HF506

Purpose

• To modify Minnesota property tax rules for electric cooperatives by clarifying which electric distribution infrastructure is exempt from property taxes when used to supply electricity to farmers.

Main provisions

• The bill would amend Minnesota Statutes 2024, section 272.02, subdivision 19, to specify that:
  • Property used to distribute electricity to farmers is eligible for an exemption.
  • Specifically, electric power distribution lines and their attachments and appurtenances that are used primarily to supply electricity to farmers at retail are exempt from property tax.
  • Substations, as well as transmission or generation equipment, are not included in this exemption.

Significant changes to existing law

• Provides a clear exemption for distribution lines and related equipment used to serve farmers at retail, reinforcing or creating a tax exemption for those assets.
• Excludes substations and higher-voltage transmission or generation equipment from the exemption, limiting the scope to distribution infrastructure directly used to supply farmers.

Practical implications (summary)

• Electric cooperatives that operate distribution lines serving farmers at retail may see reduced property tax obligations on those specific distribution assets.
• The overall tax base related to electric infrastructure could shift, as only certain parts of the distribution system are covered by the exemption.

Relevant Terms - property tax exemption - electric power distribution lines - attachments - appurtenances - farmers - retail electricity - substations - transmission equipment - generation equipment - Minnesota Statutes 2024 - section 272.02 subdivision 19 - electric cooperatives - distribution infrastructure - tax exemption for distribution lines