Washington Business Fall 2017 | Legislative Review & Vote Record | Page 37

issue area reports | environment
compliance obligations, which “far exceed”
the tax revenue capacity, according to a
2016 state report. With the decline in global
petroleum prices, Hazardous Substance
Tax collections dipped temporarily and
reduced the Legislature’s ability to fund
these activities, so Gov. Jay Inslee and the
state Department of Ecology proposed a
“surtax” intended to provide $200 million in
tax revenue in the account until petroleum
prices increase again. The surtax proposals
died in House Rules and the Senate Energy,
Environment and Telecommunications
Committees.
Jim May, chief operating officer at HiTest Sand, left, and Chris Bowes of REC Silicon, testify
before the House Technology and Economic Development Committee.
non-EITE facilities to be eligible for an
exemption based on a carbon-intensive
“trade share.” Although HB 2230 struck
a meaningful compromise between some
employer and conservation interests,
budget negotiators failed to consider it and
it died without receiving a hearing.
SB 5475
tax exemption for small
modular reactors
Failed/AWB Supported
While Washington state has carbon-free
baseload nuclear energy provided only
by the Columbia Generating Station
in Richland, regional knowledge in
nuclear power engineering suggest that
development of small modular reactors —
power plants designed to generate about
one-third of the energy of a traditional
baseload nuclear power plant — could
present new industry opportunities,
either for deployment of small modular
reactors here in Washington or elsewhere.
S e n . S h a ro n B row n , R- Ke n n e w i c k ,
sponsored Senate Bill 5475 to provide a
business and occupation tax exemption to
manufacturers of small modular reactors
Bill considered as part of
AWB’s voting record
to encourage activation of the industry.
SB 5475 passed the Senate, but died in
the House Technology and Economic
Development Committee.
water quality policy
HB 1663/SB 5501
surtax on gasoline and
agricultural inputs
Failed/AWB Opposed
Rep. Strom Peterson, D-Edmonds; and
Sen. Reuven Carlyle, D-Seattle; introduced
agency-request legislation (House Bill 1633
and Senate Bill 5501) intended to provide the
Legislature additional Hazardous Substance
Tax revenue. The Hazardous Substance Tax
is collected on the wholesale value of roughly
8,000 substances — primarily petroleum
products, agricultural inputs, and certain
chemicals. The Hazardous Substance Tax,
authorized by the 1988 passage of Initiative
97, funds activities through the Model Toxics
Control Act (MTCA), which was originally
intended to implement environmental
cleanup projects. In recent years, MTCA
funds have been increasingly spent for other
uses such as local government stormwater
Favorable outcome for
Washington businesses
SHB 2182
moving tax increase on
gasoline and agricultural
inputs
Failed/AWB Opposed
Following the failure of House Bill 1663 to
receive a vote on the House Floor during
the regular legislative session, Rep. Strom
Peterson, D-Edmonds, began drafting an
alternate proposal: Substitute House Bill
2182. The bill would have attempted to
establish a fiscal mechanism by which
the Hazardous Substance Tax would
provide the Legislature the same amount
of revenue every year. The tiered structure
would have begun taxing consumers at 0.9
percent July 1 of any fiscal year, then would
have dropped to 0.7 percent (the existing
rate) when the Model Toxics Control
Account hit $110 million, and would have
hypothetically dropped to 0.14 percent
when the account hit $170 million in total
revenues. AWB members opposed the
idea of complying with multiple tax rates
throughout the year, and suggested that
the seasonal nature of agricultural versus
petroleum consumption could create
economic distortion. SHB 2182 — a tax on
drivers and farmers — was the first tax to
pass the House during the 2017 legislative
session with a party-line vote. It did not
receive a hearing in the Senate, and the
Missed Opportunities
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