Criteria modification for an eligible taxing jurisdiction to qualify for aid

A bill for an act

relating to taxation; electric generation transition aid; modifying the criteria for

an eligible taxing jurisdiction to qualify for aid; modifying the calculation of aid;

amending Minnesota Statutes 2024, section 477A.24, subdivisions 1, 3, 5;

Minnesota Statutes 2025 Supplement, section 477A.24, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 477A.24, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For purposes of this section, the following terms have

the meanings given.

(b) "Electric generating unit" means a single generating unit at an electric generating

plant powered by coal, nuclear, or natural gas.

(c) "Electric generation property" means taxable property of an electric generating plant

owned by a public utility, as defined in section
216B.02, subdivision 4
, that is powered by

coal, nuclear, or natural gas and located in an eligible taxing jurisdiction.

(d) "Eligible taxing jurisdiction" means a county, home rule charter or statutory city,

town, or school district.

(e) "Unit base year" means the assessment year in which the assessed value of electric

generation property is reduced due to the retirement
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or fuel source conversion
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of the electric

generating unit.

(f) "Unit differential" means (1) the tax capacity of electric generation property in the

assessment year preceding the unit base year, minus (2) the tax capacity of electric generation

property in the unit base year. The unit differential may not be less than zero. The unit

differential equals zero if the tax capacity of electric generation property in the eligible

taxing jurisdiction in the assessment year preceding the unit base year is less than four

percent of the total net tax capacity of the eligible taxing jurisdiction in that year, as adjusted

under section
473F.08, subdivision 2
, or
276A.06, subdivision 2
, as applicable, except that,

in an eligible taxing jurisdiction with multiple electric generating units, only the unit

differential calculated upon the first retirement
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or fuel source conversion
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of an electric

generating unit in that jurisdiction following the effective date of this section is subject to

the reduction under this sentence.

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EFFECTIVE DATE.

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This section is effective for aids payable in 2027 and thereafter.

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Sec. 2.

Minnesota Statutes 2025 Supplement, section 477A.24, subdivision 2, is amended

to read:

Subd. 2.

Required notification.

Notwithstanding the requirements of Minnesota Rules,

chapter
8100
, a public utility must notify the commissioner when the public utility expects

to retire an electric generating unit and remove that unit from the property tax base
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, or to

convert an electric generating unit to a different fuel source
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. The notification must be in the

form and manner determined by the commissioner of revenue, include information required

by the commissioner to calculate transition aid under this section, and be filed together with

the reports required under section
273.371
.

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EFFECTIVE DATE.

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This section is effective for aids payable in 2027 and thereafter.

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Sec. 3.

Minnesota Statutes 2024, section 477A.24, subdivision 3, is amended to read:

Subd. 3.

Unit transition amount.

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(a) If a jurisdiction certifies its tax rate for taxes

payable in the year following the unit base year to the commissioner of revenue on or before

April 1 of that year, the initial unit transition amount equals the product of (1) the unit

differential, times (2) the jurisdiction's tax rate for taxes payable in the year following the

unit base year.

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(a)
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(b) If a jurisdiction certifies its tax rate for taxes payable in the year following the

unit base year to the commissioner of revenue after April 1 of that year,
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the initial unit

transition amount equals the product of (1) the unit differential, times (2) the jurisdiction's

tax rate for taxes payable in the unit base year.

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(b)
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(c)
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The unit transition amount for the year following the unit base year, or in the year

as provided under subdivision 7, equals the initial unit transition amount. Unit transition

amounts in subsequent years must be reduced each year by an amount equal to five percent

of the initial unit transition amount. If the unit transition amount attributable to any unit is

less than $5,000 in any year, the unit transition amount for that unit equals zero.

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EFFECTIVE DATE.

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This section is effective for aids payable in 2027 and thereafter.

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Sec. 4.

Minnesota Statutes 2024, section 477A.24, subdivision 5, is amended to read:

Subd. 5.

Aid elimination.

(a) Notwithstanding subdivision 4, beginning for aid in the

year after the year in which the jurisdiction first qualified for aid, aid for an eligible taxing

jurisdiction equals zero if the commissioner determines that the eligible taxing jurisdiction's

total net tax capacity in the assessment year preceding the aid calculation year is greater

than the product of:

(1)
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90 percent of
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the jurisdiction's total net tax capacity in the assessment year preceding

the aid calculation year in which the jurisdiction first qualified for aid under this section;

times

(2) the greater of one or the ratio of (i) the statewide total net tax capacity of real and

personal property in the assessment year preceding the aid calculation year to (ii) the

statewide total net tax capacity of real and personal property in the assessment year preceding

the aid calculation year in which the jurisdiction first qualified for aid under this section.

(b) For the purposes of this subdivision, "net tax capacity" means net tax capacity as

adjusted under section
473F.08, subdivision 2
, or
276A.06, subdivision 2
, as applicable.

(c) If aid to a jurisdiction attributable to a previous unit retirement
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or fuel source

conversion
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has been eliminated under this subdivision, the jurisdiction may qualify for aid

under this section for subsequent unit retirements
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and fuel source conversions
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.

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EFFECTIVE DATE.

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Paragraph (a) is effective retroactively for aids payable in 2024

and thereafter. Paragraph (c) is effective for aids payable in 2027 and thereafter.

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Sec. 5.
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2027 ELECTRIC GENERATION TRANSITION AID INCREASE; UNIT

RETIREMENTS.
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If aid to a jurisdiction attributable to a previous unit retirement was eliminated under

this subdivision for aids payable in 2024, 2025, or 2026, before the jurisdiction met the

criteria in Minnesota Statutes 2024, section 477A.24, subdivision 5, paragraph (a), as

amended by section 4, the aid payment calculated for the jurisdiction under Minnesota

Statutes, section 477A.24, subdivision 6, for aids payable in 2027 must be increased by the

unit transition amounts for that unit retirement for the aids payable years in which the

jurisdiction qualified for aid but did not receive aid attributable to that unit retirement.

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EFFECTIVE DATE.

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This section is effective the day following final enactment.

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