OLIVIA — A settlement between Northern Natural Gas and the state of Minnesota will cost Renville County taxing entities a total of $34,596.67 that will have to be refunded the utility.
Marc Iverson, county-auditor treasurer, reported on the settlement to the County Board of Commissioners on Oct. 1. He is asking the commissioners to approve a resolution authorizing the county to pay the refund for taxes paid for years 2015 and 2016.
The county will pay the full refund, but the affected taxing entities, including school districts and townships, will reimburse the county for their portion of that total. The county's share of the total is $8,761.31.
The tax refunds being paid to utilities with pipeline, power lines and other infrastructure in the county remain a source of frustration for the commissioners. In 2014, they approved a $195,110 refund to Alliance Energy.
The state of Minnesota sets the values used for calculating the taxes on the parcels holding pipelines. Utility companies have been successful in having those values reduced in Minnesota Tax Court or through settlements with the state. When the values are reduced, the taxing entities must refund a portion of the taxes paid along with 4 percent interest on the taxes paid.
Iverson said he is concerned for school districts, which can be hit hard by the reduction in expected revenue. He said legislation now allows the districts to re-levy for the refund amount.
The commissioners said they are frustrated by a system that routinely results in refunds being made after the taxes are collected.
Commissioner Randy Kramer said he would like to see a depreciation schedule or agreement reached on the values used for taxes so that the county and other taxing entities would not be subject to unexpected demands for refunds.
Commissioner Bob Fox said he would like to see a legislative solution to the ongoing issue as well. He said that he does not hear of these types of issues arising with utilities in neighboring states.
Renville County has five utilities with infrastructure on lands in the county, including Great River Energy, Center Point Energy, Northern Natural Gas, Otter Tail Power and Alliance Energy. Iverson noted that some neighboring counties will be paying greater refunds to Northern Natural Gas than Renville County.