HF 3944

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/30/2022 12:52pm

A bill for an act
relating to energy; responding to the polar vortex in February 2021; allowing a
refundable individual income tax credit for excess energy costs due to extreme
cold weather in February 2021; requiring utilities to disclose certain information;
providing certain grants to public utilities; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin POLAR VORTEX RESPONSE; DISCLOSURE OF COSTS;
REIMBURSEMENT FOR RESERVE FUNDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Critical period" means the period beginning February 12, 2021, and ending February
17, 2021.
new text end

new text begin (c) "Incremental cost" means the incremental cost of natural gas purchased during the
critical period, calculated by multiplying the utility's incremental price by its impacted
volume.
new text end

new text begin (d) "Incremental price" means the average unit price a utility paid for natural gas
purchased for immediate delivery during the critical period, minus the average natural gas
unit price for wholesale natural gas the utility paid during the period between February 5,
2021, and February 10, 2021.
new text end

new text begin (e) "Impacted volume" means the volume of natural gas a utility purchased for immediate
delivery in Minnesota during the critical period.
new text end

new text begin (f) "Utility" means a nonprofit municipal utility established under Minnesota Statutes,
chapter 412, that (1) is owned by the city to which it provides service, and (2) sells natural
gas to retail customers in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin Utilities must disclose increased energy costs. new text end

new text begin No later than July 1, 2022, a
utility must calculate, for each of its customers that received natural gas service during the
critical period, the incremental price multiplied by the volume of natural gas consumed by
the customer during the critical period. The utility must certify and forward that calculation
in a written notice to each customer.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement for reserve revenues. new text end

new text begin A utility that paid for wholesale natural
gas purchased during the critical period, in whole or in part, by drawing down accumulated
reserve revenues may apply to the commissioner of commerce for a rebate equal to its
incremental cost minus any payment of its incremental cost by natural gas customers. The
commissioner shall require a utility to submit evidence supporting the rebate request amount
with a rebate application.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin $35,000,000 in fiscal year 2023 is appropriated from the general
fund to the commissioner of commerce for the purpose of making rebates to municipal
utilities under subdivision 3. This is a onetime appropriation. Any unexpended funds
remaining on December 31, 2022, cancel to the general fund.
new text end

Sec. 2. new text begin TAX CREDIT FOR EXCESS ENERGY COSTS DUE TO THE POLAR
VORTEX.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Excess energy costs" means the amount of energy costs disclosed to a taxpayer by
a utility under section 1, subdivision 2.
new text end

new text begin (c) The definitions in section 1, subdivision 1, and Minnesota Statutes, section 290.01,
apply for this section.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual income taxpayer is allowed a credit against
the tax due under Minnesota Statutes, chapter 290, equal to the amount of the taxpayer's
excess energy costs.
new text end

new text begin (b) Credits allowed to a partnership, a limited liability company taxed as a partnership,
or an S corporation are passed through pro rata to the partners, members, or shareholders
based on their share of the entity's income for the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin (a) If the amount of credit which a taxpayer would be
eligible to receive under this section exceeds the claimant's tax liability under Minnesota
Statutes, chapter 290, the excess amount of the credit shall be refunded to the claimant by
the commissioner of revenue.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner of revenue from the general fund.
new text end

new text begin Subd. 4. new text end

new text begin Denial of double benefit. new text end

new text begin For a taxpayer who deducted excess energy costs in
calculating adjusted gross income and claimed the credit under this section, the amount of
excess energy costs is an addition, as defined in Minnesota Statutes, section 290.0131,
subdivision 1. The rules governing additions in that section apply for this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2020, and before January 1, 2022.
new text end

Sec. 3. new text begin ESTABLISHMENT OF ACCOUNT.
new text end

new text begin The polar vortex restitution account is established in the special revenue fund of the
state treasury. The commissioner of management and budget shall manage the account and
shall credit to the account all appropriations and transfers to the account. Funds remaining
in the account at the end of a fiscal year do not cancel to the general fund but remain in the
account until expended.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin APPROPRIATION; CUSTOMERS OF PUBLIC UTILITIES.
new text end

new text begin $....... in fiscal year 2023 is appropriated from the general fund to the commissioner of
management and budget for deposit in the polar vortex restitution account established in
section 3 for the purpose of distributing the funds to public utilities, as defined in Minnesota
Statutes, section 216B.02, subdivision 4, in order to mitigate the price impacts on customers
who received natural gas service during the critical period, as defined in section 1. The
Public Utilities Commission shall issue orders determining the amount of each public utility's
prudently incurred expenses during the critical period and the commissioner of management
and budget shall distribute the money to public utilities in a grant according to the terms of
the orders. This is a onetime appropriation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end