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WEDNESDAY, APRIL 18, 2007
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TVA bill would bring more utility money

By M.J. Ellington
mjellington@decaturdaily.com (334) 262-1104

MONTGOMERY — Legislation introduced in the state House last week would end a decades-old practice of sharing TVA in-lieu-of-tax revenue with Alabama counties not served by the utility.

A 1978 state law requires that dry counties outside the Tennessee Valley Authority's service area share in the money TVA pays the state in lieu of taxes. As a federal agency, TVA does not pay state and local taxes.

A coalition of lawmakers representing the Tennessee Valley wants the money to stay in the Valley.

A bill by Rep. Jeff McLaughlin, D-Guntersville, would phase out funding for non-TVA counties over five years, meaning Alabama counties served by the nation's largest utility would reap the full benefits.

The process began in 2006, when the Legislature passed a bill giving TVA counties a greater share of TVA's payments, their first increase since 1985.

The 2006 increase gave TVA counties an additional $1.5 million. The projected revenue increase for 2007 is $3.2 million.

"Tax dollars should benefit the area where customers generate the money," McLaughlin said.

Rapidly growing Tennessee Valley counties need the extra revenue to help meet the needs of a larger population, he said.

Last year, retired Sen. Tommy Ed Roberts, D-Hartselle, recalled the negotiations that set up the 1978 law.

"The TVA money had always gone to the state General Fund, but we found out that Alabama Power paid its money to the counties and cities it served," Roberts said. "We decided to ask for the TVA money to go to counties and cities it served as well."

The request ran into opposition from the state's most powerful politician at the time, Gov. George C. Wallace. Wallace didn't agree to the plan until lawmakers agreed to distribute some of the TVA funds to counties where liquor sales were prohibited, Roberts said.

The state currently keeps 17 percent of the TVA's payments, which goes to the Incentives Financing Authority for economic development.

McLaughlin said the 2006 law included a compromise that keeps a percentage of revenue that goes into the General Fund level until it reaches $17.8 million.

McLaughlin's bill's co-sponsors include Reps. Bill Dukes, D-Decatur; Micky Hammon, R-Decatur; Ronald Grantland, D-Hartselle; Jody Letson, D-Hillsboro; Jeremy Oden, R-Eva; and Henry White, D-Athens.

TVA money

North Alabama counties received the following Tennessee Valley in-lieu-of-tax funds in 2004-05:

  • Morgan, $11.9 million.

  • Limestone, $6.25 million

  • Lawrence, $1.7 million

  • Madison, $14.9 million

  • Cullman, $3.7 million

  • Marshall, $4.96 million

    - Alabama Legislative Fiscal Office

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