SENATE BILL REPORT

E2SHB 321

BYHouse Committee on Ways & Means/Revenue (originally sponsored by Representatives Peery, Sutherland, L. Smith, Cooper, Nutley and P. King) 

Authorizing excise tax deferrals on machinery, equipment, and other personal property used in the production or casting of aluminum.

House Committe on Trade & Economic Development

Rereferred House Committee on Ways & Means/Revenue

Senate Committee on Ways & Means

Senate Hearing Date(s):April 6 1987

Majority Report:  Do pass.

      Signed by Senators Bauer, Bluechel, Craswell, Deccio, Fleming, Kreidler, Lee, McDonald, Saling, Vognild, Wojahn, Zimmerman.

Senate Staff:Stephen Rose (786-7443)

                  April 6, 1987

AS REPORTED BY COMMITTEE ON WAYS & MEANS, APRIL 6, 1987

BACKGROUND:

The provisions of law permitting out-of-state firms locating new facilities in Washington State to defer sales taxes on new construction were extended through June of 1988 as a result of legislation passed in the 1986 legislative session.  Under these provisions, taxes may be deferred for up to three years, with payment required over the following five years.  The sales tax deferral program covers taxes on new construction and equipment.  The sales tax on the labor utilized in investment project is not covered by the deferral permitted by these provisions.

SUMMARY:

The bill extends the definition of situations in which sales tax deferrals shall be granted to include acquisition of all new or used machinery, equipment or personal property used in the production or casting of aluminum.  This is to apply to any aluminum smelter plant, and its related facilities, in operation prior to 1975, that has ceased operation or is imminent danger of ceasing operation for economic reasons.

In order to receive an excise tax deferral, consultation is required with any collective bargaining unit representing employees of the plant on the proposed operation of the plant and the terms and conditions of employment for wage and salaried employees.  A written concurrence from the bargaining unit on the decision to apply for a deferral is also required unless a concurrence waiver is granted by the Department of Trade and Economic Development.

Excise tax deferrals shall also be granted in cases of modernization projects in aluminum smelters and rolling mills involving construction, acquisition, or upgrading of equipment or machinery, including services or labor, which are commenced after the effective date of this act and which are intended to increase the operating efficiencies of existing facilities.  Plant must have been in operation prior to 1975.  As in the case of the purchase of a plant, consultation is required with any collective bargaining unit representing employees of the plant on the proposed operation of the plant and the terms and conditions of employment for wage and salaried employees.  Again, a written concurrence from the bargaining unit on the decision to apply for a deferral is required, unless the Department of Trade and Economic Development grants a concurrence waiver.

Fiscal Note:      requested

Senate Committee - Testified: No one