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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 191-S.F.No. 1820 
                  An act relating to energy; providing for customer-specific 
                  terms in electric utility service contracts; modifying 
                  provisions relating to the legislative electric energy 
                  task force; requiring study on restructuring the 
                  electric industry; allowing exception to prohibition 
                  on natural gas outdoor lighting; exempting property 
                  that produces hydroelectric or hydromechanical power 
                  on federal land from property taxation; requiring 
                  reports on mercury emissions resulting from generation 
                  of electricity; amending Minnesota Statutes 1996, 
                  sections 216B.05; 216B.162, subdivisions 1, 4, and by 
                  adding subdivisions; 216C.051, subdivisions 2 and 6; 
                  216C.19, subdivision 5; 272.02, subdivision 1; and 
                  295.44, subdivision 1; proposing coding for new law in 
                  Minnesota Statutes, chapter 116. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
           Section 1.  Minnesota Statutes 1996, section 216B.05, is 
        amended to read: 
           216B.05 [FILING SCHEDULES, RULES, AND SERVICE AGREEMENTS.] 
           Subdivision 1.  [SCHEDULES PUBLIC RATE FILINGS.] Every 
        public utility shall file with the commission schedules showing 
        all rates, tolls, tariffs and charges which it has established 
        and which are in force at the time for any service performed by 
        it within the state, or for any service in connection therewith 
        or performed by any public utility controlled or operated by it. 
           Subd. 2.  [SCHEDULES AND RULES AND SERVICE 
        AGREEMENTS FILINGS.] Every public utility shall file with and as 
        a part of the schedule filings under subdivision 1, all rules 
        that, in the judgment of the commission, in any manner affect 
        the service or product, or the rates charged or to be charged 
        for any service or product, as well as any contracts, agreements 
        or arrangements relating to the service or product or the rates 
        to be charged for any service or product to which the schedule 
        is applicable as the commission may by general or special order 
        direct; provided that contracts and agreements for electric 
        service must be filed as required by subdivision 2a of this 
        section.  
           Subd. 2a.  [ELECTRIC SERVICE CONTRACTS.] A contract for 
        electric service entered into between a public utility and one 
        of its customers, in which the public utility and the customer 
        agree to customer-specific rates, terms, or service conditions 
        not already contained in the approved schedules, tariffs, or 
        rules of the utility, must be filed for approval by the 
        commission pursuant to the commission's rules of practice.  
        Contracts between public utilities and customers that are 
        necessitated by specific statutes in this chapter must be filed 
        for approval under those statutes and any rules adopted by the 
        commission pursuant to those statutes. 
           Subd. 3.  [PUBLIC INSPECTION.] Every public utility shall 
        keep copies of the schedules filings under subdivisions 1, 2, 
        and 2a open to public inspection under rules as the commission 
        may prescribe.  
           Sec. 2.  Minnesota Statutes 1996, section 216B.162, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (a) The terms used in this 
        section have the meanings given them in this subdivision. 
           (b) "Effective competition" means a market situation in 
        which an electric utility serves a customer that: 
           (1) is located within the electric utility's assigned 
        service area determined under section 216B.39; and 
           (2) has the ability to obtain its energy requirements from 
        an energy supplier that is not regulated by the commission under 
        section 216B.16. 
           (c) "Competitive rate schedule" means a rate schedule under 
        which an electric utility may set or change the price for its 
        service to an individual customer or group of customers subject 
        to effective competition. 
           (d) "Competitive rate" means the actual rate offered by the 
        utility, and approved by the commission, to a customer subject 
        to effective competition. 
           (e) "Discretionary rate reduction" means a specific 
        reduction to an existing rate, offered voluntarily by the 
        utility to an individual customer or group of customers and 
        approved by the commission in accordance with subdivisions 10 and 
        11. 
           Sec. 3.  Minnesota Statutes 1996, section 216B.162, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RATES AND TERMS OF COMPETITIVE RATE SCHEDULE.] 
        When the commission authorizes a competitive rate schedule for a 
        customer class, it shall set the terms and conditions of service 
        for that schedule, which must include: 
           (1) that the minimum rate for the schedule recover at least 
        the incremental cost of providing the service, including the 
        cost of additional capacity that is to be added while the rate 
        is in effect and any applicable on-peak or off-peak 
        differential; 
           (2) that the maximum possible rate reduction under a 
        competitive rate schedule does not exceed the difference between 
        the electric utility's applicable standard tariff and the cost 
        to the customer of the lowest cost competitive energy supply; 
           (3) that the term of a contract for a customer who elects 
        to take service under a competitive rate must be no less than 
        one year and no longer than five years; 
           (4) that the electric utility, within a general rate case, 
        be allowed to seek recovery of the difference between the 
        standard tariff and the competitive rate times the usage level 
        during the test year period; 
           (5) (4) a determination that a rate within a competitive 
        rate schedule meets the conditions of section 216B.03, for other 
        customers in the same customer class; 
           (6) (5) that the rate does not compete with district 
        heating or cooling provided by a district heating utility as 
        defined by section 216B.166, subdivision 2, paragraph (c); and 
           (7) (6) that the rate may not be offered to a customer in 
        which the utility has a financial interest greater than 50 
        percent. 
           Sec. 4.  Minnesota Statutes 1996, section 216B.162, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [DISCRETIONARY RATE REDUCTIONS 
        PERMITTED.] Notwithstanding sections 216B.03, 216B.06, 216B.07, 
        and 216B.16, a public utility whose rates are regulated under 
        this chapter may, at its discretion, offer a reduced rate for 
        tariffed electric services to eligible customers.  The 
        commission may approve a discretionary rate reduction provided 
        that: 
           (1) the reduction is offered to customers who are located 
        within the exclusive service territory of the public utility 
        that offers discretionary rate reductions or to potential 
        customers who are not customers of a Minnesota electric utility, 
        as defined in section 216B.38, but who propose to be located 
        within the exclusive service territory of the public utility; 
           (2) the reduction applies to customers requiring electric 
        service with a connected load of at least 2,000 kilowatts; 
           (3) the reduced rate recovers at least the incremental cost 
        of providing the service, including the cost of additional 
        capacity that is to be added while the rate is in effect and any 
        applicable on-peak or off-peak differential; 
           (4) in the event the commission has approved unbundled 
        rates, the reduction is not offered for any unbundled service 
        other than generation, unless the unbundled service is available 
        to the customer from a competitive supplier; 
           (5) the reduced rate does not compete with district heating 
        or cooling services provided by a district heating utility as 
        defined by section 216B.166, subdivision 2, paragraph (c); and 
           (6) the reduced rate does not compete with a natural gas 
        service provided by a natural gas utility and regulated by the 
        commission. 
           Sec. 5.  Minnesota Statutes 1996, section 216B.162, is 
        amended by adding a subdivision to read: 
           Subd. 11.  [COMMISSION DETERMINATION.] (a) Proposals for 
        discretionary rate reductions offered by utilities must be filed 
        with the commission, with copies of the filing served upon the 
        department of public service and the office of attorney general 
        at the same time it is served upon the commission.  The 
        commission shall review the proposals according to procedures 
        developed under section 216B.05, subdivision 2a.  The commission 
        shall not approve discretionary rate reductions offered by 
        public utilities that do not have an accepted resource plan on 
        file with the commission.  The commission shall not approve 
        discretionary rate reductions unless the utility has made the 
        customer aware of all cost-effective opportunities for energy 
        efficiency improvements offered by the utility. 
           (b) Public utilities that provide service under 
        discretionary rate reductions shall not, through increased 
        revenue requirements or through prospective rate design changes, 
        recover any revenues foregone due to the discretionary rate 
        reductions, nor shall the commission grant such recovery. 
           Sec. 6.  Minnesota Statutes 1996, section 216C.051, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ESTABLISHMENT.] (a) There is established a 
        legislative electric energy task force to study future electric 
        energy sources and costs and to make recommendations for 
        legislation for an environmentally and economically sustainable 
        and advantageous electric energy supply. 
           (b) The task force consists of: 
           (1) eight ten members of the house of representatives 
        including the chairs of the environment and natural resources 
        and regulated industries and energy committees and six members 
        to be appointed by the speaker of the house, two four of whom 
        must be from the minority caucus; 
           (2) eight ten members of the senate including the chairs of 
        the environment and natural resources and jobs, energy, and 
        community development committees and six members to be appointed 
        by the subcommittee on committees, two four of whom must be from 
        the minority caucus. 
           (c) The task force may employ staff, contract for 
        consulting services, and may reimburse the expenses of persons 
        requested to assist it in its duties other than state employees 
        or employees of electric utilities.  The director of the 
        legislative coordinating commission shall assist the task force 
        in administrative matters.  The task force shall elect cochairs, 
        one member of the house and one member of the senate from among 
        the committee chairs named to the committee.  The task force 
        members from the house shall elect the house cochair, and the 
        task force members from the senate shall elect the senate 
        cochair. 
           Sec. 7.  Minnesota Statutes 1996, section 216C.051, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ASSESSMENT; APPROPRIATION.] On request by the 
        cochairs of the legislative task force and after approval of the 
        legislative coordinating commission, the commissioner of the 
        department of public service shall assess from electric 
        utilities, in addition to assessments made under section 
        216B.62, the amount requested for the studies and analysis 
        required in subdivisions 3 and 4 and for operation of the task 
        force not to exceed $350,000 $700,000.  This authority to assess 
        continues until the commissioner has assessed a total of 
        $350,000 $700,000.  The amount assessed under this section is 
        appropriated to the director of the legislative coordinating 
        commission for those purposes, and is available until expended. 
           Sec. 8.  Minnesota Statutes 1996, section 216C.19, 
        subdivision 5, is amended to read: 
           Subd. 5.  [NATURAL GAS OUTDOOR LIGHTING PROHIBITED; 
        EXCEPTION.] After July 1, 1974, no new natural gas outdoor 
        lighting shall be installed in the state.  However, the 
        installation and use of natural gas outdoor lighting that is 
        equipped with either an automatic daytime shutoff device or is 
        otherwise capable of being switched on and off, is permitted. 
           Sec. 9.  Minnesota Statutes 1996, section 272.02, 
        subdivision 1, is amended to read: 
           Subdivision 1.  All property described in this section to 
        the extent herein limited shall be exempt from taxation: 
           (1) All public burying grounds. 
           (2) All public schoolhouses. 
           (3) All public hospitals. 
           (4) All academies, colleges, and universities, and all 
        seminaries of learning. 
           (5) All churches, church property, and houses of worship. 
           (6) Institutions of purely public charity except parcels of 
        property containing structures and the structures described in 
        section 273.13, subdivision 25, paragraph (c), clauses (1), (2), 
        and (3), or paragraph (d), other than those that qualify for 
        exemption under clause (25). 
           (7) All public property exclusively used for any public 
        purpose. 
           (8) Except for the taxable personal property enumerated 
        below, all personal property and the property described in 
        section 272.03, subdivision 1, paragraphs (c) and (d), shall be 
        exempt.  
           The following personal property shall be taxable:  
           (a) personal property which is part of an electric 
        generating, transmission, or distribution system or a pipeline 
        system transporting or distributing water, gas, crude oil, or 
        petroleum products or mains and pipes used in the distribution 
        of steam or hot or chilled water for heating or cooling 
        buildings and structures; 
           (b) railroad docks and wharves which are part of the 
        operating property of a railroad company as defined in section 
        270.80; 
           (c) personal property defined in section 272.03, 
        subdivision 2, clause (3); 
           (d) leasehold or other personal property interests which 
        are taxed pursuant to section 272.01, subdivision 2; 273.124, 
        subdivision 7; or 273.19, subdivision 1; or any other law 
        providing the property is taxable as if the lessee or user were 
        the fee owner; 
           (e) manufactured homes and sectional structures, including 
        storage sheds, decks, and similar removable improvements 
        constructed on the site of a manufactured home, sectional 
        structure, park trailer or travel trailer as provided in section 
        273.125, subdivision 8, paragraph (f); and 
           (f) flight property as defined in section 270.071.  
           (9) Personal property used primarily for the abatement and 
        control of air, water, or land pollution to the extent that it 
        is so used, and real property which is used primarily for 
        abatement and control of air, water, or land pollution as part 
        of an agricultural operation, as a part of a centralized 
        treatment and recovery facility operating under a permit issued 
        by the Minnesota pollution control agency pursuant to chapters 
        115 and 116 and Minnesota Rules, parts 7001.0500 to 7001.0730, 
        and 7045.0020 to 7045.1260, as a wastewater treatment facility 
        and for the treatment, recovery, and stabilization of metals, 
        oils, chemicals, water, sludges, or inorganic materials from 
        hazardous industrial wastes, or as part of an electric 
        generation system.  For purposes of this clause, personal 
        property includes ponderous machinery and equipment used in a 
        business or production activity that at common law is considered 
        real property. 
           Any taxpayer requesting exemption of all or a portion of 
        any real property or any equipment or device, or part thereof, 
        operated primarily for the control or abatement of air or water 
        pollution shall file an application with the commissioner of 
        revenue.  The equipment or device shall meet standards, rules, 
        or criteria prescribed by the Minnesota pollution control 
        agency, and must be installed or operated in accordance with a 
        permit or order issued by that agency.  The Minnesota pollution 
        control agency shall upon request of the commissioner furnish 
        information or advice to the commissioner.  On determining that 
        property qualifies for exemption, the commissioner shall issue 
        an order exempting the property from taxation.  The equipment or 
        device shall continue to be exempt from taxation as long as the 
        permit issued by the Minnesota pollution control agency remains 
        in effect. 
           (10) Wetlands.  For purposes of this subdivision, 
        "wetlands" means:  (i) land described in section 103G.005, 
        subdivision 15a; (ii) land which is mostly under water, produces 
        little if any income, and has no use except for wildlife or 
        water conservation purposes, provided it is preserved in its 
        natural condition and drainage of it would be legal, feasible, 
        and economically practical for the production of livestock, 
        dairy animals, poultry, fruit, vegetables, forage and grains, 
        except wild rice; or (iii) land in a wetland preservation area 
        under sections 103F.612 to 103F.616.  "Wetlands" under items (i) 
        and (ii) include adjacent land which is not suitable for 
        agricultural purposes due to the presence of the wetlands, but 
        do not include woody swamps containing shrubs or trees, wet 
        meadows, meandered water, streams, rivers, and floodplains or 
        river bottoms.  Exemption of wetlands from taxation pursuant to 
        this section shall not grant the public any additional or 
        greater right of access to the wetlands or diminish any right of 
        ownership to the wetlands. 
           (11) Native prairie.  The commissioner of the department of
        natural resources shall determine lands in the state which are 
        native prairie and shall notify the county assessor of each 
        county in which the lands are located.  Pasture land used for 
        livestock grazing purposes shall not be considered native 
        prairie for the purposes of this clause.  Upon receipt of an 
        application for the exemption provided in this clause for lands 
        for which the assessor has no determination from the 
        commissioner of natural resources, the assessor shall refer the 
        application to the commissioner of natural resources who shall 
        determine within 30 days whether the land is native prairie and 
        notify the county assessor of the decision.  Exemption of native 
        prairie pursuant to this clause shall not grant the public any 
        additional or greater right of access to the native prairie or 
        diminish any right of ownership to it. 
           (12) Property used in a continuous program to provide 
        emergency shelter for victims of domestic abuse, provided the 
        organization that owns and sponsors the shelter is exempt from 
        federal income taxation pursuant to section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992, notwithstanding the fact that the sponsoring organization 
        receives funding under section 8 of the United States Housing 
        Act of 1937, as amended. 
           (13) If approved by the governing body of the municipality 
        in which the property is located, property not exceeding one 
        acre which is owned and operated by any senior citizen group or 
        association of groups that in general limits membership to 
        persons age 55 or older and is organized and operated 
        exclusively for pleasure, recreation, and other nonprofit 
        purposes, no part of the net earnings of which inures to the 
        benefit of any private shareholders; provided the property is 
        used primarily as a clubhouse, meeting facility, or recreational 
        facility by the group or association and the property is not 
        used for residential purposes on either a temporary or permanent 
        basis. 
           (14) To the extent provided by section 295.44, real and 
        personal property used or to be used primarily for the 
        production of hydroelectric or hydromechanical power on a site 
        owned by the federal government, the state, or a local 
        governmental unit which is developed and operated pursuant to 
        the provisions of section 103G.535. 
           (15) If approved by the governing body of the municipality 
        in which the property is located, and if construction is 
        commenced after June 30, 1983:  
           (a) a "direct satellite broadcasting facility" operated by 
        a corporation licensed by the federal communications commission 
        to provide direct satellite broadcasting services using direct 
        broadcast satellites operating in the 12-ghz. band; and 
           (b) a "fixed satellite regional or national program service 
        facility" operated by a corporation licensed by the federal 
        communications commission to provide fixed satellite-transmitted 
        regularly scheduled broadcasting services using satellites 
        operating in the 6-ghz. band. 
        An exemption provided by clause (15) shall apply for a period 
        not to exceed five years.  When the facility no longer qualifies 
        for exemption, it shall be placed on the assessment rolls as 
        provided in subdivision 4.  Before approving a tax exemption 
        pursuant to this paragraph, the governing body of the 
        municipality shall provide an opportunity to the members of the 
        county board of commissioners of the county in which the 
        facility is proposed to be located and the members of the school 
        board of the school district in which the facility is proposed 
        to be located to meet with the governing body.  The governing 
        body shall present to the members of those boards its estimate 
        of the fiscal impact of the proposed property tax exemption.  
        The tax exemption shall not be approved by the governing body 
        until the county board of commissioners has presented its 
        written comment on the proposal to the governing body or 30 days 
        have passed from the date of the transmittal by the governing 
        body to the board of the information on the fiscal impact, 
        whichever occurs first. 
           (16) Real and personal property owned and operated by a 
        private, nonprofit corporation exempt from federal income 
        taxation pursuant to United States Code, title 26, section 
        501(c)(3), primarily used in the generation and distribution of 
        hot water for heating buildings and structures.  
           (17) Notwithstanding section 273.19, state lands that are 
        leased from the department of natural resources under section 
        92.46. 
           (18) Electric power distribution lines and their 
        attachments and appurtenances, that are used primarily for 
        supplying electricity to farmers at retail.  
           (19) Transitional housing facilities.  "Transitional 
        housing facility" means a facility that meets the following 
        requirements.  (i) It provides temporary housing to individuals, 
        couples, or families.  (ii) It has the purpose of reuniting 
        families and enabling parents or individuals to obtain 
        self-sufficiency, advance their education, get job training, or 
        become employed in jobs that provide a living wage.  (iii) It 
        provides support services such as child care, work readiness 
        training, and career development counseling; and a 
        self-sufficiency program with periodic monitoring of each 
        resident's progress in completing the program's goals.  (iv) It 
        provides services to a resident of the facility for at least 
        three months but no longer than three years, except residents 
        enrolled in an educational or vocational institution or job 
        training program.  These residents may receive services during 
        the time they are enrolled but in no event longer than four 
        years.  (v) It is owned and operated or under lease from a unit 
        of government or governmental agency under a property 
        disposition program and operated by one or more organizations 
        exempt from federal income tax under section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992.  This exemption applies notwithstanding the fact that the 
        sponsoring organization receives financing by a direct federal 
        loan or federally insured loan or a loan made by the Minnesota 
        housing finance agency under the provisions of either Title II 
        of the National Housing Act or the Minnesota housing finance 
        agency law of 1971 or rules promulgated by the agency pursuant 
        to it, and notwithstanding the fact that the sponsoring 
        organization receives funding under Section 8 of the United 
        States Housing Act of 1937, as amended. 
           (20) Real and personal property, including leasehold or 
        other personal property interests, owned and operated by a 
        corporation if more than 50 percent of the total voting power of 
        the stock of the corporation is owned collectively by:  (i) the 
        board of regents of the University of Minnesota, (ii) the 
        University of Minnesota Foundation, an organization exempt from 
        federal income taxation under section 501(c)(3) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1992, and 
        (iii) a corporation organized under chapter 317A, which by its 
        articles of incorporation is prohibited from providing pecuniary 
        gain to any person or entity other than the regents of the 
        University of Minnesota; which property is used primarily to 
        manage or provide goods, services, or facilities utilizing or 
        relating to large-scale advanced scientific computing resources 
        to the regents of the University of Minnesota and others. 
           (21)(a) Wind energy conversion systems, as defined in 
        section 216C.06, subdivision 12, installed after January 1, 
        1991, and before January 2, 1995, and used as an electric power 
        source, are exempt. 
           (b) Wind energy conversion systems, as defined in section 
        216C.06, subdivision 12, installed after January 1, 1995, 
        including the foundation or support pad, which are (i) used as 
        an electric power source; (ii) located within one county and 
        owned by the same owner; and (iii) produce two megawatts or less 
        of electricity as measured by nameplate ratings, are exempt. 
           (c) Wind energy conversion systems, as defined in section 
        216C.06, subdivision 12, installed after January 1, 1995, and 
        used as an electric power source but not exempt under item (b), 
        are treated as follows:  (i) the foundation and support pad are 
        taxable; (ii) the associated supporting and protective 
        structures are exempt for the first five assessment years after 
        they have been constructed, and thereafter, 30 percent of the 
        market value of the associated supporting and protective 
        structures are taxable; and (iii) the turbines, blades, 
        transformers, and its related equipment, are exempt. 
           (22) Containment tanks, cache basins, and that portion of 
        the structure needed for the containment facility used to 
        confine agricultural chemicals as defined in section 18D.01, 
        subdivision 3, as required by the commissioner of agriculture 
        under chapter 18B or 18C. 
           (23) Photovoltaic devices, as defined in section 216C.06, 
        subdivision 13, installed after January 1, 1992, and used to 
        produce or store electric power. 
           (24) Real and personal property owned and operated by a 
        private, nonprofit corporation exempt from federal income 
        taxation pursuant to United States Code, title 26, section 
        501(c)(3), primarily used for an ice arena or ice rink, and used 
        primarily for youth and high school programs. 
           (25) A structure that is situated on real property that is 
        used for: 
           (i) housing for the elderly or for low- and moderate-income 
        families as defined in Title II of the National Housing Act, as 
        amended through December 31, 1990, and funded by a direct 
        federal loan or federally insured loan made pursuant to Title II 
        of the act; or 
           (ii) housing lower income families or elderly or 
        handicapped persons, as defined in Section 8 of the United 
        States Housing Act of 1937, as amended. 
           In order for a structure to be exempt under (i) or (ii), it 
        must also meet each of the following criteria: 
           (A) is owned by an entity which is operated as a nonprofit 
        corporation organized under chapter 317A; 
           (B) is owned by an entity which has not entered into a 
        housing assistance payments contract under Section 8 of the 
        United States Housing Act of 1937, or, if the entity which owns 
        the structure has entered into a housing assistance payments 
        contract under Section 8 of the United States Housing Act of 
        1937, the contract provides assistance for less than 90 percent 
        of the dwelling units in the structure, excluding dwelling units 
        intended for management or maintenance personnel; 
           (C) operates an on-site congregate dining program in which 
        participation by residents is mandatory, and provides assisted 
        living or similar social and physical support services for 
        residents; and 
           (D) was not assessed and did not pay tax under chapter 273 
        prior to the 1991 levy, while meeting the other conditions of 
        this clause. 
           An exemption under this clause remains in effect for taxes 
        levied in each year or partial year of the term of its permanent 
        financing. 
           (26) Real and personal property that is located in the 
        Superior National Forest, and owned or leased and operated by a 
        nonprofit organization that is exempt from federal income 
        taxation under section 501(c)(3) of the Internal Revenue Code of 
        1986, as amended through December 31, 1992, and primarily used 
        to provide recreational opportunities for disabled veterans and 
        their families. 
           (27) Manure pits and appurtenances, which may include 
        slatted floors and pipes, installed or operated in accordance 
        with a permit, order, or certificate of compliance issued by the 
        Minnesota pollution control agency.  The exemption shall 
        continue for as long as the permit, order, or certificate issued 
        by the Minnesota pollution control agency remains in effect. 
           (28) Notwithstanding clause (8), item (a), attached 
        machinery and other personal property which is part of a 
        facility containing a cogeneration system as described in 
        section 216B.166, subdivision 2, paragraph (a), if the 
        cogeneration system has met the following criteria:  (i) the 
        system utilizes natural gas as a primary fuel and the 
        cogenerated steam initially replaces steam generated from 
        existing thermal boilers utilizing coal; (ii) the facility 
        developer is selected as a result of a procurement process 
        ordered by the public utilities commission; and (iii) 
        construction of the facility is commenced after July 1, 1994, 
        and before July 1, 1997. 
           (29) Real property acquired by a home rule charter city, 
        statutory city, county, town, or school district under a lease 
        purchase agreement or an installment purchase contract during 
        the term of the lease purchase agreement as long as and to the 
        extent that the property is used by the city, county, town, or 
        school district and devoted to a public use and to the extent it 
        is not subleased to any private individual, entity, association, 
        or corporation in connection with a business or enterprise 
        operated for profit. 
           Sec. 10.  Minnesota Statutes 1996, section 295.44, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXEMPTION.] Notwithstanding the provisions 
        of sections 272.01, subdivision 2, 272.02, subdivision 5, and 
        273.19, subdivision 1, real or personal property used or to be 
        used primarily for the production of hydroelectric or 
        hydromechanical power on a site owned by the federal government, 
        the state, or a local governmental unit and developed and 
        operated pursuant to section 103G.535 may be exempt from 
        property taxation for all years during which the site is 
        developed and operated under the terms of a lease or agreement 
        authorized by section 103G.535. 
           Sec. 11.  [LEGISLATIVE ELECTRIC ENERGY TASK FORCE; ELECTRIC 
        INDUSTRY RESTRUCTURING.] 
           (a) The legislative electric energy task force shall review 
        and analyze issues relating to the restructuring of the electric 
        industry.  At a minimum, the task force shall study the 
        potential costs and benefits of restructuring on: 
           (1) low-income, residential, small business and large 
        commercial, and industrial electric consumer rates and services, 
        including the ability of all customers to participate in and 
        benefit from a restructured industry; 
           (2) the overall state's economy, as well as the economy of 
        regions within the state, and the cost of doing business in the 
        state; 
           (3) the reliability and safety of the electricity system, 
        including system planning and operation; 
           (4) the state's environment, including the cost-effective 
        promotion of conservation and renewable energy; and 
           (5) public, private, and cooperative utilities, and 
        alternative electricity suppliers, including the development of 
        competitively neutral markets. 
           The task force shall present recommendations to the 
        legislature regarding electric industry restructuring by January 
        15, 1998. 
           (b) In performing the review and analysis under paragraph 
        (a), the task force shall solicit information from and the 
        viewpoints of all affected and involved parties, which include, 
        but are not limited to: 
           (1) the public utilities commission; 
           (2) investor-owned utilities; 
           (3) rural electric cooperatives and municipal electric 
        utilities; 
           (4) large business electricity consumers; 
           (5) small business electricity consumers; 
           (6) residential consumers; 
           (7) environmental interest groups; and 
           (8) the general public. 
           Sec. 12.  [UTILITY TAXATION; LEGISLATIVE ELECTRIC ENERGY 
        TASK FORCE.] 
           The legislative electric energy task force shall, by 
        January 15, 1998, conduct an analysis of issues relating to the 
        personal property tax on electric and gas utilities in the state 
        and shall issue its findings and recommendations to the 
        legislature by that date regarding: 
           (1) the effects the personal property tax has on the 
        ability of Minnesota electric and gas utilities to compete in a 
        less regulated energy industry; 
           (2) the impacts that eliminating the personal property tax 
        on utilities would have on local government units, including 
        school districts, that depend on the revenues from that tax; 
           (3) the impact eliminating the personal property tax would 
        have on state revenues, local government aids, school district 
        funding formulas, and ratepayers; and 
           (4) alternatives the legislature can consider to address 
        the issues that arise under clause (1) while minimizing the 
        impacts described in clause (2). 
           The task force shall establish an interim subcommittee on 
        utility taxation to address these issues, and the subcommittee 
        shall work closely with officials from affected local government 
        units in formulating recommendations to present to the full task 
        force. 
           Sec. 13.  [EFFECTIVE DATE.] 
           Sections 1, 6 to 8, 11, and 12 are effective the day 
        following final enactment.  Sections 9 and 10 are effective for 
        taxes payable in 1998 and thereafter. 
                                   ARTICLE 2
           Section 1.  [TITLE.] 
           Section 2 may be referred to as the Mercury Emissions 
        Consumer Information Act of 1997. 
           Sec. 2.  [116.925] [ELECTRIC ENERGY; MERCURY EMISSIONS 
        REPORT.] 
           Subdivision 1.  [REPORT.] To address the shared 
        responsibility between the providers and consumers of 
        electricity for the protection of Minnesota's lakes, each 
        electric utility, as defined in section 216B.38, subdivision 5, 
        and each person that generates electricity in this state for 
        that person's own use or for sale at retail or wholesale shall 
        provide to the commissioner of the pollution control agency by 
        April 1 an annual report of the amount of mercury emitted in 
        generating that electricity at that person's facilities for the 
        previous calendar year. 
           Subd. 2.  [CONTENTS OF REPORT.] A report must include: 
           (1) a list of all generation facilities owned or operated 
        by the utility or person subject to subdivision 1; 
           (2) all readily available information regarding the amount 
        of electricity purchased by the utility or person subject to 
        subdivision 1, for use in the state; and 
           (3) information for each facility owned or operated by the 
        utility or person subject to subdivision 1, stating:  (i) the 
        amount of electricity generated at the facility for use or for 
        sale in this state at retail or wholesale; (ii) the amount of 
        fuel used to generate that electricity at the facility; and 
        (iii) the amount of mercury emitted in generating that 
        electricity in the previous calendar year, based on emission 
        factors, stack tests, fuel analysis, or other methods approved 
        by the commissioner.  The report must include the mercury 
        content of the fuel if it is determined in conjunction with a 
        stack test. 
           (b) The following are de minimis standards for small and 
        little-used generation facilities: 
           (1) less than 240 hours of operation by the combustion unit 
        per year; 
           (2) a fuel capacity input at the combustion unit of less 
        than 150 million British thermal units per hour; or 
           (3) an electrical generation unit with maximum output of 
        less than or equal to 15 megawatts.  
           A utility or person subject to this section who owns or 
        operates a combustion unit that qualifies under one of these de 
        minimis standards is not required to provide the information 
        described in paragraph (a) for that combustion unit. 
           (c) A report need not be filed for a combustion device for 
        a year in which the device has documented mercury emissions of 
        three pounds or less. 
           Subd. 3.  [REPORT TO CONSUMERS.] By January 1, 1999, and 
        biennially thereafter in the report on air toxics required under 
        section 115D.15, the commissioner shall report the amount of 
        mercury emitted in the generation of electricity. 
           Sec. 3.  [EFFECTIVE DATE.] 
           Sections 1 and 2 are effective the day following final 
        enactment. 
           Presented to the governor May 19, 1997 
           Signed by the governor May 20, 1997, 10:47 a.m.