Purpose

• Change how income property data is protected in Minnesota property tax cases.
• Allow limited legal access to certain income-property data in court cases, while keeping most data private or nonpublic.
• Set rules for how data can be used, shared, and disclosed in legal proceedings, with safeguards like protective orders.
• Increase requirements on taxpayers about providing information to assessors and the court, with deadlines and possible penalties.

Main Provisions

• Data that stays private or nonpublic

  • The bill lists specific data about income properties that remain private or nonpublic, including:
  • detailed income and expense figures
  • average vacancy factors and vacancy rates
  • verified net rentable areas or net usable areas
  • anticipated income and expenses
  • projected vacancy factors and lease information

• Legal discovery and protective orders

  • In a legal proceeding, a party can request legal discovery of income property assessment data.
  • The owner of the property must be notified.
  • Data accessed through discovery must only be used for the case and not shared with people not involved, unless a protective order allows it.
  • In Tax Court, income property assessment data cannot be used as evidence unless the Tax Court first issues a protective order.

• Tax Court procedures

  • Tax Court hearings are de novo (new review) and can have an advisory jury if the judge requests.
  • Hearings must be public.
  • Protective orders are required to protect private or nonpublic data, and the court may review data in camera (private review).

• Assessor records and evidence

  • Assessor records (like certificates of real estate value, assessor field cards, and property appraisal cards) must be made available to the petitioner for inspection and copying and can be offered as evidence, subject to discovery rules.
  • These records cannot be excluded from discovery or admissible evidence just because they’re confidential or private data, so long as protective orders are used.
  • The term “assessors records” also includes other data classified as private/nonpublic, even if it relates to a different property or is in the assessor’s file.

• Information required from petitioners and deadlines

  • For cases involving income-producing property, petitioners must provide to the county assessor by August 1:
  • year-end financial statements for the year before the assessment date
  • year-end financial statements for the year of the assessment date
  • rent roll listing tenants, lease dates, base rent, square footage, and vacancy
  • identification of all lease agreements not on the rent roll (name, dates, rent, and square footage)
  • total net rentable square footage
  • projected income and expenses in the form of a proposed budget for the year after the assessment year
  • The information provided for leases does not have to include the leases themselves.
  • If the assessor finds a deficiency, the petitioner has 30 days to correct it after notice, unless the deficiency was due to unavailability or the petitioner wasn’t aware of the requirement. If those conditions apply, the petitioner has an additional 30 days.
  • If, after August 1, the county assessor determines actual leases are needed to evaluate the property, they can require the leases within 60 days. The Tax Court will handle disputes about these additional information requests.
  • If timely provided, the assessor must give the petitioner the property appraisal at least five days before the hearing; the petitioner must provide their appraisal at least five days before the hearing. If the county’s appraisal is not available or compliant, it may not be admissible, and the petition may be dismissed for noncompliance.

• Admissibility and protective orders

  • The Tax Court can order protective orders to safeguard private/nonpublic data.
  • If the Department of Revenue’s sales ratio study is used as evidence, it is admissible only as allowed by applicable statute.

Significant Changes to Existing Law

• Stronger data protection with discretionary sharing

  • Maintains privacy for many income-property data items but creates a controlled pathway for discovery in legal cases, under protective orders.

• Expanded access in court, with guardrails

  • Allows discovery of certain income-property data in legal proceedings, but restricts use and sharing to participants in the case and under court orders.

• New requirements on data disclosure in petitions

  • Establishes concrete deadlines and lists the exact items taxpayers must provide to assessors, with potential dismissal penalties for noncompliance.

• Evidentiary rules for assessor records

  • Clarifies that assessor records can be used as evidence and discovered, while still requiring protective orders to limit public disclosure.

• Tax Court process and protections

  • Mandates public hearings but strengthens data protection via protective orders and in-camera review possibilities.

Impact and Who Is Affected

• Affects property owners with income-producing properties, county assessors, Tax Court, and other state or local government offices involved in property tax valuation.
• Aims to balance taxpayer privacy with the need for detailed data in some legal challenges to valuations.

Implementation Considerations

• Practitioners should be prepared for new deadlines (August 1, rent rolls, financials, etc.) and potential dismissal if information is not provided.
• Expect stricter handling of sensitive data in court, with protective orders and possible in-camera review.

Relevant Terms - income property assessment data - private data - nonpublic data - detailed income and expense figures - average vacancy factors / vacancy rates - net rentable areas / net usable areas - anticipated income and expenses - projected vacancy factors - lease information - legal discovery - protective order - Tax Court - de novo - public hearing - advisory jury - assessors records - certificates of real estate value - assessors field cards - property appraisal cards - rent roll - leases - year-end financial statements - August 1 deadline - 60-day information request - discovery standards - Rules of Civil Procedure 37 - departments’ sales ratio study - 278.05 subdivision 2