HCS HJR 53 -- UTILITY TAXATION

SPONSOR:  Mays (50)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Utilities
Regulation by a vote of 15 to 3.

This substitute for the proposed constitutional amendment
authorizes the General Assembly to enact replacement taxes for
local gross receipts taxes on electricity and natural gas sales;
franchise fees based on gross receipts from electricity and
natural gas sales; local sales and use taxes imposed by any
political subdivision on electricity and natural gas sales; and
taxes on real or personal property used directly for electricity
generation, transmission, and distribution.

On the effective date of the replacement tax, the tax or fee
being replaced will be void and repealed.  The replacement tax
will be imposed on any distributor that delivers electricity or
natural gas to the user or on the user if the electricity or
natural gas is received from a source other than the distributor
who has paid the replacement taxes.  The General Assembly will
establish rates for replacement taxes or fees that are designed
to produce, to the greatest extent practicable, revenues
equivalent to the revenues generated by the prior taxes or fees.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$52,560 in FY 2001, and $0 in FY 2002 and FY 2003.

PROPONENTS:  Supporters say that tax issues appear to be the
first issue to address in the electric restructuring debate, and
the Hancock Amendment poses a challenge in overhauling the
current utility tax system.  This constitutional amendment will
authorize the General Assembly to enact replacement taxes.

Testifying for the bill was Representative Mays (50).

OPPONENTS:  There was no opposition voiced to the committee.

Donna Schlosser, Legislative Analyst

HJR 53 -- Utility Taxation

Co-Sponsors:  Mays (50), Burton

This proposed constitutional amendment authorizes the General
Assembly to enact replacement taxes for local gross receipts
taxes on electricity and natural gas sales, franchise fees based
on gross receipts from electricity and natural gas sales, local
sales and use taxes imposed by any political subdivision on
electricity and natural gas sales, and taxes on real or personal
property used directly for electricity generation, transmission,
and distribution.

On the effective date of the replacement tax, the tax or fee
being replaced will be void and repealed.  The replacement tax
will be imposed on any distributor that delivers electricity or
natural gas to the user or on the user if the electricity or
natural gas is received from a source other than the distributor
who has paid the replacement taxes.  To the greatest extent
practicable, the year 2000 will be the basis in the year of
implementation for the proportionate share of replacement taxes
paid for groups of like users.  To the greatest extent
practicable, all revenues lost to political subdivision will be
replaced through the replacement taxes.