Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1992 

                        CHAPTER 556-H.F.No. 2031 
           An act relating to taxation; property; providing for 
          the valuation and assessment of vacant platted 
          property; excluding certain unimproved land sales from 
          sales ratio studies; allowing for orderly annexations 
          by petition and by ordinance; limiting the 
          establishment of certain fire protection district; 
          amending Minnesota Statutes 1990, sections 124.2131, 
          subdivision 1; 273.11, by adding a subdivision; 
          414.0325, by adding a subdivision; and 414.033, 
          subdivisions 2, 3, 5, and by adding a subdivision; 
          Minnesota Statutes 1991 Supplement, section 273.11, 
          subdivision 1; repealing Minnesota Statutes 1990, 
          section 414.031, subdivision 5. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1990, section 124.2131, 
subdivision 1, is amended to read: 
    Subdivision 1.  [ADJUSTED GROSS TAX CAPACITY.] (a)  
[COMPUTATION.] The department of revenue shall annually conduct 
an assessment/sales ratio study of the taxable property in each 
school district in accordance with the procedures in paragraphs 
(b) and (c).  Based upon the results of this assessment/sales 
ratio study, the department of revenue shall determine an 
aggregate equalized gross tax capacity and an aggregate 
equalized net tax capacity for the various classes of taxable 
property in each school district, which tax capacity shall be 
designated as the adjusted gross tax capacity and the adjusted 
net tax capacity, respectively.  The department of revenue may 
incur the expense necessary to make the determinations.  The 
commissioner of revenue may reimburse any county or governmental 
official for requested services performed in ascertaining the 
adjusted gross tax capacity and the adjusted net tax capacity.  
On or before March 15 annually, the department of revenue shall 
file with the chair of the tax committee of the house of 
representatives and the chair of the committee on taxes and tax 
laws of the senate a report of adjusted gross tax capacities and 
adjusted net tax capacities.  On or before April 15 annually, 
the department of revenue shall file its final report on the 
adjusted gross tax capacities and adjusted net tax capacities 
established by the previous year's assessment with the 
commissioner of education and each county auditor for those 
school districts for which the auditor has the responsibility 
for determination of local tax rates.  A copy of the report so 
filed shall be mailed to the clerk of each district involved and 
to the county assessor or supervisor of assessments of the 
county or counties in which each district is located. 
    (b) [METHODOLOGY.] In making its annual assessment/sales 
ratio studies, the department of revenue shall use a methodology 
consistent with the most recent Standard on Assessment Ratio 
Studies published by the assessment standards committee of the 
International Association of Assessing Officers.  The 
commissioner of revenue shall supplement this general 
methodology with specific procedures necessary for execution of 
the study in accordance with other Minnesota laws impacting the 
assessment/sales ratio study.  The commissioner shall document 
these specific procedures in writing and shall publish the 
procedures in the State Register, but these procedures will not 
be considered "rules" pursuant to the Minnesota administrative 
procedure act.  For purposes of this section, section 270.12, 
subdivision 2, clause (8), and section 278.05, subdivision 4, 
the commissioner of revenue shall exclude from the 
assessment/sales ratio study the sale of any nonagricultural 
property which does not contain an improvement, if (1) the 
statutory basis on which the property's taxable value as most 
recently assessed is less than market value as defined in 
section 273.11, or (2) the property has undergone significant 
physical change or a change of use since the most recent 
assessment.  
    (c) [AGRICULTURAL LANDS.] For purposes of determining the 
adjusted gross tax capacity and adjusted net tax capacity of 
agricultural lands for the calculation of adjusted gross tax 
capacities and adjusted net tax capacities, the market value of 
agricultural lands shall be the price for which the property 
would sell in an arms length transaction. 
    Sec. 2.  Minnesota Statutes 1991 Supplement, section 
273.11, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivisions 6, 8, 9, and 11, and 14 or section 273.17, 
subdivision 1, all property shall be valued at its market 
value.  The market value as determined pursuant to this section 
shall be stated such that any amount under $100 is rounded up to 
$100 and any amount exceeding $100 shall be rounded to the 
nearest $100.  In estimating and determining such value, the 
assessor shall not adopt a lower or different standard of value 
because the same is to serve as a basis of taxation, nor shall 
the assessor adopt as a criterion of value the price for which 
such property would sell at a forced sale, or in the aggregate 
with all the property in the town or district; but the assessor 
shall value each article or description of property by itself, 
and at such sum or price as the assessor believes the same to be 
fairly worth in money.  The assessor shall take into account the 
effect on the market value of property of environmental factors 
in the vicinity of the property.  In assessing any tract or lot 
of real property, the value of the land, exclusive of structures 
and improvements, shall be determined, and also the value of all 
structures and improvements thereon, and the aggregate value of 
the property, including all structures and improvements, 
excluding the value of crops growing upon cultivated land.  In 
valuing real property upon which there is a mine or quarry, it 
shall be valued at such price as such property, including the 
mine or quarry, would sell for a fair, voluntary sale, for 
cash.  In valuing real property which is vacant, the fact that 
such platted property is platted shall be taken into account.  
An individual lot of such platted property shall be assessed at 
its market value beginning with the first assessment following 
final approval of the plat assessed as provided in subdivision 
14.  All property, or the use thereof, which is taxable under 
section 272.01, subdivision 2, or 273.19, shall be valued at the 
market value of such property and not at the value of a 
leasehold estate in such property, or at some lesser value than 
its market value. 
    Sec. 3.  Minnesota Statutes 1990, section 273.11, is 
amended by adding a subdivision to read: 
    Subd. 14.  [VACANT LAND PLATTED ON OR AFTER AUGUST 1, 
1991.] (a) All land platted on or after August 1, 1991, and not 
improved with a permanent structure, shall be assessed as 
provided in this subdivision.  The assessor shall determine the 
market value of each individual lot based upon the highest and 
best use of the property as unplatted land.  In establishing the 
market value of the property, the assessor shall consider the 
sale price of the unplatted land or comparable sales of 
unplatted land of similar use and similar availability of public 
utilities. 
    (b) The market value determined in paragraph (a) shall be 
increased as follows for each of the three assessment years 
immediately following the final approval of the plat:  one-third 
of the difference between the property's unplatted market value 
as determined under paragraph (a) and the market value based 
upon the highest and best use of the land as platted property 
shall be added in each of the three subsequent assessment years. 
    (c) Any increase in market value after the first assessment 
year following the plat's final approval shall be added to the 
property's market value in the next assessment year.  
Notwithstanding paragraph (b), if construction begins before the 
expiration of the three years in paragraph (b), that lot shall 
be eligible for revaluation in the next assessment year.  The 
market value of a platted lot determined under this subdivision 
shall not exceed the value of that lot based upon the highest 
and best use of the property as platted land. 
    Sec. 4.  Minnesota Statutes 1990, section 414.0325, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [ORDERLY ANNEXATION BY PETITION.] If the board 
receives a petition for annexation of an area owned by a 
municipality or from all of the property owners in an area, and 
the area is within two miles of the corporate boundaries of the 
municipality, the petition shall confer jurisdiction on the 
board to consider designation of the area for orderly annexation.
Upon receipt of the petition, the board shall inform the 
affected parties of their opportunity to request a hearing 
before the board on the petition, and if a hearing is requested, 
it must be held within 60 days of the request.  Any person 
aggrieved by the board's designation of an area as appropriate 
for orderly annexation may appeal the board's order to district 
court in accordance with section 414.07. 
    At least 30 days before a petition is filed for annexation 
under this subdivision or section 414.033, the petitioner must 
be notified by the municipality that the cost of utility service 
to the petitioner may change if the land is annexed to the 
municipality.  The notice must estimate the cost impact of any 
change in utility services, including rate changes and 
assessments, resulting from the annexation. 
    Sec. 5.  Minnesota Statutes 1990, section 414.033, 
subdivision 2, is amended to read: 
    Subd. 2.  A municipal council may by ordinance declare land 
annexed to the municipality and any such land is deemed to be 
urban or suburban in character or about to become so if: 
    (a) (1) the land is owned by the municipality; or 
    (b) (2) the land is completely surrounded by land within 
the municipal limits; or 
    (3) the land abuts the municipality and the area to be 
annexed is 60 acres or less, and the municipality receives a 
petition for annexation from all the property owners of the land.
    Sec. 6.  Minnesota Statutes 1990, section 414.033, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [MUNICIPALITY MAY ANNEX.] Notwithstanding the 
abutting requirement of subdivision 1, if land is owned by a 
municipality or if all of the landowners petition for 
annexation, and the land is within an existing orderly 
annexation area as provided by section 414.0325, then the 
municipality may declare the land annexed. 
    Sec. 7.  Minnesota Statutes 1990, section 414.033, 
subdivision 3, is amended to read: 
    Subd. 3.  If the perimeter of the area to be annexed by a 
municipality is 60 percent or more bordered by the municipality 
and if the area to be annexed is 40 acres or less, the 
municipality shall serve notice of intent to annex upon the town 
board and the municipal board, unless the area is appropriate 
for annexation by ordinance under subdivision 2, clause (3).  
The town board shall have 90 days from the date of service to 
serve objections with the board.  If no objections are 
forthcoming within the said 90 day period, such land may be 
annexed by ordinance.  If objections are filed with the board, 
the board shall conduct hearings and issue its order as in the 
case of annexations under section 414.031, subdivisions 3 and 4. 
    Sec. 8.  Minnesota Statutes 1990, section 414.033, 
subdivision 5, is amended to read: 
    Subd. 5.  If the land is platted, or, if unplatted, does 
not exceed 200 acres, the property owner or a majority of the 
property owners in number may petition the municipal council to 
have such land included within the abutting municipality and, 
within ten days thereafter, shall file copies of the petition 
with the board, the town board, the county board and the 
municipal council of any other municipality which borders the 
land to be annexed.  Within 90 days from the date of service, 
the town board or the municipal council of such abutting 
municipality may submit written objections to the annexation to 
the board and the annexing municipality.  Upon receipt of such 
objections, the board shall proceed to hold a hearing and issue 
its order in accordance with section 414.031, subdivisions 3, 4, 
and 5. If written objections are not submitted within the time 
specified hereunder and if the municipal council determines that 
property proposed for the annexation is now or is about to 
become urban or suburban in character, it may by ordinance 
declare such land annexed to the municipality.  If the petition 
is not signed by all the property owners of the land proposed to 
be annexed, the ordinance shall not be enacted until the 
municipal council has held a hearing on the proposed annexation 
after at least 30 days mailed notice to all property owners 
within the area to be annexed. 
    Sec. 9.  [VACANT LAND PLATTED BEFORE AUGUST 1, 1991.] 
    All land platted before August 1, 1991, and not improved 
with a structure shall be assessed as provided in this section.  
In valuing real property which is vacant, the fact that such 
property is platted shall not be taken into account.  An 
individual lot of such platted property shall not be assessed in 
excess of the valuation of the land as if it were unplatted 
until the lot is improved with a permanent improvement all or 
part of which is located on the lot, or for a period of three 
years after final approval of the plat, whichever is shorter.  
When a lot is sold or construction begun, that lot shall be 
eligible for revaluation. 
    Sec. 10.  [TOWNS OF QUEEN AND EDEN; FOREST FIRE PROTECTION 
DISTRICTS.] 
    Notwithstanding Minnesota Statutes, section 88.08 or other 
law, the commissioner of natural resources may not create and 
establish forest fire protection districts, in whole or in part, 
within the towns of Queen and Eden in Polk county. 
    Sec. 11.  [LOCAL APPROVAL.] 
    Section 10 is effective for each of the towns named in 
section 10 the day after the filing of a certificate of local 
approval by the town board of the respective town in compliance 
with Minnesota Statutes, section 645.021, subdivision 3. 
    Sec. 12.  [REPEALER.] 
    Minnesota Statutes 1990, section 414.031, subdivision 5, is 
repealed. 
    Sec. 13.  [EFFECTIVE DATE.] 
    Sections 1, 2, and 9 are effective the day following final 
enactment.  Section 3 is effective for assessments in 1992 and 
thereafter. 
    Presented to the governor April 17, 1992 
    Signed by the governor April 29, 1992, 8:09 a.m.