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County hears back on one utility tax lawsuit

CARLTON COUNTY BOARD

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It could have been worse.

That was the consensus by Carlton County officials Tuesday after discussing news of a Minnesota Tax Court decision April 18 regarding a lawsuit disputing property tax assessments filed by Minnesota Energy Resources Corporation (MERC).

In the appeal, the natural gas company appealed the Department of Revenue's (DOR) valuation of its property (where lines are located) for assessment years 2008-2012. The decision April 18 set the values lower than than the DOR, but higher than the number MERC suggested.

For example, statewide in 2008, the DOR assessed MERC's property at $118,247,871. MERC suggested the land should have been valued at $51,461,168. The Tax Court's value was set at $94,732,200 last week.

However, MERC also appealed the valuation of its properties for assessment years 2013-2016, appeals that were stayed pending the resolution of the 2008-2012 appeals. The later appeals will now move forward through the tax court process. MERC is just one of a number of utility companies in Minnesota that appealed their land valuations, including Enbridge Energy, which has several pipelines running through Carlton County.

So county officials know more, but they don't really have any answers yet, noted Carlton County Assessor Kyle Holmes.

"Nothing has really changed but this case is a good indicator," Holmes said. There will be refunds due to Merc for the 2008-2011, but they have to pay some money back for 2012. And the Enbridge case is completely different."

There are no dollar figures broken down by county yet, and Carlton County was one of 53 counties last week to receive the update from the Minnesota Department of Revenue last week. Both sides have until June 19 to appeal the ruling, so nothing will be coming out before then, he said. In addition, the state legislature could decide to help counties repay the excess, since it was a state department that determined the valuations.

That seems pretty unlikely, County Auditor Paul Gassert said.

"But we'll see what happens [with the legislature]," Gassert said. "We should know after May 22."

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