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HF 4151

as introduced - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

KEY: stricken = removed, old language.
underscored = added, new language.
  1.1                          A bill for an act 
  1.2             relating to taxation; utility property; providing a 
  1.3             state paid refund to utilities for taxes on utility 
  1.4             personal property; exempting certain new utility 
  1.5             personal property from property tax; allowing certain 
  1.6             counties, cities, and towns to impose an optional fee 
  1.7             on certain utilities; requiring the public utilities 
  1.8             commission to adjust utility rates for reduced utility 
  1.9             property taxes; proposing coding for new law in 
  1.10            Minnesota Statutes, chapters 216B; 272; and 273. 
  1.12     Section 1.  [216B.071] [RATE ADJUSTMENT; REAL AND PERSONAL 
  1.14     Each electric utility, as defined in section 216B.38, 
  1.15  subdivision 5, subject to rate regulation by the public 
  1.16  utilities commission shall notify the commission of its 
  1.17  reduction in property tax obligation under section 272.028 and 
  1.18  the amount of any fees imposed by a local government under 
  1.19  section 273.372.  By December 1 of the year before the property 
  1.20  tax reduction is effective, the commission shall issue an order 
  1.21  reducing the utility's rates by the full amount of the tax 
  1.22  reduction.  The rate reduction must apply to each customer class 
  1.23  in the same proportion as the utility's revenue requirements is 
  1.24  reduced by the tax, thereby providing each customer class with 
  1.25  an equal percentage reduction in its rate.  The new rates must 
  1.26  be effective as of January 1 of the taxes payable year that the 
  1.27  property tax reduction is initially effective.  The commissioner 
  1.28  shall allow a utility to recover in its rates any fees imposed 
  2.1   under section 273.372. 
  2.2      Sec. 2.  [272.028] [PERSONAL PROPERTY USED TO GENERATE 
  2.4      In the case of a new generating plant built after the day 
  2.5   following final enactment, personal property used to generate 
  2.6   electric power is exempt.  For purposes of this section, 
  2.7   "personal property" means tools, implements, and machinery of 
  2.8   the generating plant.  This exemption does not apply to 
  2.9   transformers, transmission lines, distribution lines, or any 
  2.10  other tools, implements, and machinery that is part of an 
  2.11  electric substation, wherever located. 
  2.12     In the case of a plant existing or under construction 
  2.13  before the day following final enactment a partial exemption 
  2.14  applies if the nameplate capacity of the plant is increased from 
  2.15  that existing on the day of final enactment.  This exemption 
  2.16  must be computed by taking the increase in megawatts over the 
  2.17  total megawatt nameplate capacity after construction is 
  2.18  complete, multiplied by the cost of all taxable tools, 
  2.19  implements, and machinery of the generating plant. 
  2.20     Sec. 3.  [273.372] [OPTIONAL FEE; COUNTY, CITY, AND TOWN.] 
  2.21     A local government may impose, by ordinance, a fee on a 
  2.22  utility whose personal property is exempt under section 272.028 
  2.23  and is located within the local government's boundaries.  If the 
  2.24  local government decides to impose a fee under this section, 
  2.25  they shall negotiate the fee with the utility prior to the 
  2.26  construction of the new facility.  The fee may be for a defined 
  2.27  number of years or in perpetuity and may be a specified amount 
  2.28  subject to the maximum imposed by this section or may be for a 
  2.29  percentage of the maximum amount.  
  2.30     The commissioner of revenue shall determine the market 
  2.31  value of the property that was exempted under section 272.028 
  2.32  for the year that the property was placed in service and shall 
  2.33  also determine what the local government's tax rate would have 
  2.34  been if that personal property were not exempt.  The 
  2.35  commissioner shall certify the total exempt market value and the 
  2.36  resulting tax rate to the local government in which the property 
  3.1   is located.  The maximum annual fee allowed under this section 
  3.2   is equal to the market value as certified by the commissioner, 
  3.3   multiplied by the appropriate class rate for the current taxes 
  3.4   payable year, multiplied by the tax rate as certified by the 
  3.5   commissioner.  The local government shall notify the utility of 
  3.6   the amount of the fee, time of payment, and any relevant factors 
  3.7   relating to the fee's computation.  
  3.8      For purposes of this section, "local government" means a 
  3.9   county, a statutory or home rule charter city, or a town, 
  3.10  including a town operating under chapter 368. 
  3.11     Sec. 4.  [273.373] [PROPERTY TAX REFUNDS; UTILITY 
  3.13     (a) Beginning in 2002 a refund is allowed for the property 
  3.14  taxes levied on qualifying utility personal property.  The 
  3.15  refund is equal to the full amount of the property taxes levied 
  3.16  for the current taxes payable year and paid by the utility on 
  3.17  the qualifying utility personal property. 
  3.18     (b) Within seven days after the utility has paid its May 15 
  3.19  property tax payment and its October 15 property tax payment, 
  3.20  the county treasurer shall furnish the utility with a statement 
  3.21  that the amount of taxes due and payable on all real and 
  3.22  personal property has been paid, and the amount of those taxes 
  3.23  paid which are on the qualifying personal property. 
  3.24     (c) For purposes of this refund, "qualifying utility 
  3.25  personal property" means the tools, implements, machinery, and 
  3.26  equipment of an electric generation system. 
  3.27     (d) The utility may apply to the commissioner of revenue 
  3.28  for a refund and shall furnish the commissioner with a copy of 
  3.29  the statement from the county treasurer verifying that the 
  3.30  property tax payment was timely paid, the amount of that 
  3.31  property tax payment for the qualifying utility personal 
  3.32  property, and any additional information the commissioner deems 
  3.33  necessary. 
  3.34     (e) The commissioner shall issue a refund to the utility 
  3.35  within 30 days of receipt of the utility's application for each 
  3.36  of the refunds. 
  4.1      (f) An amount sufficient to pay refunds under this section 
  4.2   is appropriated to the commissioner from the general fund. 
  4.3      Sec. 5.  [EFFECTIVE DATE.] 
  4.4      Section 1 is effective for rate adjustments made January, 
  4.5   2001, and thereafter.  Section 3 is effective for fees imposed 
  4.6   beginning in 2002.