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RESOLUTION 1997-6 <br />A RESOLUTION IN SUPPORT AND FORMATION OF A COALITION <br />OF CITIES TO DEAL WITH TAX REFORM FOR INVESTOR-OWNED <br />UTILITIES REGARDING TAX ON PERSONAL PROPERTY <br />WHEREAS, The City of Hugo derives substantial revenues from personal <br />property taxes levied on electrical distribution facilities located in the community <br />equaling 12.03% of the City's property tax base (tax capacity); and <br />WHEREAS, the Minnesota Department of Revenue, in conjunction with the <br />Public Utilities Commission (PUC) and the Department of Public Service, has <br />issued a study dated January 15, 1997 entitled "Analysis of Utilities Taxation in <br />Minnesota" and has presented such information before the Senate Subcommittee <br />for Property Tax and Local Government Budget Division, Senator Sandra L. <br />Pappas, Chair on February 5, 1997; and <br />WHEREAS, the above -referenced study by the Department of Revenue <br />recommends the decreased use or elimination of personal property tax as a source <br />of revenue for local entities; and <br />WHEREAS, Investor Owned Utilities (IOU's) has proposed legislation which <br />would remove the personal property tax of their facilities from the available tax <br />capacities of the affected jurisdictions: and <br />WHEREAS, jurisdictions who lose tax capacity could see significant increases in <br />property taxes at the local level as a result of such legislation; and <br />WHEREAS, proposed replacement revenues, such as "meter" tax, would be <br />collected and administered outside of local control, decreasing the reliability and <br />security of the revenues; and <br />WHEREAS, with the loss of the personal property taxes, the affected jurisdictions <br />will experience adverse impact on their bond ratings, and problems with <br />outstanding debt, including issues concerning bond disclosure requirements. <br />NOW, THEREFORE BE IT RESOLVED, That the City of Hugo shall appoint <br />Jim Leroux as liaison to work with other similarly -affected- governmental entities. <br />This person shall serve as a representative of the committee overseeing the activities <br />of the coalition. <br />