    [From the U.S. Government Printing Office, www.gpo.gov]

        LOCAL TAX RIEvenuef GenERRTIEP By
        wifconfin CORf TRL enERGY FRCILITircf

        December 1982                                                   COASTAL ZONE
                                                                    INFORMATION

              2441
              .A2                      Prepared by Robert Halstead
              H3                                for the
              1982
                          WISCONSIN COASTAL MANAGEMENT PROGRAM

                                      LOCAL TAX REVENUES GENERATED BY

                                    WISCONSIN COASTAL ENERGY FACILITIES

                                               Prepared by:
                                              Robert Halstead

                                      Bureau of Coastal Management
                                 Wisconsin Department of Administration

                                                     LibrarY

                                             December, 1982

                                   U  S  DEPARTMENT OF COMMERCE NOAA
                                   COA'Qz1 AL SERVICES CENTER
                                   2
                                     2-
                                     Z34 SCUTH @iOHON AVENUE
                                   r      QTON , SC 29405-2413

        r6

                        AL.

                                                                                     Anthony S. Earl
                                                  S"tate of Wisconsin                G,,,,,or
                                                                                     Dods J. Hanson
                                                                                     Secretary
                                  11,)Deparlment of Administration

                                                   101 South Webster Street Madison, Wisconsin 53702 Mailing Addr
                                                                                     Post Office Box 7868
                February 24, 1983                                                    Madison, Wl 53707

                Dear Friend:

                Enclosed is a copy of Local Tax Revenues Generated By Wisconsin Coastal Energy
                Facilities, a study,recently completed by the Wisconsin Coastal Management
                Program.

                We believe t.he study is timely in light of anticipated reductions in federal
                funding for coastal energy Impacts. We hope the study will assist coastal
                planners in evaluating the extent to which direct taxes on energy facilities
                may be used for financing impact mitigation measures.

                The report documents the amount of revenues generated for municipal and county
                governments by specific types of energy facilities. The major source of such
                revenues are utility shared tax payments to counties and municipalities
                hosting major electric generating stations, totalling $4.9 million in 1981.
                Property and occupational taxes on coal transshipment facilities were the
                second largest source of payments, providing approximately $1.3 million to
                counties and municipalities in 1981.

                We welcome your comments on the report. Please direct correspondence to the
                author, Robert Halstead, Coastal Energy Impact Coordinator, P.O. Box 7868,
                Madison, WI 53707.

                Respectfully,

                Allen H. Miller
                Program Manager
                Bureau of Coastal Management

                AHM:BH:ry/2840Q-2/d

                Enclosure

                                     LOCAL TAX REVENUES GENERATED BY

                                   WISCONSIN COASTAL ENERGY FACILITIES

                                             TABLE OF CONTENTS

                                                                                         Page

                 Executive Summary . . . . .. . . . . . . . . . . . . . . . . . . . . .

                 Introduction  . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2

                 Tax Status of Coastal Energy Facilities  . . . . . . . . . . . . . . .     4

                 Utility Shared Taxes   . . . . . . . . . . . . . . . . . . . . . . . .

                 Local Property Taxes   . . . . . . . . . . . . . . . . . . . . . . . .    17

                 Occupational Taxes on Coal and Petroleum   . . . . . . . . . . . .        20

                 Distribution of Local Tax Revenues by Community  . . . . . . . . .        25

                                             Executive Summary

             Wisconsin coastal energy facilities provide revenue to municipal and county

             governments through utility shared taxes, property taxes, and occupational

             taxes. Electric generating stations are subject-to utility property taxes

             collected by the state, and are exempt from the local property tax levies to

             which other energy facilities are subject. Coal docks and petroleum

             refineries are subject to special occupational taxes.

             The major source of tax revenues generated by coastal energy facilities are

             utility shared tax payments made to coastal counties and municipalities,

             totalling $5.3 million in 1980 and $4.9 million in 1981.

             Local property taxes on coastal energy facilities levied in 1981 (payable in

             1982) total about $1.7 million.

             Occupational taxes on coastal coal docks and petroleum refineries totalled

             $308,569 in 1981. Of this total, $235,429 was retained by municipalities;

             $48,753 was distributed to counties; and $24,377 was paid into the state

             general fund.

             Payments to communities from all three tax sources totalled $4.25 million in

             1981. The City of Superior was the largest recipient, with $1.36 million.

             Payments to counties from all three tax sources totalled $2.65 million in

             1981. Kenosha County was the largest recipient, with $625,607.

              1.0 Introduction

              The purpose of this report is to identify the state and local taxes applicable.

              to Wisconsin coastal energy facilities and to determine the amount of revenue

              generated by these taxes. The report focuses upon revenues payable to

              municipalities and counties through the utility portion of the shared tax

              formula, occupational taxes, and local property taxes.

              The report does not address state income and sales tax effects of the

              construction and operation of coastal energy facilities.

              Summing the payments under each-of the three tax categories studied here

              provides only an approximation of total annual revenue contribution because of

              different base periods. Because of frequent changes in the utility portion of

              the shared tax formula, future tax payments to local governments may be less

              than under the present formula. Utility shared taxes are reported based on

              actual 1980 and 1981 payments. Local property taxes reported are 1981 levies

              payable in 1982. Occupational taxes are actual 1981 payments based on 1980

              receipts of coal and crude petroleum.

              The broader topic of local economic impacts of coastal energy facilities has.

              been previously investigated and reported in the Great Lakes Basin Commission,

              Inergy Facility Siting in the Great Lakes Coastal Zone: Analysis and Policy

              Options, prepared for the Office of Coastal Zone Management, NOAA, U. S.

                                                    -2-

               Department of Commerce (1977); and D. Muench and R. Halstead,'Energy Facility

               Impacts: A.Handbook for Citizens and Local Government Officials, prepared for

               the Wisconsin Coastal Management Program by Bay-Lake Regional Planning

               Commiss.ion,,(1981)-.

                                                      -3-

              2.0 Tax Status of Coastal Energy Facilities

              The tax status of Wisconsin coastal energy facilities varies according to the

              type., ownership, and size or capacity of the facility. The major applicable.

              taxes are ad valorem utility taxes collected and distributed by the state;

              occupational taxes collected by a municipality an d divided between the

              municipality, the county and the state; and local real estate and personal

             .property taxes levied at the municipal level. The tax status of the most

              common energy facility types is presented in Table 2.1.

                                                  TABLE 2.1

                              TAX STATUS OF WISCONSIN COASTAL ENERGY FACILITIES

              FACILITY TYPE                               APPLICABLE TAXES
                                     OCCUPATIONAL TAY.   PROPERTY TAX AD VALOREM UTILITY TAX
                                         (STATE)            (LOCAL)             (STATE)

              Coal Dock                    Yes               Yes                  No

              Electric Generating.
              Station                      No                No                   Yes

              Pipeline Terminal
              Facilities                   No                Yes                  Yes

              Petroleum Refinery           Yes               Yes                  No

              Petroleum Storage            No                Yes                  No

              Source: Bureau of Coastal Management, Wisconsin Department of Administration

                                                     -4-

                                                                     1    s presented in
              The current inventory of taxable coastal energy facilittes i'

              Appendix A. Sixteen electric generating stations, ranging in size from 2 MW

              to 1690 MW.,- are located along the coast (see Figure 2-1). Nine of these are

              coal-fire&, one is coal- and wood-fired, two are'nuclear, and four are fueled

              by oil and natural gas. Ten coal docks receive Eastern and Midwestern coal by

              vessel, and one transshipment terminal-receives Western coal by rail for

              transfer f6'lake vessels (see Figure 2-2). Three electric utility coal docks

              (Pullian, Port Washington, and'Valley) are considered part of the power plants

              they serve. Twenty-three petroleum terminals and storage facilities, eight of

              which receive or ship products by ves,sel, are located at lake ports, as is

              Wisconsin's only petroleum refinery.

              The greatestconcentrations of  coastal energy facilities are around the port

              cities of Green Bay, Milwaukee,, and Superior. Coal docks and petroleum

              facilities are generally clustered in major port areas, as are older electric

              generating..facilities. More,recently,constructed ppwe.rplants such as the

              Kewaunee and Point Beach Nuclear units are located in rural areas.

                                                    -5-

                                                                        Figure 2. 1

                                                                                             Coastal Pmmr Plants in Wisconsin

                                                                                                     Coal-Fired

                                                                                                        mmistlus

                                                                                                        flanned

                                                                                                        Potential

                                                                    VZOR                             Nuclear

                                                                                                     A 1xisting

                                                                                                     other

                                                                                                     0 SmIsting

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                                                                                    Ga".   -00       ftm@f.
                                                                          ""TIT C
                            Kajor Coastal Population Centers

                                  25,000.- 100.000
                             13'  Greater than 100,000

                                                         Figure 2.2

                                                                           Coastal Coal Transportation. Transfer,
                                                                           a" Storage Facilities in Wisconsin

                                                                                 Coal Terminals

                                                                                      WoUng

                                                                                   a Planned

                                                                                   A Potential

                                                                                 Shipyard

                                                                                   0 wating

                                                                                 Upacted Rail Lines

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                                                LA COUSIC                  G"t-
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                                                                        M-0.  000"

                                                     10-0

                                                                     O.-C

                       Major Coastal Population Centers

                            25,000 100.000
                        0   Greater than 100,000

                                                                -7-

              3.0 Utility Shared Taxes

              The largest single source of tax revenues generated by coastal energy

              facilities results from special utility payments under state revenue sharing

              laws (Chapter 79, Wisconsin Statutes). Under Wisconsin statutes, electric

              generating plants and associated transmission facilities, pipelines, and some

              port transportation facilities are exempt from local taxes. These facilities

              are taxed by the state, and collections accrue to the state's general fund.

              The state makes payments based on the value of qualifying property to both

              host and non-host communities, according to a formula established by statute.

              This discussion will'focus upon electric generating stations, since these are

              by far the greatest source of tax revenues from energy facilities.

              The utility shared tax was established by law in 1905, and provided that 85

              percent of the tax on utility property be paid to the municipality and the

              remaining 15 percent to the state. The law was revised in 1917 to include

              payments to counties, and a 1963 amendment set the distribution formula at 17

              percent to the state, 19-1/2 percent to the county and 63-1/2 percent to the

              municipality.

              During the 1950s and 1960s, Wisconsin utilities, like their counterparts

              across the country, began to construct more and larger electric generating

              units, located for the most part at sites along Lake Michigan. Coastal

              locations offered water for once-through cooling system s. waterborne coal

              transportation, and access to existing transmission networks. This had the

              effect of concentrating the bulk of the state's electric generating capacity

              in a few coastal localities. The current inventory of coastal electric

                                                     -8-

                                                                                            TABLE 3.1

                                                                      WISCONSIN    COASTAL ELECTRIC GENERATING STATIONS

                                                                                                                                                ORIGINAL COST
                                                                                             CAPACITY                         YEAR              (MILLIONS OF
                                 COUNTY-       HUNTCIPALITY             UNIT                     (MW)          FUEL          INSTALLED              DOLLARS)

                                 Ashland       Ashland               Bay Front                     82      Coal, Wood         1941-58                   18.0

                                 Brown         Green Bay             Pulliam                     383       Coal               1926-64                   56.9

                                 Douglas       Superior              Winslow                       25      Oil                1942-52                    5.1

                                 Kenosha       Pleasant  Prairie     Pleasant Prairie 1          570       Coal               1980                    368.9
                                 Kenosha       Pleasant  Prairie     Plea"nt'Prairie 2           570       -Coal              (1984/5)

                                 Kewaunee      Carlton               Kewaunee                    535       Nuclear            1974                    214.6

                                 Manitowoc     Manitowoc             Manitowoc                     69      Coal               1935-64                    9.8

                                 Manitowoc     Two Creeks            Point Beach                 909       Nuclear, Oil       1970-72                 172.5

                                 Marinette     Marinette             W. Marinette                  84      Oil, Gas           1971-73                    7.0

                                 Milwaukee     Milwaukee             Commerce                      35      Coal               1941                       5.2

                                 Milwaukee     Milwaukee            @.Valley                     270       Coal               1968-69                   50.3

                                 Milwaukee     Oak Creek.            N. Oak  Creek               500       Coal, Oil          1953-57                   93.3

                                 Milwaukee     Oak Creek             S. Oak  Creek              1,190      Coal, Oil          1960-66,  1968          166.3

                                 Milwaukee   -,St-..Francis          Lakeside                    345       .011, Gas          1920-30,  1968            32.9

                                 Ozaukee       Port Washington       Port Washington             420       coal. Oil          1935-50,  1969            56.7

                                 Sheboygan     Sheboygan             Edgewater 3-4-              447       Coal               1942-51,  1969            -64.0
                                 Sheboygan     Sheboygan             Edgewater 5                 400       Coal               (1984/5)                  -

                                 Source4   Public Service    Commission of Wisconsin, Bulletin       No.   46 (August, 1981)o and Wisconsin Division
                                           of  State Energy, Department     of Administration.

              generating stations is presented in Table 3.1. The assessed value of new

              facilities increased as state utilities began to construct larger coal., and

              later nuclear, power plants. The trends towards larger and more expensive

              power plants concentrated at a few sites, coupled with the generous provisions,

              of theutility shared tax law, resulted in the creation of so-called "tax

              islands", communities in which the utility payments were sorgreat that local

              property taxes were.substantially reduced or eliminated (for example, Two

              Creeks).

              The emergence of these "tax islands" raised concerns about the equity of the

              utility shared tax distribution formula. A related but seldomly expressed

              concern involved the fear that electric utilities would capitalize upon,

              localities' desires for tax benefits to reduce opposition to new facilities

              regardless of the potential environm ental.impacts, particularly the impacts of

              proposed nuclear facilities, of which six were planned for construction in  the

              early 1970s. These concerns resulted in substantial revision of the shared

              utility tax laws.

              In 1967, the law was amended to equalize the distribution of revenues between

              host municipalities, host.counties, and the state as a whole. The 1967

              amendments also specified minimum and maximum payments to municipalities.

              Further amendments in 1972,, 1975, 1977 and 1978 reduced the level of payments

              to host municipalities, increased payments to host counties, imposed minimum

              and maximum per capita payments to receiving jurisdictions, and provided

              payments to host communities during the construction period of new power

              plants in recognition of the need for additional public services during

              construction.

                                                     _10-

              The cumulative affect  .of these revisions is illustrated by tax payments to

              major power plant host communities in the Bay-Lake region for the years

              1968-1978 (Table 3.2). In 1971', four municipalities in the Bay-Lake region

              each received an average of more than $1 million per year. After the 1972

              amendments,, these payments were substantially reduced in each of the following

              years. Payments to counties hosting new power plants (Kewaunee, Manitowoc,

              and Sheboygan) increased significantly in the mid-1970s before gradually

              tapering off.

              Current shared utility taxes on electric geher    Iating'stations are based on the

              1975, 1977 -anId 1978 amendments. Payments to municipalities and counties for

              operating power plants are determined by the book value of the plant (which

              decreases with age); status of the host municipality (village, town, or city);

              population o .f the',host municipaiity; and population of the host county. The

              base paym6nt,to towns i's 3 mills (9 mill is 1/10 of a cent) on each dollar of

              assessed value up'to $100-million.' The base payment to cities and villages is

              6 mills on the first $100 million. The maximum payment to a town, village or

              city may not exceed $300.00 per capita. The minimum payment to a municipality

              for hosting'a facility rated at 200 MW or larger is $75,000.00. Payment to

              counties is set at-3 mills on the first $100 million of assessed value for

              facilities located in cities or    villages of the county, and 6 mills for

              facilities'l'ocated in towns within a county. The minimum payment to a county

              hosting a 200 MW or larger power    plant is $75,000. The maximum payment to a

              county is $iOO.00 per capita.

              The 1978 amendment provided a sliding scale reduction in payments for power

              plants constructed prior to 1975. The 1978 payments were guaranteed to be no

              less than 70% of the 1975 payments. This guaranteed payment figure decreases

              10% annually. For mu nicipalities in which power plants were operational in

              1975, the final guaranteed payment, of 10% will be reached in 1984. There are

              no guaranteed payments for plants put in operation after 1975.

              In'addition to payments for operating  power plants, the law also provides

              payments to municipalities and counties during the construction period. The

              1975 amendment provided a $100,000.00 per year payment to the host

              municipality during each of the first four years after construction commenced,

              for facilities rated at 250 MW or greater. The 1977 amendment provided the

              same level.of paym6nt,annually to counties during the four-year construction

              period. The  construction period payments to both  municipalities and counties

              are exempt from the per capita limitations.

              Total special utility tax payments to Wisconsin coastal communities   and

              counties hosting major power plants in 1980 and 1981 averaged about   $5 million

              per year (see Table 3.3). The largest recipients at the municipal level were

              the Cities of Milwaukee, Oak Creek, Pleasant Prairie, and Sheboygan; and the

              Towns of Carlton and Two Creeks. The largest recipients at the county level

              were Kenosha, Kewaunee, Manitowoc, Milwaukee, and Sheboygan.

              Per capita utility shared tax payments for 1980 by municipality a     county are

              presented in Tables 3.4. The Town of Two Creeks received the maximum per

              capita payment allowed by law, $300.00 per capita, for a total payment of

                                                     -13-

                                                                                        TABLE 3.2

                                                                   UTILITY SHARED TAX   REVENUES  FOR SELECTED AREAS
                                                                                IN THE  RAY-LAKE  REGION
                                                                                        1968-1978

                         MUNICIPALITY        1968      1969        1970        1971       1972       1973         1974      1975      1976      1977      1978

                         CARLTON             16.620     79,532    192,568     788,385     46,906   468,141      568,311 333,842 320,100 320,400 300,000
                          (1974)                                                        648,392*   156,709*       9.524*

                         GREEN RAY       1,195.928   1,274,706   1,290,544   1,461,859  367.906    337,548      303,991 183,481 265,132       146,783 128,437
                          (1964)

                         SHEBOYGAN          453,779   751.945     934,782    1,294,886  529,724    500.587    , 484.626 294,349 264,914       235.479 213,720
                           (1969)

                         WO CREEKS          213,0818  636,259     997.512    1$901,574    24,002   366,503      375,051 228,481 205,633       182,785 159,937
                         (1970 & 1972)                                                  360,600*   340.200*     263,053*

                             COUNTY

                         REWAUNEE             RA        55,974      92,972    280,497   706,678    722,073     1,073,601  972,839 486,420     847,667    603,350

                         BROWN                NA      440,844     461,776     531,864   241,474    224,034      204,308   196,472     98,236    98,236    70,699

                         SHEBOYGAN            NA      313,371     380,908     508,822   324,662    307,912      301,277   299,709 149,836     149,836    122,710

                         MANITOWOC            NA      309,937     429,317     719i579   702,350    731.983      743,482   7106,066 353,033    601,762    565.020

                           Guarantee Payment
                         NA - Not Available

                         Source. David Muench and Robert Halstead,     Energy Facill ty Impacts (1981).

                                                                                                 TABLE 3.3

                                                                     SPECIAL UTILITY PAYM`FNTSa TO WISCONSIN COASTAL COMMUNITIES
                                                                     AND COUNTIES HOSTING MAJOR ELECTRIC GENERATING FACILITIES
                                                                                               1980  AND 1981

                        COUNTY           COMMUNITY                                        1980                                                        19RI
                                                                     DIRECT          DIRECT          TOTAL PAYMENT             DIRECT           DIRECT            TOTAL PAYMENT
                                                                     PAYMENT         PAYMENT         TO LOCALITIES             PAYMENT          PAYMENT           TO LOCALITIES
                                                                 TO LOCALITY        TOCOUNTY            AND COUNTY           TO LOCALITY       TO COUNTY            AND COURT    Y

                        As  hland        Ashland                     27,888            0,621               47,509               23,939            17.447                41,386

                        Brown            Green Bay                   91.140            75.000            166.740                75,000            75.000              150.00

                        Douglas          Superior (City)             96j373b           18,379            114,752               77,099b            18.301                95,40

                        Kenosha          Pleasant Prairie            380.077         717,950            1,098,027              300.064          625,607               925,671

                        Kewaunee         Carlton                     300,000         602,847             902,847               300,000          602,738               902,739
                        Manitowoc        Manitowoc                     4@401         477,802             634,403                   4,473        473.652               634,425
                                         Two Creeks                  151,800                                                   156,300

                        Marinette        Marinette                     1,901         43,854c               45,755                  2,033        41,922c                 43,955

                        Milwaukee        Milwaukee                   371,793                                                   412.574
                                         Oak Creek                   601,730         547,129            1,595,652              601.641          564j688             1,653,903
                                         St. Francis                 75,000
                                                                                                                                75,000

                        ozaukee          Port Washington             82,697            75,000            157,697                75,000            75.000              150,006.

                        Sheboygan        Sheboygan                   281,895         209,285             491,180               171.153          102.409               273,562
                        TOTAL                                   $2,467,695       T2-,T8 6 -.8 6 7    T5_,_25T. 5-6 2        T2_,_2_7T._2T6_  T2_,_5_9_6_,_7_6T     $4.871,040

                        a- Includes payments      based  on assessed.value     of substations, transmission         facilities  and other related property and equipmelit.
                        b- Includes payments      based  on assessed value     of port transportation facilities not related to electric generation.
                        c- Includes payments      based  on assessed value     of hydroelectric facilities located on Lake Michigan tributaries but situated
                            outside the qormally Oefined coastal management zone.

                        Source: Bureau of Coastal Management, Wisconsin            Department of Administration. Compiled from Bureau of Local Financial
                                 .Assistance, Division of State and Local          Finance, Wisconsin Department of Revenue, Taxe
                                                                                                                                          f:r. A
                                                                                                                                               l,;:l aand Shared Taxes in
                                  Wisconsin Municipalities, 1980 (January, 1982). and Notice to City and County Cle                                     yments (NovembeF_16,
                                  1981).

                                                       TABLE 3.4

                                      SPECIAL UTILITY PAYMENTS PER CAPITA FOR
                                SELECTED COASTAL MUNICIPALITIES AND COUNTIES, 1980

                                               1980 SPECIAL                  1980                 1980
               MUNICIPALITIES               UTILITY PAYMENTS              POPULATION            $/CAPITA

               Carlton                            $300,000                   1,125                $166-66

               Green Bay                            91,740                  87,120                  1.05

               Oak Creek                          601,730                   16,605                  36.24

               Pleasant  Prairie                  380,077                   12,428                  30.58

               Port Washington                      82,697                   8,612                  9.60

               Sheboygan                          281,895                   47,566                  5.93

               Two Creeks                         151,800                        506              300.00

                                               1980 SPECIAL                  1980                 1980
               COUNTIES                     UTILITY PAYMENTS              POPULATION             $/CAPITA

               Brown                             $ 75,000                   173,070               $ 0.43

               Kenosha                            717,950                   120,020                 5.98

               Kewaunee                           602,847                   19064                   31.13

               Manitowoc                          477,802                   81,744-                 5.85

               Mi lwa.uk4E@e                      547,129                   9449139                 0.58

               Ozaukee                              75,000                  66,981                  1.12

               Sheboygan                          209,285                   99,657                  2.10

               Source: Bureau of Coastal Management,       Wisconsin Department of Administration.
                         Compiled from Taxes, Aids and     Shared Taxes in Wisconsin
                         Municipalities, 1980 (January, 1982).

                                                          -15-

              $151,800.00.  The Town of Carlton received the maximum allowable payment to a

              town, $300,000-00 per year (3 mills on the first $100 million assessed value),

              which represents a per capita payment of $266-66. Among  counties, the highest

              per capita distribution was.to Kewaunee, where the total payment of

              $602,847-00 represents $31.13 per capita.

              While successive revisions to the utility shared tax laws, during the 1970s.

              have reduced the number and size of "tax islands", the distribution formula

             .still allows substantial benefits to several localities. The most notable

              examples are the Towns of Carlton and Two Creeks which host nuclear power

              plants constructed prior to 1975., In 1980, shared utility tax revenues in Two

              Creeks were sufficient to allow the town to eliminate property taxes. In

              1980, special utility payments to the Town of Carlton exceeded local property

              tax collections by almost $80,000-00. In prior years, Carlton had been able

              to dispense with property taxes altogether. In contrast, the $380,000.00

              special utility tax payment to the Town of Pleasant Prairie, site of a major

              new two-unit, coal-fired generating station equaled about 10% of the total

              property tax collected.

                                                    -16-

              4.0 Local Propert.y Ta-xes

              Local-property taxes on certain types of energy facilities are a major source

              of revenue in at least one coastal community. Electric generating stations,

              the most highly assessed coastal energy facilities, are exempt from-local

              taxes. Coal docks, petroleum storage and refineries, and pipeline terminals

              are subject to local real estate and personal property taxes-.

              It is difficult to compare the local taxes levied by'different communities on

              coastal energy facilities.  Real-estate is assessed differently, and taxed at

              different-rates, in different communities. The acreage occupied and value of

              installed equipment may vary considerably between similar facilities of

              comparable tapac'ity.'

              The 1981 property tax levies (payable in 1982) on coastal energy facilities

              total about $1.7 million (see Table 4-1). The City of Superior alone accounts

              for more than-$1.'O million (almost 62 percent of the total), while Milwaukee

              and Green Bay receive more than a quarter million dollars each. Coal docks

              account for $1,051,161 of the total.

              The fiscal significance of property taxes on coastal energy facilities varies

              from community to community (see Table 4.2). In Superior, local taxes on

              coastal energy facilities comprise more than 10 percent of the total

              mercantile and residential property levy. In Green Bay, the percentage is

              0.7, and in Milwaukee it is 0.1 percent.

                                                                                           TABLE 4.1

                                                                  LOCAL REAL ESTATE AND PERSONAL PROPERTY TAXES LEVIED
                                                                  ON COASTAL ENERGY FACILITIES, 1981      (Payable in 1982)

                                                                                                                                                        1981
                                                                                                                                                  (PAYABLE 1982)
                            COUNTY         CITY/TOWN              FACILITY NAME                           FACILITY TYPE                                 TAX LEVY
                            Ashland        Ashland                C. Reiss Coal Company                   Coal Dock                                     18,474
                            Brown          Green  Bay             Amoco Oil Company                       Pipeline Terminal Facilities                  29,932
                                           Green  Bay             Apex Oil Company (formerly              Pipeline Terminal Facilities                  16,237
                                                                    Clark Oil Company)
                                           Green  Bay             Blue Line Coal Company                  Coal Dock                                     179223
                                           Green  Bay             C- Reiss Coal-Company                   Coal Dock                                     45,724
                                           Green  Bay             Cities Service Oil Company              Pipeline Terminal Facilities                  14,805
                                           Green  Bay             Green Bay Products Terminal             Pipeline Terminal Facilities                  7,917
                                           Green  Bay             Green Bay Terminal, Inc.                Pipeline   Terminal Facilities                24,403
                                           Green  Bay             Fort Howard Paper,Company               Coal Dock (Motor Street)                      39.220*
                                           Green  Bay             Fort Howard Paper Company               Coal Dock (Arndt Street)                      .3,966
                                           Green  Bay             Fort Howard Paper Company               Pipeline Terminal Facilities
                                           Green  Bay             Koch Fuels, Inc.                        Pipeline Terminal Facilities                  .22,907
                                           Green  Bay             Mobil Oil Corporation                   Pipeline.Terminal Facilities                  19,075
                                           Green  Bay             U.S. Oil Company, Inc.                  Pipeline Terminal Facilities                  1 107
                                           Green  Bay             CITY TOTAL                                                                            S2.5g,'300
                            Door           Washington-Island      Amoco Oil Company.                      Petroleum Storage/Transfer                       NA
                            Douglas        Superior               Amoco Oil Company                       Pipeline Terminal Facilities                  36,253
                                           Superior               Dome Petroleum                          Pipeline Termina  1  Facilities               157.891
                                           Superior               Husky Oil Company                       Pipeline Terminal Facilities                  18,868
                                           Superior               Lakehead Pipeline    Company            Pipeline Terminal Facilities                  25,056
                                           Superior               Murphy Oll Corporation                  Petroleum Refinery and Terminal               147,731
                                           Superior               Superior Midwest Energy Term.           Coal Dock                                     669,197
                                           Superior               Union Oil Company of California         Pipeline Terminal Fac'ilities                 16 761
                                           Superior               CITY TOTAL                                                                        1,071:757
                            Manitowoc      Manitowoc              C. Reiss Coal Company                   Coal Dock                                     9,546
                                           Two Rivers             U.S. Oil Company, Inc.                  Petroleum  Storage/Transfer                      KA
                            Marinette      Marinette              Marinette Fuel and Dock Co.             Coal Dock                                        KA
                            Milwa  ukee    Milwaukee              Hometown, Inc..                         Coal Dock                                        KA
                                           Milwaukee              Jacobus Company                         Pipeline Terminal    Facilities               9,716
                                           Milwaukee              Marathon Oil Company                    Pipellae@Terminal    Facilities               16,324
                                           Milwaukee              Milwaukee Solvay Coke    Co.            Coal Dock                                     128,644
                                           Milwaukee              Mobil Oil Conpany                       Pipeline Terminal    Facilities               17,414
                                           Milwaukee              Schneider Fuel Company                  'Coal Dock                                    20,315
                                           Milwaukee              Schwerman Marine Terminal               Petroleum Storage/Transfer                    49,797
                                           Milwaukee              Shell Oil Company                       Pipeline Terminal Fac   ilit ies              25,897
                                           Milwaukee              Tanco Terminal                          Pipeline Terminal Facilities                  2 850
                                                                  CITY TOTAL                                                                            271,157
                            Racine         Racine                 W.H. Pugh Oil Company                   Petroleum Storage/Transfer                    7,429
                            Sheboygan      Sheboygan              C. Reiss Coal Company                   Coal Dock
                                           Sheboygan              C. Reiss Coal Company                   Petroleum  Storage/Transfer                   98 852
                                           Sheboygan              CITY TOTAL

                            TOTAL
                                                                                                                                                  $2,736,515

                            SOURCE:  Bureau of Coastal Management, Wisconsin Department of Administration. Compiled from              personal communications
                                     with local assessors.

                                                        TABLE 4.2

                               LOCAL PROPERTY TAX LEVY ON COASTAL ENERGY FACILITIES
                                    AS PERCENTAGE OF TOTAL LEVY ON BUSINESS AND
                                      RESIDENTIAL PROPERTY) 1981 (PAYABLE 1982)

                                          TAX RATE           TOTAL LEVY ON         PERCENTAGE
                                           PER $1,000        COASTAL ENERGY         OF TOTAL
                                      ASSESSED VALUE)            FACILITIES            LEVY

               Ashland.                     $43.97              $    18,474              0.8

               Green Bay                    25.96                   259,300              o-7

               Milwaukee                    40-12                   271,157              0.1

                        7
               Sheboygan                    30.05                    98,852              0.6

               Superior   (City)            21.08                 1,071,757              10.2

               Source:*   Bureau of  Coastal Management, Wisconsin Department of Administration.
                          Compiled from personal communications with local assessors.

                                                           -19-

              .5.0 Occupational Taxes on Coal and Petroleum

              Wisconsin statutes provide for occupational taxes on a variety of port

              activities, including.grain, coal, and taconite storage and transfer, and

              petroleum refining. These taxes were first imposed in the World War I era and

              were originally envisioned as a substitute for the personal property tax on

              business inventories. During the past two decades, as changes in trade

              patterns have concentrated the activities subject to occupational taxes in the

              port of Superior, the occupational taxes have come to be seen as financial

              assistance to an economically distressed region of the state. An analysis

              prepared by.-the Department of Administration in 1977, when new occupational

              taxes were imposed on taconite and other occupational tax rates were raised,

              pointed out that "occupational tax increases would not redistribute state tax

              dollars -- they would merely increase-the share borne by interstate extractive

              industries of the cost imposed on-Superior by servicing out-of-state markets.,

              with transshipment facilities."

              In'1917, when the occupational tax on coal was instituted, Wisconsin ports

              (including.the twin ports of Superior and Duluth) received 18.5 million tons.

              of coal, much of it for transshipment to the Twin Cities and other inland

              markets. Eight Wisconsin ports handled 100,000 tons or more in 1917. The

              original tax rates were 1-1/20 per ton on bituminous coal (about 2/10 of one

              percent of the average 1917 delivered value), and 2@ per ton on anthracite

              coal (about 3/10 of one percent of the average 1917 delivered value). In

              1977, the tax was increased to its current level of 50 per ton on bituminous

              coal and 7J per ton on anthracite coal. Originally, the tax was collected

              each year based on receipts reported for the 12 months ending April 30 of the

                                                   -20-

              reporting year. In 1977 the base period was changed to the preceding calendar

              year. The occupational taxes paid in 1976, for example, represented taxes on

              coal shipments received between May 1, 1974, and April 30, 1975. Occupational

              taxes paid 'in 1977 and succeeding years represent.taxes on shipments for the

              preceding calendar year. -Receipts,from the occupational tax are shared

              according to the following formula: 70 percent to the municipality in which

              the dock is located, 20 percent to the county in which the dock is located,

              and 10 percent-to the state general fund.

              The occupationaltax applies only to coal brokerages and transshipment

              terminals. Companies operating docks which receive coal for their own use

              only are exempt from the tax. The tax is, therefore, not collected on coal

              deliveries to lakeside power plants, such as Pulliam, Port Washington, and

              Valley,.nor on coal deliveries to industrial docks such as the Fort Howard

              Paper Company'in Green Bay or-the Milwaukee Solvay Coke Company.

              Two distinct movements of coal are currently subject to the occupational tax,

              the eastern and midwesiern coal delivered to Wisconsin docks by lake vessel,

              and western coal delivered to the Superior Midwest Energy Terminal by rail for

              transshipment to Michigan power plants. At the current rate of 50 per ton on

              bituminous coal, the occupational tax represents about 1/10 of one percent of

              the value of eastern or midwestern coal delivered to docks in Wisconsin, and

              represents approximately 2/10 of one-percent of the value of Montana coal

              delivered to the terminal in Superior. The tax on anthracite coal is of

              little significance, since.total deliveries of anthracite to the state are

              presently less than 5,000 tons per year.

                                                     -21-

              Wisconsin docks currently receive between 3-1/2 and 4 million tons of eastern

              and midwestern coal by vessel per year, of which approximately  I million tons

              per year is subject to the occupational taxes. The Superior Midwest Energy

              Terminal currently receives more than 4 million tons of western coal per year,

              all of which is subject to the occupational tax-@ Occupational taxes on coal

              collected by municipality for the years 1974 to 1981  are presented in Table

              5.1. The total occupational taxes collected have increased from less than
              $20,000-00 per year in the early 1970s to $245,000-00  in-1981. Virtually-all

              of the increase has accrued to the City of Superior, which in 1981 accounted

              for more than 80% of the total occupational taxes collected on coal.

              The second occupational tax applicable  to coastal energy facilities is the tax

              on crude petroleum received at refineries. This tax was first imposed in 1957
              at a rate of 2-1/21 per,ton re -- ceived. In 1977, the occupational"tax on crude

              petroleum was doubled to 5e per ton,  which represents approximately 2/100-of

              one percent of the present delivered  cost of crude. Wisconsints only

              petroleum refinery, operated by the Murphy Oil Company, is located in

              Superior. The amounts collected, for the years 1974 to 1981 range from

              $33,000-00 to $87,000.00 (see Table 5.2). All of the receipts are retained by

              the collecting jurisdiction, the City of Superior.

                                                    -22-

                                                                                          TABLE 5.1

                                                                       OCCUPATIONAL TAXES COLLECTED ON COAL DOCKS,
                                                                          BY COLLECTING MUNICIPALITY, 1974-1981

                                                     1974          1975          1-976         1977         1978           1979           1980            1981
                          Ashland                 4  595.'21    4,448.00     3,447.66       2,044.92   t 6,670.75     $ 9,302.65     t 15,931.95       11,946.55

                          Green Bay               7,076.97      5,738.71     5,929.33       5,05.83       24,666.09      20,590.12      26,009.55      19,625.20
                          La Crosse*                 329-80       259.87        213.13       217.41        1,324.62         854.11        880.76           928.24

                          Manitowoc               41,820.00     1,592.:64    1,717.23       2,178.24       6,708.20       3,435.85       3,138.85       2,675.15

                          Marinette                  243.30        65.67         32.46          33.00        104.70          73.80           97.10          76.00

                          Milwaukee               1.827.46        990.54        296-59       864.08          873.41       1,433-57        756.47        2,930@62

                          Prairie du Chien*          37.50         17.93            .00        88.74           24.68         44.50        274.00           524.60

                          Racine                     30.85         21.60         10.32            .00            .00            .00            .00            .00

                          Sheboygan               1,268.67         79.04        996.41       440.91        1,498.80       4,524.40       8,143.50       5,361.15

                          Superior.,                 53.40         53.40     2,511.66      57,526.18     144,433.40     128,619.45     215,471.25     201,155-05

                          State Total,          $17,283.16    .$13,267.40  $15,154.79 $68,589.31 $186,304.65          $168,878.45 4270,703.43 $245,222.56

                            Mlsslssippi@ River Docks

                          Source: Bureau of-Coastal Management, Wisconsin         Department of Administration.

                                                                                       -23-

                                                     TABLE 5.2

                              OCCUPATIONAL TAXES COLLECTED ON PETROLEUM'REFINERIES
                                            CITY OF SUPERIOR, 1974-1981

                                         1974                    $ 45,082.48

                                         1975                      32,540.55

                                         1976                      33,681-83

                                         1977                      39,768-05

                                         1978                      87,373.70

                                         1979                      59,670.75

                                         1980                      80,068-65

                                         1981                      64,799-30

               Source: Bureau of Coastal Management, Wisconsin      Department of Administration.

                                                        -24-

              6.0 Distribution of Local Tax Revenues by Community

              Local tax revenues from coastal energy facilities in 1981 are summarized in

              Tables 6.1 and 6-2.

              Payments to municipalities totalled $4,248,822 in 1981. The City of Superior

              was the largest single receipient with $1,364,485, more than 32 percent of the

              total payments to municipalities. The Cities of Milwaukee and Oak Creek each

              received more than $600,000. The City of Green Bay, the Town of Pleasant

              Prairie,, and the Town of Carlton each received more than $300,000.

              Payments to counties totalled $2,645,517. Kenosha County was the largest

              single recipient, with $625,607, or almost 24 percent of the total payments to

              counties. Kewaunee and Milwaukee Counties each received more than $500,000,

              and Manitowoc received almost $500,1000. All four of these counties benefited

              by the distribution of revenues under the utility portion of the shared tax

              formula.

                                                    -25-

                                                          TABLE 6.1

                             COASTAL ENERGY FACILITY TAX PAYMENTS TO COMMUNITIES, 1981

                                      SPECIAL UTILITY       OCCUPATIONAL      LOCAL PROPERTY
                COMMUNITY                   PAYMENTS        TAX PAYMENTS       TAX PAYMENTS          TOTAL

                Ashland                  $    23,939         $ 8,363           $     18,474      $    50,776

                Carlton                     300,000                   0                              300,000

                Green Bay                     75,000             13,738             259,300          348,038

                Hanitowoc                       4,473             1,872               ..9,546         15,892

                Marinette                       2,033                53                  N/A            2,086-

                Milwaukee                   412,574               2,051             271,157          685,782.

                Oak Creek                   601,641                   0                   0          601,641

                Pleasant  Prairie           300,064                   0                   0          300,0641.

                Port Washington               75,000                  0                   0           75,000.

                St. Francis                   75,000                  0
                                                                                          0           75,000

                Sheboygan                   171,153               3,753             .98,852          273,758

                Superior                      77,099            215,629          1,071,757          lp-364,485

                Two Creeks                  1@6,300                   0                   0          156,300

                                          $2,274,276         $245,460.          $11,729)086       $4,248,822

                Source: Bureau of Coastal Management, Wisconsin           Department of    Administration.

                                                             -26-

                                                    TABLE 6.2

                            COASTAL ENERGY FACILITY TAX PAYMENTS TO COUNTIES, 1981

                                   SPECIAL UTILITY             OCCUPATIONAL
                                         PAYMENTS                    TAXES                 TOTAL

              Ashland                 $   17,447                  $ 2,389                   19,836

              Brown                       75,000                     3,925                  78,925

              Douglas                     18,301                    40,231                  58,532

              Kenosha                    625,607                         0                 625,607

              KewaunIee                  602,738                         0                 602,738

              Manitowoc                  473,652                       535                 474,187

              Marinette,                  41,922                        1@                  41,937

              Milvauk6e                  564,688                       586                 565,274

              Ozaukee                     75,000                         0                  75,000

              Sheboygan                  102,409                     1,072                 103,481

              Total                    $2,596,764                  $48,753              $2,645,517

              Source:   Bureau of Coastal  Management,  Wisconsin Department of Administration.

                                                      -27-

                                                                                      APP-ENDIX A

                                                                         INVENTORY OF TAXABLE COASTAL ENERGY
                                                                               FACILITIES, APRIL, 1982

                                COUM        CITY/TO'.-4          FACILITY TYPF                     FACILITY NAME

                                kshland     Ashland              Coal Dock                         C. Reiss Coal   Company
                                            Ashland              Power Plant                       layfront (LSDP)

                                Bayfleld    -----

                                Brown       Green Bay            Coal Dock                         Fort Howard Paper Company
                                            Green Bay            Coal Dock                         Blue Line Coal Company
                                            Green Bay            Coal Dock                         C. Reiss Coal Company
                                            Green Bay            Power Plant                       Pulliam (WPSQ
                                            Green Bay            Pipeline Terminal  Facilities     Amoco Oil Company
                                            Green Bay            Pipeline Terminal  Facilities     Cities Service Oil
                                            Green Bay            Pipeline Terminal  Facilities     Apex Oil Company
                                            Green Bay            Pipeline Terminal  Facilities     Green Bay Products Terminal
                                            Green Bay            Pipeline Terminal  Facilities     Green Bay Terminal, Inc.
                                            Green Bay            Pipeline Terminal  Facilities     Koch Fuels, Inc. (ship only)
                                            Green Bay            Pipeline Terminal  Facilities     Mobil Oil Corporation
                                            Green Bay            Pipeline Terminal  Facilities     Fort Howard Paper Company (former   ly  Shell Oil
                                                                                                   Company, Inc.)
                                            Green Bay            Pipeline Terminal  Facilities     U.S. Oil Company, Inc.

                                Door        Washington Island    Petroleum Storage/Transfer        Amoco Oil Company
                                                                 Power Plant                       Washington Island Electric Coop

                                Douglas     Superior             Coal Dock                         Superior Midwest Energy Terminal
                                            Superior             Power Plant                       Winslow (SWPL)
                                            Superior             Petroleum R&finery & Terminal     Murphy Oil Corporation
                                            Superior             Pipeline, Terminal Facilities     Amoco Oil Company
                                            Superior             Pipeline Terminal Facilities      Union Oil Company of California
                                            Superior             Pipeline Terminal Facilities      Lakehead Pipeline Company
                                            Superior             Pipeline Terminal Facilities      Williams  Pipeline Company

                                tron

                                Kenosha     Pleasant Prairie     Power  Plant                      Pleasant  Prairie (WEPCO)

                                Kewaunee    Carlton              Power  Plant                      Kewaunee  (WPSC)

                                Manitowoc   Manitowoc            Coal Dock                         C. Reiss  Coal Company.
                                            Manitowoc            Power Plant                       Manitowoc (Municipal)
                                            Two Creeks           Power Plant                       Point Beach (WEPCO)
                                            Two Rivers           Petroleum Storage/Transfer        U.S. 011,Company (served by ship)

                                Marinette   Marinette            Coal Dock                         Marinette Fuel and Dock
                                                                 Fewer Plant                       West Marinette (WPSC)

                                Milwaukee   Milwaukee            Coal Dock                         Solvay Coke Company
                                            Milwaukee            Coal Dock                         Hometown, Inc.
                                            Milwaukee            Coal Dock                         Schneider Fuel
                                            Milwaukee            Power Plant                       Commerce (WEPCO)
                                            Milwaukee            Power Plant                       East Wells (WEPCO)
                                            Milwaukee            Power Plant                       Valley (WEPCO)
                                            Milwaukee            Pipeline Terminal Facilities      Tanco Terminal
                                            Milwaukee            Pipeline Terminal Facilities      Jacobus Company (Milwaukee Liquid Laken       also
                                                                                                   served by ship)
                                            Milwaukee            Petroleum Storage/Transfer        Schwerman Marine Terminal (ship only)@
                                            Milwaukee            Pipeline Terminal Facilities      Mobil Oil Company
                                            Milwaukee            Pipeline Terminal Facilities      Shell Oil Company
                                            Milwaukee            Pipeline Terminal Facilities      Marathon Oil Company
                                            Oak Creek            Power Plant                       Oak Creek (WEPCO)
                                            St. Francis          Power Plant                       Lakeside (WEPCO)

                                Oconto

                                Ozaukee     Port Washington      Power.Plant                       Part Washington (WEPCO)

                                Racine      Racine               Petroleum Storage/Transfer        W. H. Pugh Oil Company (served by ship)

                                Sheboygan   Sheboygan            Coal Dock                         C. Reiss Coal Company
                                            Sheboygan            Power Plant                       Edgewater (WPL)
                                            Sheboygan            Petroleum Storage/Transfer        C. Reiss Coal Company

                                Source:  Bureau of Coastal Management, Wisconsin Department of Administration

                                kcd/51809

                                                                               -28-

                                                                                                     DATE DUE

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