AB818: Bill Text

LRB-3679/1

JK:lmk:rs

2005 - 2006 LEGISLATURE

2005 Assembly BILL 818

November 9, 2005 - Introduced by Representatives Honadel, Hahn, Albers, Gottlieb, Gronemus, Hines, Hundertmark, Jensen, Kerkman, Kreibich, Kreuser, F. Lasee, LeMahieu, McCormick, Montgomery, Nerison, Nischke, Ott, Petrowski, Sheridan, Steinbrink, Towns and Van Roy, cosponsored by Senators Plale, Leibham, Kanavas, Brown, A. Lasee and Wirch. Referred to Committee on Energy and Utilities.

AB818,1,8 An Act to renumber and amend 196.20 (7) (c); to amend 16.969 (2) (a), 70.05 (5) (a) 1m., 70.112 (4) (a), 76.28 (9), 76.29 (2), 79.04 (1) (intro.), 79.04 (1) (b) 1., 79.04 (2) (a), 79.04 (2) (am) 1., 79.04 (6) (a) and 196.491 (3) (gm); and to create 70.112 (4) (am), 70.32 (2) (a) 8., 70.32 (2) (c) 2m., 70.995 (15), 76.28 (3) (e), 76.48 (3d), 79.04 (4m) and 196.20 (7) (c) 2. of the statutes; relating to: public utility aid payments, imposing local general property taxes on production plant general structures and substations, and creating a credit against license fees imposed on light, heat, and power companies and electric cooperatives.

Analysis by the Legislative Reference Bureau

Under current law, beginning in 2005, each county and municipality in which a power production plant is located receives a state aid payment based on the net book value of the production plant, for production plants that, generally, began operation before January 1, 2004, or based on the production plant's megawatt capacity, for production plants that began operation after December 31, 2003. Under this bill, beginning in 2007, if in any year the payments to the municipality and county in which a production plant is located would be greater based on the production plant's name-plate capacity than on the depreciated net book value of the production plant, the municipality and county will receive payments based on the production plant's name-plate capacity beginning in that year and in each year thereafter.

Under current law, generally, the property of a light, heat, and power company, including general structures and substations, is exempt from the imposition of local general property taxes, if the company is subject to license fees. Under the bill, beginning with the property tax assessments as of January 1, 2007, a general structure that is owned or leased by a light, heat, and power company is subject to local general property taxes. In addition, beginning with the property tax assessments as of January 1, 2008, a substation of a light, heat, and power company, not including transmission substation property, is subject to local general property taxes. However, the property of a light, heat, and power company that is located within the municipality that operates the company is not subject to property taxes.

In addition, beginning with license fees that are due in 2008, a light, heat, and power company may claim as a credit against its license fee liability an amount equal to the amount of the property taxes that the company paid in the calendar year on general structures and substations. An electric cooperative may also claim a credit against its license fee liability in an amount equal to the amount of any payments in lieu of property taxes that the cooperative paid in the calendar year, not to exceed the amount of property taxes that the cooperative would have paid had its property been subject to property taxes. If the credit claimed by a light, heat, and power company or an electric cooperative exceeds the license fee liability of the company or cooperative, the state will not issue a refund check, but the company or cooperative may carry forward any remaining credit to the 15 following years.

Under current law, a person who is issued a certificate of public convenience and necessity for a high-voltage transmission line must pay the Department of Administration an annual impact fee equal to 0.3 percent of the cost of the high-voltage transmission line. Under the bill, the annual impact fee is equal to 0.3 percent of the net book value of the high-voltage transmission line.

Under the bill, if the Public Service Commission receives a mitigation payment agreement before June 10, 2003, and does not determine that the agreement is unreasonable before November 11, 2003, mitigation payments in accordance with the terms of the agreement are recoverable in rates.

Finally, the bill requires the Department of Revenue to convene a study group, no later than December 31, 2005, to assess the feasibility and desirability of imposing local general property taxes on all distribution property of electric cooperatives, municipal utilities, and light, heat, and power companies.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB818, s. 1 Section 1. 16.969 (2) (a) of the statutes is amended to read:

AB818,3,3 16.969 (2) (a) An annual impact fee in an amount equal to 0.3% 0.3 percent of the cost net book value of the high-voltage transmission line, as determined by the commission under s. 196.491 (3) (gm).

AB818, s. 2 Section 2. 70.05 (5) (a) 1m. of the statutes is amended to read:

AB818,3,9 70.05 (5) (a) 1m. "Class of property" means residential under s. 70.32 (2) (a) 1.; commercial under s. 70.32 (2) (a) 2.; public utility general structures and substations under s. 70.32 (2) (a) 8.; personal property; or the sum of undeveloped under s. 70.32 (2) (a) 5., agricultural forest under s. 70.32 (2) (a) 5m.; productive forest land under s. 70.32 (2) (a) 6. and other under s. 70.32 (2) (a) 7.

AB818, s. 3 Section 3. 70.112 (4) (a) of the statutes is amended to read:

AB818,3,24 70.112 (4) (a) All Except as provided in par. (am), all special property assessed under ss. 76.01 to 76.26 and property of any light, heat, and power company taxed under s. 76.28, car line company, and electric cooperative association that is used and useful in the operation of the business of such company or association. If Except as provided in par. (am) 1., if a general structure for which an exemption is sought under this section is used and useful in part in the operation of any public utility assessed under ss. 76.01 to 76.26 or of the business of any light, heat, and power company taxed under s. 76.28, car line company, or electric cooperative association and in part for nonoperating purposes of the public utility or company or association, that general structure shall be assessed for taxation under this chapter at the percentage of its full market value that fairly measures and represents the extent of its use for nonoperating purposes. Nothing provided in this paragraph shall exclude any real estate or any property which is separately accounted for under s. 196.59 from special assessments for local improvements under s. 66.0705.

AB818, s. 4 Section 4. 70.112 (4) (am) of the statutes is created to read:

AB818,4,5 70.112 (4) (am) 1. Except as provided in subd. 3., beginning with the property tax assessments as of January 1, 2007, a general structure owned or leased by a light, heat, and power company taxed under s. 76.28 or 76.29 is subject to general property taxes and, beginning with distributions in 2008, shall not be included in the calculation of payments under s. 79.04 (1) and (2).

AB818,4,11 2. Except as provided in subd. 3., beginning with the property tax assessments as of January 1, 2008, a substation of a light, heat, and power company taxed under s. 76.28 or 76.29 is subject to general property taxes and, beginning with distributions in 2009, shall not be included in the calculation of payments under s. 79.04 (1) and (2), except that this subdivision does not apply to transmission substation property.

AB818,4,14 3. This paragraph does not apply to the property of a light, heat, and power company that is located within the boundaries of the municipality that operates the company and for which payments are made under s. 66.0811 (2).

AB818,4,16 4. Property subject to taxation under this paragraph shall be assessed by the department of revenue, as provided under s. 70.995.

AB818, s. 5 Section 5. 70.32 (2) (a) 8. of the statutes is created to read:

AB818,4,18 70.32 (2) (a) 8. Public utility general structures and substations.

AB818, s. 6 Section 6. 70.32 (2) (c) 2m. of the statutes is created to read:

AB818,4,21 70.32 (2) (c) 2m. "Public utility general structures and substations" means property described under s. 70.112 (4) (am).

AB818, s. 7 Section 7. 70.995 (15) of the statutes is created to read:

AB818,4,25 70.995 (15) (a) For the property tax assessments as of January 1, 2007, the treatment of manufacturing property under subs. (4) to (14) extends to property described under s. 70.112 (4) (am) 1.

AB818,5,3 (b) For the property tax assessments as of January 1, 2008, the treatment of manufacturing property under subs. (4) to (14) extends to property described under s. 70.112 (4) (am) 2.

AB818, s. 8 Section 8. 76.28 (3) (e) of the statutes is created to read:

AB818,5,14 76.28 (3) (e) Beginning with the fees due in calendar year 2008, a light, heat, and power company may claim as a credit against the fees imposed under sub. (2) and s. 76.29 (2) an amount equal to the amount of property taxes imposed under ch. 70 on general structures and substations that the light, heat, and power company paid in the then current calendar year. If a credit computed under this paragraph is not entirely offset against the license fees otherwise due for the then current calendar year, the unused balance may be carried forward and credited against license fees otherwise due for the following 15 calender years to the extent not offset by the license fees otherwise due in all intervening years between the year in which the property taxes were paid and the year in which the carry-forward credit is claimed.

AB818, s. 9 Section 9. 76.28 (9) of the statutes is amended to read:

AB818,6,4 76.28 (9) Property subject to local tax. The Except as provided in s. 70.112 (4) (am) the license fees imposed by this section upon the gross revenues of light, heat and power companies as defined in sub. (1) (e) shall be in lieu of all other taxes on all property used and useful in the operation of the business of such companies in this state, except that the same shall be subject to special assessments for local improvements. If a general structure is used and useful in part in the operation of the business of those companies in this state and in part for nonoperating purposes, the license fees imposed by this section are in place of the percentage of all other taxes on the property that fairly measures and represents the extent of the use and usefulness in the operation of the business of those companies in this state, and the balance is subject to local assessment and taxation, except that the entire general structure is subject to special assessments for local improvements. Property under s. 76.025 (2) shall not be taxed under this section, but shall be subject to local assessment and taxation.

AB818, s. 10 Section 10. 76.29 (2) of the statutes is amended to read:

AB818,6,17 76.29 (2) Imposition. There Subject to the credits under ss. 76.28 (3) (e) and 76.48 (3d), there is imposed on every light, heat, and power company and electric cooperative that owns an electric utility plant, an annual license fee to be assessed by the department on or before May 1, 2005, and every May 1 thereafter, ending with the assessment on May 1, 2010, measured by the gross revenues of the preceding tax period in an amount equal to the apportionment factor multiplied by gross revenues multiplied by 1.59% 1.59 percent. The fee shall become delinquent if not paid when due and when delinquent shall be subject to interest at the rate of 1.5% 1.5 percent per month until paid. Gross revenues earned by a light, heat, and power company after December 31, 2009, are subject to the license fee imposed under s. 76.28 (2). Gross revenues earned by an electric cooperative after December 31, 2009, are subject to the license fee imposed under s. 76.48 (1r).

AB818, s. 11 Section 11. 76.48 (3d) of the statutes is created to read:

AB818,7,5 76.48 (3d) (a) Beginning with the fees due in calendar year 2008, an electric cooperative may claim as a credit against the fees imposed under sub. (1r) and s. 76.29 (2) an amount equal to the amount of any payments in lieu of property taxes that the electric cooperative paid in the then current calendar year, not to exceed the amount of property taxes that the cooperative would have paid in that year had the cooperative's property been subject to taxation under ch. 70. If a credit computed under this paragraph is not entirely offset against the license fees otherwise due for the then current calendar year, the unused balance may be carried forward and credited against license fees otherwise due for the following 15 calender years to the extent not offset by the license fees otherwise due in all intervening years between the year in which the payments were paid and the year in which the carry-forward credit is claimed.

AB818,7,12 (b) Beginning with distributions in 2008, a general structure owned or leased by an electric cooperative for which a payment in lieu of property taxes is made in the year of the distribution shall not be included in the calculation of payments under s. 79.04 (1) and (2). Beginning with distributions in 2009, a substation of an electric cooperative, other than a transmission substation, for which a payment in lieu of property taxes is made in the year of the distribution shall not be included in the calculation of payments under s. 79.04 (1) and (2).

AB818, s. 12 Section 12. 79.04 (1) (intro.) of the statutes is amended to read:

AB818,7,24 79.04 (1) (intro.) Annually, except for production plants that begin operation after December 31, 2003, or begin operation as a repowered production plant after December 31, 2003, and except as provided in sub. (4m) and under s. 70.112 (4) (am), the department of administration, upon certification by the department of revenue, shall distribute to a municipality having within its boundaries a production plant, general structure, or substation, used by a light, heat, or power company assessed under s. 76.28 (2) or 76.29 (2), except property described in s. 66.0813 unless the production plant or substation is owned or operated by a local governmental unit located outside of the municipality, or by an electric cooperative assessed under ss. 76.07 and 76.48, respectively, or by a municipal electric company under s. 66.0825 the amount determined as follows:

AB818, s. 13 Section 13. 79.04 (1) (b) 1. of the statutes is amended to read:

AB818,8,6 79.04 (1) (b) 1. Beginning with the distribution under this subsection in 1991, and ending with the distribution under this subsection in 2006, the amount determined under par. (a) to value property used by a light, heat or power company in a municipality may not be less than the amount determined to value the property for the distribution to the municipality under this subsection in 1990, subject to subds. 2., 3. and 4.

AB818, s. 14 Section 14. 79.04 (2) (a) of the statutes is amended to read:

AB818,9,16 79.04 (2) (a) Annually, except for production plants that begin operation after December 31, 2003, or begin operation as a repowered production plant after December 31, 2003, and except as provided in sub. (4m) and under s. 70.112 (4) (am), the department of administration, upon certification by the department of revenue, shall distribute from the shared revenue account or, for the distribution in 2003, from the appropriation under s. 20.835 (1) (t) to any county having within its boundaries a production plant, general structure, or substation, used by a light, heat or power company assessed under s. 76.28 (2) or 76.29 (2), except property described in s. 66.0813 unless the production plant or substation is owned or operated by a local governmental unit that is located outside of the municipality in which the production plant or substation is located, or by an electric cooperative assessed under ss. 76.07 and 76.48, respectively, or by a municipal electric company under s. 66.0825 an amount determined by multiplying by 6 mills in the case of property in a town and by 3 mills in the case of property in a city or village the first $125,000,000 of the amount shown in the account, plus leased property, of each public utility except qualified wholesale electric companies, as defined in s. 76.28 (1) (gm), on December 31 of the preceding year for "production plant, exclusive of land," "general structures," and "substations," in the case of light, heat and power companies, electric cooperatives or municipal electric companies, for all property within the municipality in accordance with the system of accounts established by the public service commission or rural electrification administration, less depreciation thereon as determined by the department of revenue and less the value of treatment plant and pollution abatement equipment, as defined under s. 70.11 (21) (a), as determined by the department of revenue plus an amount from the shared revenue account or, for the distribution in 2003, from the appropriation under s. 20.835 (1) (t) determined by multiplying by 6 mills in the case of property in a town, and 3 mills in the case of property in a city or village, of the total original cost of production plant, general structures, and substations less depreciation, land and approved waste treatment facilities of each qualified wholesale electric company, as defined in s. 76.28 (1) (gm), as reported to the department of revenue of all property within the municipality. The total of amounts, as depreciated, from the accounts of all public utilities for the same production plant is also limited to not more than $125,000,000. The amount distributable to a county under this subsection and sub. (6) in any year shall not exceed $100 times the population of the county.

AB818, s. 15 Section 15. 79.04 (2) (am) 1. of the statutes is amended to read:

AB818,9,22 79.04 (2) (am) 1. Beginning with the distribution under this subsection in 1991, and ending with the distribution under this subsection in 2006, the amount determined under par. (a) to value property used by a light, heat or power company in a county may not be less than the amount determined to value the property for the distribution to the county under this subsection in 1990, subject to subds. 2. and 3.

AB818, s. 16 Section 16. 79.04 (4m) of the statutes is created to read:

AB818,9,25 79.04 (4m) Beginning with distributions in 2007, for production plants described under subs. (1) and (2), if in any year the payments to the municipality and county in which the production plant is located would be greater under subs. (6) and (7) (c) 1. based on the production plant's name-plate capacity than under sub. (1) or (2) based on the depreciated net book value of the production plant, the municipality and county shall receive payments under subs. (6) and (7) (c) 1., rather than under sub. (1) or (2), beginning in that year and in each year thereafter.

AB818, s. 17 Section 17. 79.04 (6) (a) of the statutes is amended to read: