SB 0080 Revises various utility taxes
LR Number:0215S.01I Fiscal Note:0215-01
Committee:Commerce and Environment
Last Action:01/16/01 - Second Read and Referred S Commerce and Environment Journal page:S102
Effective Date:Various
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Current Bill Summary

SB 80 - This act revises provisions pertaining to gross receipts taxes and sales taxes on electricity and natural gas service which are similar to SB 612 and SB 803 from 2000 and provisions revising taxes on utility distributable property.

GROSS RECEIPTS TAXES AND FRANCHISE FEES - This act makes changes to the provisions enacted in SB 627 in 1998, which required sellers of electricity and gas to be certified by the Public Service Commission (PSC) and to file agreements which the sellers entered into, with either the distributor or political subdivision, for the payment of all business license taxes or franchise fees owed. This act clarifies that a retail user will not be considered a seller. An enforcement provision is added which requires electrical and gas corporations to file tariffs, and electric cooperatives to implement service conditions, within ninety days, to enforce the agreement structure. The act requires political subdivisions which impose business license taxes, have franchise fee agreements or payments-in-lieu-of-tax (PILOTs) to submit the corresponding consumption tax to the voters for approval no later than April 15, 2003.

SALES TAXES - The act also extends the same framework to sales and use taxes, requiring sellers of electricity and gas to file, with the PSC, agreements entered into with either the distributor or political subdivision to collect and remit all sales and use taxes. Distributors and political subdivisions are prohibited from selling energy services to any person unless the seller has been certified by the PSC and has filed its agreements. Sellers are required to waive all rights to challenge the validity of any agreement and of any right to a refund. A declaratory judgment action is authorized. Legal action challenging the validity of any agreement suspends that agreement until a final court judgment is made; if a court judgment invalidates the agreement structure, energy services may only be provided upon a showing of public convenience and necessity by the PSC.

PROPERTY TAXES - Property taxes are revised to specify that current IOU distributable property shall continue to be assessed by the current, unit-value method until the PSC finds the property is functionally separated from the IOU's regulated property. Once so determined, the State Tax Commission (STC) shall assess the property as an independent property beginning with the following tax year. The value of such property shall continue to be distributed on a pole mile basis. New distributable property shall be assessed by the STC as independent property and distributed locally.

EFFECTIVE DATES - The section authorizing the STC to assess electric generation property has a normal effective date, and the other provisions shall become effective on January 1, 2002.