HF 1146

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 03/09/2017 10:52am

A bill for an act
relating to local government; providing for notice and referendum on whether a
municipality may use public utility license, permit, rights, or franchise fees to raise
revenue; amending Minnesota Statutes 2016, section 216B.36.

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

Section 1.

Minnesota Statutes 2016, section 216B.36, is amended to read:

216B.36 MUNICIPAL REGULATORY AND TAXING POWERS.

new text begin Subdivision 1. new text end

new text begin Municipal authority to regulate public utilities. new text end

Any public utility
furnishing the utility services enumerated in section 216B.02 or occupying streets, highways,
or other public property within a municipality may be required to obtain a license, permit,
right, or franchise in accordance with the terms, conditions, and limitations of regulatory
acts of the municipality, including the placing of distribution lines and facilities underground.
Under the license, permit, right, or franchise, the utility may be obligated by any municipality
to pay to the municipality fees to raise revenue or defray increased municipal costs accruing
as a result of utility operations, or both. new text begin A fee that raises revenue under a license, permit,
right, or franchise agreement entered into or renewed on or after August 1, 2017, is subject
to the requirements of subdivision 2. new text end The fee may include but is not limited to a sum of
money based upon gross operating revenues or gross earnings from its operations in the
municipality so long as the public utility shall continue to operate in the municipality, unless
upon request of the public utility it is expressly released from the obligation at any time by
such municipality. Notwithstanding the definition of "public utility" in section 216B.02,
subdivision 4, a municipality may require payment of a fee under this section by a cooperative
electric association organized under chapter 308A that furnishes utility services within the
municipality. All existing licenses, permits, franchises, and other rights acquired by any
public utility or municipality prior to April 11, 1974, including the payment of existing
franchise fees, shall not be impaired or affected in any respect by the passage of this chapter,
except with respect to matters of rate and service regulation, service area assignments,
securities, and indebtedness that are vested in the jurisdiction of the commission by this
chapter. However, in the event that a court of competent jurisdiction determines, or the
parties by mutual agreement determine, that an existing license, permit, franchise, or other
right has been abrogated or impaired by this chapter, or its execution, the municipality
affected shall impose and the public utility shall collect an excise tax on the utility charges
which from year to year yields an amount which is reasonably equivalent to that amount of
revenue which then would be due as a fee, charges or other thing or service of value to the
municipality under the franchise, license, or permit. The authorization shall be over and
above taxing limitations including, but not limited to, those of section 477A.016. Franchises
granted pursuant to this section shall be exempt from the provisions of chapter 80C. For
purposes of this section, a public utility shall include a cooperative electric association.

new text begin Subd. 2. new text end

new text begin Five-year renewal; reverse referendum. new text end

new text begin (a) A municipality may impose a
fee under subdivision 1 to raise revenue beyond what is needed to defray increased municipal
costs due to utility operations for up to a five-year period, following the procedures in this
subdivision.
new text end

new text begin (b) The municipality must include in its ordinance or license, permit, or franchise
agreement with the public utility what constitutes a cost to the city.
new text end

new text begin (c) The municipality must identify in its ordinance or license, permit, or franchise
agreement the uses of the portion of the fee that is for purposes other than to defray city
costs. The municipality must publish a notice that explains:
new text end

new text begin (1) the fee and its intended uses;
new text end

new text begin (2) that the public utility is likely to pass the fee on to customers and how much that
may increase customers' utility bills;
new text end

new text begin (3) that alternatives to the revenue-raising portion of the fee are to raise the revenue
from another source available to the municipality or forego planned uses of the revenue;
and
new text end

new text begin (4) what revenue raised from another source will cost those paying it.
new text end

new text begin The notice must be published at least once each week for two consecutive weeks in the
official publication of the municipality and must remain posted on the municipality's Web
site throughout the notice period. The notice must also be sent to all affected ratepayers by
either first class mail by the municipality or by including the notice in the affected ratepayers'
billings.
new text end

new text begin (d) Following publication and before imposing the fee, the municipality must provide
an opportunity at its next regular meeting for public comment relating to the issue. No
sooner than 90 days after the public comment opportunity, the municipality may proceed
with imposing the fee, unless a petition is filed as provided in paragraph (e).
new text end

new text begin (e) Within 90 days after the meeting held by the municipality at which public comment
was accepted, a petition requesting a referendum may be filed with the chief clerical officer
of the municipality. The petition must be signed by at least five percent of the registered
voters in the municipality. The petition must meet the requirements of the secretary of state,
as provided in section 204B.071, and any rules adopted to implement that section. If the
petition is sufficient, the question of whether the municipality may impose a fee that raises
revenue as provided in subdivision 1 must be placed on the ballot at the next general election.
If a majority of the voters voting on the question votes in favor of using the fee to raise
revenue, the municipality may proceed with imposing the fee.
new text end

new text begin (f) If a license, permit, right, or franchise agreement is entered into or renewed before
August 1, 2017, and by its terms and the ordinance authorizing it, will be in effect after
August 1, 2022, the municipality must follow the procedures in this subdivision to provide
notice, a public hearing, and opportunity for a petition for a referendum by August 1, 2022.
new text end

new text begin (g) Except as provided in paragraph (f), this subdivision applies to a license, permit,
right, or franchise agreement entered into or renewed on or after August 1, 2017.
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