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Last Updated: 5/13/2019

Capitalization Rate Study

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The Minnesota Department of Revenue assesses utility, pipeline, and railroad operating property. We measure the present value of anticipated future benefits of property ownership to determine unitary valuations of State Assessed Property in Minnesota.

 

How does the department complete the Capitalization Rate Study?

 

We determine the following rates:

  • Yield Capitalization
  • Direct Capitalization
  • Implied Growth
  • Short-term Growth
  • Long-term Growth
  • Implied Inflation
 

For each of these market segments:

  •  Electric
  • Gas Distribution
  • Gas Transmission Pipeline
  • Fluid Transportation Pipeline
  • Class I Railroads
  • Other Railroads


Yield and direct capitalization rates
:
combined rates of debt and equity components using capital structure indicated by the market.

Implied growth rate: difference between the yield and direct rates, by market segment.

Short-term growth rate: estimates of growth by market segment.

Long-term growth rate: long-term growth rate of the United States Economy.

Implied inflation rate: market indicators of expected inflation.

View and download the 2019 Capitalization Rate Study.


How can I view the Capitalization Rate Study?

2019 Capitalization Rate Study

 

What if I have questions?

Email: sa.property@state.mn.us

Mail: Minnesota Revenue
         Attn: State Assessed Property Section 
         Mail Station 3340
         St. Paul, MN 55146-3340