Bill > HF3277

This bill modifies property tax assessment rules for railroad properties in Minnesota by introducing three new valuation exclusions and adjusting how yield capitalization rates are calculated. First, the bill requires the revenue commissioner to compare Minnesota's yield capitalization rate for railroad property with rates in neighboring states (Wisconsin, Iowa, South Dakota, and North Dakota), and mandates that Minnesota's rate be at least 0.05 percent of the lowest rate among those states. The bill then creates three specific market value exclusions for railroad property improvements: (1) improvements supporting public transit and rail programs made after January 1, 2016, such as subgrade work and rail infrastructure; (2) safety-related improvements funded by state or federal safety programs, including rail replacements, joint eliminations, and bridge repairs; and (3) environmental safety improvements like locomotive emission reductions, including modifying existing locomotives or replacing them with lower-emission models. For each exclusion, railroad companies must apply by December 31 to receive the tax benefit for the following year, and the revenue commissioner will estimate the property's market value and apply the exclusion proportionately across all railroad operating property in the state. These provisions will be effective for taxes payable in 2025 and retroactively for the 2024 assessment year.

Budget and Finance

https://www.revisor.mn.gov/bills/bill.php?b=House&f=HF3277&ssn=0&y=2025