8/6/2019 ALEC Concurrent Resolution on Energy Taxation in a
Competitive Electricity Market
1/2
A Concurrent Resolution on Energy Taxationin a Competitive
Electricity Marketplace
Existing stateand ocal tax structures everanticipated he current
rend to deregulate he electricutility industry. Such ax structures
ould becomediscriminatory f allowed to persist n a morecompetitive
ndustry. During the transition to competition, existing stateand
ocal tax policiesthat are mposedon regulatedelectric utilities
shouldbe evaluatedand any necessaryeformsshould be proposed.But
aspart of any reform of energy ax policies, ways o reduce he
overalllevel of taxation should be considered, ecognizing hat the
net reductions n electricity costsinducedby competition can offset
tax revenues llocated o schoolsand other purposes.Model
ResolutionWHEREAS, nationwide a transition hasbegun oward
competition n electric generationandrelatedservices hat can be more
efficiently provided n a competitivemarketplace;WHEREAS, local
electric utilities haveoften servedas tax collectors and the
traditional taxtreatmentof suchcompaniesmay be inappropriate n a
competitive market with multiplesuppliersof competitive electric
services;WHEREAS, all consumers ave he right to know the amountof
taxesand subsideshey arepaying as a condition to purchasing
lectricity and relatedelectric services;WHEREAS, special ax
assessments,istinctions,and ees, ncluding multiple
taxes,mayunfairly disadvantageocal electric utility companieswhen
they are n competition with othersuppliersof competitive electric
services;WHEREAS, the property ax burdenof someelectric utilities
is artificially increased y theabove-market aluation of
uneconomicassets;WHEREAS, a fair and nondiscriminatory ax policy
can only be designedand mplementedonce he competitive market
structure s known;WHEREAS, the final resolution of existing
taxation disparitiesshould not be used o delay orprevent he onsetof
competition, and deny he benefitsof suchcompetition to
consumers;WHEREAS, competition n electric serviceswill
significantly reduce he cost of electricity toschoolsand stateand
ocal governmentagencies therwisedependent n tax revenues;WHEREAS,
the reform of any tax structureshould be consideredn the context of
the broaderpublic policy objective o reduce, implify, and make more
equitable, he overall tax burdenonconsumers nd the economy;now
8/6/2019 ALEC Concurrent Resolution on Energy Taxation in a
Competitive Electricity Market
2/2
THEREFORE BE IT RESOLVED THAT THE {INSERT LOWER HOUSE} OF
THESTATE OF {INSERT STATE} AND THE {INSERT UPPER HOUSE}
CONCURRING,that the Legislature s herebydirected o appoint a oint
legislative study committee on electricservice axation o assesshe
amount of stateand ocal tax revenues erived rom
previouslyregulatedelectric suppliersand how such evenueso the
Stateand each ocal governmentmaybe changedby the deregulationof
generationand relatedcompetitive services,and offset by
thereduction n energycosts esulting from deregulation;andBE IT
FURTHER RESOLVED, that the oint study committee shall recommendback
to theLegislatureany appropriate hanges o the manner n which
taxesshall be imposedoncompetitive electric servicesuppliers,
ncluding: (1) the appropriateStateand ocal agenciesoadministersuch
axes; 2) the minimization of multiple taxation; (3) the
appropriatemethod ofmeasuring, eporting,paying, and
administeringeach ax; (4) me appropriate ates hat producerevenues
ot to exceed otal existing assessments;5) the methodsby which such
axesand anysubsidiesare disclosedon consumerbills; and (6)
suchother mattersasnecessaryo institute aneasy o
administer,equitable,and competitively-neutral ystemof taxation;
andBE IT FURTHER RESOLVED, that the Joint Study Committees
nvestigationbe executednparallel with the expeditious ransition o
full competition n the Stateselectric ndustry, and notact to delay
such ransition.
