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272.039 LEGISLATIVE FINDINGS AND CONCLUSIONS RELATED TO THE
TAXATION OF MINERALS OWNED SEPARATELY FROM THE SURFACE.
The legislature finds, for the reasons stated below, that a class of real property has been
created which, although not exempt from taxation, is not assessed for tax purposes and does not,
therefore, contribute anything toward the cost of supporting the governments which protect and
preserve the continued existence of the property. These reasons are as follows: (1) In the case
of Washburn v. Gregory, 1914, 125 Minn. 491, 147 N.W. 706, the Minnesota Supreme Court
determined that where mineral interests are owned separately from the surface interests in real
estate, the mineral interest is a separate interest in land, separately taxable, and does not forfeit if
the overlying surface interest forfeits for nonpayment of taxes due on the surface interest; (2)
Since this 1914 decision, mineral interests owned separately from the surface have been valued
and assessed for tax purposes, as a practical matter, only if the value of the minerals has been
determined through drilling and drill core analysis; and (3) The absence of any taxation of mineral
interests owned separately from the surface, except where drilling analysis is available, has
encouraged the separation of ownership of surface and mineral estates and resulted in the creation
of hundreds of thousands of acres of untaxed mineral estate lands which thus are immune from
tax forfeiture. The legislature also finds that the province of Ontario in Canada, which has land
ownership patterns and mineral characteristics similar to that of Minnesota, has imposed a tax of
$.50 an acre on minerals owned separately from the surface since 1968, and $.10 an acre before
that. The legislature further finds that the identification of separately owned mineral interests by
taxing authorities requires title searches which are extremely burdensome and, where no public
tract index is available, prohibitively expensive. This result is caused in part by the decision in
Wichelman v. Messner, 1957, 250 Minn. 88, 83 N.W. (2d) 800, where the so called "40 year law"
was held inapplicable to mineral interests owned separately from surface interests. On the basis
of the above findings, and for the purpose of requiring mineral interests owned separately from
surface interests to contribute to the cost of government at a time when other interests in real
property are heavily burdened with real property taxes, the legislature concludes that the taxation
of severed mineral interests as provided in section 273.165, subdivision 1 is necessary and in the
public interest, and provides fair taxation of a class of real property which has escaped taxation
for many years. The legislature further concludes that such a tax is not prohibited by Minnesota
Constitution, article 10, section 2. The legislature concludes finally that the amendments and
repeals made by Laws 1973, chapter 650 to sections 93.52 to 93.58, are necessary to provide
adequate identification of mineral interests owned separately from the surface and to prevent the
continued escape from taxation of obscure and fractionalized severed mineral interests.
History: 1973 c 650 art 20 s 1; 1976 c 2 s 172; 1Sp1985 c 14 art 4 s 32

Official Publication of the State of Minnesota
Revisor of Statutes