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administered by the state or administered <br />locally, apply to the total charges to the <br />customer, including charges for services <br />provided by accommodation <br />intermediaries. <br />FF-11. Taxation of Electric <br />Generation Personal Property <br />Issue: Investor -owned utilities (IOUs) have <br />a longstanding relationship with Minnesota <br />cities. IOUs site baseload power plants in <br />host communities, and in exchange pay <br />personal property tax on attached generation <br />machinery to the cities, counties and school <br />districts hosting the plants. These plants <br />bring jobs to our communities, but they also <br />create nuisances such as air pollution, <br />nuclear waste, noise, vibration, and coal <br />train traffic. They also create security risks <br />and take up land that could be used for <br />other, less disruptive commercial and <br />industrial development. Cities believe <br />personal property taxes paid by IOUs are a <br />fair compensation for the environmental and <br />economic costs of hosting baseload power <br />plants. <br />IOUs argue that personal property tax relief <br />is important to pass along to their <br />shareholders and ratepayers. However, only <br />a few IOU shareholders and ratepayers <br />actually live in the communities hosting <br />baseload power plants. Further, almost all <br />new power plants receive personal property <br />tax exemptions from the Legislature, while <br />host communities with existing, non-exempt <br />baseload plants will continue to have them <br />for decades to come. <br />Currently the taxation of electric generation <br />personal property represents the best method <br />for reimbursing host communities for the <br />cost of hosting IOUs. However, a 2015 MN <br />Department of Revenue study on electric <br />generation taxation has generated proposals <br />to change the state system of taxing electric <br />136 <br />generation which raise equal or greater <br />revenues for host cities. <br />Response: Personal property taxes on <br />attached electric generation machinery <br />are a fair way to spread the <br />environmental and economic costs of <br />electric generation power plants among <br />all IOU shareholders and ratepayers. The <br />League of Minnesota Cities supports the <br />continuation of personal property taxes <br />paid by IOUs to host communities for <br />existing and new facilities or a tax system <br />which generates equal or greater revenue <br />for host communities. As the Department <br />of Revenue analyzes methods of utility <br />taxation in its Study of Electric Energy <br />Producing Systems (Session Law 2014, <br />Chapter 308), the League supports the <br />inclusion of these environmental and <br />economic costs in assessing the <br />appropriate property taxes paid to host <br />cities by electric generation facilities. <br />FF-12. Electric Generation <br />Taxation Reform <br />Issue: Currently, electric utilities are subject <br />to a personal property tax on personal <br />property which is part of an electric <br />generating, transmission, or distribution <br />system. This tax has a number of <br />exemptions and exclusions which make a <br />patchwork of taxation statewide. The <br />Department of Revenue issued a report on <br />February 15, 2015 which laid out the details <br />of this tax system, stating, "The utility tax <br />base comprised of these energy producing <br />facilities is not predictable. The <br />unpredictability is a result of law and rule <br />changes that determine the amount of utility <br />tax base available for host communities." <br />Cities which host Investor Owned Utility <br />base load power plants have faced <br />unpredictability in tax base from both <br />changes to state law regarding the personal <br />