1.1 A bill for an act
1.2 relating to taxation; property; providing market value exclusions for certain railroad
1.3 property; modifying calculation of net present value of anticipated future income
1.4 for state-assessed property; amending Minnesota Statutes 2024, sections 270.84,
1.5 by adding a subdivision; 273.11, by adding subdivisions.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 270.84, is amended by adding a subdivision
1.8to read:
1.9 Subd. 1a.Yield capitalization rate; adjustment.If the commissioner calculates a yield
1.10capitalization rate to determine the unit value of railroad property for a given year, the
1.11commissioner shall compare the resulting rate with the respective yield capitalization rates
1.12calculated by the respective governing agencies in the states of Wisconsin, Iowa, South
1.13Dakota, and North Dakota. The commissioner shall adjust the yield capitalization rate to
1.14be no less than 0.05 percent of the lowest yield capitalization rate set in Wisconsin, Iowa,
1.15South Dakota, and North Dakota.
1.16 EFFECTIVE DATE.This section is effective for taxes payable in 2025 and thereafter.
1.17 Sec. 2. Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
1.18read:
1.19 Subd. 24.Valuation exclusion for improvements to certain railroad property.(a)
1.20Property classified under section 273.13, subdivision 24, and improved as provided in this
1.21subdivision, qualifies for a valuation exclusion for assessment purposes.
1Sec. 2.
REVISOR MS/NS 25-0413004/09/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 3277
NINETY-FOURTH SESSION
Authored by Torkelson and Davids04/30/2025
The bill was read for the first time and referred to the Committee on Taxes 2.1 (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
2.2property must meet the following conditions:
2.3 (1) the improvements must have been implemented to accommodate a public transit
2.4program, light rail transit, commuter rail, or intercity passenger rail;
2.5 (2) the improvements include but are not limited to: (i) subgrade work; (ii) grading; (iii)
2.6adding subgrade material; and (iv) utilizing ballast, ties, rail, materials to attach the rails to
2.7the ties, and rail switches to join rail sidings to a main rail line; and
2.8 (3) the improvements were made after January 1, 2016.
2.9 (c) The commissioner of revenue must estimate the market value of the railroad property
2.10in the assessment year immediately following the year that the taxpayer notified the
2.11commissioner that an improvement was made. The commissioner must apply the exclusion
2.12provided under this subdivision proportionately across all railroad operating property within
2.13the state. The commissioner must require an application. Applications must be received by
2.14December 31 each year in order to be effective for taxes payable in the following year.
2.15 EFFECTIVE DATE.This section is effective retroactively for assessment year 2024.
2.16 Sec. 3. Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
2.17read:
2.18 Subd. 25.Valuation exclusion for safety improvements to certain railroad
2.19property.(a) Property classified under section 273.13, subdivision 24, and improved as
2.20provided in this subdivision, qualifies for a valuation exclusion for assessment purposes.
2.21 (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
2.22property must meet the following conditions:
2.23 (1) the improvements to the rail line must have been implemented in connection to or
2.24funded by a state or federal safety program or funded by a state or federal safety grant
2.25program;
2.26 (2) the improvements include but are not limited to: (i) rail replacement to a heavier
2.27weight rail; (ii) eliminating and replacing existing rail joints; (iii) utilizing ballast, ties, and
2.28materials to attach the rails to the ties; (iv) surfacing joint-eliminated rails or continuous
2.29welded rail; and (v) bridge repairs or strengthening weight rating of bridges; and
2.30 (3) the improvements were made after January 1, 2016.
2.31 (c) The commissioner of revenue must estimate the market value of the railroad property
2.32in the assessment year immediately following the year that the taxpayer notified the
2Sec. 3.
REVISOR MS/NS 25-0413004/09/25 3.1commissioner that an improvement was made. The commissioner must apply the exclusion
3.2provided under this subdivision proportionately across all railroad operating property within
3.3the state. The commissioner must require an application. Applications must be received by
3.4December 31 each year in order to be effective for taxes payable in the following year.
3.5 EFFECTIVE DATE.This section is effective retroactively for assessment year 2024.
3.6 Sec. 4. Minnesota Statutes 2024, section 273.11, is amended by adding a subdivision to
3.7read:
3.8 Subd. 26.Valuation exclusion for environmental safety improvements to certain
3.9railroad property.(a) Property classified under section 271.13, subdivision 24, and
3.10improved as provided in this subdivision, qualifies for a valuation exclusion for assessment
3.11purposes.
3.12 (b) To be eligible for the valuation exclusion in this subdivision, improvements to railroad
3.13property must meet the following conditions:
3.14 (1) the improvements to the railroad property must have been for locomotive emission
3.15reductions implemented in connection to or funded by a state or federal safety grant program;
3.16 (2) the improvements were either: (i) modifying existing locomotives to reduce emissions;
3.17or (ii) replacing existing locomotives with new emission-reducing locomotives; and
3.18 (3) the improvements were made after January 1, 2016.
3.19 (c) The commissioner of revenue must estimate the market value of the railroad property
3.20in the assessment year immediately following the year that the taxpayer notified the
3.21commissioner that an improvement was made. The commissioner must apply the exclusion
3.22provided under this subdivision proportionately across all railroad operating property within
3.23the state. The commissioner must require an application. Applications must be received by
3.24December 31 each year in order to be effective for taxes payable in the following year.
3.25 EFFECTIVE DATE.This section is effective retroactively for assessment year 2024.
3Sec. 4.
REVISOR MS/NS 25-0413004/09/25