Purpose of the Bill

The bill aims to adjust how taxes are calculated for railroad properties in Minnesota by modifying certain assessment procedures. It specifically provides new methods for determining the market value exclusion and the calculation of net present value for these state-assessed properties.

Main Provisions

• Market Value Exclusions: The bill proposes market value exclusions for certain types of railroad properties. This would likely reduce the taxable value of these properties, which may lower the property tax burden for railroad companies.
• Yield Capitalization Rate Adjustment: The bill introduces a requirement for the commissioner to adjust the yield capitalization rate used to determine the unit value of railroad properties. This adjustment ensures that the rate in Minnesota does not fall below the rates set by the neighboring states of Wisconsin, Iowa, South Dakota, and North Dakota by more than 0.05 percent.

Significant Changes

• The bill adds new subdivisions to Minnesota Statutes sections 270.84 and 273.11, introducing specific tax assessment procedures directed at railroad properties.
• The method for calculating the net present value of anticipated future income for state-assessed properties will now include a comparative analysis with neighboring states to ensure consistency and competitiveness.

Relevant Terms

• Taxation
• Property Tax
• Market Value Exclusions
• Yield Capitalization Rate
• Railroad Property
• State-Assessed Property
• Net Present Value