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Tax bill provision could help utility claim loss

The tax break was reportedly pushed by Rep. Clay Shaw, who recently received a contribution from Florida Power's PAC.

The big tax bill passed by Congress last week includes a tax break that might help Florida Progress Corp.

A provision in the $792-billion measure might allow the St. Petersburg parent of Florida Power Corp. to claim a loss on its tax return for Mid-Continent Life Insurance Co., a troubled subsidiary in Oklahoma.

Congressional staffers said the bill would clarify a fuzzy area in the tax code and ensure that insurance companies and banks owned by larger corporations are treated the same as other types of businesses when their stock becomes worthless.

The Wall Street Journal, which reported the tax break Friday, said it was pushed by Rep. Clay Shaw, a Fort Lauderdale Republican who recently received a contribution from Florida Power's political action committee. But Donna Boyer, a spokeswoman for Shaw, said Shaw did not push the bill.

"Mr. Shaw didn't request that it be included," Boyer said.

Boyer said she did not know who sponsored the provision. A spokesman for the House Ways and Means Committee did not return phone calls Friday.

Six weeks ago, Shaw received a $1,000 contribution from Florida Power's political action committee, according to his latest filing with the Federal Election Commission.

Shaw voted for the tax bill and had requested a cost estimate of the provision from congressional staff.

The tax break would cost the U.S. Treasury an estimated $108-million over 10 years, according to Shaw's office. No cost estimates were available on how much Florida Progress would benefit from it.

A Florida Progress spokeswoman said officials were unavailable to discuss the tax break.

"We are aware of the provision and we need more clarification to see what it means and what impact it would have," spokeswoman Mary Estes said.

The bill has little chance of becoming law. President Clinton has vowed to veto it because he dislikes how it would spend the budget surplus. But the fact the tax break was included in the bill means Congress is likely to include it in future bills.

Mid-Continent Life, which was purchased by Florida Progress in 1986, ran into financial difficulties. The Oklahoma insurance commissioner seized the company and put it in receivership, a kind of insurance company bankruptcy. A consultant hired by the commissioner is reviewing offers from 10 companies to buy Mid-Continent.

Shaw's office said it is not clear if Florida Progress would be eligible for the tax break because Mid-Continent has been in receivership.