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2000 SESSION

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SB 185 Natural Gas Consumption Tax created.

Introduced by: John C. Watkins | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

Natural Gas Industry Restructuring. Restructures the taxation of natural gas by eliminating the gross receipts tax and special regulatory revenue tax and by imposing a net corporate income tax and a consumption tax on gas utilities. This bill is identical to HB 279.

SUMMARY AS PASSED SENATE:

Natural Gas Industry Restructuring. Creates a retail supply choice program for natural gas customers and replaces the state and local gross receipts taxes and special regulatory revenue tax with a consumption tax on consumers and a corporate income tax on gas suppliers, pipeline distribution companies, and gas utilities. The bill is patterned after the legislative package on electric utilities restructuring adopted during the 1999 Session of the General Assembly. Gas suppliers, pipeline distribution companies and gas utilities are authorized to file a retail supply choice plan with the SCC that includes (i) a schedule to implement the program; (ii) a methodology to recover stranded costs from consumers who do not participate in the choice program; (iii) proposed unbundled rates and terms and conditions to provide nondiscriminatory, open access; and (iv) provisions to insure that one class of customer does not subsidize another class. Customers of municipal-owned utilities cannot participate in the program. The bill would impose a state consumption tax based upon units of 100 cubic feet (CCF) used per month, at a rate of $.0135 per CCF consumed, up to 500 CCF, which would be added as a separate charge to the consumer's monthly bill. The local consumption tax rate would be $0.004 per CCF consumed and the special regulatory tax rate would be $ 0.002 per CCF consumed, with both consumption taxes limited to the first 500 CCF consumed per month. Localities are authorized to impose an additional tax based on CCF delivered monthly to each consumer, with a $3.00 maximum per month for residential consumers. Federal, state, and local governments would be exempt from the consumption taxes and such taxes would not be imposed on consumers of municipal-owned utilities. Under current law, gas suppliers, pipeline distribution companies, and gas utilities are subject to a state license tax on gross receipts of 2 percent and a special assessment tax paid to the SCC of 0.11 percent of gross receipts. Localities are also permitted to impose a license tax on gross receipts not to exceed 0.5 percent. The corporate income tax and consumption tax provisions would be effective for taxable years beginning on or after January 1, 2001.

SUMMARY AS INTRODUCED:

Natural Gas Consumption Tax. Restructures the taxation of natural gas by eliminating the gross receipts tax and imposing a net corporate income tax and a consumption tax.