City Council Resolution 1997-08RESOLUTION 97-$
A RESOLUTION SUPPORTING THE FORMATION OF
A COALITION OF CITIES TO DEAL WITH TAX REFORM FOR
INVESTOR-OWNED UTILITIES REGARDING
TAX ON PERSONAL PROPERTY
WHEREAS, the City of Monticello is the host to the NSP Nuclear Power Plant; and
WHEREAS, the City of Monticello derives revenues from the energy facility located
in Monticello in the form of personal property taxes on machinery, which amounts
to over 57°l0 of the total tax levy for the year 1997; and
WHEREAS, a study conducted by the Minnesota Department of Revenue in
conjunction with the Public Utilities Commission (PUC) and the Department of
Public Service has issued a study dated January 15, 1997, entitled "Analysis of
Utility Taxation in Minnesota" and has presented such information before the
Senate Subcommittee for Property Tax and Local Government Budget Division,
Senator Sandra L. Pappas, Chair, on February 5, 1997; and
WHEREAS, the above-referenced study by the Department of Revenue has in fact
recommended the decreased use or elimination of personal property tax as a source
of revenue for local entities; and
WHEREAS, investor-owned utilities (IOU's) have proposed legislation which would
remove personal property tax from the available tax capacities of the affected
jurisdictions; and
WHEREAS, jurisdictions who lose tax capacity could see significant increases in
property taxes at the local level as a result of such legislation without replacement
revenues; and
WHEREAS, the replacement revenues of a utility or "meter" tax or other such
remedies do not provide the same assurance of cash flow and leaves affected
jurisdictions with an inability to deal adequately with financial concerns; and
WHEREAS, the replacement revenues would also be subject to collection and
"tinkering" by the state giving jurisdictions inadequate security in receipt of
revenues both now and in the future with the added responsibility of sunsetting the
revenue stream completely; and
WHEREAS, with the loss of the personal property taxes, the affected jurisdictions
will experience an adverse impact in its ability to bond, its bond ratings, its long-
term debt, and will experience problems with outstanding debt and including issues
concerning bond disclosure requirements.
Resolution 97- s
Page 2
NOW, THEREFORE, BE IT RESOLVED, the City of Monticello shall appoint the
City Administrator as the liaison to work with other similarly-affected
governmental entities and representatives of the investor-owned utility groups in a
joint effort to develop appropriate language in any potential legislation introduced
to state legislators that would protect the revenue sources and taxing capabilities of
governmental entities with utility personal property.
BE IT FURTHER RESOLVED that the coalition of cities will lobby toward the
coalition's goal of delaying any personal property tax reform during the current
legislative session until a satisfactory proposal with replacement revenue sources is
established.
BE IT FURTHER RESOLVED that the representatives will work as committee
members for the purpose of giving direction to lobbyists working on the issue as
well as the generation of a coalition budget and formula for funding of the effort.
Adopted this 10th day of March, 1997.
,, /, ~~ - '
Mayor
City Administrat