Senate panel hears sales-tax exemption to help fund Woodbury PFAS water treatment project

The Minnesota Senate Taxes Committee on Feb. 20 heard Senate File 13, a bill to exempt and refund state sales tax on materials and supplies used to build a new Woodbury water treatment plant, water tower and associated pipelines, with eligible purchases dated Jan. 31, 2024, through Dec. 1, 2028.

The measure, carried by Senator Sarah Mitchell, targets work tied to PFAS contamination in the East Metro and is intended to reduce project costs for Woodbury residents. "This bill relates to a new water treatment facility and water tower, based on the fact that the East Metro, particularly Woodbury, has had problems with pollution PFAS in our water," Mitchell told the committee.

Mary Van Milligan, director of public works for the City of Woodbury, described the project as a long-term PFAS treatment solution that includes a permanent treatment plant, a water tower and roughly 17 miles of pipeline. She said the city has built temporary treatment facilities and expects the 3M settlement to cover a portion of costs but still faces a funding gap of "up to $35,000,000".

"Eliminating the sales tax on city-funded materials, supplies and equipment used in the construction of our water treatment plant, water tower, and pipelines would be a step in that direction," Van Milligan said, asking the committee to pass SF13 as a refundable exemption for construction materials.

The committee laid Senate File 13 over for possible inclusion in the omnibus tax bill; no final vote on the bill’s merits occurred in the hearing.

The bill would direct refunds under Department of Revenue procedures and appropriate funds to the commissioner of revenue for that purpose.