Mass. Gen. Laws ch. 164A, § 8 – Taxation of municipal electric departments owning interests in electric power facilities; definitions; exemptions; payments in lieu of taxes; application of other laws

(a) Notwithstanding the definition of ''electric power facilities'' in section one, for the purposes of this section only, ''electric power facilities'' with respect to municipal electric departments shall mean generating units rated twenty-five megawatts or above and transmission facilities rated sixty-nine kilovolts or above which (i) have been designated as pool or pool-planned facilities under the New England power pool agreement or (ii) are financed in whole or in part under the provisions of sections eleven to twenty-two, inclusive, and with respect to foreign electric utilities which are governmental entities shall mean generating units rated twenty-five megawatts or above and transmission facilities rated sixty-nine kilovolts or above. For the purposes of this section no such designation under clause (i) shall be made except with the written consent, or upon written application, of the electric utility or utilities having primary responsibility for the construction or operation of the facility being so designated. The provisions of this section for payments in lieu of taxes shall not apply to electric power facilities constructed or substantially under construction by a municipal electric department prior to September thirtieth, nineteen hundred and seventy-three. Taxes and payments in lieu of taxes by municipal electric departments shall be treated as operating expenses except that taxes and payments in lieu of taxes with respect to the period prior to commercial operation of a facility may be treated by the municipal light board as construction costs.
(b)
(i) Interests in electric power facilities, real and personal, situated within the commonwealth and owned by any municipal electric department shall be exempt from property taxation, provided, however, that a municipal electric department which owns or has an interest in such electric power facilities shall, in lieu of property taxes, pay to any governmental body authorized to levy property taxes the amount which would be assessable as taxes on the real and personal property if such property were the property of a corporation defined as an ''electric company'' in section one of chapter one hundred sixty-four. Such payments shall be due, and bear interest if unpaid, as in the case of taxes on the property of such an ''electric company''. For purposes of such payments in lieu of taxes, the assessors of the taxing authority shall make a valuation and assessment of the property and determine the tax that would be assessable if such property were owned by a corporation so defined as an ''electric company''. Where property in respect to which in lieu payments are to be made hereunder is situated in a municipality that owns said property, any ten inhabitants of said municipality may, within three months after said assessment and determination, appeal the same to the appellate tax board or, if said municipality fails to make an assessment or determination or otherwise to collect the tax, may petition the superior court in equity for declaratory or other appropriate relief for failure to act as aforesaid.
(ii) Payments in lieu of taxes made hereunder shall be treated in the same manner as taxes for purposes of all procedural and substantive provisions of law, including appeals, now and hereafter in effect applicable to assessment and taxation of real and personal property, collection and abatement of such taxes and the raising of public revenues.
(c) There is hereby imposed on each municipal electric department an annual payment in lieu of taxes equal to the then equalization percentage of (A) the original cost less depreciation of its direct ownership interest in electric power facilities located within the commonwealth, excluding any portion thereof represented by any investment by others as described in (B), and (B) in the event a municipal electric department has an interest other than direct ownership described in (A), the amount of its investment less any amortization thereof through ownership of securities, prepayment or similar arrangements in such facilities under this chapter, all as at the end of the municipal electric department's last fiscal year. The equalization percentage shall be determined by the commissioner of corporations and taxation on or prior to July first of each year and shall be the percentage resulting from the fraction, the numerator of which shall be the aggregate amount paid in the preceding calendar year by all domestic electric utilities which are not municipal electric departments for franchise taxes paid to the commonwealth, plus any other taxes not covered by subsections (b) or (d) of this section paid to the commonwealth or any subdivision thereof and the denominator of which shall consist of the aggregate amount of net utility plant, as of the end of the preceding calendar year, of all domestic electric utilities which are not municipal electric departments; the amount of said taxes and net utility plant to be obtained by the commissioner from the annual reports for said preceding calendar year filed with the department of telecommunications and energy by said domestic electric utilities. If such taxes are reported for a period other than the calendar year, or if such net utility plant is reported as of a date other than the end of a calendar year, the commissioner shall use such period or date as is reasonable and practicable with such adjustments as may be necessary to carry out the purposes of this section. In the event a municipal electric department uses a fiscal year longer or shorter than twelve months, the commissioner shall appropriately adjust the payment to be made under this section. Such payment is to be in lieu of a tax upon the franchise of the municipal electric department to own or operate directly or indirectly such electric power facilities and is to be in accordance with the following provisions:
1. (1) Every municipal electric department subject to this section shall annually, on or before the fifteenth day of the third month following the close of its fiscal year, make a return to the commissioner of corporations and taxation sworn to by its manager, a majority of its commissioners, or in their absence or incapacity by any other principal officer, in such form as said commissioner with the approval of the state tax commission shall prescribe, stating such information as said commissioner may require for the determination of the payment imposed by this subsection. Said payment shall be due and payable on or before the due date of the return.
2. (2) All provisions of chapter sixty-three relative to the assessment, collection, payment, abatement, verification and administration of taxes, including penalties, applicable to domestic business corporations, as defined in section thirty of chapter sixty-three, shall, so far as pertinent, be applicable to payments under this subsection.
3. (3) All revenue collected under the provisions of this section shall be credited to the General Fund.
(d) In connection with all sales, use, excise and other taxes imposed with respect to electric power facilities, materials included or to be included therein, or energy produced thereat and sold at wholesale therefrom under authority of this chapter, by any laws of the commonwealth and not covered by subsections (b) and (c), a municipal electric department participating in an electric power facility by ownership, prepayment or contract for purchase of capacity and related energy from a specifically identified generating unit shall be subject to payments in lieu of such taxes in the same manner and under the same procedures as a corporation defined as an ''electric company'' in section one of chapter one hundred sixty-four is subject to such taxes and shall be limited to only those exemptions as are available to such a corporation.
(e) Legislative consent is hereby given to the application of the laws of other states with respect to taxation, payments in lieu of taxes, and the assessment thereof to any domestic electric utility which has acquired or has an interest in an electric power facility, real or personal, situated without the commonwealth, or which is owning or operating electric power facilities without the commonwealth pursuant to authority granted in this chapter.