Nation : Refunds by Utilities Rejected
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WASHINGTON — The House Ways and Means Committee today rejected a bill that could have resulted in quick refunds averaging $223 apiece for customers of the nation’s utility companies.
The bill by Rep. Robert T. Matsui (D-Sacramento) lost on a 22-13 vote, with 12 Democrats and one Republican supporting it.
At issue in the bill, co-written by Rep. Byron L. Dorgan (D-N.D.), was about $19 billion that the power, gas and telephone companies collected in advance from customers to pay corporate taxes to the federal government. The money was collected in anticipation that the utilities would owe taxes at a 46% corporate rate. However, when Congress enacted the 1986 tax overhaul, it cut the top corporate rate to 34%. Matsui was able to win passage at that time of an amendment giving utilities as long as 30 years to refund the excess to consumers.
Matsui says now that he made a mistake, that he was misled by the utilities into believing that the excess would be used to buy new equipment. Many utilities, he says, are so rich with cash that they are buying such businesses as golf courses, recording studios and a drug store chain.
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