Corbett Press Conference on Windfall Profits Tax

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 05/07/2001 12:13 PM -----

"Chris Micheli" <cmicheli@carpentersnodgrass.com<
05/07/2001 10:14 AM

To: "Susan McCabe" <smccabe@mccabeandcompany.net<, "Sue Mara"
<smara@enron.com<, "Steven Kelley" <steven@iepa.com<, "Steve Ponder"
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cc:
Subject: Corbett Press Conference

This morning Assemblywoman Ellen Corbett held a press conference on her AB
128x. Several print journalists and 3 TV cameras were present at the
conference. Also of interest is that the Senate tax consultants and Burton's
staff were at the event. Assemblywoman Hannah-Beth Jackson showed up late
and gave a few quotes to the media present. A spokesman from Mirant also
gave a few interviews after the press conference.
According to Corbett's staff, they expect to handout the bill amendments at
the hearing.
Among Corbett's comments to the media present:
"This bill is not a negotiating tool. I'm very serious about this bill. I
want to see it through the process. The Governor will sign a bill like this."
The following amendments are to be presented at the committee hearing today
as follows:
AB 128X
1) Creates a Tax on Excess Gross Receipts from Electrical Energy
Distribution (called a "tax on excess greed")
2) Imposes a tax on the first sale of electricity by generators and
middlemen.
3) Establishes as the measure for the tax, the amount by which the
gross receipts exceed a specified price ("the base price"). The measure of
tax is called the excess gross receipts.
4) Creates a 3-tier system of rates as follows:
a) Sales price more than the base price but not more than 150%
of the base price, tax rate = 50%
b) Sales price more than 150% of the base price but not more
than 200% of the base price, tax rate = 70%
c) Sales price more than 200% of the base price, tax rate = 90%
5) Creates a rebuttable presumption that the base price represents a
fair sales price.
6) Adds a mechanism to require withholding of the tax by purchasers.
Residential consumers and small business are exempt.
7) Requires sellers to file annual tax returns to report the tax on excess
gross receipts and pay any remaining tax due.
8) The measure sunsets after five (5) years.
There will be a report after today's Assembly Rev & Tax Cmte hearing.
As opposed to SB 1x that returns the taxes raised to ratepayers, AB 128x
would "repay" the State's General Fund.

Chris Micheli, Esq.
Carpenter Snodgrass & Associates
1201 K Street, Suite 710
Sacramento, CA 95814
(916) 447-2251
FAX: (916) 445-5624
EMAIL: cmicheli@carpentersnodgrass.com