HOUSE BILL REPORT

HB 200

BYRepresentative Madsen; by request of Department of Revenue

Clarifying the public utility tax on sewerage collection businesses.

House Committe on Ways & Means/Revenue

Majority Report:     Do pass.  (10)

     Signed by Representatives Appelwick, Chair; Basich, Bristow, Grimm, Holland, Rust, Schoon, Taylor, Valle and Winsley.

House Staff:Rick Wickman (786-7150)

AS PASSED HOUSE MARCH 2, 1987

BACKGROUND:

Engrossed Substitute Senate Bill No. 4228 (Chapter 471, Laws of 1985) made sewerage collection businesses subject to the public utility tax.  The Department of Revenue originally defined sewerage collection to include treatment and disposal.  In the summer of 1986, the Joint Administrative Rules Review Committee found that this interpretation did not reflect legislative intent.  The department changed its ruling to exclude treatment and disposal.

SUMMARY:

The costs of treatment and disposal of sewerage is not included in the base upon which the public utility tax liability is calculated.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Barney McClure, Department of Revenue.

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     The Department of Revenue requested clarification to conform to its own adopted rules that only collection of sewage is subject to the public utility tax and that charges for sewage treatment and disposal are subject to the business and occupation tax.

House Committee - Testimony Against: None Presented.