The Enbridge tax settlement case that could have resulted in 13 Minnesota counties – including Hubbard County – paying nearly $30 million has reached a conclusion, with the Minnesota Legislature agreeing to pay all of the $47 million owed to Enbridge after it was determined that the company's pipeline properties had been overvalued in numerous years.
The 13 counties the pipeline system runs through are Beltrami, Aitkin, Carlton, Cass, Clearwater, Hubbard, Itasca, Kittson, Marshall, Pennington, Polk, Red Lake and St. Louis.
Enbridge's tax case started when the company appealed its state-assessed property tax valuation by the Minnesota Department of Revenue (DOR) from 2012 to 2018 to the Minnesota Tax Court.
The court ruled in favor of Enbridge for the years 2012-2016, and in coming to the recent agreement, Enbridge said in a statement they made "concessions for taxes in 2017 and 2018 and forgave interest for those years."
Enbridge also agreed to pay an additional $35 million in taxes in the first year of operation following completion of the Line 3 pipeline.
The legislation passed on July 1 allows the state to pay the county, township and school district portions of money owed to Enbridge as a result of the tax court’s decisions.
"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," Enbridge said in a statement. "We are pleased to have come to an equitable conclusion to this issue."
The DOR is responsible for assessing the value of utility companies in Minnesota, not county agencies or assessors, leading Hubbard County officials to ask that the state step in to pay local entities’ share of the tax refund.
Hubbard County Auditor-Treasurer Kay Rave estimated the tax amount that local government entities would have had to refund Enbridge:
Hubbard County $220,828
Farden and Helga townships $79,934
Bemidji and Cass Lake-Bena school districts $166,938
Special taxing districts (Hubbard County Housing and Redevelopment Authority and Headwaters Regional Development Commission) $5,935
The Hubbard County Board had a resolution prepared to pass at its July 6 meeting, urging the Minnesota Legislature to find a financial solution. The resolution stated, “Hubbard County does not have adequate reserves to pay this obligation and it would need to resort to bonding and/or significantly increased taxes on all property owners in the county, subsequently causing a ripple effect on taxpayers and affected entities.”
Rave said she is “eager to calculate the new data, so that we know the final amounts and how it will affect our taxing entities.