A transmission line of two hundred thirty kilovolts or larger, and its associated transmission substations, which is not taxable under chapter 57-33.2 and is initially placed in service on or after October 1, 2002, is subject to a tax at the rate of three hundred dollars per mile [1.61 kilometers] or fraction of a mile. A transmission line subject to taxation under this section is exempt from property taxes for the first taxable year after the line is initially placed in service, and the taxes under this section must be reduced by:

1.    Seventy-five percent for the second taxable year of operation of the transmission line.

2.    Fifty percent for the third taxable year of operation of the transmission line.

3.    Twenty-five percent for the fourth taxable year of operation of the transmission line. After the fourth taxable year of operation of the transmission line, the transmission line and its associated transmission substations are exempt from property taxes and are subject to a tax at the rate of three hundred dollars per mile [1.61 kilometers] or fraction thereof of the line located in this state. The per mile tax imposed by this section applies to the transmission line and its associated transmission substations and is subject to allocation among counties in the proportion that the miles of that transmission line in the county bears to the miles of that transmission line in the state.

For purposes of this section, “initially placed in service” includes both new construction and substantial expansion of the carrying capacity of a pre-existing line, and “substantial expansion” means an increase in carrying capacity of fifty percent or more.