3.4. SR 04-09-2001 - Laserfiche WebLink

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In 1997, the Coalition of Utility Counties was then formed. This was a voluntary organization where counties which have generation facilities as well as transmission and distribution facilities located within their boundaries have come together for the primary purpose to ensure stability of their tax base and protect the economic viability of the community as a whole. Subsequently, the Cities who are hosts to generation facilities formulated the Coalition of Utility Cities. We have worked in conjunction with these folks since then. The Coalition representative in Sherburne County has been the Mayor for the elected officials and the City Administrator Joe Rudberg for staff. Subsequent to the DOR rule change and the FERC Order 888-889, the State of Minnesota, obviously changed its classification rate for commercial and industrial properties. The classification rate went from 4.5 down to 4.0 down to 3.5. This has resulted in as of yet unseen shift in the tax burden to agricultural land as well as residential homes. The impact is unseen given the fact the State has a surplus and has been able to utilize that surplus to give a credit particularly to homeowners. However, as a surplus is cyclical in nature, the elimination of the credit will create a significant onus on our citizens. This onus will be compounded if the personal property tax were eliminated/decreased. The Counties have been involved in the attempt for resolution of this issue. The Counties, in their talks with the IOUs had agreed that any relief to the utilities should have a trigger mechanism, to-wit; the relief was only for the time when consumers had choices as to which their provider would be. This was premised on the IOUs initial complaint that they were at a competitive disadvantage in a deregulated market. The IOUs have shifted twice in their plea to the legislator. The second argument that they use for request for relief on PPT is that they are not on an even playing field with other IOUs in other states and that they should not be taxed differently than other industrial and commercial properties. This year, they have added a new wrinkle. With the onset of rolling brown downs in California and the attention paid to the need for added generation and transmission and distribution (T & D), they now identify that they are not able to site because of the PPT and the long drawn out process for the siting. (Presently it takes 8-10 years to site and build a facility.) I have no reason to disagree with the latter statement. However, this issue begs then the question: What is the incentive f~t communities to have more facilities in their back yard if the revenue strear~Cne? Please note that utilities are valued differently ~at other industrial and commercial (C & I) properties: The Department of Revenue (DE)R) values the businesses based on their nexus to the state. The exception to this rule is the land that underlies the properties. The Department uses the FFRC (Federal Energy and Regulatory .Commission) reports to allocate that portion of the business that lies within the State of Minnesota. They then apply the unit value