HOUSE BILL REPORT

                 SSB 6129

                      As Passed House:

                      February 27, 1998

Title:  An act relating to allowing continued use of pollution control tax credits after facilities have been modified to maintain effective pollution control.

Brief Description:  Allowing continued use of pollution control tax credits after facilities are modified to maintain effective pollution control.

Sponsors:  Senate Committee on Agriculture & Environment (originally sponsored by Senators Swecker, Fraser and Winsley; by request of Department of Ecology).

Brief History:

  Committee Activity:

Agriculture & Ecology:  2/23/98 [DP].

Floor Activity:

Passed House:  2/27/98, 97-0.

HOUSE COMMITTEE ON AGRICULTURE & ECOLOGY

Majority Report:  Do pass.  Signed by 9 members:  Representatives Chandler, Chairman; Schoesler, Vice Chairman; Linville, Ranking Minority Member; Anderson, Assistant Ranking Minority Member; Delvin; Koster; Mastin; Regala and Sump.

Staff:  Bill Lynch (786-7092).

Background:  Between 1969 and 1981, entities which purchased pollution control facilities (equipment, systems, control devices, etc.) in order to comply with laws pertaining to clean air or clean water could apply for a certificate from the Department of Ecology.  The certificate allowed the entity to obtain a credit against the business and occupation tax, use tax, or public utility tax of up to 50 percent of the cost of the facility.  The amount of the credit could not exceed 2 percent of the cost of the facility per year.  Although the granting of new credits ended in 1981, there are still 69 companies which still hold certificates under the program.

The Department of Ecology is required to revoke a certificate if the facility covered by the certificate is modified or replaced, even if the new or modified facility is an improvement over the facility covered by the certificate.

Summary of Bill:  If an entity modifies or replaces a facility covered by a pollution control tax credit certificate issued by the Department of Ecology, and the facility is still operated primarily for the control or reduction of water pollution or the control, capture, and removal of air pollution, and the facility is reasonably adequate to meet the purposes of the laws pertaining to water and air pollution, then the certificate may not be revoked because of the modification or replacement of the original facility.   The department is also prohibited from revoking the certificate if the facility is modified or removed because of an alteration in the production process, or because of an alteration to the establishment in which the facility is located, and the alteration results in reasonably adequate compliance with the water and air pollution control laws.  The certificate also cannot be revoked if part or all of the establishment in which the facility was installed ceases operations and the cessation of operation results in reasonably adequate compliance with the water and air pollution control laws.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  This continues the existing program for businesses which have already received a certificate for tax credits.

Testimony Against:  None.

Testified:  Jerry Thielen, Department of Ecology; and Scott Hazelgrove, Association of Washington Businesses (pro).