MINNESOTA TAX COURT REVISES PREVIOUS ENBRIDGE RULING WHICH, BARRING APPEAL, BENEFITS COUNTIES

The Minnesota Tax Court makes changes to its previous valuation order for the Enbridge pipeline corridor originally ordered in May 2018 for the years 2012-14.  For example, in May 2018, the Tax Court valued Enbridge’s corridor at $3.42 billion for 2014, on November 5 they revised the valuation with prodding from the Minnesota Supreme Court, at $4.73 billion.  That is still nearly $900 million below what the Minnesota Department of Revenue originally valued the corridor in 2014. 

The Tax Court also declined an appeal from Enbridge to reconsider the valuation for 2015-2016, which the tax court ruled should be increased by 5 percent and 3 percent for those two years respectively.  The results of those two decisions are that counties will owe less money for 2012-14 and be owed more by Enbridge for 2015-16 explains Polk County Director of Property Records Michelle Cote.  “The ’12, ’13, ’14 years result in us having to give a payback to Enbridge based on a reduced value,” said Cote.  “The ’15-16 years resulted in value increase, which the net effect of that is Enbridge will owe us.  But the decisions can be appealed by both the Department of Revenue and/or Enbridge.  So, once again we’re in that waiting game until the end of the appeal window January 4.   We haven’t had any indication if either party will be appealing it.”

Because both the Department of Revenue and Enbridge can further appeal both rulings into January, the exact valuations for the years in question could still move said, Cote. “They are still in the appeal window of time so once again it’s a bit of a moving target,” said Cote.  “What we’ve seen is that some of the allocations have come down which have altered our estimated percentages of value reduction.  In preliminary calculations, we are estimating that the net amount that we would owe is decreased based on the current decisions.  That was good news for us, and we are waiting for further direction from the Department of Revenue.  And waiting for the appeal process to be concluded.”

The Enbridge corridor traverses just a small section of four taxing districts in Polk County, so comparatively the impact could be minimal. But other counties could require aid from the state to pay for a mistake that originated at the state level, which could mean the state legislature will need to provide funds to assist all counties with their payback.  That said, for neighboring Red Lake County, and for Clearwater County, the ruling has a significant impact.  Based on the May 2018 ruling, both counties would’ve owed Enbridge more money then they raise from taxpayers annually. 

After the initial ruling in 2018, Polk County estimated it would have to pay Enbridge approximately $1 million, plus an interest payment for what was overtaxed.  But Cote said that if the current estimates hold the county will pay back significantly less. “Our net, combining all of those five years still results in us owing Enbridge,” said Cote.  “Can that change with another appeal process – absolutely.  But the good news was that from our initial calculations the recalc’d amounts were significantly less than the original amounts which were approximately $1 million.”