Bill would expand partial property-tax exemption for airport-leased manufacturing hangars in mid-sized cities

House File 443, sponsored by Representative Kozlowski, would expand property-tax treatment for airport-leased property by permitting a 50% exemption for manufacturing hangars used in aircraft manufacturing at airports in cities with populations between 50,000 and 150,000 for a 10-year term.

Representative Kozlowski said current law treats airport property leased for business purposes as taxable even when the airport is publicly owned; that redundancy can discourage investment. Tom Werner (testifying remotely), executive director of the Duluth Airport Authority, told the Committee the Duluth aviation cluster produces significant economic impact—he cited a figure of $1.4 billion in annual economic impact and more than 4,000 jobs tied to airport-centered activity—and argued the exemption would be a useful economic-development tool to attract and retain aviation manufacturing jobs.

Supporters said the bill is inspired by an existing full exemption for airports in cities under 50,000 and would extend a partial (50%) exemption to larger regional centers such as Duluth, St. Cloud and Rochester. Members from affected cities said they had been kept informed of the proposal; Rochester indicated neutrality but members from Duluth praised the bill. Questions from committee members focused on which airport facilities are affected and how existing exemptions operate; a House Research staff member clarified the bill’s narrow change relating to manufacturing hangars.

Representative Kozlowski renewed the motion to lay HF443 over for possible inclusion in the 2025 omnibus tax bill; the motion carried by voice vote.