The following is a press release from Assembly Member Ellen Corbett
regarding her new windfall profits tax bill ABX 128 which will probably
be heard in committee following the Easter break.





For Immediate
Release
Contact:    Rebecca Nieto
April 4,
2001
(916) 319-2018



Corbett Introduces Windfall Profits Tax Measure


SACRAMENTO ) Responding to increasing electricity rates and the
continuing threat of rolling blackouts, Assembly Revenue and Taxation
Committee Chair Ellen Corbett (D-San Leandro) today introduced a
windfall profits tax measure intended to help restore sanity to the
pricing of electricity in California.  The bill, AB 128X, imposes an
electrical power generation windfall profits tax on the windfall profits
realized by power generators, their affiliates, and the middlemen who
participate in California's energy market. However, in recognition of
the fact that some generators are cooperatively working with the state
by holding their costs down, the measure is targeted at generators whose
gross receipts significantly exceed the cost these entities incur to
produce the energy they sell.

"We cannot continue to pay the exorbitant rates that are currently being
charged in today's marketplace.  Consumers and small businesses are
seeing their energy rates skyrocket.  The state is spending $45 million
per day to help meet demand.  We are looking toward a summer of rolling
blackouts.  Yet, we continue to allow some electricity generators and
middlemen to reap enormous profits on their sales of electricity into
the state.  This profiteering must stop, and AB 128X will help us ensure
that it does."

The windfall profits tax measure imposes an add-on tax equal to a set
percentage of the gross receipts derived from the sale of electrical
power into the state. The measure also targets middlemen who have been
able to game the electricity market by buying up supply and reselling it
at much higher rates.  AB 128X hits these middlemen by taxing the
receipts they realize from excessively high markups.

"As Chair of a working group charged with developing a windfall profits
tax, I look forward to working with my colleagues on moving this measure
through the Legislature."
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