SENATE BILL REPORT

SB 5294

BYSenators Newhouse, Moore, Warnke, Hayner, Saling, Owen, Sellar, Stratton, Amondson, Bauer, Matson, Benitz, Smitherman, Smith, Craswell, Nelson, Madsen, Conner, Hansen, Patterson, Bluechel, Johnson, Vognild, von Reichbauer and Lee

Modifying the business and occupation tax on low-level waste.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 27, 1989; March 6, 1989

Majority Report:  That Substitute Senate Bill No. 5294 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bluechel, Cantu, Hayner, Johnson, Lee, Matson, Newhouse, Owen, Saling, Smith, Williams.

Senate Staff:William Bafus (786-7437)

                  March 9, 1989

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 6, 1989

BACKGROUND:

Under current law, persons engaging in the business of disposing of low level nuclear waste are assessed a business and occupation tax at a rate of 30 percent of the gross proceeds from such activity.  An additional 10 percent surcharge brings the total tax rate applicable to such activity to 33 percent.

SUMMARY:

Persons engaged in supercompacting low level nuclear waste in this state are subjected to the same tax treatment as persons disposing of these wastes.  The business and occupation tax rate for all such taxpayers is reduced to 5 percent through calendar year 1992, and to 1.5 percent thereafter.  The additional 10 percent surcharge would continue to apply.  This would make the actual rates 5.5 percent and 1.65 percent in the appropriate time periods.

EFFECT OF PROPOSED SUBSTITUTE:

Persons engaged in supercompacting low level nuclear waste in this state are excluded from the provisions of the bill.  The business and occupation tax rate applicable to persons engaged in disposing of such wastes is modified as follows:

      1.The basic rate shall be 30 percent whenever the volume of waste exceeds 500,000 cubic feet per year, or whenever the volume of waste is less than or equal to 300,000 feet per year prior to December 31, 1992.

      2.The basic rate shall be 20 percent in 1989 when the volume of waste is equal to or less than 500,000 cubic feet.

      3.The basic rate shall be 10 percent in 1990 and 1991 when the volume of waste is equal to or less than 500,000 cubic feet.

      4.The basic rate shall be 5 percent in 1992 and thereafter when the volume of waste is equal to or less than 500,000 cubic feet.

      5.Retroactivity of the new tax rates to January 1, 1989 is deleted.

Appropriation:    none

Revenue:    yes

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: Jon Scoville, US Ecology (for); Barry Bede, US Ecology (for); Cliff Ellenwood, Department of Revenue; Joanne Buehler, US Ecology (for)