Concurrent Resolution on Energy Taxation in a Competitive Electricity Marketplace Exposed

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A Concurrent Resolution on Energy Taxation in a Competitive Electricity Marketplace does not include adoption or approval information. ALEC has attempted to distance itself from this piece of legislation after the launch of in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

ALEC Resolution Text


Existing state and local tax structures never anticipated the current trend to deregulate the electric utility industry. Such tax structures could become discriminatory if allowed to persist in a more competitive industry. During the transition to competition, existing state and local tax policies that are imposed on regulated electric utilities should be evaluated and any necessary reforms should be proposed. But as part of any reform of energy tax policies, ways to reduce the overall level of taxation should be considered, recognizing that the net reductions in electricity costs induced by competition can offset tax revenues allocated to schools and other purposes.

Model Resolution

WHEREAS, nationwide a transition has begun toward competition in electric generation and related services that can be more efficiently provided in a competitive marketplace;

WHEREAS, local electric utilities have often served as “tax collectors” and the traditional tax treatment of such companies may be inappropriate in a competitive market with multiple suppliers of competitive electric services;

WHEREAS, all consumers have the right to know the amount of taxes and subsides they are paying as a condition to purchasing electricity and related electric services;

WHEREAS, special tax assessments, distinctions, and fees, including multiple taxes, may unfairly disadvantage local electric utility companies when they are in competition with other suppliers of competitive electric services;

WHEREAS, the property tax burden of some electric utilities is artificially increased by the above-market valuation of uneconomic assets;

WHEREAS, a fair and nondiscriminatory tax policy can only be designed and implemented once the competitive market structure is known;

WHEREAS, the final resolution of existing taxation disparities should not be used to delay or prevent the onset of competition, and deny the benefits of such competition to consumers;

WHEREAS, competition in electric services will significantly reduce the cost of electricity to schools and state and local government agencies otherwise dependent on tax revenues;

WHEREAS, the reform of any tax structure should be considered in the context of the broader public policy objective to reduce, simplify, and make more equitable, the overall tax burden on consumers and the economy; now

THEREFORE BE IT RESOLVED THAT THE {INSERT LOWER HOUSE} OF THE STATE OF {INSERT STATE} AND THE {INSERT UPPER HOUSE} CONCURRING, that the Legislature is hereby directed to appoint a joint legislative study committee on electric service taxation to assess the amount of state and local tax revenues derived from previously regulated electric suppliers and how such revenues to the State and each local government may be changed by the deregulation of generation and related competitive services, and offset by the reduction in energy costs resulting from deregulation; and

BE IT FURTHER RESOLVED, that the joint study committee shall recommend back to the Legislature any appropriate changes to the manner in which taxes shall be imposed on competitive electric service suppliers, including:

(1) the appropriate State and local agencies to administer such taxes;
(2) the minimization of multiple taxation;
(3) the appropriate method of measuring, reporting, paying, and administering each tax;
(4) me appropriate rates that produce revenues not to exceed total existing assessments;
(5) the methods by which such taxes and any subsidies are disclosed on consumer bills; and
(6) such other matters as necessary to institute an easy to administer, equitable, and competitively-neutral system of taxation; and

BE IT FURTHER RESOLVED, that the Joint Study Committee’s investigation be executed in parallel with the expeditious transition to full competition in the State’s electric industry, and not act to delay such transition.