01-14-1985 Council Packet - Laserfiche WebLink

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RS-8•. MALTING STRUCTURES (H) The league recommends that the legislature specifically designate all structures used in the process of creating malt from grain as well as structures used for storage and drying grain as real property subject to property taxation. Recently a Minnnesota Tax Court decision declared that portions of the structures used in the process of converting grain into melt were attached machinery and therefore exempt from real property taxation. The impact of this decision on property taxes in certain areas with a concentration of malting operations is significant. There is concern that based on this precedent, the courts could extend the exemption to any structure specifically designed for warehousing certain goods or commodities such as grain elevators. The legislature has specifically designated electric generating plants and equipment as real property subject to property taxes so there is precedent for this type of -iesignation. RS-9. RAILROAD TAXATION (C) A new formula should be adopted for the valuation of railroad operatin& property for property tax purposes. The existing system for taxation of railroad operating property is not consistent with the taxation of other commercial and industrial properties. The present formula values railroad operating property at about 20% of the value which would be determined by a local assessor using generally accepted assessing principles. The League recommends that a new system of property taxation be established which enable railroads operating in Minnesota to be taxed consistent with the taxation of other commercial and industrial properties. This system should contain the following features: A new formula should be developed for the valuation of railroad operating property for property tax purposes. The new formula should contain two equal factors. One of these factors should be 50 percent of an amount based upon: the average value of all of the taxable land in the city or county times the area of the railroad operating land plus the value of railroad operating structures as determined by the local assessor. The other factor would be an amount based on either the stock and debt of the railroad or the capitalization of earnings approach. "Operating land" is defined to mean any land which underlies the operating structures defined below and rights -of -ways adjacent thereto and which is necessary to the integral performance of railroad transportation services. "Operating structures" is defined to mean all structures owned or used by a railroad company in the performance of railroad transportation services including without limitation, franchises. bridges, trestles, tracks, shops, docku, wharves, buildings, and other related structures. All operating structures except railroad bridges, trestles, tracks, docks and wharves, should be taxable. The present system for v.:luing and taxing non -operating property should not be changed. -4 5-