Another tax case is coming down the pipe

OLIVIA - One week ago the Renville County Board of Commissioners approved a $195,110 “refund check’’ to Alliance Pipeline, the consequence of a tax court settlement that lowered the value of the pipeline through the county.
On Tuesday, the board learned that new litigation is in the works. County Administrator Sara Folsted said CenterPoint Energy has filed a lawsuit in tax court seeking a reduction in the value of its pipeline that also runs through the county.
The recent Alliance Pipeline refund is the second such refund the county has had to pay the pipeline company due to tax court litigation.
It’s a vexing issue for the commissioners. The $195,110 represents taxes already collected from the pipeline company for the county, two school districts and five townships for the previous four years.
The tax court settlement reduced the assessed valuation of the pipeline company’s property by 9.25 percent in each of the last four years.
The dilemma for the county is that the state of Minnesota’s Department of Revenue determines the value of the pipeline property. The county and other taxing entities base their levies and budgets on the state valuation. The local entities have no way of anticipating whether the valuation will be lowered. Yet it leaves them with the challenge of refunding tax money collected and already spent.
The county had asked for a meeting with the Department of Revenue to discuss the local concerns, but the request was denied, according to information presented to the commissioners when they approved the refund check on August 26.
Commissioner Randy Kramer said Alliance Pipeline officials recently indicated they may once again file for a reduction in the assessed value of the pipeline. Renville County has a significant exposure when the pipeline valuations are reduced. Commissioners discussed Tuesday that there has been a steady progression of cases in which the value of pipelines for taxing purposes has been reduced, even though the value of the farmland through which they run has increased.