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| SPONSOR: | Sandel | DATE TYPED: | 02/10/00 | HB | HJM 16 | ||
| SHORT TITLE: | Alternatives for Taxing Sales of Electricity | SB | |||||
| ANALYST: | Williams | ||||||
| Recurring
or Non-Rec |
Fund
Affected | ||||
| FY00 | FY01 | FY00 | FY01 | ||
| None | |||||
(Parenthesis ( ) Indicate Expenditure Decreases)
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY00 | FY01 | |||
| None | ||||
(Parenthesis ( ) Indicate Revenue Decreases)
Duplicates/Conflicts with/Companion to/Relates to
SOURCES OF INFORMATION
Taxation and Revenue Department (TRD)
Public Regulation Commission (PRC)
SUMMARY
Synopsis of Bill
Requests the Revenue Stabilization and Tax Policy Committee to examine alternative methods of taxing sales of electricity that will protect state and local revenues and recommend legislation at the 2001 legislative session. The bill addresses uncertainty regarding imposition of gross receipts taxes and franchise fees and concern about potential decline in revenues due to declining electricity prices.
Significant Issues
Electric industry competition will begin in New Mexico on January 1, 2001. Other western states have already opened up their electric power markets to competition, and many providers are expected to compete with the current in-state utilities for customers.
OTHER SUBSTANTIVE ISSUES
TRD notes the potential for considerable tax avoidance by out-of-state suppliers. A consumption tax may be one method of avoiding the ramifications of this problem. TRD also notes the state's share of gross receipts taxes on electric utilities was approximately $39 million in FY99. TRD discusses that industrial customers pay a far smaller share of gross receipts tax than residential customers.
TRD also notes local governments also charge access fees which would need to be examined.
PRC notes the bill could be amended to require all competitive power suppliers to have offices in New Mexico.
AW/gm