SF 1998

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

  1.1                          A bill for an act
  1.2             relating to electric utilities; exempting certain 
  1.3             personal property from taxation; establishing a social 
  1.4             responsibility surcharge; amending Minnesota Statutes 
  1.5             1996, sections 124.2131, subdivision 1; 272.02, 
  1.6             subdivision 1, and by adding a subdivision; and 
  1.7             273.13, subdivision 31, and by adding a subdivision; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 216B; repealing Minnesota Statutes 1996, 
  1.10            section 273.41. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1
  1.13                   UTILITY PERSONAL PROPERTY TAX
  1.14     Section 1.  Minnesota Statutes 1996, section 124.2131, 
  1.15  subdivision 1, is amended to read: 
  1.16     Subdivision 1.  [ADJUSTED NET TAX CAPACITY.] (a) 
  1.17  [COMPUTATION.] The department of revenue shall annually conduct 
  1.18  an assessment/sales ratio study of the taxable property in each 
  1.19  school district in accordance with the procedures in paragraphs 
  1.20  (b) and (c).  Based upon the results of this assessment/sales 
  1.21  ratio study, the department of revenue shall determine an 
  1.22  aggregate equalized net tax capacity for the various classes of 
  1.23  taxable property in each school district, which tax capacity 
  1.24  shall be designated as the adjusted net tax capacity.  The 
  1.25  adjusted net tax capacities shall be determined using the net 
  1.26  tax capacity percentages in effect for the assessment year 
  1.27  following the assessment year of the study.  The department of 
  1.28  revenue shall make whatever estimates are necessary to account 
  2.1   for changes in the classification system.  The department of 
  2.2   revenue may incur the expense necessary to make the 
  2.3   determinations.  The commissioner of revenue may reimburse any 
  2.4   county or governmental official for requested services performed 
  2.5   in ascertaining the adjusted net tax capacity.  On or before 
  2.6   March 15 annually, the department of revenue shall file with the 
  2.7   chair of the tax committee of the house of representatives and 
  2.8   the chair of the committee on taxes and tax laws of the senate a 
  2.9   report of adjusted net tax capacities.  On or before June 15 
  2.10  annually, the department of revenue shall file its final report 
  2.11  on the adjusted net tax capacities established by the previous 
  2.12  year's assessments and the current year's net tax capacity 
  2.13  percentages with the commissioner of children, families, and 
  2.14  learning and each county auditor for those school districts for 
  2.15  which the auditor has the responsibility for determination of 
  2.16  local tax rates.  A copy of the report so filed shall be mailed 
  2.17  to the clerk of each district involved and to the county 
  2.18  assessor or supervisor of assessments of the county or counties 
  2.19  in which each district is located. 
  2.20     (b)  [METHODOLOGY.] In making its annual assessment/sales 
  2.21  ratio studies, the department of revenue shall use a methodology 
  2.22  consistent with the most recent Standard on Assessment Ratio 
  2.23  Studies published by the assessment standards committee of the 
  2.24  International Association of Assessing Officers.  The 
  2.25  commissioner of revenue shall supplement this general 
  2.26  methodology with specific procedures necessary for execution of 
  2.27  the study in accordance with other Minnesota laws impacting the 
  2.28  assessment/sales ratio study.  The commissioner shall document 
  2.29  these specific procedures in writing and shall publish the 
  2.30  procedures in the State Register, but these procedures will not 
  2.31  be considered "rules" pursuant to the Minnesota administrative 
  2.32  procedure act.  For purposes of this section, sections 270.12, 
  2.33  subdivision 2, clause (8), and 278.05, subdivision 4, the 
  2.34  commissioner of revenue shall exclude from the assessment/sales 
  2.35  ratio study the sale of any nonagricultural property which does 
  2.36  not contain an improvement, if (1) the statutory basis on which 
  3.1   the property's taxable value as most recently assessed is less 
  3.2   than market value as defined in section 273.11, or (2) the 
  3.3   property has undergone significant physical change or a change 
  3.4   of use since the most recent assessment.  
  3.5      (c)  [AGRICULTURAL LANDS.] For purposes of determining the 
  3.6   adjusted net tax capacity of agricultural lands for the 
  3.7   calculation of adjusted net tax capacities, the market value of 
  3.8   agricultural lands shall be the price for which the property 
  3.9   would sell in an arms length transaction. 
  3.10     (d)  [FORCED SALES.] The commissioner may include forced 
  3.11  sales in the assessment/sales ratio studies if it is determined 
  3.12  by the commissioner that these forced sales indicate true market 
  3.13  value. 
  3.14     (e)  [STIPULATED VALUES AND ABATEMENTS.] The estimated 
  3.15  market value to be used in calculating sales ratios shall be the 
  3.16  value established by the assessor before any stipulations 
  3.17  resulting from appeals by property owners and before any 
  3.18  abatement unless the abatement was granted for the purpose of 
  3.19  correcting mere clerical errors. 
  3.20     (f)  [SALES OF INDUSTRIAL PROPERTY.] Separate sales ratios 
  3.21  shall be calculated for commercial property and for industrial 
  3.22  property.  These two classes shall be combined only in 
  3.23  jurisdictions in which there is not an adequate sample of sales 
  3.24  in each class. 
  3.25     (g) For the purpose of determining adjusted net tax 
  3.26  capacities for school districts or other local taxing 
  3.27  jurisdictions to be used in the computation of an aid or levy 
  3.28  amount for a certain taxes payable year, the value of the 
  3.29  property described in section 272.02, subdivision 9, shall be 
  3.30  reduced by the percentage specified in section 273.13, 
  3.31  subdivision 34, corresponding to the year for which the levy or 
  3.32  aid amount is being determined. 
  3.33     Sec. 2.  Minnesota Statutes 1996, section 272.02, 
  3.34  subdivision 1, is amended to read: 
  3.35     Subdivision 1.  All property described in this section to 
  3.36  the extent herein limited shall be exempt from taxation: 
  4.1      (1) All public burying grounds. 
  4.2      (2) All public schoolhouses. 
  4.3      (3) All public hospitals. 
  4.4      (4) All academies, colleges, and universities, and all 
  4.5   seminaries of learning. 
  4.6      (5) All churches, church property, and houses of worship. 
  4.7      (6) Institutions of purely public charity except parcels of 
  4.8   property containing structures and the structures described in 
  4.9   section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
  4.10  and (3), or paragraph (d), other than those that qualify for 
  4.11  exemption under clause (25). 
  4.12     (7) All public property exclusively used for any public 
  4.13  purpose. 
  4.14     (8) Except for the taxable personal property enumerated 
  4.15  below, all personal property and the property described in 
  4.16  section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
  4.17  exempt.  
  4.18     The following personal property shall be taxable:  
  4.19     (a) Except as provided in subdivision 9, personal property 
  4.20  which is part of an electric generating, transmission, or 
  4.21  distribution system or a pipeline system transporting or 
  4.22  distributing water, gas, crude oil, or petroleum products or 
  4.23  mains and pipes used in the distribution of steam or hot or 
  4.24  chilled water for heating or cooling buildings and structures; 
  4.25     (b) railroad docks and wharves which are part of the 
  4.26  operating property of a railroad company as defined in section 
  4.27  270.80; 
  4.28     (c) personal property defined in section 272.03, 
  4.29  subdivision 2, clause (3); 
  4.30     (d) leasehold or other personal property interests which 
  4.31  are taxed pursuant to section 272.01, subdivision 2; 273.124, 
  4.32  subdivision 7; or 273.19, subdivision 1; or any other law 
  4.33  providing the property is taxable as if the lessee or user were 
  4.34  the fee owner; 
  4.35     (e) manufactured homes and sectional structures, including 
  4.36  storage sheds, decks, and similar removable improvements 
  5.1   constructed on the site of a manufactured home, sectional 
  5.2   structure, park trailer or travel trailer as provided in section 
  5.3   273.125, subdivision 8, paragraph (f); and 
  5.4      (f) flight property as defined in section 270.071.  
  5.5      (9) Personal property used primarily for the abatement and 
  5.6   control of air, water, or land pollution to the extent that it 
  5.7   is so used, and real property which is used primarily for 
  5.8   abatement and control of air, water, or land pollution as part 
  5.9   of an agricultural operation, as a part of a centralized 
  5.10  treatment and recovery facility operating under a permit issued 
  5.11  by the Minnesota pollution control agency pursuant to chapters 
  5.12  115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
  5.13  and 7045.0020 to 7045.1260, as a wastewater treatment facility 
  5.14  and for the treatment, recovery, and stabilization of metals, 
  5.15  oils, chemicals, water, sludges, or inorganic materials from 
  5.16  hazardous industrial wastes, or as part of an electric 
  5.17  generation system.  For purposes of this clause, personal 
  5.18  property includes ponderous machinery and equipment used in a 
  5.19  business or production activity that at common law is considered 
  5.20  real property. 
  5.21     Any taxpayer requesting exemption of all or a portion of 
  5.22  any real property or any equipment or device, or part thereof, 
  5.23  operated primarily for the control or abatement of air or water 
  5.24  pollution shall file an application with the commissioner of 
  5.25  revenue.  The equipment or device shall meet standards, rules, 
  5.26  or criteria prescribed by the Minnesota pollution control 
  5.27  agency, and must be installed or operated in accordance with a 
  5.28  permit or order issued by that agency.  The Minnesota pollution 
  5.29  control agency shall upon request of the commissioner furnish 
  5.30  information or advice to the commissioner.  On determining that 
  5.31  property qualifies for exemption, the commissioner shall issue 
  5.32  an order exempting the property from taxation.  The equipment or 
  5.33  device shall continue to be exempt from taxation as long as the 
  5.34  permit issued by the Minnesota pollution control agency remains 
  5.35  in effect. 
  5.36     (10) Wetlands.  For purposes of this subdivision, 
  6.1   "wetlands" means:  (i) land described in section 103G.005, 
  6.2   subdivision 15a; (ii) land which is mostly under water, produces 
  6.3   little if any income, and has no use except for wildlife or 
  6.4   water conservation purposes, provided it is preserved in its 
  6.5   natural condition and drainage of it would be legal, feasible, 
  6.6   and economically practical for the production of livestock, 
  6.7   dairy animals, poultry, fruit, vegetables, forage and grains, 
  6.8   except wild rice; or (iii) land in a wetland preservation area 
  6.9   under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
  6.10  and (ii) include adjacent land which is not suitable for 
  6.11  agricultural purposes due to the presence of the wetlands, but 
  6.12  do not include woody swamps containing shrubs or trees, wet 
  6.13  meadows, meandered water, streams, rivers, and floodplains or 
  6.14  river bottoms.  Exemption of wetlands from taxation pursuant to 
  6.15  this section shall not grant the public any additional or 
  6.16  greater right of access to the wetlands or diminish any right of 
  6.17  ownership to the wetlands. 
  6.18     (11) Native prairie.  The commissioner of the department of
  6.19  natural resources shall determine lands in the state which are 
  6.20  native prairie and shall notify the county assessor of each 
  6.21  county in which the lands are located.  Pasture land used for 
  6.22  livestock grazing purposes shall not be considered native 
  6.23  prairie for the purposes of this clause.  Upon receipt of an 
  6.24  application for the exemption provided in this clause for lands 
  6.25  for which the assessor has no determination from the 
  6.26  commissioner of natural resources, the assessor shall refer the 
  6.27  application to the commissioner of natural resources who shall 
  6.28  determine within 30 days whether the land is native prairie and 
  6.29  notify the county assessor of the decision.  Exemption of native 
  6.30  prairie pursuant to this clause shall not grant the public any 
  6.31  additional or greater right of access to the native prairie or 
  6.32  diminish any right of ownership to it. 
  6.33     (12) Property used in a continuous program to provide 
  6.34  emergency shelter for victims of domestic abuse, provided the 
  6.35  organization that owns and sponsors the shelter is exempt from 
  6.36  federal income taxation pursuant to section 501(c)(3) of the 
  7.1   Internal Revenue Code of 1986, as amended through December 31, 
  7.2   1992, notwithstanding the fact that the sponsoring organization 
  7.3   receives funding under section 8 of the United States Housing 
  7.4   Act of 1937, as amended. 
  7.5      (13) If approved by the governing body of the municipality 
  7.6   in which the property is located, property not exceeding one 
  7.7   acre which is owned and operated by any senior citizen group or 
  7.8   association of groups that in general limits membership to 
  7.9   persons age 55 or older and is organized and operated 
  7.10  exclusively for pleasure, recreation, and other nonprofit 
  7.11  purposes, no part of the net earnings of which inures to the 
  7.12  benefit of any private shareholders; provided the property is 
  7.13  used primarily as a clubhouse, meeting facility, or recreational 
  7.14  facility by the group or association and the property is not 
  7.15  used for residential purposes on either a temporary or permanent 
  7.16  basis. 
  7.17     (14) To the extent provided by section 295.44, real and 
  7.18  personal property used or to be used primarily for the 
  7.19  production of hydroelectric or hydromechanical power on a site 
  7.20  owned by the state or a local governmental unit which is 
  7.21  developed and operated pursuant to the provisions of section 
  7.22  103G.535. 
  7.23     (15) If approved by the governing body of the municipality 
  7.24  in which the property is located, and if construction is 
  7.25  commenced after June 30, 1983:  
  7.26     (a) a "direct satellite broadcasting facility" operated by 
  7.27  a corporation licensed by the federal communications commission 
  7.28  to provide direct satellite broadcasting services using direct 
  7.29  broadcast satellites operating in the 12-ghz. band; and 
  7.30     (b) a "fixed satellite regional or national program service 
  7.31  facility" operated by a corporation licensed by the federal 
  7.32  communications commission to provide fixed satellite-transmitted 
  7.33  regularly scheduled broadcasting services using satellites 
  7.34  operating in the 6-ghz. band. 
  7.35  An exemption provided by clause (15) shall apply for a period 
  7.36  not to exceed five years.  When the facility no longer qualifies 
  8.1   for exemption, it shall be placed on the assessment rolls as 
  8.2   provided in subdivision 4.  Before approving a tax exemption 
  8.3   pursuant to this paragraph, the governing body of the 
  8.4   municipality shall provide an opportunity to the members of the 
  8.5   county board of commissioners of the county in which the 
  8.6   facility is proposed to be located and the members of the school 
  8.7   board of the school district in which the facility is proposed 
  8.8   to be located to meet with the governing body.  The governing 
  8.9   body shall present to the members of those boards its estimate 
  8.10  of the fiscal impact of the proposed property tax exemption.  
  8.11  The tax exemption shall not be approved by the governing body 
  8.12  until the county board of commissioners has presented its 
  8.13  written comment on the proposal to the governing body or 30 days 
  8.14  have passed from the date of the transmittal by the governing 
  8.15  body to the board of the information on the fiscal impact, 
  8.16  whichever occurs first. 
  8.17     (16) Real and personal property owned and operated by a 
  8.18  private, nonprofit corporation exempt from federal income 
  8.19  taxation pursuant to United States Code, title 26, section 
  8.20  501(c)(3), primarily used in the generation and distribution of 
  8.21  hot water for heating buildings and structures.  
  8.22     (17) Notwithstanding section 273.19, state lands that are 
  8.23  leased from the department of natural resources under section 
  8.24  92.46. 
  8.25     (18) Electric power distribution lines and their 
  8.26  attachments and appurtenances, that are used primarily for 
  8.27  supplying electricity to farmers at retail.  
  8.28     (19) Transitional housing facilities.  "Transitional 
  8.29  housing facility" means a facility that meets the following 
  8.30  requirements.  (i) It provides temporary housing to individuals, 
  8.31  couples, or families.  (ii) It has the purpose of reuniting 
  8.32  families and enabling parents or individuals to obtain 
  8.33  self-sufficiency, advance their education, get job training, or 
  8.34  become employed in jobs that provide a living wage.  (iii) It 
  8.35  provides support services such as child care, work readiness 
  8.36  training, and career development counseling; and a 
  9.1   self-sufficiency program with periodic monitoring of each 
  9.2   resident's progress in completing the program's goals.  (iv) It 
  9.3   provides services to a resident of the facility for at least 
  9.4   three months but no longer than three years, except residents 
  9.5   enrolled in an educational or vocational institution or job 
  9.6   training program.  These residents may receive services during 
  9.7   the time they are enrolled but in no event longer than four 
  9.8   years.  (v) It is owned and operated or under lease from a unit 
  9.9   of government or governmental agency under a property 
  9.10  disposition program and operated by one or more organizations 
  9.11  exempt from federal income tax under section 501(c)(3) of the 
  9.12  Internal Revenue Code of 1986, as amended through December 31, 
  9.13  1992.  This exemption applies notwithstanding the fact that the 
  9.14  sponsoring organization receives financing by a direct federal 
  9.15  loan or federally insured loan or a loan made by the Minnesota 
  9.16  housing finance agency under the provisions of either Title II 
  9.17  of the National Housing Act or the Minnesota housing finance 
  9.18  agency law of 1971 or rules promulgated by the agency pursuant 
  9.19  to it, and notwithstanding the fact that the sponsoring 
  9.20  organization receives funding under Section 8 of the United 
  9.21  States Housing Act of 1937, as amended. 
  9.22     (20) Real and personal property, including leasehold or 
  9.23  other personal property interests, owned and operated by a 
  9.24  corporation if more than 50 percent of the total voting power of 
  9.25  the stock of the corporation is owned collectively by:  (i) the 
  9.26  board of regents of the University of Minnesota, (ii) the 
  9.27  University of Minnesota Foundation, an organization exempt from 
  9.28  federal income taxation under section 501(c)(3) of the Internal 
  9.29  Revenue Code of 1986, as amended through December 31, 1992, and 
  9.30  (iii) a corporation organized under chapter 317A, which by its 
  9.31  articles of incorporation is prohibited from providing pecuniary 
  9.32  gain to any person or entity other than the regents of the 
  9.33  University of Minnesota; which property is used primarily to 
  9.34  manage or provide goods, services, or facilities utilizing or 
  9.35  relating to large-scale advanced scientific computing resources 
  9.36  to the regents of the University of Minnesota and others. 
 10.1      (21)(a) Wind energy conversion systems, as defined in 
 10.2   section 216C.06, subdivision 12, installed after January 1, 
 10.3   1991, and before January 2, 1995, and used as an electric power 
 10.4   source, are exempt. 
 10.5      (b) Wind energy conversion systems, as defined in section 
 10.6   216C.06, subdivision 12, installed after January 1, 1995, 
 10.7   including the foundation or support pad, which are (i) used as 
 10.8   an electric power source; (ii) located within one county and 
 10.9   owned by the same owner; and (iii) produce two megawatts or less 
 10.10  of electricity as measured by nameplate ratings, are exempt. 
 10.11     (c) Wind energy conversion systems, as defined in section 
 10.12  216C.06, subdivision 12, installed after January 1, 1995, and 
 10.13  used as an electric power source but not exempt under item (b), 
 10.14  are treated as follows:  (i) the foundation and support pad are 
 10.15  taxable; (ii) the associated supporting and protective 
 10.16  structures are exempt for the first five assessment years after 
 10.17  they have been constructed, and thereafter, 30 percent of the 
 10.18  market value of the associated supporting and protective 
 10.19  structures are taxable; and (iii) the turbines, blades, 
 10.20  transformers, and its related equipment, are exempt. 
 10.21     (22) Containment tanks, cache basins, and that portion of 
 10.22  the structure needed for the containment facility used to 
 10.23  confine agricultural chemicals as defined in section 18D.01, 
 10.24  subdivision 3, as required by the commissioner of agriculture 
 10.25  under chapter 18B or 18C. 
 10.26     (23) Photovoltaic devices, as defined in section 216C.06, 
 10.27  subdivision 13, installed after January 1, 1992, and used to 
 10.28  produce or store electric power. 
 10.29     (24) Real and personal property owned and operated by a 
 10.30  private, nonprofit corporation exempt from federal income 
 10.31  taxation pursuant to United States Code, title 26, section 
 10.32  501(c)(3), primarily used for an ice arena or ice rink, and used 
 10.33  primarily for youth and high school programs. 
 10.34     (25) A structure that is situated on real property that is 
 10.35  used for: 
 10.36     (i) housing for the elderly or for low- and moderate-income 
 11.1   families as defined in Title II of the National Housing Act, as 
 11.2   amended through December 31, 1990, and funded by a direct 
 11.3   federal loan or federally insured loan made pursuant to Title II 
 11.4   of the act; or 
 11.5      (ii) housing lower income families or elderly or 
 11.6   handicapped persons, as defined in Section 8 of the United 
 11.7   States Housing Act of 1937, as amended. 
 11.8      In order for a structure to be exempt under (i) or (ii), it 
 11.9   must also meet each of the following criteria: 
 11.10     (A) is owned by an entity which is operated as a nonprofit 
 11.11  corporation organized under chapter 317A; 
 11.12     (B) is owned by an entity which has not entered into a 
 11.13  housing assistance payments contract under Section 8 of the 
 11.14  United States Housing Act of 1937, or, if the entity which owns 
 11.15  the structure has entered into a housing assistance payments 
 11.16  contract under Section 8 of the United States Housing Act of 
 11.17  1937, the contract provides assistance for less than 90 percent 
 11.18  of the dwelling units in the structure, excluding dwelling units 
 11.19  intended for management or maintenance personnel; 
 11.20     (C) operates an on-site congregate dining program in which 
 11.21  participation by residents is mandatory, and provides assisted 
 11.22  living or similar social and physical support services for 
 11.23  residents; and 
 11.24     (D) was not assessed and did not pay tax under chapter 273 
 11.25  prior to the 1991 levy, while meeting the other conditions of 
 11.26  this clause. 
 11.27     An exemption under this clause remains in effect for taxes 
 11.28  levied in each year or partial year of the term of its permanent 
 11.29  financing. 
 11.30     (26) Real and personal property that is located in the 
 11.31  Superior National Forest, and owned or leased and operated by a 
 11.32  nonprofit organization that is exempt from federal income 
 11.33  taxation under section 501(c)(3) of the Internal Revenue Code of 
 11.34  1986, as amended through December 31, 1992, and primarily used 
 11.35  to provide recreational opportunities for disabled veterans and 
 11.36  their families. 
 12.1      (27) Manure pits and appurtenances, which may include 
 12.2   slatted floors and pipes, installed or operated in accordance 
 12.3   with a permit, order, or certificate of compliance issued by the 
 12.4   Minnesota pollution control agency.  The exemption shall 
 12.5   continue for as long as the permit, order, or certificate issued 
 12.6   by the Minnesota pollution control agency remains in effect. 
 12.7      (28) Notwithstanding clause (8), item (a), attached 
 12.8   machinery and other personal property which is part of a 
 12.9   facility containing a cogeneration system as described in 
 12.10  section 216B.166, subdivision 2, paragraph (a), if the 
 12.11  cogeneration system has met the following criteria:  (i) the 
 12.12  system utilizes natural gas as a primary fuel and the 
 12.13  cogenerated steam initially replaces steam generated from 
 12.14  existing thermal boilers utilizing coal; (ii) the facility 
 12.15  developer is selected as a result of a procurement process 
 12.16  ordered by the public utilities commission; and (iii) 
 12.17  construction of the facility is commenced after July 1, 1994, 
 12.18  and before July 1, 1997. 
 12.19     (29) Real property acquired by a home rule charter city, 
 12.20  statutory city, county, town, or school district under a lease 
 12.21  purchase agreement or an installment purchase contract during 
 12.22  the term of the lease purchase agreement as long as and to the 
 12.23  extent that the property is used by the city, county, town, or 
 12.24  school district and devoted to a public use and to the extent it 
 12.25  is not subleased to any private individual, entity, association, 
 12.26  or corporation in connection with a business or enterprise 
 12.27  operated for profit. 
 12.28     Sec. 3.  Minnesota Statutes 1996, section 272.02, is 
 12.29  amended by adding a subdivision to read: 
 12.30     Subd. 9.  [ELECTRIC UTILITY PERSONAL PROPERTY.] Tools, 
 12.31  implements, and machinery of an electric generation system and 
 12.32  all electric distribution lines outside of the corporate limits 
 12.33  of cities are exempted from property taxes for the 2007 
 12.34  assessment year and thereafter.  During the ten-year period from 
 12.35  assessment year 1998, taxes payable in 1999, through assessment 
 12.36  year 2006, taxes payable in 2007, the market value of the 
 13.1   property described under this subdivision shall be exempted from 
 13.2   property taxation according to the phase-out schedule in section 
 13.3   273.13, subdivision 34.  The exemption under this subdivision 
 13.4   shall include the market value of dry casks located at a nuclear 
 13.5   electric generating plant.  
 13.6      For purposes of this subdivision, the commissioner of 
 13.7   revenue shall annually classify the property in the same manner 
 13.8   as it is classified by the Federal Energy Regulatory Commission. 
 13.9      Sec. 4.  Minnesota Statutes 1996, section 273.13, 
 13.10  subdivision 31, is amended to read: 
 13.11     Subd. 31.  [CLASS 5.] Class 5 property includes:  
 13.12     (1) except as provided in sections 272.02, subdivision 9, 
 13.13  and 273.13, subdivision 34, tools, implements, and machinery of 
 13.14  an electric generating, transmission, or distribution system or 
 13.15  a pipeline system transporting or distributing water, gas, crude 
 13.16  oil, or petroleum products or mains and pipes used in the 
 13.17  distribution of steam or hot or chilled water for heating or 
 13.18  cooling buildings, which are fixtures; 
 13.19     (2) unmined iron ore and low-grade iron-bearing formations 
 13.20  as defined in section 273.14; and 
 13.21     (3) all other property not otherwise classified. 
 13.22     Class 5 property has a class rate of 5.06 percent of market 
 13.23  value. 
 13.24     Sec. 5.  Minnesota Statutes 1996, section 273.13, is 
 13.25  amended by adding a subdivision to read: 
 13.26     Subd. 34.  [ELECTRIC UTILITY VALUATION REDUCTION.] For 
 13.27  property taxes payable in the years 1999 through 2005, the 
 13.28  market value of the personal property described in section 
 13.29  272.02, subdivision 9, shall be exempted in accordance with the 
 13.30  percentages in the following schedule: 
 13.31  Taxes Payable Year         Reduction Percentage
 13.32            1999                        12.5%
 13.33            2000                        25.0%
 13.34            2001                        37.5%
 13.35            2002                        50.0%
 13.36            2003                        62.5%
 14.1             2004                        75.0%
 14.2             2005                        87.5%
 14.3      Sec. 6.  [REPEALER.] 
 14.4      Minnesota Statutes 1996, section 273.41, is repealed. 
 14.5      Sec. 7.  [EFFECTIVE DATE.] 
 14.6      Section 6 is effective for calendar year 1999 and 
 14.7   thereafter. 
 14.8                              ARTICLE 2
 14.9                    SOCIAL RESPONSIBILITY PROGRAM
 14.10     Section 1.  [216B.2425] [SOCIAL RESPONSIBILITY PROGRAM.] 
 14.11     Subdivision 1.  [FEE.] The commission shall provide for the 
 14.12  funding of the social responsibility program by assessing a 
 14.13  uniform recurring surcharge of $0.00 per kilowatt-hour of 
 14.14  electricity sold to ultimate consumers for use in Minnesota.  
 14.15  Every electric utility, as defined in section 216B.38, 
 14.16  subdivision 5, shall collect the fee established by the 
 14.17  commission on all electricity distributed by the utility to 
 14.18  ultimate consumers for use in Minnesota, and shall remit the 
 14.19  amounts collected to the commissioner of administration.  The 
 14.20  commissioner of administration must deposit the receipts in the 
 14.21  account established in subdivision 2. 
 14.22     Subd. 2.  [ACCOUNT.] A social responsibility account is 
 14.23  established as an account in the state treasury.  Earnings, such 
 14.24  as interest, dividends, and any other earnings arising from 
 14.25  account assets, must be credited to the account. 
 14.26     Subd. 3.  [APPROPRIATION.] Money in the fund is 
 14.27  appropriated to the department of public service for the 
 14.28  purposes described in subdivision 4. 
 14.29     Subd. 4.  [EXPENDITURES.] Money in the fund may only be 
 14.30  used for: 
 14.31     (1) expenses incurred by the commissioner or by a utility 
 14.32  under: 
 14.33     (i) sections 216B.095 and 216B.097 for restrictions on 
 14.34  cold-weather disconnections; 
 14.35     (ii) section 216B.16, subdivision 14, for low-income 
 14.36  discount electric rates; 
 15.1      (iii) section 216B.241 for conservation improvements; 
 15.2      (iv) section 216C.31 for energy audits; 
 15.3      (v) section 216C.37 for energy conservation investment 
 15.4   loans; and 
 15.5      (vi) other conservation and weatherization programs 
 15.6   conducted by the commissioner or a utility; 
 15.7      (2) grants or loans for generation technology research and 
 15.8   development, including research into alternative sources of 
 15.9   energy; 
 15.10     (3) economic development grants to cities that host an 
 15.11  electric generation facility equal to 25 percent of the 1997 
 15.12  revenue that would have been expedited by the city; and 
 15.13     (4) administrative expenses of the department, including 
 15.14  personnel costs and other reasonable expenses not to exceed 5 
 15.15  percent of total program expenditures. 
 15.16     Sec. 2.  [RECOMMENDATIONS BY THE COMMISSIONER OF PUBLIC 
 15.17  SERVICE.] 
 15.18     By January 1, 1998, the commissioner of public service 
 15.19  shall provide the legislature with recommendations regarding: 
 15.20     (1) the amount of the surcharge established in section 
 15.21  216B.2425; 
 15.22     (2) the appropriate administration of the social 
 15.23  responsibility program; 
 15.24     (3) the expenditures to be authorized under that program; 
 15.25  and 
 15.26     (4) changes to the statutes referenced in Minnesota 
 15.27  Statutes, section 216B.2424, subdivision 4. 
 15.28     Sec. 3.  [EFFECTIVE DATE.] 
 15.29     Section 1 is effective as of July 1, 1998, except for 
 15.30  subdivision 4, clause (3), which becomes effective on January 1, 
 15.31  2007.  Section 2 is effective on the day following final 
 15.32  enactment.