Purpose of the Bill

The purpose of this bill is to adjust taxation procedures for railroad properties in the state of Minnesota. It aims to modify the method by which the market value and net present value of these properties are calculated.

Main Provisions

• Market Value Exclusions: The bill provides specific exclusions that apply to the market value of certain railroad properties. This could potentially lower the taxable value and, therefore, the taxes owed by those properties.

• Yield Capitalization Rate Adjustment: The bill requires the Minnesota commissioner to determine the unit value of railroad property annually by calculating a yield capitalization rate. This rate must be compared with those calculated by similar agencies in neighboring states (Wisconsin, Iowa, South Dakota, and North Dakota). The Minnesota rate must then be adjusted to be no less than 0.05% of the lowest rate from these states.

Significant Changes to Existing Law

• The law amends existing sections of the Minnesota Statutes to include the new method of adjusting the yield capitalization rate for assessing the value of railroad property.

• It introduces a comparison mechanism with neighboring states to ensure that Minnesota's taxation rates are competitive and perhaps more favorable to railroad property owners.

Relevant Terms

• Taxation
• Railroad property
• Market value exclusion
• Yield capitalization rate
• Net present value
• State-assessed property