Lake Country Power Cooperative, Mille Lacs Energy Cooperative, Peoples Energy Cooperative, Relators,
Commissioner of Revenue, Respondent.
Court Office of Appellate Courts
Jeffery J. McNaught, The Law Offices of Jeffery J. McNaught,
LLC, Minneapolis, Minnesota; and Ann E. Kennedy, Ann E.
Kennedy Law PLLC, Saint Paul, Minnesota, for relators.
Swanson, Attorney General, Kristine K. Nogosek, Assistant
Attorney General, Saint Paul, Minnesota, for respondent.
taken by electricity distribution cooperatives from notices
of value issued by the Commissioner of Revenue were governed
by the 60-day deadline established by Minn. Stat. §
271.06, subd. 2 (2016). Because those appeals were filed more
than 60 days after the date of the Commissioner's
notices, the appeals were untimely.
Lake Country Power Cooperative, Mille Lacs Energy
Cooperative, and Peoples Energy Cooperative (collectively,
"the Cooperatives") each separately appealed the
valuation orders of the Commissioner of Revenue ("the
Commissioner") for the 2014, 2015, and 2016 tax years.
The tax court dismissed the appeals as untimely because they
were not filed within the 60-day deadline for appeals from
orders of the Commissioner, see Minn. Stat.
§§ 271.06, subd. 2; 273.372, subd. 2(b) (2016). The
Cooperatives appealed, arguing that the tax court failed to
recognize that the two appeal paths provided by subdivision 2
of Minnesota Statutes § 273.372 effectively establish a
single deadline, namely, April 30 of the year in which the
tax becomes payable. Because the two appeal paths provided by
section 273.372 apply to distinct steps in the property tax
assessment process and therefore have separate deadlines, and
because the Cooperatives' notices of appeal were governed
only by a 60-day deadline, and were therefore untimely, we
affirm the decision of the tax court.
Cooperatives are electricity distribution cooperatives that
operate electric power companies. Their property-transmission
lines and certain equipment- is assessed by the Commissioner
at estimated market value. Minn. Stat. § 273.37, subd. 2
(2016). On or before August 1 each year, the Commissioner
certifies the assessed values to the city or county assessor
in which the property is located. Id.; see
also Minn. R. 8100.0200 (2015) (stating that after the
Commissioner establishes the estimated value, "the
portion" of the utility's taxable system allocated
to Minnesota "is distributed to the various taxing
districts within the state"). The local assessor then
uses that value to calculate the tax for the property located
within the taxing district. See Minn. Stat. §
273.37, subd. 2 (explaining that the property is assessed
with property subject to assessment by the Commissioner can
appeal the assessment, valuation, or classification of their
property under section 273.372. See Minn. Stat.
§ 273.372, subd. 1(b) (2016) (explaining that the
statute governs "appeals to court of a claim that
utility . . . property has been partially, unfairly, or
unequally assessed, or assessed at a valuation greater than
its real or actual value, [or] misclassified"). The
statute provides two possibilities for an appeal. First, the
utility can appeal "from an order of the
commissioner," which includes "a certification or
notice of value by the commissioner." Id.,
subd. 2(b). These appeals are governed by chapter 271 of the
Minnesota Statutes. Id. Alternatively, the utility
may appeal "from the tax that results from
implementation of the commissioner's order," in
which case the appeal is governed by chapter 278 of the
Minnesota Statutes. Id., subd. 2(c).
each of the tax years at issue here-2013, 2014, and 2015-the
Commissioner sent each Cooperative a notice of assessed value
of its property, which would be used to calculate the
Cooperatives' property taxes for the taxes due in the
April of the year after the Commissioner's valuation
orders were issued-that is, April of 2014, 2015, and 2016-the
Cooperatives filed notices of appeal with the tax court. The
notices of appeal stated that the Cooperatives appealed from
"Orders of the Commissioner," specifically, the
Commissioner's "valuation" of each
Cooperative's property. The Cooperatives attached a copy
of the Commissioner's valuation notice from the preceding
year to each notice of appeal. The Cooperatives also asserted
that the tax court had jurisdiction over their appeals under
Minn. Stat. §§ 271.01, 271.06, and 273.372 (2016).
In answer to each notice of appeal, the Commissioner asserted
that the appeals were untimely, the tax court lacked subject
matter jurisdiction over the appeals filed in 2015 and 2016,
and the Cooperatives had not met the statutory requirements
for their 2016 appeals.
nine appeals were stayed by joint agreement of the parties,
pending our decision in Minnesota Energy Resources Corp.
v. Commissioner of Revenue (MERC I), 886 N.W.2d
786 (Minn. 2016). After we issued our decision in MERC
I, the tax court ordered a limited consolidation of the
Cooperatives' appeals for the sole purpose of allowing
the Commissioner to file a motion to dismiss the appeals for
lack of subject matter jurisdiction. The Commissioner moved
for dismissal on March 29, 2017, asserting that all nine
appeals were subject to the 60-day time limit in Minn. Stat.
§ 271.06, subd. 2. Further, because the Cooperatives
filed their appeals after expiration of that deadline, the
Commissioner contended that the tax court lacked jurisdiction
over the appeals, which required dismissal. The Cooperatives
jointly opposed this motion, arguing that their appeals were
timely under Minn. Stat. § 278.01, subd. 1(c) (2016),
which allows taxpayers to file an appeal as late as April 30
of the year in which the tax is due. The Cooperatives
asserted that Minn. Stat. § 273.372 created two
overlapping appeal paths, they were free to pursue either
path in their appeals, and their appeals were therefore
timely under the path created by subdivision 2(c) of section
"no doubt" that the Cooperatives had appealed
orders of the Commissioner, the tax court concluded that the
appeals were governed by Minn. Stat. § 273.372, subd.
2(b), and, by extension, chapter 271 of the Minnesota
Statutes. The tax court therefore concluded that the
Cooperatives' appeals were subject to the 60-day deadline
in Minn. Stat. § 271.06, subd. 2. Finally, because the
Cooperatives' appeals were all filed more than 60 days
after the date ...