Date: March 11, 2026

To: State Tax Commission

Via: Joycelyn Isenberg, Executive Director

From: Darcy Marusich, Property Services Division

Subject: Request Approval of Capitalization Rates for 2026 State Assessment

Property Services Division staff is recommending the approval of the following Capitalization Rates for 2026 to be used in the preparation of the assessments for railroad and railcar companies on the State Assessed Utility Roll. These rates have been developed using the methodology used in prior years and they reflect the relatively strong competitive position of the Michigan railroads. The requested rates are as follows:

Class 1 Railroads: Cap Rate of 8.91%

Short Line Railroads: Cap Rate of 9.77%

Very Short Line Railroads: Cap Rate of 10.80%

Railcar Company: Cap Rate of 8.91%