In addition, on December 13, 1968, the Company filed its Amended Declaration of Estimated Income Tax for 1968 on the basis of depreciating its properties acquired subsequent to December 31, 1967 at accelerated rates for tax purposes. Also, registration statements filed with the Securities and Exchange Commission in May 1969, with respect to the Florida Gas Company Employees Savings Plan and the Florida Gas Company Qualified Stock Option Plan, contain statements with respect to accelerated depreciation similar to those contained in the Annual Report of Florida Gas Company. For the above reasons, Florida Gas Transmission Company requests that subsection 167 (k)(1)(A) of the Internal Revenue Code, as proposed to be amended by Section 451(a) of House Bill 13270, be amended in one of the following manners: 1. 2. 3. Delete subsection (1)(A) and substitute the following: "(A) with respect to such property (or with Delete subsection (1) (a) and substitute the following: "(A) with respect to such property (or with Delete subsection (1) (A) and substitute the following: "(A) with respect to such property (or with - 4 4. 5. 6. 7. than the straight-line method, or (ii) had Delete the date "July 22, 1969" and substitute the date Delete the words "for which a return was filed" and insert in lieu thereof the word "ending" so that subsection (1)(A) would read as follows: "(A) with respect to such property (or with Delete the word "filed" and insert in lieu thereof the words "initially due" so that subsection (1)(A) would read as follows: "(A) with respect to such property (or with After the words "for which a return was filed on or before July 22, 1969" add "or on or before a subsequent date if a valid extension to file at such later date had been granted on or before July 22, 1969", so that subsection (1)(A) would read as follows: EDISON ELECTRIC INSTITUTE TO THE COMMITTEE ON FINANCE September 9, 1969 SUMMARY SHEET 1. We urge the elimination of an existing inequity in our tax structure and an increase in the Federal revenue by requiring presently tax-exempt electric power systems to pay Federal taxes equivalent to those now paid by tax-paying systems. Since taxes are an operating expense of electric utility systems and since their rates must be fixed to cover all such expenses, the customers of government-owned and government-financed power systems, which do not now pay any Federal income taxes, escape the tax contributions which customers of the investor-owned systems are required to pay. We urge that this inequality and inequity in the discriminatory treatment of one group of citizens as against another should be eliminated. 2. We urge that Section 103 of the Internal Revenue Code be amended to except from interest exemption all bonds issued to acquire facilities used in the business of furnishing electric energy or in any other comparable business functions. The furnishing of electric energy to the public is a proprietary or business function as is evidenced by the fact that approximately 78% of all electric customers in the United States are served by investor-owned companies. When Congress, in 1959, authorized TVA to issue revenue bonds to finance its electric power business, Congress expressly provided that the interest on such bonds would not be exempt from the Federal income tax. There is no valid reason why the obligations of a State or any political subdivision of a State, issued to finance the business of supplying electric energy, should be exempt from Federal income tax. 3. We urge that the Congress authorize State and local taxing authorities to impose on Federal power systems, on a non-discriminatory basis, the same State and local taxes as are levied on comparable investor-owned systems. |