, the
commissioner of transportation shall obtain at least one appraisal of each parcel of land that
is or could be identified within the final report, final project plan, or other final document.
The appraisal must be obtained in conjunction with the publication of the report, project
plan, other document. To the extent that it is practicable, each appraisal must include only
the portion of the property proposed to be acquired. In making the appraisal, the appraiser
shall confer with one or more of the owners of the property, if reasonably possible.
new text end

new text begin (b) If the Department of Transportation obtains an appraisal more than 12 months
before negotiation for direct purchase under subdivision 3, it must be replaced by an
adjusted appraisal. The adjusted appraisal is equal to the appraised property value plus the
increase in value from the quarter and year of the appraisal to the most recent quarter and
year for which data is available, using the house price index for the state of Minnesota as
published by the United States Department of Housing and Urban Development, Office
of Federal Housing Enterprise Oversight. The adjusted appraisal must be used in lieu
of the appraisal for the purposes of negotiation for direct purchase or eminent domain
proceedings. Nothing in this subdivision prevents a new appraisal from being obtained by
the commissioner of transportation or the owner.
new text end

Sec. 2.

Minnesota Statutes 2006, section 117.036, subdivision 2, is amended to read:

Subd. 2.

Appraisal.

(a) Before commencing an eminent domain proceeding under
this chapter, the acquiring authority must obtain at least one appraisal for the property
proposed to be acquired new text begin if one has not been obtained under subdivision 1b new text end . In making the
appraisal, the appraiser must confer with one or more of the owners of the property, if
reasonably possible. Notwithstanding section 13.44, the acquiring authority must provide
the owner with a copy of each appraisal new text begin and adjusted appraisal new text end the acquiring authority has
obtained for the property at the time an offer is made, but no later than 60 days before
presenting a petition under section 117.055, and inform the owner of the right to obtain an
appraisal under this section. Upon request, the acquiring authority must make available to
the owner all appraisals of the property. If the acquiring authority is considering both a
full and partial taking of the property, the acquiring authority shall obtain and provide the
owner with appraisals for both types of takings.

(b) The owner may obtain an appraisal by a qualified appraiser of the property
proposed to be acquired. The owner is entitled to reimbursement for the reasonable costs
of the appraisal from the acquiring authority up to a maximum of $1,500 for single family
and two-family residential property and minimum damage acquisitions and $5,000 for
other types of property, provided that the owner submits to the acquiring authority the
information necessary for reimbursement, including a copy of the owner's appraisal,
at least five days before a condemnation commissioners' hearing. For purposes of this
paragraph, a "minimum damage acquisition" means an interest in property that a qualified
person with appraisal knowledge indicates can be acquired for a cost of $10,000 or less.

(c) The acquiring authority must pay the reimbursement to the owner within 30
days after receiving a copy of the appraisal and the reimbursement information. Upon
agreement between the acquiring authority and the owner, the acquiring authority may pay
the reimbursement directly to the appraiser.

Sec. 3.

Minnesota Statutes 2006, section 117.036, subdivision 3, is amended to read:

Subd. 3.

Negotiation.

In addition to the appraisal requirements under subdivision 2,
before commencing an eminent domain proceeding, the acquiring authority must make a
good faith attempt to negotiate personally with the owner of the property in order to
acquire the property by direct purchase instead of the use of eminent domain proceedings.
In making this negotiation, the acquiring authority must consider new text begin (1) new text end the appraisals in its
possession, including any appraisal obtained and furnished by the owner if available new text begin ,
but excluding any appraisal that was subsequently replaced by an adjusted appraisal
under subdivision 1b new text end , and new text begin (2) new text end other information that may be relevant to a determination
of damages under this chapter. If the acquiring authority is considering both a full and
partial taking of the property, the acquiring authority must make a good-faith attempt to
negotiate with respect to both types of takings.

Sec. 4.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Valuation of property; future transportation uses. new text end

new text begin (a) The
commissioner of transportation shall notify the assessor of each county where the
Department of Transportation has identified property proposed to be acquired for a
transportation project as provided under section 117.036, subdivision 1b. The certification
shall contain a detailed listing of the specific parcels of property, or portions of the parcels
that may be acquired for the project or route, and the anticipated number of years before
each of the parcels will be acquired. The Department of Transportation shall make the
necessary information available to the assessor to ensure that the parcels have been
properly identified.
new text end

new text begin (b) Based upon the certification under paragraph (a), the assessor shall establish the
market value for tax purposes for each of the parcels of property as follows: (1) determine
the estimated market value of the property in the same manner as other similar property;
and (2) reduce the value in clause (1) by a percentage that is uniformly increased each
year so that at the end of the number of years of the timeline for that specific parcel
certified under paragraph (a), the property's market value for tax purposes will be equal
to 50 percent of the estimated market value. If the property is subject to limited market
value under subdivision 1a, the adjustment under clause (2) must be made to the property's
limited market value.
new text end

new text begin (c) Capital gains on property sold pursuant to this section are exempt from income
tax under chapter 290.
new text end