Update on Senate Windfall Profits tax lang. -- from IEP

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 04/05/2001 08:37 AM -----

"Steven Kelly" <steven@iepa.com<
04/04/2001 05:47 PM

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Subject: Update on Senate Windfall Profits tax lang.

As expected, the Senate Revenue and Tax Committe voted out SB1X, the
Windfall Tax Bill (see attached bill language). While the co-author noted
it was a "work in progress," he noted that he envisioned a program wherein
150% of the existing corporate rate would apply to the "excess profits."
This approach would result in a tax rate of approximately 13.5 percent
applied to the "excess proftis."

IEP testified against the bill (see attached IEP letter opposing the bill).
In response to questions, the author indicated the intent was not to "go
after QFs", but he also presumed that QFs were not receiving "gross
profits." Questions left unanswered included: would the tax apply to
municipal entities; how would the tax apply to out-of-state entities; what
would be the impact on system sales and reliability; what would be the
impact on incentives for new development.

The bill is expected to move to the Senate Appropriations Committee.
However, the Appropriations Committee is not expected to take the bill up
this week, and the members apparently are still planning on taking a recess
next week.

-----Original Message-----
From: Carol Hudson [mailto:carol@iepa.com]
Sent: Wednesday, April 04, 2001 4:44 PM
To: Steven Kelly (E-mail)
Subject: FW: windfall profits tax lang.

- windfall profits tax bill 4-04-01.doc
- Senate Bill 1.rtf