Purpose of the Bill

This bill aims to modify how railroad property is taxed in Minnesota. It focuses on creating market value exclusions for certain railroad properties and changing how the net present value of future income for state-assessed properties is calculated.

Main Provisions

• Market Value Exclusions: The bill introduces market value exclusions specifically for certain railroad properties. This is designed to adjust the taxable value of these properties.
• Yield Capitalization Rate Adjustment: The bill mandates a comparison of the yield capitalization rate, used to determine the value of railroad properties, with rates from neighboring states (Wisconsin, Iowa, South Dakota, and North Dakota). The rate used in Minnesota must be adjusted to be no less than 0.05 percent above the lowest rate from these states.

Significant Changes to Existing Law

• The bill amends Minnesota Statutes 2024 sections 270.84 and 273.11 by adding new subdivisions. These changes specifically modify how the net present value of future income and property valuations are calculated for properties assessed by the state.

Relevant Terms

• Taxation
• Property valuation
• Market value exclusions
• Railroad property
• Yield capitalization rate
• Net present value