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Key: (1) language to be deleted (2) new language

                             CHAPTER 9-H.F.No. 164 
                  An act relating to utilities; regulating area 
                  development rate plans; amending Minnesota Statutes 
                  1994, section 216B.161; and Laws 1990, chapter 370, 
                  section 7. 
           Section 1.  Minnesota Statutes 1994, section 216B.161, is 
        amended to read: 
           216B.161 [AREA DEVELOPMENT RATE PLAN.] 
           Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
        section, the following terms have the meanings given them in 
        this subdivision. 
           (b) "Area development rate" means a rate schedule 
        established by a utility that provides customers within an area 
        development zone service under a base utility rate schedule, 
        except that monthly demand charges may be reduced from the base 
        rate as agreed upon by the utility and the customer consistent 
        with this section. 
           (c) "Area development zone" means a contiguous or 
        noncontiguous area designated by an authority or municipality 
        for development or redevelopment and within which one of the 
        following conditions exists: 
           (1) obsolete buildings not suitable for improvement or 
        conversion or other identified hazards to the health, safety, 
        and general well-being of the community; 
           (2) buildings in need of substantial rehabilitation or in 
        substandard condition; or 
           (3) low values and damaged investments. 
           (d) "Authority" means a rural development financing 
        authority established under sections 469.142 to 469.150; a 
        housing and redevelopment authority established under sections 
        469.001 to 469.047; a port authority established under sections 
        469.048 to 469.068; an economic development authority 
        established under sections 469.090 to 469.108; a redevelopment 
        agency as defined in sections 469.152 to 469.165; the iron range 
        resources and rehabilitation board established under section 
        298.22; a municipality that is administering a development 
        district created under sections 469.124 to 469.134 or any 
        special law; a municipality that undertakes a project under 
        sections 469.152 to 469.165, except a town located outside the 
        metropolitan area as defined in section 473.121, subdivision 2, 
        or with a population of 5,000 persons or less; or a municipality 
        that exercises the powers of a port authority under any general 
        or special law.  
           (e) "Municipality" means a city, however organized, and, 
        with respect to a project undertaken under sections 469.152 to 
        469.165, "municipality" has the meaning given in sections 
        469.152 to 469.165, and, with respect to a project undertaken 
        under sections 469.142 to 469.151 or a county or multicounty 
        project undertaken under sections 469.004 to 469.008, also 
        includes any county. 
        commission shall order at least one public utility to establish 
        a pilot program that offers an may allow gas or electric public 
        utilities to offer area development rate rates.  The program 
        must be designed to assist industrial revitalization projects 
        located within the service area of the participating utility. 
           Subd. 3.  [TERMS AND CONDITIONS OF THE RATE.] An area 
        development rate offered under this section must: 
           (1) be offered for a period of more than two years but no 
        more than five years specified length of time to be determined 
        by the commission; 
           (2) be offered as a supplement to other development 
        incentives offered by the authority or municipality in which the 
        rate is available; 
           (3) be available only to new or expanding manufacturing or 
        wholesale trade customers; 
           (4) be designed to recover at least the incremental cost of 
        providing service to the participating customers; 
           (5) be offered in a fixed number of area development zones; 
           (6) include a provision that the utility provide 
        participating customers with an energy audit and inform those 
        customers of all existing energy conservation programs available 
        from the utility. 
        Recovery of costs under clause (4) may be made only from the 
        class of customers to which the rate is offered and not must not 
        be from residential customers.  A utility within a general rate 
        case, may seek recovery of the difference in revenue collected 
        under the area development plan rate and what would have been 
        collected under the standard tariff. 
           Subd. 4.  [EVALUATION.] The commission shall evaluate the 
        impact and effectiveness of the area development plan or plans 
        established under this section.  The evaluation must include 
        analysis of information submitted by the utility regarding the 
        plan.  Within 60 days after the expiration of a plan, the 
        commission shall determine whether the area development rates 
        should be continued, modified, or eliminated.  The commission 
        shall submit its findings to the legislature by January 1, 1995. 
           Sec. 2.  Laws 1990, chapter 370, section 7, is amended to 
           Sec. 7.  [REPEALER.] 
           Sections 2 and 3 are Section 3 is repealed July 1, 1995. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
           Presented to the governor March 9, 1995 
           Signed by the governor March 10, 1995, 2:31 p.m.