by April Scheinoha
Reporter
The State of Minnesota is providing $29.3 million in county aid to northern counties impacted by a miscalculation related to Enbridge Energy LLC’s properties.
“It’s a big win for the 13 counties affected by this,” said Pennington County Board Chairperson Neil Peterson, who added it’s also important that the state fix the formula that led to the initial error.
In a press release, Sen. Mark Johnson (R-East Grand Forks) noted the state tax bill requires the Minnesota Department of Revenue to review the process by which utility and pipeline properties are valued.
In 2018, the Minnesota Tax Court ruled MDR had overvalued Enbridge’s pipeline system through 13 counties in Minnesota. According to Enbridge, the total settlement to resolve the state’s miscalculation is nearly $47 million. Of that amount, $29 million is the local government share.
Enbridge released a statement saying, “From the beginning, we have acknowledged that counties were caught in the middle of this tax valuation issue, and have been committed to working with them to ensure undue hardship does not result. In coming to this agreement, Enbridge did make concessions for taxes in 2017 and 2018 and forgave interest for those years. We are pleased to have come to an equitable conclusion to this issue.”
Many counties, including Pennington County, earlier passed resolutions saying that MDR should be responsible for the payment since it caused the assessment error.
In Pennington County’s case, it was estimated that Enbridge was owed somewhere in the neighborhood of $2.4 million. With interest, the amount was expected to be $3 million.
If the county had been forced to refund the full amount on its own, the county would have been forced to bill the Thief River Falls School District, townships and special taxing districts. The school district was expected to take the biggest hit – an estimated $407,000 plus interest. Earlier this month, Peterson said it would have financially broken two or three townships he represents.
Kittson, Marshall, Polk and Red Lake counties were also affected by the miscalculation. Marshall County would have had to refund the most money – $3 million – which didn’t include interest.
In its statement, Enbridge said, “Once the replaced Line 3 comes online, Enbridge will pay an additional $35 million in taxes in the first year of operation.”