Friends and neighbors,

Media sources are reporting that Enbridge prevailed in Minnesota Tax Court and that counties need to brace for a fiscal hit. This issue has been bouncing between the Tax Court and the Minnesota Supreme Court now for a few years. This all started when Enbridge challenged the assessed value determined by the Minnesota Department of Revenue. The first ruling from the Tax Court came in 2018 showing that the Department of Revenue had consistently overvalued the pipelines starting in 2012.

The Minnesota Department of Revenue assesses the value of pipelines along with other utilities and railroads and passes this information along to our counties to process and collect their property tax. In 2012 the assessed value of these pipelines increased dramatically, and Enbridge challenged the values. The Department of Revenue has testified that the last time they made any changes to the way they assess these properties was in 2008. Well, they definitely changed something in 2012 but will not disclose it.

I have presented bills in front of our Tax Committee in prior years for this issue and will be drafting another bill as soon as we have the final numbers. The bill is to make the Department of Revenue responsible for the tax refund payments to Enbridge and not our counties, cities, townships, and school districts, who did absolutely nothing wrong. This issue keeps bouncing back and forth between the Minnesota Tax Court and the Minnesota Supreme Court. And we expect it to be appealed back to the Supreme Court again after this latest March 9th ruling coming from the Tax Court.

At some point this will end, and we will know what we must deal with. The problem lies within the Minnesota Department of Revenue and Enbridge just did what any responsible business would do when they see a problem. They expose it! Pipelines, like the other utilities and railroads operate across state lines and when every other state values their respective infrastructure at a much lower rate, the businesses ask questions and appeal the assessed value. That brings us to where we are at today. Stay tuned!

LEGISLATIVE RECAP

Bills regarding education, reverse mortgages and natural gas/polar vortex made headlines during a very busy week at the Legislature.

On Monday, the Minnesota Senate approved a series of bills to support kids, families, and teachers as they attempt to recover from learning loss suffered during Gov. Walz’s COVID-19-related school closures.

• These bills will provide an accurate measure of how COVID-19 has affected student progress by requiring all students to be administered annual Minnesota Comprehensive Assessments (MCAs)
• It gives students an opportunity to regain lost ground by pausing the creation and implementation of new educational standards; address teacher shortages by opening the door to more qualified substitutes, and ease budget pressures by granting local schools more flexibility

Senate File 628 will guarantee that families, teachers, and policymakers have an accurate measure of student regression from COVID-19 by requiring the Department of Education (MDE) to administer statewide MCAs during the spring of 2021, regardless of whether students are participating in distance, hybrid, or in-person learning.

• MCAs are the state’s only objective, statewide measure of student progress in core academic subjects. The assessments were canceled last year. 

Senate File 438 allows students, families, teachers, and MDE to focus all of their effort and energy on recovering from Covid-19 by suspending, until 2023, the development or implementation of any new state-mandated academic standards.

Senate File 710 allows a school district to redirect any reserved or restricted revenue to another use during the 2021 fiscal year.

• Immediately provides critical flexibility for local school districts so that they can best serve our kids. Moving to distance learning has put a large strain on the budgets of many school districts. This bill allows schools all across Minnesota to use the funds that they already have in a way that will best impact our students
• The bill also requires the school board to adopt a written resolution to approve the amount that would be redirected and how the funds will be used in order to uphold transparency and accountably of taxpayer dollars
• The relaxed restrictions will give school districts more flexibility to manage potential budget pressures

Senate File 819 addresses a growing shortage of short-term substitute teachers by expanding the pool of qualified applicants for “short-call” substitute teachers with a pilot program.

• After a year of distance learning, it is massively important to make it as easy as possible for our children to learn in a classroom. When we, as legislators, go out into our districts we need to listen. Our school districts are asking for the ability to fill their classrooms and to make their own hiring decisions
• Expanding the availability of short-call substitutes has been a demand from local school districts for years. A short-call substitute can fill in a classroom for up to 15 days. This legislation returns control to the communities and allows them to make decisions about what’s best in their classrooms. School officials across the state advocated for this bill and helped to get it through the Senate

At this point, we are all familiar with the pain and hardship that school closures have caused students. The Senate is taking the smart steps necessary to help students catch their breath and recover from some of the worst side effects of COVID-19.

On Thursday, the Minnesota Senate passed two bills with true bipartisan support – not one senator voted against either bill.

Senate File 531 requires a reverse mortgage loan servicer to send communications regarding delinquencies, defaults, and unfulfilled obligations to a third-party designee, if the borrower has chosen one.

• It also allows a servicer to mail the communications to a third-party designee concurrently with those sent to the borrower or email the third-party designee if the borrower fails to respond to the initial mailed communication
• Under this proposed law, a 3rd party (e.g. family member) can receive written communications regarding delinquencies, defaults, obligations that may result in a foreclosure
• Since there’s been a growing number of seniors that have been using reverse mortgage loans, defaults have been on the rise

It’s a good bill designed to help prevent defaults for the elderly and provides an extra layer of protection for our seniors.

Senate File 1018 establishes a 2021 Polar Vortex Loan Account for municipal utilities that purchased natural gas during the extreme weather that hit the U.S. last month.

• Due to varying factors from the polar vortex that occurred from February 12-17, the price of natural gas had an unprecedented price surge for Texas and all the Midwest. In Minnesota, all natural gas utilities were hit by this price surge, while also coinciding with a cold snap, meaning consumers were using more and paying a higher rate for the natural gas
• The bill provides $15 million from the General Fund for zero-interest loans for utility providers to ensure that consumers don’t see skyrocketing prices on their next bill
• Loan account will allow municipal entities to spread the cost out over 5 years while still keeping the heat on for their consumers. Could lead to customers’ bills tripling (akin to budgeting $50 for your standard utilities payment only to realize the bill is actually for $600)

This bill provides much-needed relief for our utilities and ensures that they have the flexibility to protect consumers from bills that are as much as ten times their usual charge.


Fun stuff to break up the doom & gloom:

March 25 – National Waffle Day and National Pecan Day
March 27 – Passover begins at Sundown to celebrate the freeing of the Jews from Egyptian rule around 3000 years ago
March 28 – Palm Sunday – the beginning of the Holy week leading to Easter and commemorates Jesus’s triumphant entry into Jerusalem where people put palms down in front of his path

• Fun fact: the ashes you receive on Ash Wednesday are from (i.e. symbolize) the prior year’s palms

March 29 – National Vietnam War Veterans Day – a day to thank and honor our nation’s Vietnam veterans and their families for their service and sacrifice
March 30 – National Doctor’s Day
April 1 – April Fool’s Day
April 2 – Children’s Book Day
April 2 – Good Friday – commemorates when Jesus died on the cross
April 3 – Pony Express begins delivering mail in 1860
April 4 – Easter Sunday


That’s all for this week’s update.

Please note that the Legislature will be on Easter / Passover break until Monday April 5. Session will resume on Tuesday April 6.

Please do not hesitate to reach out to me to share any thoughts, concerns, or questions you may have. I can be reached by phone at 651-296-9651 or by email at sen.paul.utke@senate.mn

Happy Easter!
Paul Utke