SF 3469

Introduction - 94th Legislature (2025 - 2026)

Posted on 05/02/2025 09:53 a.m.

A bill for an act
relating to taxation; property; providing market value exclusions for certain railroad
property; modifying calculation of net present value of anticipated future income
for state-assessed property; amending Minnesota Statutes 2024, sections 270.84,
by adding a subdivision; 273.11, by adding subdivisions.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 270.84, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Yield capitalization rate; adjustment. new text end

new text begin If the commissioner calculates a yield
capitalization rate to determine the unit value of railroad property for a given year, the
commissioner shall compare the resulting rate with the respective yield capitalization rates
calculated by the respective governing agencies in the states of Wisconsin, Iowa, South
Dakota, and North Dakota. The commissioner shall adjust the yield capitalization rate to
be no less than 0.05 percent of the lowest yield capitalization rate set in Wisconsin, Iowa,
South Dakota, and North Dakota.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2025 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Valuation exclusion for improvements to certain railroad property. new text end

new text begin (a)
Property classified under section 273.13, subdivision 24, and improved as provided in this
subdivision, qualifies for a valuation exclusion for assessment purposes.
new text end

new text begin (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
property must meet the following conditions:
new text end

new text begin (1) the improvements must have been implemented to accommodate a public transit
program, light rail transit, commuter rail, or intercity passenger rail;
new text end

new text begin (2) the improvements include but are not limited to: (i) subgrade work; (ii) grading; (iii)
adding subgrade material; and (iv) utilizing ballast, ties, rail, materials to attach the rails to
the ties, and rail switches to join rail sidings to a main rail line; and
new text end

new text begin (3) the improvements were made after January 1, 2016.
new text end

new text begin (c) The commissioner of revenue must estimate the market value of the railroad property
in the assessment year immediately following the year that the taxpayer notified the
commissioner that an improvement was made. The commissioner must apply the exclusion
provided under this subdivision proportionately across all railroad operating property within
the state. The commissioner must require an application. Applications must be received by
December 31 each year in order to be effective for taxes payable in the following year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for assessment year 2024.
new text end

Sec. 3.

Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 25. new text end

new text begin Valuation exclusion for safety improvements to certain railroad
property. new text end

new text begin (a) Property classified under section 273.13, subdivision 24, and improved as
provided in this subdivision, qualifies for a valuation exclusion for assessment purposes.
new text end

new text begin (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
property must meet the following conditions:
new text end

new text begin (1) the improvements to the rail line must have been implemented in connection to or
funded by a state or federal safety program or funded by a state or federal safety grant
program;
new text end

new text begin (2) the improvements include but are not limited to: (i) rail replacement to a heavier
weight rail; (ii) eliminating and replacing existing rail joints; (iii) utilizing ballast, ties, and
materials to attach the rails to the ties; (iv) surfacing joint-eliminated rails or continuous
welded rail; and (v) bridge repairs or strengthening weight rating of bridges; and
new text end

new text begin (3) the improvements were made after January 1, 2016.
new text end

new text begin (c) The commissioner of revenue must estimate the market value of the railroad property
in the assessment year immediately following the year that the taxpayer notified the
commissioner that an improvement was made. The commissioner must apply the exclusion
provided under this subdivision proportionately across all railroad operating property within
the state. The commissioner must require an application. Applications must be received by
December 31 each year in order to be effective for taxes payable in the following year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for assessment year 2024.
new text end

Sec. 4.

Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 26. new text end

new text begin Valuation exclusion for environmental safety improvements to certain
railroad property. new text end

new text begin (a) Property classified under section 271.13, subdivision 24, and
improved as provided in this subdivision, qualifies for a valuation exclusion for assessment
purposes.
new text end

new text begin (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
property must meet the following conditions:
new text end

new text begin (1) the improvements to the railroad property must have been for locomotive emission
reductions implemented in connection to or funded by a state or federal safety grant program;
new text end

new text begin (2) the improvements were either: (i) modifying existing locomotives to reduce emissions;
or (ii) replacing existing locomotives with new emission-reducing locomotives; and
new text end

new text begin (3) the improvements were made after January 1, 2016.
new text end

new text begin (c) The commissioner of revenue must estimate the market value of the railroad property
in the assessment year immediately following the year that the taxpayer notified the
commissioner that an improvement was made. The commissioner must apply the exclusion
provided under this subdivision proportionately across all railroad operating property within
the state. The commissioner must require an application. Applications must be received by
December 31 each year in order to be effective for taxes payable in the following year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for assessment year 2024.
new text end