OLIVIA -- A proposed settlement in a tax dispute with the Alliance Pipeline could see Renville County return $368,160 in tax revenues collected by the county, townships and school districts over the past three years.
The exact amount will not be known until attorneys finalize a settlement agreement, County Auditor Larry Jacobs told the Renville County Board of Commissioners on Tuesday.
Renville County is among 13 counties in Minnesota through which the pipeline passes, and one of the most adversely affected by the settlement. The pipeline slices through 23.2 miles of the county, including portions of four townships and two school districts. Importantly, the pipeline company also has a large compressor station located north of Bird Island.
As a result, the assessed value of the pipeline company's property in Renville County is relatively high. It makes the pipeline the largest single taxpaying entity in the county.
Alliance Pipeline filed a lawsuit against the Minnesota Department of Revenue and the counties through which the pipeline runs. It charged that the assessed valuations placed on the utility's property by the state were too high.
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A settlement being reached in the case will reduce the assessed valuations for taxing purposes, and make the reduction retroactive to include taxes collected for the years 2004, 2005, and 2006.
Based on the reduced valuations, Renville County will need to return $261,460 of the tax revenues it collected in the three years. The affected townships, watershed districts, and school districts will need to return $106,700, bringing the overall total in Renville County to $368,160.
In addition, the state of Minnesota will need to return $232,910 in general tax monies collected in Renville County from the pipeline.
The settlement also means that future tax collections will be based on the reduced valuations, meaning tax projections in the county, the schools and townships will have to be adjusted accordingly.
The commissioners took no action at their meeting, but indicated that since the county served as the tax collecting agency, it will be responsible for returning the $368,160 to satisfy the settlement. It will then require the affected townships and school districts to reimburse the county for their portions. That will give those entities an opportunity to levy for their share of the total.
Jacobs said the difficulty now facing the county and other taxing entities is the lack of a final settlement. He and the commissioners said they would like to see final numbers reached while there remains time to adjust budgets and taxes. They noted that townships will be setting their budgets at annual meetings on March 13.
The Alliance Pipeline is 2,307 miles long and carries 1.3 billion cubic feet of raw natural gas each day from fields in British Columbia and northwestern Alberta, Canada, to facilities in the Chicago area.
