Amendment ASA1-AB489

Analysis by the Legislative Reference Bureau

Under current law, if a power production plant that is exempt from property taxes is decommissioned or closed, and therefore becomes taxable, the county and municipality where the plant is located each receive a utility aid payment for the first five years in which the plant is subject to the property tax, in an amount equal to a percentage of the utility aid payment received for the last year in which the plant was exempt. Under the bill, these post-exemption utility aid payments are made only for a production plant that is decommissioned. Under the bill, “decommissioned” means, with regard to a production plant, the earliest of the following: 1) the production plant is no longer recovered through the utility's rates; or 2) the production plant is transferred to a person who is not subject to the annual license fees imposed by the state.

The bill also provides that a county and municipality where a power production plant is located may receive a utility aid payment for up to 10 years if the plant is decommissioned because it is transferred to a person who is not subject to the annual license fees, depending on when the plant is so transferred. In that case, the payment amount is determined by a sliding scale so that, for example, if a power production plant is transferred in the third year in which all power generation units of the plant are no longer generating electricity, the county and municipality receive payments for eight years and the payments decrease each year, with the final payment being 12.5 percent of the amount received for the last year in which the plant was exempt.

The bill also provides that, with regard to a power production plant that has multiple power generation units, the utility aid payment received by a county or municipality will not be reduced on the basis that one or more, but not all, of the power generation units are no longer generating electricity, and the amount of the payment will be the same as the payment received in the year before the year the first power generation unit is no longer generating electricity. In addition, the phase out of utility aid payments under the bill does not begin until the production plant is decommissioned, and the amounts of the phase-out payments are determined on the basis of the amount of the payment received in the year before the year the first power generation unit is no longer generating electricity.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB489-ASA1,1 Section 1. 66.0602 (3) (n) 1. of the statutes is amended to read:

AB489-ASA1,2,13 66.0602 (3) (n) 1. For a political subdivision that receives a payment under s. 79.04 (5) (a) or (b) or (9) (a) to (e), the limit otherwise applicable under this section is increased by the amount that the political subdivision levies in that year to replace a revenue reduction incurred under s. 79.04 (5) (a) or (b) or (9) (a) to (e). Subject to subd. 2., the amount levied under this paragraph for a particular property may not exceed the amount paid to the political subdivision under s. 79.04 (5) (a) 1. or (b) 1. or (9) (a) 1., (b) 1., (c) 1., (d) 1., or (e) 1., less the amount to be paid to the political subdivision under s. 79.04 (5) (a) or (b) or (9) (a) to (e) in the year in which the levy is imposed and less any amounts previously levied under this paragraph. A revenue reduction is incurred under this paragraph when the amount received by a political subdivision under s. 79.04 (5) (a) or (b) or (9) (a) to (e) in the current year is less than the amount received under s. 79.04 (5) (a) or (b) or (9) (a) to (e) in the previous year.

AB489-ASA1,2 Section 2. 66.0602 (3) (n) 2. of the statutes is amended to read:

AB489-ASA1,3,8 66.0602 (3) (n) 2. This paragraph applies to revenue reductions for which a payment under s. 79.04 (5) (a) or (b) or (9) (a) to (e) is made after November 23, 2019. If the first payment made under s. 79.04 (5) (a) or (b) or (9) (a) to (e) after November 23, 2019, is under s. 79.04 (5) (a) 2. to 5. or (b) 2. to 5. or (9) (a) 1. to 10., (b) 1. to 9., (c) 1. to 8., (d) 1. to 7. or (e) 1. to 6., the amount of the payment made under s. 79.04 (5) (a) or (b) or (9) (a) to (e) in the previous year shall be used in determining the maximum amount of revenue reduction incurred.

AB489-ASA1,3 Section 3. 79.005 (1h) of the statutes is created to read:

AB489-ASA1,3,11 79.005 (1h) “Decommissioned” means, with regard to a production plant, the earliest of the following:

AB489-ASA1,3,15 (a) The production plant is no longer recovered through the utility's or cooperative's rates or, for a production plant owned by a qualified wholesale electric company, as defined in s. 76.28 (1) (gm), the production plant is no longer generating electricity.

AB489-ASA1,3,17 (b) The production plant is transferred to a person who is not subject to the annual license fee imposed under s. 76.28 (2) or 76.29 (2).

AB489-ASA1,4 Section 4. 79.04 (5) (a) (intro) of the statutes is amended to read:

AB489-ASA1,4,2 79.04 (5) (a) (intro.) If Except as provided in sub. (9), 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, unless the production plant is owned or operated by a local governmental unit located outside of the municipality, or by an electric cooperative, or by a municipal electric company under s. 66.0825, is decommissioned or closed, the municipality shall be paid, from the public utility account, an amount equal to 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:

AB489-ASA1,5 Section 5. 79.04 (5) (b) (intro) of the statutes is amended to read:

AB489-ASA1,4,12 79.04 (5) (b) (intro.) If Except as provided in sub. (9), 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, unless the production plant is owned or operated by a local governmental unit located outside of the municipality, or by an electric cooperative, or by a municipal electric company under s. 66.0825, is decommissioned or closed, the county shall be paid, from the public utility account, an amount equal to 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:

AB489-ASA1,6 Section 6. 79.04 (8) of the statutes is created to read:

AB489-ASA1,4,17 79.04 (8) All of the following apply to the payments for property of a production plant that includes multiple power generation units, except that this subsection applies only if the production plant's first power generation unit is no longer generating electricity after the effective date of this subsection .... [LRB inserts date]:

AB489-ASA1,4,22 (a) No payment received by a municipality or county under sub. (1), (2), (6), or (7) shall be reduced on the basis that one or more, but not all, of the power generation units are no longer generating electricity, and the amount of the payment shall be the amount that the municipality or county received in the year before the year in which the first power generation unit is no longer generating electricity.

AB489-ASA1,5,2 (b) The payments under subs. (5) (a) or (b) or (9) shall not be made until the production plant is decommissioned, and then the payments shall be determined on the basis of the amount of the payment received by the municipality or county under sub. (1), (2), (6), or (7) in the year before the year in which the first power generation unit is no longer generating electricity.

AB489-ASA1,7 Section 7. 79.04 (9) of the statutes is created to read:

AB489-ASA1,5,10 79.04 (9) (a) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred within the first year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the following percentages of the payment the municipality and county received under this section during the last year that the property was exempt from the property tax:

AB489-ASA1,5,11 1. In the first year that the property is taxable, 100 percent.

AB489-ASA1,5,12 2. In the 2nd year that the property is taxable, 90 percent.

AB489-ASA1,5,13 3. In the 3rd year that the property is taxable, 80 percent.

AB489-ASA1,5,14 4. In the 4th year that the property is taxable, 70 percent.

AB489-ASA1,5,15 5. In the 5th year that the property is taxable, 60 percent.

AB489-ASA1,5,16 6. In the 6th year that the property is taxable, 50 percent.

AB489-ASA1,5,17 7. In the 7th year that the property is taxable, 40 percent.

AB489-ASA1,5,18 8. In the 8th year that the property is taxable, 30 percent.

AB489-ASA1,5,19 9. In the 9th year that the property is taxable, 20 percent.

AB489-ASA1,5,20 10. In the 10th year that the property is taxable, 10 percent.

AB489-ASA1,6,2 (b) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred in the 2nd year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the following percentages of the payment the municipality and county received under this section during the last year that the property was exempt from the property tax:

AB489-ASA1,6,3 1. In the first year that the property is taxable, 100 percent.

AB489-ASA1,6,4 2. In the 2nd year that the property is taxable, 89 percent.

AB489-ASA1,6,5 3. In the 3rd year that the property is taxable, 78 percent.

AB489-ASA1,6,6 4. In the 4th year that the property is taxable, 67 percent.

AB489-ASA1,6,7 5. In the 5th year that the property is taxable, 56 percent.

AB489-ASA1,6,8 6. In the 6th year that the property is taxable, 45 percent.

AB489-ASA1,6,9 7. In the 7th year that the property is taxable, 34 percent.

AB489-ASA1,6,10 8. In the 8th year that the property is taxable, 23 percent.

AB489-ASA1,6,11 9. In the 9th year that the property is taxable, 12 percent.

AB489-ASA1,6,17 (c) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred in the 3nd year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the following percentages of the payment the municipality and county received under this section during the last year that the property was exempt from the property tax:

AB489-ASA1,6,18 1. In the first year that the property is taxable, 100 percent.

AB489-ASA1,6,19 2. In the 2nd year that the property is taxable, 87.5 percent.

AB489-ASA1,6,20 3. In the 3rd year that the property is taxable, 75 percent.

AB489-ASA1,6,21 4. In the 4th year that the property is taxable, 62.5 percent.

AB489-ASA1,6,22 5. In the 5th year that the property is taxable, 50 percent.

AB489-ASA1,6,23 6. In the 6th year that the property is taxable, 37.5 percent.

AB489-ASA1,6,24 7. In the 7th year that the property is taxable, 25 percent.

AB489-ASA1,6,25 8. In the 8th year that the property is taxable, 12.5 percent.

AB489-ASA1,7,6 (d) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred in the 4th year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the following percentages of the payment the municipality and county received under this section during the last year that the property was exempt from the property tax:

AB489-ASA1,7,7 1. In the first year that the property is taxable, 100 percent.

AB489-ASA1,7,8 2. In the 2nd year that the property is taxable, 86 percent.

AB489-ASA1,7,9 3. In the 3rd year that the property is taxable, 72 percent.

AB489-ASA1,7,10 4. In the 4th year that the property is taxable, 58 percent.

AB489-ASA1,7,11 5. In the 5th year that the property is taxable, 44 percent.

AB489-ASA1,7,12 6. In the 6th year that the property is taxable, 30 percent.

AB489-ASA1,7,13 7. In the 7th year that the property is taxable, 16 percent.

AB489-ASA1,7,19 (e) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred in the 5th year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the following percentages of the payment the municipality and county received under this section during the last year that the property was exempt from the property tax:

AB489-ASA1,7,20 1. In the first year that the property is taxable, 100 percent.

AB489-ASA1,7,21 2. In the 2nd year that the property is taxable, 83 percent.

AB489-ASA1,7,22 3. In the 3rd year that the property is taxable, 66 percent.

AB489-ASA1,7,23 4. In the 4th year that the property is taxable, 49 percent.

AB489-ASA1,7,24 5. In the 5th year that the property is taxable, 32 percent.

AB489-ASA1,7,25 6. In the 6th year that the property is taxable, 16 percent.

AB489-ASA1,8,5 (f) For a production plant that is decommissioned as provided under s. 79.005 (1h) (b) as a result of the plant being transferred after the 5th year that all power generation units of the plant are no longer generating electricity, each municipality and county shall be paid, from the public utility account, an amount equal to the amounts determined under sub. (5).

AB489-ASA1,8,6 (End)