SB180: Bill Text

LRB-2735/3

JK:wlj:rs

2003 - 2004 LEGISLATURE

2003 Senate BILL 180

May 23, 2003 - Introduced by Senators Brown, Cowles, Panzer, M. Meyer and Plale, cosponsored by Representatives Gottlieb, Jensen, Gielow and Gronemus. Referred to Committee on Energy and Utilities.

SB180,1,5 An Act to repeal 79.01 (1) (c) 3.; to amend 20.835 (1) (d), 79.04 (1) (intro.), 79.04 (1) (a), 79.04 (1) (c) 1., 79.04 (2) (a) and 79.04 (4); and to create 20.835 (1) (dm), 79.005 (4), 79.01 (2m), 79.04 (3m), 79.04 (5), 79.04 (6), 79.04 (7) and 196.20 (7) of the statutes; relating to: payments to local governments for public utilities and making an appropriation.

Analysis by the Legislative Reference Bureau

Under current law, generally, the property of a public utility is subject to a state tax rather than local property taxes. Instead of collecting property taxes on public utility property, municipalities and counties receive payments from the shared revenue account based on the value of public utility property located in the municipalities and counties. The amount of a municipality's payment is equal to the value of public utility property located in the municipality, not exceeding $125,000,000 for each utility, multiplied by either three mills, for a town, or six mills, for a city or village. However, the payment may not exceed an amount that is equal to $300 multiplied by the municipality's population. The amount of a county's payment is equal to the value of public utility property located in each municipality within the county, not exceeding $125,000,000 for each utility, multiplied by either three mills, for a city or village located within the county, or six mills, for a town located within the county. However, the amount of the county's payment may not exceed an amount that is equal to $100 multiplied by the county's population.

Under this bill, for public utilities that begin operation before January 1, 2004, municipalities and counties in which such utilities are located will continue to receive payments from the shared revenue account as described above. Under the bill, beginning in 2005, the payments to municipalities and counties related to public utility production plants that begin operation after December 31, 2003, are paid from the public utility distribution account, which is created by the bill, instead of from the shared revenue account, and the amount of such payments is based on the megawatt capacity of all production plants located in the municipality and county, rather than on the value of the public utility property multiplied by the municipality's or county's mill rate. If a production plant is located in a city or village, the city or village in which the plant is located receives two-thirds of the amount of the payment determined by megawatt capacity, and the county in which the plant is located receives one-third of the amount of the payment determined by megawatt capacity. If a production plant is located in a town, the town in which the plant is located receives one-third of the amount of the payment determined by megawatt capacity, and the county in which the plant is located receives two-thirds of the amount of the payment determined by megawatt capacity. The total payment is equal to the production plant's megawatt capacity multiplied by $2,000.

Under the bill, beginning in 2005, for production plants that begin operation after December, 31, 2003, each municipality and county in which a production plant is located will receive additional payments based on the megawatt capacity of a production plant located in the municipality or county, if the production plant meets any of the following criteria: 1) it is not a nuclear-powered production plant and it is built on the site of, or adjacent to, an existing or decommissioned production plant, on the site of, or adjacent to, brownfields, or on a site purchased by a public utility before January 1, 1980, and identified in an advance plan as a proposed production plant site; 2) it is a baseload electric generating facility, as determined by the Public Service Commission; or 3) it is a production plant that derives energy from a renewable resource. The amount of the payment under this first criterion equals the production plant's megawatt capacity multiplied by $600, and the amount of the payment under the second and third criteria is equal to the production plant's megawatt capacity multiplied by $1,000.

Under current law, if public utility property is decommissioned and thereby subject to local property taxes, the municipalities and counties in which the property is located no longer receive shared revenue payments based on the value of that property. Under the bill, shared revenue payments related to decommissioned utility property are phased out over five years.

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:

SB180, s. 1 Section 1. 20.835 (1) (d) of the statutes is amended to read:

SB180,3,4 20.835 (1) (d) Shared revenue account. A sum sufficient to meet the requirements of the shared revenue account established under s. 79.01 (2) to provide for the distributions from the shared revenue account to counties, towns, villages and cities under ss. 79.03, 79.04 (1) to (4), and 79.06.

SB180, s. 2 Section 2. 20.835 (1) (dm) of the statutes is created to read:

SB180,3,7 20.835 (1) (dm) Public utility distribution account. Beginning in 2005, a sum sufficient to make the payments under s. 79.04 (5), (6), and (7).

SB180, s. 3 Section 3. 79.005 (4) of the statutes is created to read:

SB180,3,9 79.005 (4) "Repowering" means any of the following:

SB180,3,12 (a) Replacing the boiler on an existing fossil fuel steam unit with a combustion turbine and heat recovery steam generator and reusing the steam turbine and heat rejection system.

SB180,3,14 (b) Adding a heat recovery steam generator to a simple cycle combustion turbine.

SB180,3,16 (c) Demolishing or abandoning an existing power generation unit and adding a new combustion turbine, heat recovery steam generator, and steam turbine.

SB180, s. 4 Section 4. 79.01 (1) (c) 3. of the statutes is repealed.

SB180, s. 5 Section 5. 79.01 (2m) of the statutes is created to read:

SB180,3,22 79.01 (2m) There is established an account in the general fund entitled the "Public Utility Distribution Account," referred to in this chapter as the "public utility account." There shall be appropriated to the public utility account the sums specified in s. 79.04 (5), (6), and (7).

SB180, s. 6 Section 6. 79.04 (1) (intro.) of the statutes is amended to read:

SB180,4,8 79.04 (1) (intro.) Annually, for production plants that begin operation before January 1, 2004, other than plants that undergo repowering after December 31, 2003, the department of administration, upon certification by the department of revenue, shall distribute to a municipality having within its boundaries a production plant or a general structure, including production plants and general structures under construction, 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 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:

SB180, s. 7 Section 7. 79.04 (1) (a) of the statutes is amended to read:

SB180,5,6 79.04 (1) (a) An amount from the shared revenue account determined by multiplying by 3 mills in the case of a town, and 6 mills in the case of 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 either "production plant, exclusive of land" and "general structures", or "work in progress" for production plants and general structures under construction, in the case of light, heat and power companies, electric cooperatives or municipal electric companies, for all property within a 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 determined by multiplying by 3 mills in the case of a town, and 6 mills in the case of a city or village, of the first $125,000,000 of the total original cost of production plant, general structures and work-in-progress 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 municipality under this subsection and sub. (6) in any year shall not exceed $300 times the population of the municipality.

SB180, s. 8 Section 8. 79.04 (1) (c) 1. of the statutes is amended to read:

SB180,5,14 79.04 (1) (c) 1. The payment for any municipality in which a production plant is located, which the public service commission certifies to the department of revenue will produce a nominal rated capacity of 200 megawatts or more, shall be no less than $75,000 annually, except that the amount distributable to a municipality in any year shall not exceed the per capita limit specified in par. (a). Payments under this paragraph may be extended to decommissioned production plants as provided in subd. 3.

SB180, s. 9 Section 9. 79.04 (2) (a) of the statutes is amended to read:

SB180,6,23 79.04 (2) (a) Annually, for production plants that begin operation before January 1, 2004, other than plants that undergo repowering after December 31, 2003, the department of administration, upon certification by the department of revenue, shall distribute from the shared revenue account to any county having within its boundaries a production plant or a general structure, including production plants and general structures under construction, 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 is owned or operated by a local governmental unit that is located outside of the municipality in which the production plant 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 either "production plant, exclusive of land" and "general structures", or "work in progress" for production plants and general structures under construction, 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 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 work-in-progress 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.

SB180, s. 10 Section 10. 79.04 (3m) of the statutes is created to read:

SB180,7,5 79.04 (3m) For purposes of determining the amount of the payments under subs. (1) and (2), the payments for a municipality and county in which an ash disposal facility is operating prior to the effective date of this subsection .... [revisor inserts date], shall be calculated to include an amount that is equal to the net book value of the ash disposal facility multiplied by 2.

SB180, s. 11 Section 11. 79.04 (4) of the statutes is amended to read:

SB180,7,13 79.04 (4) (a) Annually, in addition to the amount amounts distributed under sub. (1) subs. (1), (5), (6), and (7), the department of administration shall distribute $50,000 to a municipality if spent nuclear fuel is stored within the municipality on December 31 of the preceding year. If a spent nuclear fuel storage facility is located within one mile of a municipality, that municipality shall receive $10,000 annually and the municipality where that storage facility is located shall receive $40,000 annually.

SB180,7,21 (b) Annually, in addition to the amount amounts distributed under sub. (2) subs. (2), (5), (6), and (7), the department of administration shall distribute $50,000 to a county if spent nuclear fuel is stored within the county on December 31 of the preceding year. If a spent nuclear fuel storage facility is located at a production plant located in more than one county, the payment shall be apportioned according to the formula under sub. (1) (c) 2., except that the formula, as it applies to municipalities in that subdivision, applies to counties in this paragraph. The payment under this paragraph may not be less than $10,000 annually.

SB180, s. 12 Section 12. 79.04 (5) of the statutes is created to read:

SB180,8,6 79.04 (5) (a) Beginning with the distributions in 2005, if property that was exempt from the property tax under s. 70.112 (4) and that was used to generate power by a light, heat, or power company, except property under s. 66.0813, or by an electric cooperative, is decommissioned, the municipality shall be paid, from the public utility account, an amount calculated by subtracting an amount equal to the property taxes paid for that property during the current year to the municipality for its general operations from the following percentages of the payment that the municipality received under this section during the last year that the property was exempt from the property tax:

SB180,8,7 1. In the first year that the property is taxable, 100%.

SB180,8,8 2. In the 2nd year that the property is taxable, 80%.

SB180,8,9 3. In the 3rd year that the property is taxable, 60%.

SB180,8,10 4. In the 4th year that the property is taxable, 40%.

SB180,8,11 5. In the 5th year that the property is taxable, 20%.

SB180,8,19 (b) Beginning with the distributions in 2005, if property that was exempt from the property tax under s. 70.112 (4) and that was used to generate power by a light, heat, or power company, except property under s. 66.0813, or by an electric cooperative, is decommissioned, the county shall be paid, from the public utility account, an amount calculated by subtracting an amount equal to the property taxes paid for that property during the current year to the county for its general operations from the following percentages of the payment the county received under this section during the last year that the property was exempt from the property tax:

SB180,8,20 1. In the first year that the property is taxable, 100%.

SB180,8,21 2. In the 2nd year that the property is taxable, 80%.

SB180,8,22 3. In the 3rd year that the property is taxable, 60%.

SB180,8,23 4. In the 4th year that the property is taxable, 40%.