SF 3308

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to energy; providing tax refunds to electric utilities that transition to
soy-based transformer fluid; appropriating money; proposing coding for new law
in Minnesota Statutes, chapter 216B.

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

Section 1.

[216B.1695] SOY-BASED TRANSFORMER FLUID TAX REFUND.

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following terms
have the meanings given them in this subdivision.

(b) "Commissioner" means the commissioner of revenue or the commissioner's
designee.

(c) "Electric utility" means a public utility as defined in section 216B.02, but also
includes municipal utilities and cooperative electric associations, rural or otherwise,
organized under chapter 308A and producing or furnishing electric service.

(d) "Soy-based transformer fluid" means dielectric fluid that contains at least 98
percent soy-based products.

(e) "Transition period" means the period after June 30, 2006, and before January
1, 2008.

Subd. 2.

Soy-based transformer fluid tax refund, limits.

(a) An electric utility is
eligible for a refund of taxes paid during the transition period from using non-soy-based
transformer fluid to soy-based transformer fluid. The refund is intended to offset the cost
of purchasing soy-based transformer fluid only during the transition period. Eligible
costs must be incurred:

(1) during the transition period;

(2) in the first 18 months of the transition period from using non-soy-based
transformer fluid to using soy-based transformer fluid; and

(3) to purchase soy-based transformer fluid.

(b) No more than 40,000 gallons are eligible for any electric utility.

(c) The total amount of eligible soy-based transformer fluid is limited to 120,000
gallons for all claimants.

Subd. 3.

Tax refund procedure.

(a) An electric utility may apply to the
commissioner for the soy-based transformer fluid tax refund by submitting to the
commissioner all of the following:

(1) a completed application in a form prescribed by the commissioner;

(2) a copy of a signed and dated purchase agreement or other agreement to purchase
soy-based transformer fluid during the transition;

(3) proof of state corporate franchise, sales and use, and property taxes paid during
the transition period meeting the requirements of subdivision 4 in a form specified by the
commissioner; and

(4) any other information required by the commissioner.

(b) The commissioner shall calculate the refund earned during the transition period
and issue payment to qualified applicants at a rate of $2 per gallon purchased up to a limit
of 40,000 gallons per electric utility or the total of eligible state taxes paid as determined
under subdivision 4, whichever is smaller.

(c) Applications must be reviewed and refunds awarded in the order received by
the commissioner.

(d) Ineligible applicants must be notified in writing.

Subd. 4.

Limitation to tax liability.

Refunds under this section are limited to the
sum of the liability for the following taxes paid or incurred by the applicant or its owners:

(1) corporate franchise tax under chapter 290 for the taxable years ending during
the transition period;

(2) for a business organized as a partnership, S corporation, or an estate or trust
electing to have its income taxed directly to the individual, the entity is treated as paying
individual income tax under chapter 290 equal to 7.5 percent of the net income reported
to partners, shareholders, or beneficiaries on federal schedule K-1 for the taxable years
ending during the transition period;

(3) state and local property tax liability payable during the transition period; and

(4) state sales or use tax under chapter 297A paid by the applicant during the
transition period.

Subd. 5.

Appropriation.

$240,000 is appropriated from the general fund to the
commissioner of revenue to pay the refunds authorized by this section.

Subd. 6.

Applicability.

This chapter applies to calendar years ending after June 30,
2006, and beginning before January 1, 2008.

Subd. 7.

Expiration.

This section expires January 8, 2009.