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OLYMPIA -- A bill intended to clarify how much Hanford contractors must pay for the state's business and occupation tax passed out of the House Finance Committee on Monday, more than a week after some lawmakers declared it dead.
The bill is intended to clarify what kinds of businesses are directly involved in cleanup of radioactive waste, thereby qualifying for a preferential tax rate enacted in 1996.
The law covered businesses involved in "activities integral and necessary to the direct performance of cleanup," which had been interpreted to include businesses such as Lockheed Martin, which provides information technology services to the Hanford site.
But the state Department of Revenue in a 2005 audit of Lockheed Martin decided the Hanford subcontractor was not doing cleanup and should pay a tax rate more than triple the preferential rate.
Tri-City leaders have fought to clarify the law for three years, arguing the environmental cleanup couldn't happen without computers or other support services such as security and health services.
Proposals to amend the law to define cleanup activities to include information technology, infrastructure, security, safety and health services have failed in two previous legislative sessions.
Tri-City leaders also have argued money to pay the tax would come out of the cleanup budget and cost jobs at Hanford.
House Speaker Frank Chopp, D-Seattle, told a delegation of about 100 Tri-Citians in Olympia on Feb. 19 that while he thought they'd made a good case in support of the bill, it was unlikely to pass in the current session because of the state's projected $8.3 billion deficit.
But the Finance Committee agreed unanimously Monday to send the bill on for further consideration. It next will go to the House Rules Committee, which will decide whether to give it to the full House of Representatives for a vote.
The version passed by the committee included an amendment introduced by Committee Chairman Rep. Ross Hunter, D-Medina, making the revised law effective Oct. 1, 2009, and putting a July 1, 2015, sunset on the preferential tax rate for cleanup.
"When we make changes to the tax code to provide exemptions we want to make sure we have an opportunity to review those," Hunter said.
A previous version of the bill would have made the law effective July 1.
Also Monday, the committee unanimously recommended passing a bill allowing multiple local governments to unite to create a single public facilities district, with voter approval.
The committee heard testimony from bill sponsor Rep. Brad Klippert, R-Kennewick, and Pasco Councilman Matt Watkins, who said the law would allow the Tri-Cities to combine to build a regional facility -- such as an aquatic center -- that none of the individual cities could build on their own.
"There is a consensus in the Tri-Cities that this is a key to our strategic future -- to be able to build regional facilities that the public might want," Watkins said.
A similar bill co-sponsored by Sens. Jerome Delvin, R-Richland, and Mike Hewitt, R-Walla Walla, passed in the Senate Government Operations and Elections Committee on Feb. 19.
