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Lawmakers believe pipelines will follow tax exemptions

State resources have been used in past years to help broadband providers build infrastructure in unserved areas of the state. Lawmakers are now looking to use a similar strategy to bring natural gas providers to rural Minnesota.

Sponsored by Rep. Matt Bliss (R-Pennington), HF4063 would provide a 12-year property tax exemption for pipelines constructed after 2017 and located in areas not currently receiving natural gas services.

The bill was held over by the House Property Tax and Local Government Finance Division Monday for possible omnibus bill inclusion. Its companion, SF3735, sponsored by Sen. Mark Johnson (R-East Grand Forks), awaits action by the Senate Taxes Committee.

Bliss said the bill tries to address one of Greater Minnesota’s emerging economic problems: It is cost-prohibitive to extend natural gas services to many rural communities. Walker Mayor Jed Shaw said his community has struggled to attract natural gas services for more than 20 years.

“Because of the costs of such an endeavor, we have never been able to accomplish this goal, it was simply too expensive,” Shaw said.  “… No one single act will have as broad or positive an economic impact as this will.”

In addition to serving community members, supporters of the bill believe newly installed natural gas services will bring industry and development to rural areas.

“You’ll see investment in housing, in small businesses like metal fabrication and plastic extrusion, in new poultry operations and other businesses in these small towns,” said Tim Thompson, CEO of Lake Region Electric Cooperative. “It helps businesses prosper, it helps the whole community prosper.”

The period of 12 years was chosen because it gives providers enough time to begin recovering capital costs and paying off debt, making it more feasible to remain in operation. 

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