Minnesota Administrative Rules
Agency 181 - Revenue Department
Chapter 8106 - RAILROAD VALUATION
Part 8106.0100 - DEFINITIONS

Subpart 1. Scope.

As used in this chapter, the following words, terms, and phrases have the meanings given to them by this part. Some of the words, terms, and phrases are defined by statute but are included here for completeness.

Subp. 2. Allocation.

"Allocation" means the process by which a fair and reasonable portion of each railroad's total unit value is assigned to Minnesota for purposes of taxation.

Subp. 3. Apportionment.

"Apportionment" means the process of distributing that portion of the railroad's unit value which has been allocated to Minnesota after deducting exempt and nonoperating property to the various counties and taxing districts in which the railroad company operates.

Subp. 4. Assessment/sales ratio.

"Assessment/sales ratio" means the ratio derived by dividing the estimated market value of a property by its adjusted selling price and used as a measure of the level of estimated market value to real or true market value.

Subp. 5. Book depreciation.

"Book depreciation" means the depreciation shown by a railroad company on its corporate books and allowed the company by the Surface Transportation Board.

Subp. 6. Capitalization rate.

"Capitalization rate" means an anticipated rate of return from an investment, a rate at which income is processed (capitalized) to indicate the probable capital value. This rate is usually expressed as a percentage.

Subp. 7. Equalization.

"Equalization" means the adjustment of the estimated market value of railroad operating property to the apparent assessment/sales ratio of commercial and industrial property.

Subp. 8. Exempt property.

"Exempt property" means property which is nontaxable for ad valorem tax purposes by statutes. An example of such property is personal property exempt from taxation under Minnesota Statutes, chapter 272.

Subp. 9. [Repealed, 28 SR 1297]

Subp. 10. Mainline track.

"Mainline track" means all track reported to the STB by the respondent railroad as main line.

Subp. 11. [Repealed, L 2003 c 127 art 5 s 50]

Subp. 12. Obsolescence allowance.

"Obsolescence allowance" means the adjustment to be made to the gross cost indicator of value to reflect the loss of economic usefulness or value because of causes other than physical deterioration.

Subp. 13. Operating property.

"Operating property" means all property owned or used on a regular and continual basis by a railroad company in the performance of railroad transportation services, including without limitation, franchises, rights-of-way, bridges, trestles, shops, docks, wharves, buildings, and structures.

Subp. 14. Original cost.

"Original cost" means the amount paid for an asset as recorded on the railroad's books in accordance with STB accounting rules and regulations.

Subp. 15. [Repealed, L 2003 c 127 art 5 s 50]

Subp. 16. [Repealed, L 2003 c 127 art 5 s 50]

Subp. 17. Restated cost.

"Restated cost" means the cost of an asset recorded on a railroad's books after adjusting the amount from a retirement-replacement-betterment accounting basis to a depreciation accounting basis, in accordance with Code of Federal Regulations, title 49, part 1201 (effective January 1, 1983).

Subp. 17a. STB.

"STB" means the Surface Transportation Board, a federal regulatory agency.

Subp. 18. Structure.

"Structure" means all coal and ore wharves or docks, station houses, depots, shops, office buildings, and all other buildings with a restated cost of over $10,000.

Subp. 19. System.

"System" means the total tangible property, real and personal, of a company which is used in its railroad operations in all states in which it operates.

Subp. 20. Unit value.

"Unit value" means the value of the system of a railroad company taken as a whole without any regard to the value of its component parts.

Subp. 21. Weighting.

"Weighting" means the confidence or reliability given to a factor or indicator. It is usually expressed as a portion of 100 percent.