Minor memos

Minor memos

December 07, 2004

The corporate tax bill that President Bush signed on October 22 would reduce US taxes on domestic manufacturing income. Utilities may feel pressure in some states to pass through any benefit from the lower rates to ratepayers by reducing electricity prices. For example, TURN, a consumer group, asked the California Public Utilities Commission in late October to investigate what effect the changes should have on utility rates in California. Income from generating electricity qualifies for the lower rate, but not income from transmitting or distributing the electricity. The new law does not actually reduce rates. Rather, companies are allowed a deduction for 3% of their income from domestic manufacturing in 2005 and 206. The deduction increases to 6% from 2007 through 2009 and to 9% in 2010 . . . . Michigan Governor Jennifer Granholm (D) vetoed two bills in midNovember that would have exempted methane digesters and similar equipment for converting manure into  methane from property taxes and authorized the state to make loans of up to $5 million to farmers who want to build ethanol plants or methane digesters or install other equipment for generating electricity from farm wastes and crops. The governor said the state has no money to support the plan.