SF 1268

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to public utilities; authorizing electric 
  1.3             utilities to charge an electric utility personal 
  1.4             property tax replacement fee in lieu of including its 
  1.5             ad valorem personal property taxes in the utility's 
  1.6             electric rates; exempting certain personal property 
  1.7             initially assessed after January 2, 1997; amending 
  1.8             Minnesota Statutes 1996, sections 216B.16, subdivision 
  1.9             7; 272.02, subdivision 1; and 273.13, subdivision 31; 
  1.10            proposing coding for new law in Minnesota Statutes, 
  1.11            chapter 216B. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1996, section 216B.16, 
  1.14  subdivision 7, is amended to read: 
  1.15     Subd. 7.  [ENERGY COST ADJUSTMENTS.] Notwithstanding any 
  1.16  other provision of this chapter, the commission may permit a 
  1.17  public utility to file rate schedules containing provisions for 
  1.18  the automatic adjustment of charges for public utility service 
  1.19  in direct relation to changes in:  (1) federally regulated 
  1.20  wholesale rates for energy delivered through interstate 
  1.21  facilities; (2) direct costs for natural gas delivered; or (3) 
  1.22  costs for fuel used in generation of electricity or the 
  1.23  manufacture of gas.  The commissioner shall also permit a public 
  1.24  utility to file rate schedules containing provisions for the 
  1.25  automatic adjustment of charges for public utility services for 
  1.26  the electric utility personal property tax replacement fee 
  1.27  established in section 216B.169, if the utility elects to charge 
  1.28  the fee under that section. 
  2.1      Sec. 2.  [216B.169] [ELECTRIC UTILITY PERSONAL PROPERTY TAX 
  2.2   REPLACEMENT FEE.] 
  2.3      Subdivision 1.  [DEFINITIONS.] For purposes of this 
  2.4   section, the following terms shall have the meanings given. 
  2.5      (a) "Electric utility" has the meaning given to it by 
  2.6   section 216B.38, subdivision 5. 
  2.7      (b) "Electric utility personal property" means all personal 
  2.8   property which is part of a utility's electric generating, 
  2.9   transmission, or distribution system. 
  2.10     (c) "Electric utility personal property tax replacement fee"
  2.11  means the fee which an electric utility may elect to impose on 
  2.12  the ultimate use of electric energy in Minnesota in lieu of 
  2.13  including in the utility's rates the amount of ad valorem taxes 
  2.14  levied upon the utility's electric utility personal property. 
  2.15     Subd. 2.  [ELECTION.] An electric utility may elect to 
  2.16  charge its customers a uniform electric utility personal 
  2.17  property tax replacement fee established according to this 
  2.18  section.  The utility shall exercise this election by notifying 
  2.19  the commissioner of revenue and the public utilities commission 
  2.20  of the utility's decision by January 1 of the first year in 
  2.21  which the election is to be effective.  This election is 
  2.22  irrevocable. 
  2.23     Subd. 3.  [RATE OF FEE.] (a) If an electric utility elects 
  2.24  to impose an electric utility personal property tax replacement 
  2.25  fee under subdivision 2, the utility shall determine the rate of 
  2.26  the fee.  The rate shall be equal to the ratio of (1) the ad 
  2.27  valorem taxes levied on the utility's electric utility personal 
  2.28  property for the current taxes payable year, to (2) the electric 
  2.29  utility's expected gross receipts for the current year from the 
  2.30  sale of electric energy purchased by an ultimate consumer for 
  2.31  use in Minnesota, including wheeling charges.  The rate shall be 
  2.32  expressed as a percentage. 
  2.33     (b) The electric utility shall certify the rate determined 
  2.34  in paragraph (a) to the commissioner of revenue, along with any 
  2.35  information the commissioner deems necessary.  The commissioner 
  2.36  shall verify that the property tax amount used in the 
  3.1   computation of the rate uses only that portion of the electric 
  3.2   utility's property taxes paid on the electric utility personal 
  3.3   property.  The commissioner of revenue must approve the electric 
  3.4   utility personal property tax replacement fee prior to its 
  3.5   imposition.  That fee must be uniform for all customers and for 
  3.6   all customer classes. 
  3.7      (c) If the annual gross receipts of the electric utility or 
  3.8   the electric utility's collection of the electric utility 
  3.9   personal property tax replacement fee results in either a 
  3.10  surplus or deficiency of funds with regard to the revenues from 
  3.11  the imposition of that fee, the electric utility shall consider 
  3.12  the amount of the surplus or deficiency when calculating the 
  3.13  electric utility personal property tax replacement fee which 
  3.14  will be imposed in the following year. 
  3.15     (d) An electric utility that exercises the election under 
  3.16  subdivision 2 shall show the electric utility personal property 
  3.17  tax replacement fee as a separate line item on the customer's 
  3.18  bill, and must designate it as the "electric utility personal 
  3.19  property tax replacement fee." 
  3.20     (e) An electric utility that exercises the election under 
  3.21  subdivision 2 shall impose the electric utility personal 
  3.22  property replacement fee beginning April 1 of the initial year 
  3.23  the election is effective.  On April 1 of each subsequent year, 
  3.24  the rate determined under paragraph (a) shall be revised to 
  3.25  adjust for changes in the electric utility's revenues, or on the 
  3.26  actual property taxes paid for electric utility personal 
  3.27  property. 
  3.28     Subd. 4.  [SEPARATE ACCOUNT.] An electric utility that is 
  3.29  exercising its election under subdivision 2 shall keep a 
  3.30  separate account of all revenues received from the electric 
  3.31  utility personal property tax replacement fee, and the personal 
  3.32  property taxes paid to the local government for the electric 
  3.33  utility personal property.  This account shall not be subject to 
  3.34  section 216B.10, and the public utilities commission shall not 
  3.35  consider this account or these revenues in any proceeding under 
  3.36  section 216B.16.  The commissioner of revenue may audit the 
  4.1   revenues derived from the electric utility personal property 
  4.2   replacement fee, and the personal property taxes paid by the 
  4.3   electric utility on the electric utility personal property. 
  4.4      Subd. 5.  [PUBLIC UTILITIES; RATES.] By April 1 of the year 
  4.5   in which the election under subdivision 2 is to be effective, 
  4.6   the commission shall adjust the tariffed rates of a public 
  4.7   utility exercising the election by an amount equal to the ad 
  4.8   valorem taxes levied on the electric utility personal property 
  4.9   tax of the electric utility for that year. 
  4.10     Sec. 3.  Minnesota Statutes 1996, section 272.02, 
  4.11  subdivision 1, is amended to read: 
  4.12     Subdivision 1.  All property described in this section to 
  4.13  the extent herein limited shall be exempt from taxation: 
  4.14     (1) All public burying grounds. 
  4.15     (2) All public schoolhouses. 
  4.16     (3) All public hospitals. 
  4.17     (4) All academies, colleges, and universities, and all 
  4.18  seminaries of learning. 
  4.19     (5) All churches, church property, and houses of worship. 
  4.20     (6) Institutions of purely public charity except parcels of 
  4.21  property containing structures and the structures described in 
  4.22  section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
  4.23  and (3), or paragraph (d), other than those that qualify for 
  4.24  exemption under clause (25). 
  4.25     (7) All public property exclusively used for any public 
  4.26  purpose. 
  4.27     (8) Except for the taxable personal property enumerated 
  4.28  below, all personal property and the property described in 
  4.29  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
  4.30  exempt.  
  4.31     The following personal property shall be taxable:  
  4.32     (a) Except as provided in clause (30), personal property 
  4.33  which is part of an electric generating, transmission, or 
  4.34  distribution system or a pipeline system transporting or 
  4.35  distributing water, gas, crude oil, or petroleum products or 
  4.36  mains and pipes used in the distribution of steam or hot or 
  5.1   chilled water for heating or cooling buildings and structures; 
  5.2      (b) railroad docks and wharves which are part of the 
  5.3   operating property of a railroad company as defined in section 
  5.4   270.80; 
  5.5      (c) personal property defined in section 272.03, 
  5.6   subdivision 2, clause (3); 
  5.7      (d) leasehold or other personal property interests which 
  5.8   are taxed pursuant to section 272.01, subdivision 2; 273.124, 
  5.9   subdivision 7; or 273.19, subdivision 1; or any other law 
  5.10  providing the property is taxable as if the lessee or user were 
  5.11  the fee owner; 
  5.12     (e) manufactured homes and sectional structures, including 
  5.13  storage sheds, decks, and similar removable improvements 
  5.14  constructed on the site of a manufactured home, sectional 
  5.15  structure, park trailer or travel trailer as provided in section 
  5.16  273.125, subdivision 8, paragraph (f); and 
  5.17     (f) flight property as defined in section 270.071.  
  5.18     (9) Personal property used primarily for the abatement and 
  5.19  control of air, water, or land pollution to the extent that it 
  5.20  is so used, and real property which is used primarily for 
  5.21  abatement and control of air, water, or land pollution as part 
  5.22  of an agricultural operation, as a part of a centralized 
  5.23  treatment and recovery facility operating under a permit issued 
  5.24  by the Minnesota pollution control agency pursuant to chapters 
  5.25  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
  5.26  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
  5.27  and for the treatment, recovery, and stabilization of metals, 
  5.28  oils, chemicals, water, sludges, or inorganic materials from 
  5.29  hazardous industrial wastes, or as part of an electric 
  5.30  generation system.  For purposes of this clause, personal 
  5.31  property includes ponderous machinery and equipment used in a 
  5.32  business or production activity that at common law is considered 
  5.33  real property. 
  5.34     Any taxpayer requesting exemption of all or a portion of 
  5.35  any real property or any equipment or device, or part thereof, 
  5.36  operated primarily for the control or abatement of air or water 
  6.1   pollution shall file an application with the commissioner of 
  6.2   revenue.  The equipment or device shall meet standards, rules, 
  6.3   or criteria prescribed by the Minnesota pollution control 
  6.4   agency, and must be installed or operated in accordance with a 
  6.5   permit or order issued by that agency.  The Minnesota pollution 
  6.6   control agency shall upon request of the commissioner furnish 
  6.7   information or advice to the commissioner.  On determining that 
  6.8   property qualifies for exemption, the commissioner shall issue 
  6.9   an order exempting the property from taxation.  The equipment or 
  6.10  device shall continue to be exempt from taxation as long as the 
  6.11  permit issued by the Minnesota pollution control agency remains 
  6.12  in effect. 
  6.13     (10) Wetlands.  For purposes of this subdivision, 
  6.14  "wetlands" means:  (i) land described in section 103G.005, 
  6.15  subdivision 15a; (ii) land which is mostly under water, produces 
  6.16  little if any income, and has no use except for wildlife or 
  6.17  water conservation purposes, provided it is preserved in its 
  6.18  natural condition and drainage of it would be legal, feasible, 
  6.19  and economically practical for the production of livestock, 
  6.20  dairy animals, poultry, fruit, vegetables, forage and grains, 
  6.21  except wild rice; or (iii) land in a wetland preservation area 
  6.22  under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
  6.23  and (ii) include adjacent land which is not suitable for 
  6.24  agricultural purposes due to the presence of the wetlands, but 
  6.25  do not include woody swamps containing shrubs or trees, wet 
  6.26  meadows, meandered water, streams, rivers, and floodplains or 
  6.27  river bottoms.  Exemption of wetlands from taxation pursuant to 
  6.28  this section shall not grant the public any additional or 
  6.29  greater right of access to the wetlands or diminish any right of 
  6.30  ownership to the wetlands. 
  6.31     (11) Native prairie.  The commissioner of the department of
  6.32  natural resources shall determine lands in the state which are 
  6.33  native prairie and shall notify the county assessor of each 
  6.34  county in which the lands are located.  Pasture land used for 
  6.35  livestock grazing purposes shall not be considered native 
  6.36  prairie for the purposes of this clause.  Upon receipt of an 
  7.1   application for the exemption provided in this clause for lands 
  7.2   for which the assessor has no determination from the 
  7.3   commissioner of natural resources, the assessor shall refer the 
  7.4   application to the commissioner of natural resources who shall 
  7.5   determine within 30 days whether the land is native prairie and 
  7.6   notify the county assessor of the decision.  Exemption of native 
  7.7   prairie pursuant to this clause shall not grant the public any 
  7.8   additional or greater right of access to the native prairie or 
  7.9   diminish any right of ownership to it. 
  7.10     (12) Property used in a continuous program to provide 
  7.11  emergency shelter for victims of domestic abuse, provided the 
  7.12  organization that owns and sponsors the shelter is exempt from 
  7.13  federal income taxation pursuant to section 501(c)(3) of the 
  7.14  Internal Revenue Code of 1986, as amended through December 31, 
  7.15  1992, notwithstanding the fact that the sponsoring organization 
  7.16  receives funding under section 8 of the United States Housing 
  7.17  Act of 1937, as amended. 
  7.18     (13) If approved by the governing body of the municipality 
  7.19  in which the property is located, property not exceeding one 
  7.20  acre which is owned and operated by any senior citizen group or 
  7.21  association of groups that in general limits membership to 
  7.22  persons age 55 or older and is organized and operated 
  7.23  exclusively for pleasure, recreation, and other nonprofit 
  7.24  purposes, no part of the net earnings of which inures to the 
  7.25  benefit of any private shareholders; provided the property is 
  7.26  used primarily as a clubhouse, meeting facility, or recreational 
  7.27  facility by the group or association and the property is not 
  7.28  used for residential purposes on either a temporary or permanent 
  7.29  basis. 
  7.30     (14) To the extent provided by section 295.44, real and 
  7.31  personal property used or to be used primarily for the 
  7.32  production of hydroelectric or hydromechanical power on a site 
  7.33  owned by the state or a local governmental unit which is 
  7.34  developed and operated pursuant to the provisions of section 
  7.35  103G.535. 
  7.36     (15) If approved by the governing body of the municipality 
  8.1   in which the property is located, and if construction is 
  8.2   commenced after June 30, 1983:  
  8.3      (a) a "direct satellite broadcasting facility" operated by 
  8.4   a corporation licensed by the federal communications commission 
  8.5   to provide direct satellite broadcasting services using direct 
  8.6   broadcast satellites operating in the 12-ghz. band; and 
  8.7      (b) a "fixed satellite regional or national program service 
  8.8   facility" operated by a corporation licensed by the federal 
  8.9   communications commission to provide fixed satellite-transmitted 
  8.10  regularly scheduled broadcasting services using satellites 
  8.11  operating in the 6-ghz. band. 
  8.12  An exemption provided by clause (15) shall apply for a period 
  8.13  not to exceed five years.  When the facility no longer qualifies 
  8.14  for exemption, it shall be placed on the assessment rolls as 
  8.15  provided in subdivision 4.  Before approving a tax exemption 
  8.16  pursuant to this paragraph, the governing body of the 
  8.17  municipality shall provide an opportunity to the members of the 
  8.18  county board of commissioners of the county in which the 
  8.19  facility is proposed to be located and the members of the school 
  8.20  board of the school district in which the facility is proposed 
  8.21  to be located to meet with the governing body.  The governing 
  8.22  body shall present to the members of those boards its estimate 
  8.23  of the fiscal impact of the proposed property tax exemption.  
  8.24  The tax exemption shall not be approved by the governing body 
  8.25  until the county board of commissioners has presented its 
  8.26  written comment on the proposal to the governing body or 30 days 
  8.27  have passed from the date of the transmittal by the governing 
  8.28  body to the board of the information on the fiscal impact, 
  8.29  whichever occurs first. 
  8.30     (16) Real and personal property owned and operated by a 
  8.31  private, nonprofit corporation exempt from federal income 
  8.32  taxation pursuant to United States Code, title 26, section 
  8.33  501(c)(3), primarily used in the generation and distribution of 
  8.34  hot water for heating buildings and structures.  
  8.35     (17) Notwithstanding section 273.19, state lands that are 
  8.36  leased from the department of natural resources under section 
  9.1   92.46. 
  9.2      (18) Electric power distribution lines and their 
  9.3   attachments and appurtenances, that are used primarily for 
  9.4   supplying electricity to farmers at retail.  
  9.5      (19) Transitional housing facilities.  "Transitional 
  9.6   housing facility" means a facility that meets the following 
  9.7   requirements.  (i) It provides temporary housing to individuals, 
  9.8   couples, or families.  (ii) It has the purpose of reuniting 
  9.9   families and enabling parents or individuals to obtain 
  9.10  self-sufficiency, advance their education, get job training, or 
  9.11  become employed in jobs that provide a living wage.  (iii) It 
  9.12  provides support services such as child care, work readiness 
  9.13  training, and career development counseling; and a 
  9.14  self-sufficiency program with periodic monitoring of each 
  9.15  resident's progress in completing the program's goals.  (iv) It 
  9.16  provides services to a resident of the facility for at least 
  9.17  three months but no longer than three years, except residents 
  9.18  enrolled in an educational or vocational institution or job 
  9.19  training program.  These residents may receive services during 
  9.20  the time they are enrolled but in no event longer than four 
  9.21  years.  (v) It is owned and operated or under lease from a unit 
  9.22  of government or governmental agency under a property 
  9.23  disposition program and operated by one or more organizations 
  9.24  exempt from federal income tax under section 501(c)(3) of the 
  9.25  Internal Revenue Code of 1986, as amended through December 31, 
  9.26  1992.  This exemption applies notwithstanding the fact that the 
  9.27  sponsoring organization receives financing by a direct federal 
  9.28  loan or federally insured loan or a loan made by the Minnesota 
  9.29  housing finance agency under the provisions of either Title II 
  9.30  of the National Housing Act or the Minnesota housing finance 
  9.31  agency law of 1971 or rules promulgated by the agency pursuant 
  9.32  to it, and notwithstanding the fact that the sponsoring 
  9.33  organization receives funding under Section 8 of the United 
  9.34  States Housing Act of 1937, as amended. 
  9.35     (20) Real and personal property, including leasehold or 
  9.36  other personal property interests, owned and operated by a 
 10.1   corporation if more than 50 percent of the total voting power of 
 10.2   the stock of the corporation is owned collectively by:  (i) the 
 10.3   board of regents of the University of Minnesota, (ii) the 
 10.4   University of Minnesota Foundation, an organization exempt from 
 10.5   federal income taxation under section 501(c)(3) of the Internal 
 10.6   Revenue Code of 1986, as amended through December 31, 1992, and 
 10.7   (iii) a corporation organized under chapter 317A, which by its 
 10.8   articles of incorporation is prohibited from providing pecuniary 
 10.9   gain to any person or entity other than the regents of the 
 10.10  University of Minnesota; which property is used primarily to 
 10.11  manage or provide goods, services, or facilities utilizing or 
 10.12  relating to large-scale advanced scientific computing resources 
 10.13  to the regents of the University of Minnesota and others. 
 10.14     (21)(a) Wind energy conversion systems, as defined in 
 10.15  section 216C.06, subdivision 12, installed after January 1, 
 10.16  1991, and before January 2, 1995, and used as an electric power 
 10.17  source, are exempt. 
 10.18     (b) Wind energy conversion systems, as defined in section 
 10.19  216C.06, subdivision 12, installed after January 1, 1995, 
 10.20  including the foundation or support pad, which are (i) used as 
 10.21  an electric power source; (ii) located within one county and 
 10.22  owned by the same owner; and (iii) produce two megawatts or less 
 10.23  of electricity as measured by nameplate ratings, are exempt. 
 10.24     (c) Wind energy conversion systems, as defined in section 
 10.25  216C.06, subdivision 12, installed after January 1, 1995, and 
 10.26  used as an electric power source but not exempt under item (b), 
 10.27  are treated as follows:  (i) the foundation and support pad are 
 10.28  taxable; (ii) the associated supporting and protective 
 10.29  structures are exempt for the first five assessment years after 
 10.30  they have been constructed, and thereafter, 30 percent of the 
 10.31  market value of the associated supporting and protective 
 10.32  structures are taxable; and (iii) the turbines, blades, 
 10.33  transformers, and its related equipment, are exempt. 
 10.34     (22) Containment tanks, cache basins, and that portion of 
 10.35  the structure needed for the containment facility used to 
 10.36  confine agricultural chemicals as defined in section 18D.01, 
 11.1   subdivision 3, as required by the commissioner of agriculture 
 11.2   under chapter 18B or 18C. 
 11.3      (23) Photovoltaic devices, as defined in section 216C.06, 
 11.4   subdivision 13, installed after January 1, 1992, and used to 
 11.5   produce or store electric power. 
 11.6      (24) Real and personal property owned and operated by a 
 11.7   private, nonprofit corporation exempt from federal income 
 11.8   taxation pursuant to United States Code, title 26, section 
 11.9   501(c)(3), primarily used for an ice arena or ice rink, and used 
 11.10  primarily for youth and high school programs. 
 11.11     (25) A structure that is situated on real property that is 
 11.12  used for: 
 11.13     (i) housing for the elderly or for low- and moderate-income 
 11.14  families as defined in Title II of the National Housing Act, as 
 11.15  amended through December 31, 1990, and funded by a direct 
 11.16  federal loan or federally insured loan made pursuant to Title II 
 11.17  of the act; or 
 11.18     (ii) housing lower income families or elderly or 
 11.19  handicapped persons, as defined in Section 8 of the United 
 11.20  States Housing Act of 1937, as amended. 
 11.21     In order for a structure to be exempt under (i) or (ii), it 
 11.22  must also meet each of the following criteria: 
 11.23     (A) is owned by an entity which is operated as a nonprofit 
 11.24  corporation organized under chapter 317A; 
 11.25     (B) is owned by an entity which has not entered into a 
 11.26  housing assistance payments contract under Section 8 of the 
 11.27  United States Housing Act of 1937, or, if the entity which owns 
 11.28  the structure has entered into a housing assistance payments 
 11.29  contract under Section 8 of the United States Housing Act of 
 11.30  1937, the contract provides assistance for less than 90 percent 
 11.31  of the dwelling units in the structure, excluding dwelling units 
 11.32  intended for management or maintenance personnel; 
 11.33     (C) operates an on-site congregate dining program in which 
 11.34  participation by residents is mandatory, and provides assisted 
 11.35  living or similar social and physical support services for 
 11.36  residents; and 
 12.1      (D) was not assessed and did not pay tax under chapter 273 
 12.2   prior to the 1991 levy, while meeting the other conditions of 
 12.3   this clause. 
 12.4      An exemption under this clause remains in effect for taxes 
 12.5   levied in each year or partial year of the term of its permanent 
 12.6   financing. 
 12.7      (26) Real and personal property that is located in the 
 12.8   Superior National Forest, and owned or leased and operated by a 
 12.9   nonprofit organization that is exempt from federal income 
 12.10  taxation under section 501(c)(3) of the Internal Revenue Code of 
 12.11  1986, as amended through December 31, 1992, and primarily used 
 12.12  to provide recreational opportunities for disabled veterans and 
 12.13  their families. 
 12.14     (27) Manure pits and appurtenances, which may include 
 12.15  slatted floors and pipes, installed or operated in accordance 
 12.16  with a permit, order, or certificate of compliance issued by the 
 12.17  Minnesota pollution control agency.  The exemption shall 
 12.18  continue for as long as the permit, order, or certificate issued 
 12.19  by the Minnesota pollution control agency remains in effect. 
 12.20     (28) Notwithstanding clause (8), item (a), attached 
 12.21  machinery and other personal property which is part of a 
 12.22  facility containing a cogeneration system as described in 
 12.23  section 216B.166, subdivision 2, paragraph (a), if the 
 12.24  cogeneration system has met the following criteria:  (i) the 
 12.25  system utilizes natural gas as a primary fuel and the 
 12.26  cogenerated steam initially replaces steam generated from 
 12.27  existing thermal boilers utilizing coal; (ii) the facility 
 12.28  developer is selected as a result of a procurement process 
 12.29  ordered by the public utilities commission; and (iii) 
 12.30  construction of the facility is commenced after July 1, 1994, 
 12.31  and before July 1, 1997. 
 12.32     (29) Real property acquired by a home rule charter city, 
 12.33  statutory city, county, town, or school district under a lease 
 12.34  purchase agreement or an installment purchase contract during 
 12.35  the term of the lease purchase agreement as long as and to the 
 12.36  extent that the property is used by the city, county, town, or 
 13.1   school district and devoted to a public use and to the extent it 
 13.2   is not subleased to any private individual, entity, association, 
 13.3   or corporation in connection with a business or enterprise 
 13.4   operated for profit. 
 13.5      (30) Tools, implements, and machinery which are initially 
 13.6   assessed after January 2, 1997, and are part of an electric 
 13.7   generating system. 
 13.8      Sec. 4.  Minnesota Statutes 1996, section 273.13, 
 13.9   subdivision 31, is amended to read: 
 13.10     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 13.11     (1) Except as provided in section 272.02, subdivision 1, 
 13.12  clause (30), tools, implements, and machinery of an electric 
 13.13  generating, transmission, or distribution system or a pipeline 
 13.14  system transporting or distributing water, gas, crude oil, or 
 13.15  petroleum products or mains and pipes used in the distribution 
 13.16  of steam or hot or chilled water for heating or cooling 
 13.17  buildings, which are fixtures; 
 13.18     (2) unmined iron ore and low-grade iron-bearing formations 
 13.19  as defined in section 273.14; and 
 13.20     (3) all other property not otherwise classified. 
 13.21     Class 5 property has a class rate of 5.06 percent of market 
 13.22  value.