HF 3470

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 04/04/2016 04:22pm

A bill for an act
relating to local government; providing for notice, hearing, and reverse
referendum on whether a municipality may use public utility license, permit,
rights, or franchise fees to raise revenue; amending Minnesota Statutes 2014,
section 216B.36.

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

Section 1.

Minnesota Statutes 2014, 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 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 Reverse referendum on fees to raise revenues. new text end

new text begin (a) Before a municipality
imposes a fee under subdivision 1 that raises revenue beyond what is needed to defray
increased municipal costs due to utility operations, the municipality must establish separate
accounts for the portion of the fee that is to defray city costs and the portion that is to be
used for other purposes. The municipality must include in its ordinance or license, permit,
or agreement with the public utility what constitutes a cost to the city and how shortfalls
or surpluses in the account to defray city costs will be addressed. The municipality must
identify in its ordinance the uses of the portion of the fee that is for purposes other than to
defray city costs, and publish a notice that explains the fee, including at a minimum its
uses; that the public utility is likely to pass the fee on to customers and how much that may
increase customers' utility bills; 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 what revenue raised from another source will cost those paying it.
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. Following publication and prior to 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 (b).
new text end

new text begin (b) 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 EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to fees due for licenses, permits, rights, or franchises issued or renewed under
this section on or after July 1, 2016.
new text end