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Assessment Practices Assessment Practices Review PanelReview Panel

2011 St. Louis County2011 St. Louis CountyOctober 26, 2011 – Prebich Conference Room, VirginiaOctober 26, 2011 – Prebich Conference Room, Virginia

County AssessorCounty Assessor

Goals:Goals:

• Customer serviceCustomer service

• Comply with State standardsComply with State standards

• Efficient and productive staffEfficient and productive staff

• Accurate assessmentsAccurate assessments

• Leverage technological toolsLeverage technological tools

• FAIRNESS - EQUALIZATIONFAIRNESS - EQUALIZATION

Today’s TopicToday’s Topic

• Property Valuation Appeals ProcessProperty Valuation Appeals Process– Local Boards of Appeal and EqualizationLocal Boards of Appeal and Equalization– County Board of Appeal and EqualizationCounty Board of Appeal and Equalization– Minnesota Tax CourtMinnesota Tax Court

• Corrections throughout the yearCorrections throughout the year– AbatementsAbatements– Current year changesCurrent year changes

Informal AppealsInformal AppealsContact your assessor!Contact your assessor!

Whenever taxpayers have questionsWhenever taxpayers have questions

Local Board ofLocal Board ofAppeal andAppeal andEqualizationEqualization

April 1 to May 31April 1 to May 31Verifies assessmentVerifies assessment

St. Louis County Board of Appeal and EqualizationSt. Louis County Board of Appeal and EqualizationMeets in JuneMeets in June

Ensures equalization from jurisdiction to jurisdictionEnsures equalization from jurisdiction to jurisdiction

Minnesota Tax CourtMinnesota Tax CourtSmall Claims divisionSmall Claims division

Sole, exclusive, and final authoritySole, exclusive, and final authority

OR

Step 1

Open Book Open Book MeetingMeeting

April 1 to May 31April 1 to May 31

Verifies assessmentVerifies assessment

ORStep 2

Step 3

Step 4

Org Org

Un

org

Minnesota Tax CourtMinnesota Tax CourtRegular divisionRegular division

Minnesota Supreme CourtMinnesota Supreme CourtStep 5

Informal AppealsInformal Appeals

• Taxpayer questionsTaxpayer questions– Answered routinely by all assessorsAnswered routinely by all assessors– Information exchangeInformation exchange– Most concerns can be resolved by simply Most concerns can be resolved by simply

calling and talking to the assessorcalling and talking to the assessor

Local Boards of Appeal & EqualizationLocal Boards of Appeal & Equalization

• Purpose: to provide a fair and Purpose: to provide a fair and objective forum for property owners to objective forum for property owners to appeal their valuation or classificationappeal their valuation or classification

• Town Board or City Council sits as the Town Board or City Council sits as the Local Board of EqualizationLocal Board of Equalization

• Quorum requiredQuorum required

• State Training requiredState Training required

Local Boards of Appeal & EqualizationLocal Boards of Appeal & Equalization

• Meet in April and MayMeet in April and May

• 98 organized jurisdictions in St. Louis 98 organized jurisdictions in St. Louis CountyCounty

• 95 Local Boards of Appeal and 95 Local Boards of Appeal and Equalization meetings in 2011Equalization meetings in 2011

• 5 Open Book meetings5 Open Book meetings

• County Assessor staff representative County Assessor staff representative attends all meetingsattends all meetings

Local Boards of Appeal & EqualizationLocal Boards of Appeal & Equalization

• Best practicesBest practices– Assessor should be prepared: know your salesAssessor should be prepared: know your sales– Have data to presentHave data to present– Assessment records should be brought to the Assessment records should be brought to the

meeting: Paper, .pdf, onlinemeeting: Paper, .pdf, online– Go back and revisit properties. Even if the Go back and revisit properties. Even if the

meeting needs to reconvene. Make sure the data meeting needs to reconvene. Make sure the data is right.is right.

– Don’t send along to County Board Don’t send along to County Board – Defend your work!Defend your work!

County Board of Appeal & EqualizationCounty Board of Appeal & Equalization

• Meets in June (usually 3 times)Meets in June (usually 3 times)• St. Louis County Board appoints a St. Louis County Board appoints a

Special Board of Appeal & EqualizationSpecial Board of Appeal & Equalization• Quorum & Training requirementsQuorum & Training requirements• County Assessor staff addresses all County Assessor staff addresses all

appealsappeals• Research and reporting requirements Research and reporting requirements

are much more extensive than Local are much more extensive than Local Board meetingsBoard meetings

Tax Court Jurisdiction Tax Court Jurisdiction

• The Tax Court has statewide The Tax Court has statewide responsibility for all tax issues, responsibility for all tax issues, including:including:– Income TaxIncome Tax– Sales TaxSales Tax– Property TaxProperty Tax

Tax Court - VenueTax Court - Venue

… … The principal office of the Tax Court The principal office of the Tax Court shall be in Saint Paul, but it shall hold shall be in Saint Paul, but it shall hold hearings at any place within the state, hearings at any place within the state, so that taxpayers may appear before so that taxpayers may appear before the court with as little inconvenience the court with as little inconvenience and expense to the taxpayer as is and expense to the taxpayer as is practicable. … 271.04 subd 1. practicable. … 271.04 subd 1.

It is a “circuit” court that travels across It is a “circuit” court that travels across the state.the state.

Tax Court - MembershipTax Court - Membership

• The Three Judges on the Tax Court The Three Judges on the Tax Court are:are:– Honorable George W. Perez, Chief JudgeHonorable George W. Perez, Chief Judge– Honorable Sheryl A. RamstadHonorable Sheryl A. Ramstad– Honorable Kathleen H. SanbergHonorable Kathleen H. Sanberg

• Judges are appointed by the Judges are appointed by the Governor for 6 year terms and are Governor for 6 year terms and are confirmed by the Senate.confirmed by the Senate.

• Tax Court Administrator is Lisa PisterTax Court Administrator is Lisa Pister– JoAnn – Paralegal and Elaine - ClerkJoAnn – Paralegal and Elaine - Clerk

Tax Court - Filing Tax Court - Filing

• Filing DatesFiling Dates– Start Filing after May 1st of the year before Start Filing after May 1st of the year before

the tax is payable.the tax is payable.– Deadline to file by April 30th of the year Deadline to file by April 30th of the year

the tax is payable.the tax is payable.• If April 30th falls on a weekend the deadline is If April 30th falls on a weekend the deadline is

then the following Monday then the following Monday • Deadline is close of business for that countyDeadline is close of business for that county

Petitioner Name(s)Petitioner Name(s)

• Whom can file? MS278.01 Subd 1 (a)Whom can file? MS278.01 Subd 1 (a)– Any person having personal property, or Any person having personal property, or

any any • EstateEstate• RightRight• TitleTitle• Interest inInterest in• Lien UponLien Upon

any parcel of land, …any parcel of land, …

Which DivisionWhich Division

• Regular DivisionRegular Division– Chapter 271, Except Section 271.21Chapter 271, Except Section 271.21

• Small Claims DivisionSmall Claims Division– Main Points are in Section 271.21Main Points are in Section 271.21

• 10 Subdivisions10 Subdivisions

271.21 Small Claims Division271.21 Small Claims DivisionSubd. 2. Subd. 2. Jurisdiction. Jurisdiction. At the election of the taxpayer, the Small At the election of the taxpayer, the Small

Claims Division shall have jurisdiction only in the Claims Division shall have jurisdiction only in the following matters:following matters:

(a) cases involving valuation, assessment, or taxation of real (a) cases involving valuation, assessment, or taxation of real or personal property, if:or personal property, if:

(i) the issue is a denial of a current year application for the (i) the issue is a denial of a current year application for the homestead classification for the taxpayer's property;homestead classification for the taxpayer's property;

(ii) (ii) only one parcel is included in the petition, the entire parcel is only one parcel is included in the petition, the entire parcel is classified as homestead class 1a or 1b under section 273.13, classified as homestead class 1a or 1b under section 273.13, and the parcel contains no more than one dwelling unit;and the parcel contains no more than one dwelling unit;

(iii) the entire property is classified as agricultural homestead (iii) the entire property is classified as agricultural homestead class 2a or 1b under section 273.13; orclass 2a or 1b under section 273.13; or

(iv) the assessor's estimated market value of the property (iv) the assessor's estimated market value of the property included in the petition is less than $300,000; orincluded in the petition is less than $300,000; or

Small Claims Division ISmall Claims Division ICost $150 plus law library fee ($162)Cost $150 plus law library fee ($162)• Typically Residential PetitionsTypically Residential Petitions• Typically Pro SeTypically Pro Se

– For himself, in his own behalf or in personFor himself, in his own behalf or in person

• A party may appear personally or may A party may appear personally or may be represented or accompanied by an be represented or accompanied by an attorney.attorney.

• All testimony shall be given under oath.All testimony shall be given under oath.• Decision is written, but not publishedDecision is written, but not published

Small Claims Division IISmall Claims Division II

• No Transcript shall be kept – No reporterNo Transcript shall be kept – No reporter• Judgment is conclusive and not Judgment is conclusive and not

appealableappealable• Judgment w/ no judicial precedentJudgment w/ no judicial precedent• Subpoenas only at discretion of courtSubpoenas only at discretion of court• No judgment until after State BoardNo judgment until after State Board• Referees – When docket is congested, Referees – When docket is congested,

referees can be appointed. MN resident referees can be appointed. MN resident and experienced. Pay is 80% of district and experienced. Pay is 80% of district court judges.court judges.

Regular DivisionRegular Division

• If one of the 4 conditions under Small If one of the 4 conditions under Small Claims are met, you may appeal in Claims are met, you may appeal in either Small Claims or Regular either Small Claims or Regular Division.Division.

• If you do not met one of these four (4) If you do not met one of these four (4) conditions, you may only file in conditions, you may only file in Regular DivisionRegular Division

• Typically, Attorney's File in Regular Typically, Attorney's File in Regular DivisionDivision

• Cost $322 includes law library feeCost $322 includes law library fee

Statutory DifferencesStatutory Differences

• Small Claims a decision is final, neither side can Small Claims a decision is final, neither side can appeal. Written but not published decisions.appeal. Written but not published decisions.

• Regular Division, decisions are published and Regular Division, decisions are published and appealable to the MN Supremes. appealable to the MN Supremes.

• Small Claims - No court reporter, thus no official Small Claims - No court reporter, thus no official recordrecord

• Regular Division must have Official Record Regular Division must have Official Record – ““Petitioner is responsible”Petitioner is responsible”

““Interest”Interest”

A.A. Owner or Part OwnerOwner or Part Owner

oror

B.B. Other (please specify):Other (please specify):Does the petitioner have sufficient interest Does the petitioner have sufficient interest

in the property to maintain this petitionin the property to maintain this petition

Location & Description Location & Description

• MS278.02 –MS278.02 –

Several items of personal property Several items of personal property and several parcels of land in or and several parcels of land in or upon … may be included in the upon … may be included in the same petition, but only if they are in same petition, but only if they are in the same city or town, except that the same city or town, except that contiguous property overlapping contiguous property overlapping city or town boundaries may be city or town boundaries may be included in one petition.included in one petition.

Assessment Date:Assessment Date:

• No petition shall include more than one No petition shall include more than one assessment date.assessment date.

……alleges the following error(s)…alleges the following error(s)…

• and shall set forth in concise language the and shall set forth in concise language the claim, defense, or objection asserted. MS claim, defense, or objection asserted. MS 278.02278.02

• Petitioner alleges the following error(s)…Petitioner alleges the following error(s)…– Estimated Market Value is greater than actualEstimated Market Value is greater than actual– Unequal AssessmentUnequal Assessment– ClassificationClassification– ExemptionExemption– OtherOther

Post Filing ChecklistPost Filing Checklist

1. For all Properties1. For all PropertiesMay 15May 15thth – RE Taxes are due – RE Taxes are due Oct 15Oct 15thth or Nov 15 or Nov 15thth 2 2ndnd half are due half are due

• If not paid the case is Statutorily DismissedIf not paid the case is Statutorily Dismissed

2. For Income Producing Properties2. For Income Producing PropertiesMS 278.05 Subd. 6(a)(b)(c) – “August 1 MS 278.05 Subd. 6(a)(b)(c) – “August 1 Rule”Rule”

2a. For Income Producing Properties2a. For Income Producing PropertiesMS 278.05 Subd. 6(d) - 5 day ExchangeMS 278.05 Subd. 6(d) - 5 day Exchange

So you are going to court!So you are going to court!

• USPAP and Tax CourtUSPAP and Tax Court

• The Court can only consider what is The Court can only consider what is brought up in trial!!!brought up in trial!!!

• The RecordThe Record– The AppraisalsThe Appraisals– The ExhibitsThe Exhibits– The TestimonyThe Testimony

USPAPUSPAP

Purpose – Appraisers develop and Purpose – Appraisers develop and communicate their analysis, opinions, communicate their analysis, opinions, and conclusions to intended users of and conclusions to intended users of their services in a matter that is their services in a matter that is meaningful and NOT misleading.meaningful and NOT misleading.

**Is the appraisal and the appraiser **Is the appraisal and the appraiser credible**credible**

Other USPAPOther USPAP

• Effective date of the appraisal is always Effective date of the appraisal is always 1/2/xxxx and establishes the context for 1/2/xxxx and establishes the context for the value opinion.the value opinion.

• Date of the report, when was the Date of the report, when was the appraisal written and completed.appraisal written and completed.

• CertificationCertification– I certify that, to the best of my knowledge I certify that, to the best of my knowledge

and belief: (at the minimum, a list of the 9 and belief: (at the minimum, a list of the 9 items)items)

“ “ Power to Engage an Appraiser”Power to Engage an Appraiser”• MS 273.053 MS 273.053 • Any county electing in accordance with section Any county electing in accordance with section 273.052273.052

is authorized and empowered to appropriate sufficient is authorized and empowered to appropriate sufficient money to defray the expenses of making a proper money to defray the expenses of making a proper assessment of all property in such county for the assessment of all property in such county for the purpose of general taxation. The county board shall by purpose of general taxation. The county board shall by resolution authorize the county assessor to employ resolution authorize the county assessor to employ such additional deputies, clerks, field workers, such additional deputies, clerks, field workers, appraisers, and employees as it may deem necessary appraisers, and employees as it may deem necessary for the proper performance of the duties of the office of for the proper performance of the duties of the office of county assessor; county assessor; such expenditure to include the hiring of such expenditure to include the hiring of experts in property valuation for any period deemed experts in property valuation for any period deemed necessary,necessary, the payment of the transportation expense of the payment of the transportation expense of such experts or other employees in traveling from place such experts or other employees in traveling from place to place in the county, and generally any expense to place in the county, and generally any expense reasonably and directly tending to the procurement of a reasonably and directly tending to the procurement of a fair and true assessment of property within such fair and true assessment of property within such county; but all such shall be made under the county; but all such shall be made under the supervision of, and with the consent of, the county supervision of, and with the consent of, the county assessor. assessor.

Exchanging Non-Public or Confidential Data Exchanging Non-Public or Confidential Data with other ASSESSORSwith other ASSESSORS

MS 273.061 Subd. 8a. MS 273.061 Subd. 8a. Additional powers and duties of the Additional powers and duties of the commissioner of revenue, county assessors and local commissioner of revenue, county assessors and local assessors. assessors.

• Notwithstanding any provision of law to the contrary, in Notwithstanding any provision of law to the contrary, in order to promote a uniform assessment and review of order to promote a uniform assessment and review of assessments, the commissioner of revenue, county assessments, the commissioner of revenue, county assessors and local assessors may exchange data on assessors and local assessors may exchange data on property which are classified under chapter 13 as property which are classified under chapter 13 as public, nonpublic or private. The data for any property public, nonpublic or private. The data for any property may include but is not limited to its sales, income, may include but is not limited to its sales, income, expenses, vacancies, rentable or usable areas, expenses, vacancies, rentable or usable areas, anticipated income and expenses, projected vacancies, anticipated income and expenses, projected vacancies, lease information, and private multiple listing service lease information, and private multiple listing service data. Data exchanged under this provision that is data. Data exchanged under this provision that is classified as nonpublic or private data shall retain its classified as nonpublic or private data shall retain its classification.classification.

Exchanging Non-Public or Exchanging Non-Public or Confidential Data withConfidential Data with

Local Boards of Equalization and/orLocal Boards of Equalization and/or

County Boards of EqualizationCounty Boards of Equalization

• ABSOLUTELY NOT, ABSOLUTELY NOT, you can not you can not exchange non-public or confidential exchange non-public or confidential information with anyone other than information with anyone other than Assessors or appraisals done for Tax Assessors or appraisals done for Tax Court.Court.

PRIVATIZATIONPRIVATIZATION

• When is a “Fee Appraiser” an When is a “Fee Appraiser” an Assessor?Assessor?

– When they are UNDER CONTRACT with When they are UNDER CONTRACT with the assessors office!the assessors office!

– This is referred to as PRIVATIZATION.This is referred to as PRIVATIZATION.

PrivatizationPrivatization

• MS 13.05MS 13.05• Subd. 11.Privatization.Subd. 11.Privatization.• (a) If a government entity enters into a contract with a private (a) If a government entity enters into a contract with a private

person to perform any of its functions, the government entity person to perform any of its functions, the government entity shall include in the contract terms that make it clear that all of shall include in the contract terms that make it clear that all of the data created, collected, received, stored, used, maintained, the data created, collected, received, stored, used, maintained, or disseminated by the private person in performing those or disseminated by the private person in performing those functions is subject to the requirements of this chapter and functions is subject to the requirements of this chapter and that the private person must comply with those requirements that the private person must comply with those requirements as if it were a government entity. The remedies in section as if it were a government entity. The remedies in section 13.0813.08 apply to the private person under this subdivision. apply to the private person under this subdivision.

• (b) This subdivision does not create a duty on the part of the (b) This subdivision does not create a duty on the part of the private person to provide access to public data to the public if private person to provide access to public data to the public if the public data are available from the government entity, except the public data are available from the government entity, except as required by the terms of the contract.as required by the terms of the contract.

Ratio or Discrimination Issues IRatio or Discrimination Issues I

• 9 Month Tax Court Ratio 9 Month Tax Court Ratio – Time and terms adjustedTime and terms adjusted– Sales from Jan 1 to Aug 31Sales from Jan 1 to Aug 31st st 2009 for pay 2009 for pay

20102010– Published on DOR web sitePublished on DOR web site

• By property types, Res (all), Apt, C/IBy property types, Res (all), Apt, C/I• Stand along ratio if 6 or more sales.Stand along ratio if 6 or more sales.• If city/township has less than 6 sales If city/township has less than 6 sales

goes to the county levelgoes to the county level

Ratio or Discrimination Issues IIRatio or Discrimination Issues II

• Acceptable range 90.0% to 105.0%Acceptable range 90.0% to 105.0%

• Ratio relief is the difference between Ratio relief is the difference between 95.0% and the published 9 month Tax 95.0% and the published 9 month Tax Court Ratio, if it is less than 90.0%Court Ratio, if it is less than 90.0%

• If Tax Court ratio is 88.0%, the relief If Tax Court ratio is 88.0%, the relief would be 7.0% (95.0 less 88.0 = 7.0%)would be 7.0% (95.0 less 88.0 = 7.0%)

• Apply the relief against the FULL EMVApply the relief against the FULL EMV

At First SettingAt First Setting

Assessor Stipulates, Petitioner Dismisses, Trial, or Assessor Stipulates, Petitioner Dismisses, Trial, or Continuance Continuance

• Expect trial on 1Expect trial on 1stst setting with PRO SE Res/Ag cases. setting with PRO SE Res/Ag cases.• First Mutual Request for ContinuanceFirst Mutual Request for Continuance

– (1st continuance to a 2nd setting)(1st continuance to a 2nd setting)– Must be continued before noon the day before the trial.Must be continued before noon the day before the trial.– Call to Court Administrator Verified call with mutually Call to Court Administrator Verified call with mutually

agreed continuance date to the tax court. agreed continuance date to the tax court. – A normal continuance to set out 90 plus days.A normal continuance to set out 90 plus days.

On 1On 1stst Setting Setting

• On 1st Setting - Appraisal ExchangeOn 1st Setting - Appraisal Exchange– For Income Producing Properties (Pro Se)For Income Producing Properties (Pro Se)– One week before scheduled trial, 5 One week before scheduled trial, 5

working days. Figure in any State Holidaysworking days. Figure in any State Holidays– So you the Assessor needs to be pretty So you the Assessor needs to be pretty

confident of the petitioners game plan confident of the petitioners game plan prior to one week before trial.prior to one week before trial.

At Second SettingAt Second Setting

Assessor Stipulates, Petitioner Dismisses, Trial, or Assessor Stipulates, Petitioner Dismisses, Trial, or Continuance Continuance

• Trial is more common on all cases at this timeTrial is more common on all cases at this time• Second Mutual Request for ContinuanceSecond Mutual Request for Continuance

– (2nd continuance to a 3nd setting)(2nd continuance to a 3nd setting)– Must be continued before noon the day before the Must be continued before noon the day before the

trial.trial.

• Conference call between petitioners attorney, Conference call between petitioners attorney, county attorney, and the Judge. Both parties county attorney, and the Judge. Both parties have mutually agreed to continuance date and have mutually agreed to continuance date and why needed.why needed.– A normal continuance to set out 90 plus days.A normal continuance to set out 90 plus days.

Date CertainDate Certain

• 3rd Setting - Date Certain3rd Setting - Date Certain– With the rarest of circumstances can With the rarest of circumstances can

date certain cases be continued.date certain cases be continued.– If it happens, it will not be because of If it happens, it will not be because of

you.you.

• The case will go to trial unless they The case will go to trial unless they dismiss or you stipulate.dismiss or you stipulate.

The MN SupremesThe MN Supremes

• The Supreme Court reviews all Tax Court The Supreme Court reviews all Tax Court Cases that are appealed. Skip Appeals Cases that are appealed. Skip Appeals CourtCourt

• Most Attn cases have written and oral arguments Most Attn cases have written and oral arguments • Pro Se typically only have written argumentsPro Se typically only have written arguments

• The Supreme Court has time limits for a The Supreme Court has time limits for a briefing schedule but not a decision.briefing schedule but not a decision.

• Can appeal to the US Supreme CourtCan appeal to the US Supreme Court

AbatementsAbatements

• M.S. 375.192: Authorizes abatementsM.S. 375.192: Authorizes abatements• St. Louis County Board resolution No. 861 St. Louis County Board resolution No. 861

establishes County policyestablishes County policy• County Assessor Policy I-3 establishes County Assessor Policy I-3 establishes

procedure for changes allowed throughout procedure for changes allowed throughout the yearthe year

• Abatements are meant to Abatements are meant to correct errorscorrect errors in in the assessment and promote the assessment and promote reasonableness with taxpayers and prudence reasonableness with taxpayers and prudence with tax and other monies due to taxing with tax and other monies due to taxing authoritiesauthorities

AbatementsAbatements

• Statute and County policy allows abatement Statute and County policy allows abatement of current year tax and back two years for of current year tax and back two years for objective errorsobjective errors

• Statute and County policy allows abatement Statute and County policy allows abatement of current year tax only for subjective of current year tax only for subjective opinionsopinions

• Abatement fee of $75 charged per parcel, Abatement fee of $75 charged per parcel, including linked parcels, per yearincluding linked parcels, per year

• Abatement list presented monthly to the Abatement list presented monthly to the County Board for their approvalCounty Board for their approval

AbatementsAbatements

• History:History:

Thank youThank you

• QuestionsQuestions

• CommentsComments