124.2131 Adjustment of net tax capacity. 

    Subdivision 1.    Adjusted net 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 net tax capacity for the various classes of 
 taxable property in each school district, which tax capacity 
 shall be designated as the adjusted net tax capacity.  The 
 adjusted net tax capacities shall be determined using the net 
 tax capacity percentages in effect for the assessment year 
 following the assessment year of the study.  The department of 
 revenue shall make whatever estimates are necessary to account 
 for changes in the classification system.  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 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 net tax capacities.  On or before June 15 
 annually, the department of revenue shall file its final report 
 on the adjusted net tax capacities established by the previous 
 year's assessments and the current year's net tax capacity 
 percentages with the commissioner of children, families, and 
 learning 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, sections 270.12, subdivision 2, clause (8), and 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 net tax capacity of agricultural lands for the 
 calculation of 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. 

    (d)    Forced sales.  The commissioner may include 
 forced sales in the assessment/sales ratio studies if it is 
 determined by the commissioner that these forced sales indicate 
 true market value. 

    (e)    Stipulated values and abatements.  The estimated 
 market value to be used in calculating sales ratios shall be the 
 value established by the assessor before any stipulations 
 resulting from appeals by property owners and before any 
 abatement unless the abatement was granted for the purpose of 
 correcting mere clerical errors. 

    (f)    Sales of industrial property.  Separate sales 
 ratios shall be calculated for commercial property and for 
 industrial property.  These two classes shall be combined only 
 in jurisdictions in which there is not an adequate sample of 
 sales in each class. 

    Subd. 2.    Adjusted net tax capacity; growth limit.  In 
 the calculation of adjusted net tax capacities for 1987 and each 
 year thereafter, the commissioner of revenue shall not increase 
 the adjusted net tax capacity of taxable property for any school 
 district over the adjusted net tax capacity established and 
 filed with the commissioner of children, families, and learning 
 for the immediately preceding year by more than the greater of 
 (1) 19 percent of the certified adjusted net tax capacity 
 established and filed with the commissioner of children, 
 families, and learning for the year immediately preceding, or 
 (2) 40 percent of the difference between the district's total 
 adjusted net tax capacity for the current year calculated 
 without the application of this subdivision and the district's 
 certified adjusted net tax capacity established and filed with 
 the commissioner of children, families, and learning for the 
 immediately preceding year.  

    Subd. 3.    Decrease in iron ore net tax capacity.  If 
 in any year the net tax capacity of iron ore property, as 
 defined in section 273.13, subdivision 31, in any district is 
 less than the net tax capacity of such property in the preceding 
 year, the commissioner of revenue shall redetermine for all 
 purposes the adjusted net tax capacity of the preceding year 
 taking into account only the decrease in net tax capacity of 
 iron ore property as defined in section 273.13, subdivision 31.  
 If subdivision 2, clause (a), is applicable to the district, the 
 decrease in iron ore property shall be applied to the adjusted 
 net tax capacity as limited therein.  In all other respects, the 
 provisions of clause (1) shall apply.  

    Subd. 3a.    Captured tax capacity adjustment.  In 
 calculating adjusted net tax capacity, the commissioner of 
 revenue shall increase the adjusted net tax capacity of a school 
 district containing a tax increment financing district for which 
 an election is made under section 469.1782, subdivision 1, 
 clause (1).  The amount of the increase equals the captured net 
 tax capacity of the tax increment financing district in the year 
 preceding the first taxes payable year in which the special law 
 permits collection beyond that permitted by the general law 
 duration limit that otherwise would apply.  The addition applies 
 beginning for aid and levy for the first taxes payable year in 
 which the special law permits collection of increment beyond 
 that permitted by the general law duration limit that otherwise 
 would apply.  The addition continues to apply for each taxes 
 payable year the district remains in effect. 

    Subd. 4.  Repealed, 1987 c 268 art 6 s 53 

    Subd. 5.    Adjusted net tax capacity; appeals.  Should 
 any district within 30 days after receipt of a copy of a report 
 filed with the commissioner of children, families, and learning 
 made pursuant to subdivision 1 or 3, be of the opinion that the 
 commissioner of revenue has made an error in the determination 
 of the school district's market value, it may appeal from the 
 report or portion thereof relating to the school district to the 
 commissioner of revenue for a review and determination of the 
 matters contained in the appeal.  The commissioner shall advise 
 the school district of the determination within 30 days.  If the 
 school district wishes to appeal the determination of the 
 commissioner, it must file a notice of appeal with the tax 
 court, as provided in subdivisions 6 to 11 within ten days of 
 the notice of determination from the commissioner.  

    Subd. 6.    Notice of appeal.  The school district shall 
 file with the court administrator of the tax court a notice of 
 appeal from the determination of the commissioner of revenue 
 fixing the market value of the school district, and such notice 
 shall show the basis of the alleged error.  A copy of such 
 notice of appeal shall be served upon the commissioner of 
 revenue, and proof of service shall be filed with the court 
 administrator. 

    Subd. 7.    Hearing.  Upon receipt of the notice of 
 appeal the tax court shall review the notice of appeal and 
 determine whether it appears from the allegations and proofs 
 therein contained that an error has been made in the 
 determination by the commissioner of revenue of the market value 
 of the property in the school district.  If the court finds it 
 probable that such an error has been made, it shall notice the 
 matter for hearing; otherwise, it shall dismiss the appeal and 
 notify the parties thereof.  Hearing shall be set and held in 
 the same manner as other hearings of the tax court are set and 
 heard, except that an appeal filed under subdivision 5 shall 
 take precedence over other appeals pending before the court.  
 The attorney general shall represent the commissioner of revenue.
 The administrative procedure act, sections 14.09 to 14.28, 
 14.38, 14.44 to 14.45, and 14.57 to 14.69, shall apply to 
 hearings insofar as it is applicable. 

    Subd. 8.    Tax court determination.  The tax court 
 shall hear, consider and determine such appeal, de novo upon the 
 issues made by the notice of appeal, if a hearing has been 
 granted thereon.  At the conclusion of the hearing the court 
 shall (1) file findings of fact, or (2) refer the issues to the 
 commissioner of revenue with instructions and recommendations 
 for a determination and correction of the market value of the 
 appealing school district.  The decision of the tax court, if it 
 decides the matter de novo, shall have the same force and effect 
 as a determination by the commissioner of revenue in the first 
 instance under this section, and the commissioner of revenue 
 shall be notified thereof.  If the matter is rereferred to the 
 commissioner of revenue, a redetermination by the commissioner 
 of revenue in accordance with the recommendations of the tax 
 court shall likewise have the same force and effect as a 
 determination by it in the first instance under this section. 

    Subd. 9.    Hearing examiner.  In addition to the 
 powers and duties of the tax court as prescribed by chapter 271, 
 and any act amendatory thereof, any hearing ordered pursuant to 
 the provisions hereunder may be heard by a hearing examiner in 
 lieu of one or more judges of the tax court.  If a hearing is 
 conducted by a hearing examiner, such hearing examiner shall 
 exercise the same powers conferred by law upon one or more 
 judges of the tax court.  The hearing examiner shall report to 
 the court. The court is authorized to make findings of fact 
 based on the report of the hearing examiner in the same manner 
 as is required by these provisions when the hearing is conducted 
 by the court.  The tax court may employ hearing examiners upon 
 such terms and conditions as it shall prescribe.  A hearing 
 examiner so appointed shall be in the unclassified service of 
 the state. 

    Subd. 10.    Limitation of appeals.  A decision of the 
 tax court pursuant to the terms hereof shall be final and shall 
 not be subject to review by any court, except upon certiorari to 
 the supreme court. 

    Subd. 11.    Aids pending appeals.  During the pendency 
 of any appeal from the commissioner of revenue evaluation, state 
 aids to the district so appealing shall be paid on the basis of 
 the evaluation subject to adjustment upon final determination of 
 the appeal. 

    HIST: Ex1971 c 31 art 20 s 3; 1973 c 582 s 3; 1973 c 683 s 
 5-10,27; 1974 c 521 s 22,23; 1975 c 432 s 25-33; 1976 c 134 s 
 78; 1976 c 239 s 35; 1976 c 271 s 44-46; 1977 c 307 s 29; 1977 c 
 423 art 3 s 1,2; art 4 s 1; 1977 c 447 art 1 s 8-15,17; 1978 c 
 706 s 32; 1978 c 733 s 20,21; 1978 c 764 s 46-51; 1978 c 767 s 
 1; 1979 c 334 art 1 s 7-11; art 3 s 4,5; 1980 c 429 s 1; 1980 c 
 443 s 1; 1980 c 509 s 33; 1980 c 607 art 4 s 1; art 7 s 8; 1980 
 c 609 art 1 s 7; 1981 c 358 art 1 s 18,19,48; 1982 c 424 s 130; 
 1984 c 502 art 11 s 1; 1Sp1985 c 14 art 3 s 1; art 4 s 18; 1986 
 c 444; 1Sp1986 c 1 art 4 s 9; 1Sp1986 c 3 art 1 s 82; 1987 c 268 
 art 6 s 3; art 7 s 3-10; 1987 c 384 art 2 s 1; 1988 c 719 art 5 
 s 2,84; 1989 c 329 art 13 s 1; art 13 s 20; 1Sp1989 c 1 art 2 s 
 11; art 9 s 1; 1992 c 511 art 2 s 5; 1992 c 556 s 1; 1993 c 224 
 art 1 s 4; 1994 c 416 art 1 s 4; 1995 c 233 art 2 s 56; 1995 c 
 264 art 5 s 1; 1Sp1995 c 3 art 16 s 13