Committee lays over bill exempting generating equipment at two municipal peaking plants from personal property tax

The committee heard House File 47-09, which would provide a personal-property tax exemption for generating equipment at two new natural-gas peaking plants proposed by the Southern Minnesota Municipal Power Agency (SMPA).

Joe Hoffman, chief external affairs officer for the power agency, described the exemption as consistent with more than 20 prior personal-property exemptions for generation projects since 2000 and said the exemption applies only to generating equipment (land and buildings remain on the local tax rolls). "The exemption does not apply to the entire value of the facility only to the generating equipment," Hoffman said, and he provided examples of prior plants that continued to contribute property taxes through other facility components.

Mayor Matt just up of Owatonna and Jay Lutz, an elected commissioner for Austin Public Utilities, testified that the plants (each described as roughly 49 megawatts in testimony) will improve local reliability, support manufacturing and generate construction activity. They said city councils and county boards had adopted resolutions supporting the exemption.

Members asked whether local outreach had occurred and how an exemption would shift tax revenues among taxing jurisdictions; witnesses said SMPA engaged member communities and that municipal public-power models direct cost savings to ratepayers.

The author renewed the motion and House File 47-09 as amended was laid over for possible inclusion in the House taxes omnibus bill.