Gas utilities are probably in much better shape to manage growth in their markets over the next 15 years as a result of legislation signed into law by President Bush in May that lowers taxes on dividends and capital gains and reduces the time needed for companies to recoup the cost of capital projects such as new transmission and distribution pipelines. The Jobs and Growth Tax Relief Reconciliation Act reduces the tax rate on dividends and capital gains to 15 percent for the top four tax brackets and to five percent for the bottom two brackets for the years 2003 through 2007. For the year 2008, the 15 percent rate does not change but the five percent rate drops to zero. To help utilities recoup capital spending more quickly, bonus depreciation―established for them in earlier legislation―was increased by the new law from 30 percent to 50 percent for property commissioned after May 5, 2003, and before January 1, 2005, according to the American Gas Association.
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