BILL REQ. #:  H-3548.8 

Read first time 01/14/10.   Referred to Committee on Transportation.

     AN ACT Relating to fuel taxes on exported fuel; amending RCW 82.36.020, 82.36.060, 82.36.230, 82.36.280, 82.36.300, 82.38.030, 82.38.080, 82.38.180, and 82.04.090; reenacting and amending RCW 43.84.092; adding new sections to chapter 82.36 RCW; adding a new section to chapter 82.38 RCW; adding a new section to chapter 46.68 RCW; creating a new section; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that investing in projects, such as the Washington state ferry system, which move people and goods efficiently in the region along with promoting tourism opportunities, helps to maintain a strong northwest economy. The state is a regional producer of many products that have positive impacts on the region's economy, but that also affect the infrastructure of the region's transportation systems. Therefore, the legislature finds that in order to invest in such projects and benefit the state's economic interests, it is necessary, considering the volatile price of crude oil, for the state to allow businesses that use crude oil in the refining process to average their state tax burden to minimize the temporary spikes in crude prices.

Sec. 2   RCW 82.36.020 and 2007 c 515 s 2 are each amended to read as follows:
     (1) There is ((hereby)) levied and imposed upon motor vehicle fuel licensees, other than motor vehicle fuel distributors, a tax at the rate computed in the manner provided in RCW 82.36.025 on each gallon of motor vehicle fuel.
     (2) The tax imposed by subsection (1) of this section is imposed when any of the following occurs:
     (a) Motor vehicle fuel is removed in this state from a terminal ((if the motor vehicle fuel is removed at the rack)) unless the removal is to a licensed exporter for direct delivery to a destination outside of the ((state)) United States;
     (b) Motor vehicle fuel is removed in this state from a refinery if either of the following applies:
     (i) The removal is by bulk transfer and the refiner or the owner of the motor vehicle fuel immediately before the removal is not a licensee; or
     (ii) The removal is at the refinery rack or by bulk transfer unless the removal is to a licensed exporter for direct delivery to a destination outside of the ((state)) United States;
     (c) Motor vehicle fuel enters into this state if either of the following applies:
     (i) The entry is by bulk transfer and the importer is not a licensee; or
     (ii) The entry is not by bulk transfer;
     (d) Motor vehicle fuel is sold or removed in this state to an unlicensed entity unless there was a prior taxable removal, entry, or sale of the motor vehicle fuel;
     (e) Blended motor vehicle fuel is removed or sold in this state by the blender of the fuel. The number of gallons of blended motor vehicle fuel subject to the tax is the difference between the total number of gallons of blended motor vehicle fuel removed or sold and the number of gallons of previously taxed motor vehicle fuel used to produce the blended motor vehicle fuel. Blended motor vehicle fuel exported from this state to another state is taxed at the fuel tax rate imposed by this chapter;
     (f) Motor vehicle fuel is sold by a licensed motor vehicle fuel supplier to a motor vehicle fuel distributor, motor vehicle fuel importer, motor vehicle fuel exporter, motor vehicle fuel blender, or international fuel tax agreement licensee and the motor vehicle fuel is not removed from the bulk transfer-terminal system.
     (3) The proceeds of the motor vehicle fuel excise tax ((shall)) must be distributed as provided in RCW 46.68.090, except for funds received from exported fuel sold. These funds must be distributed as follows:
     (a) Sixty percent must be distributed to the Puget Sound capital construction account, created in RCW 47.60.505, to be used for the construction and preservation of the Washington state ferry system;
     (b) Forty percent must be distributed to the Columbia river crossing account created in section 15 of this act to be used for the construction and preservation of the Columbia river crossing. Any excess funds after 2017 may be used for high capacity transportation as provided in section 15 of this act.

Sec. 3   RCW 82.36.060 and 2007 c 515 s 10 are each amended to read as follows:
     (1) An application for a license issued under this chapter ((shall)) must be made to the department on forms to be furnished by the department and shall contain such information as the department deems necessary.
     (2) Every application for a license must contain the following information to the extent it applies to the applicant:
     (a) Proof as the department may require concerning the applicant's identity, including but not limited to his or her fingerprints or those of the officers of a corporation making the application;
     (b) The applicant's form and place of organization including proof that the individual, partnership, or corporation is licensed to do business in this state;
     (c) The qualification and business history of the applicant and any partner, officer, or director;
     (d) The applicant's financial condition or history including a bank reference and whether the applicant or any partner, officer, or director has ever been adjudged bankrupt or has an unsatisfied judgment in a federal or state court;
     (e) Whether the applicant has been adjudged guilty of a crime that directly relates to the business for which the license is sought and the time elapsed since the conviction is less than ten years, or has suffered a judgment within the preceding five years in a civil action involving fraud, misrepresentation, or conversion and in the case of a corporation or partnership, all directors, officers, or partners.
     (3) An applicant for a license as a motor vehicle fuel importer must list on the application each state, province, or country from which the applicant intends to import motor vehicle fuel and, if required by the state, province, or country listed, must be licensed or registered for motor vehicle fuel tax purposes in that state, province, or country.
     (4) An applicant for a license as a motor vehicle fuel exporter must list on the application each state, province, or country to which the exporter intends to export motor vehicle fuel received in this state by means of a transfer outside of the bulk transfer-terminal system and, if required by the state, province, or country listed, must be licensed or registered for motor vehicle fuel tax purposes in that state, province, or country.
     (5) An applicant for a license as a motor vehicle fuel supplier must have a federal certificate of registry that is issued under the internal revenue code and authorizes the applicant to enter into federal tax-free transactions on motor vehicle fuel in the terminal transfer system.
     (6) After receipt of an application for a license, the director may conduct an investigation to determine whether the facts set forth are true. The director ((shall)) must require a fingerprint record check of the applicant through the Washington state patrol criminal identification system and the federal bureau of investigation before issuance of a license. The results of the background investigation including criminal history information may be released to authorized department personnel as the director deems necessary. The department ((shall)) must charge a license holder or license applicant a fee of fifty dollars for each background investigation conducted.
     An applicant who makes a false statement of a material fact on the application may be prosecuted for false swearing as defined by RCW 9A.72.040.
     (7) Except as provided by subsection (8) of this section, before granting any license issued under this chapter, the department ((shall)) must require applicant to file with the department, in ((such)) the form ((as shall be)) prescribed by the department, a corporate surety bond duly executed by the applicant as principal, payable to the state and conditioned for faithful performance of all the requirements of this chapter, including the payment of all taxes, penalties, and other obligations arising out of this chapter. The total amount of the bond or bonds ((shall)) must be fixed by the department and may be increased or reduced by the department at any time subject to the limitations herein provided. In fixing the total amount of the bond or bonds, the department ((shall)) must require a bond or bonds equivalent in total amount to twice the estimated monthly excise tax determined in such manner as the department may deem proper. If at any time the estimated excise tax to become due during the succeeding month amounts to more than fifty percent of the established bond, the department ((shall)) must require additional bonds or securities to maintain the marginal ratio herein specified or ((shall)) must demand excise tax payments to be made weekly or semimonthly to meet the requirements hereof.
     The total amount of the bond or bonds required of any licensee shall never be less than five thousand dollars nor more than one hundred thousand dollars.
     No recoveries on any bond or the execution of any new bond ((shall)) invalidates any bond and no revocation of any license ((shall)) effects the validity of any bond but the total recoveries under any one bond ((shall)) may not exceed the amount of the bond.
     In lieu of any such bond or bonds in total amount as herein fixed, a licensee may deposit with the state treasurer, under such terms and conditions as the department may prescribe, a like amount of lawful money of the United States or bonds or other obligations of the United States, the state, or any county of the state, of an actual market value not less than the amount so fixed by the department.
     Any surety on a bond furnished by a licensee as provided herein ((shall)) must be released and discharged from any and all liability to the state accruing on such bond after the expiration of thirty days from the date upon which such surety has lodged with the department a written request to be released and discharged, but this provision ((shall)) does not operate to relieve, release, or discharge the surety from any liability already accrued or which ((shall)) will accrue before the expiration of the thirty day period. The department ((shall)) must promptly, upon receiving any such request, notify the licensee who furnished the bond; and unless the licensee, on or before the expiration of the thirty day period, files a new bond, or makes a deposit in accordance with the requirements of this section, the department ((shall forthwith)) must cancel the license. Whenever a new bond is furnished by a licensee, the department ((shall)) must cancel the old bond as soon as the department and the attorney general are satisfied that all liability under the old bond has been fully discharged.
     The department may require a licensee to give a new or additional surety bond or to deposit additional securities of the character specified in this section if, in its opinion, the security of the surety bond theretofore filed by ((such)) the licensee, or the market value of the properties deposited as security by the licensee, ((shall)) become impaired or inadequate; and upon the failure of the licensee to give ((such)) the new or additional surety bond or to deposit additional securities within thirty days after being requested so to do by the department, the department ((shall forthwith)) must cancel his or her license.
     (8) The department may waive the requirements of subsection (7) of this section for licensed distributors if, upon determination by the department, the licensed distributor has sufficient resources, assets, other financial instruments, or other means, to adequately make payments on the estimated monthly motor vehicle fuel tax payments, penalties, and interest arising out of this chapter. The department ((shall)) must adopt rules to administer this subsection.
     (9) An application for an international fuel tax agreement license must be made to the department. The application must be filed upon a form prescribed by the department and contain such information as the department may require. The department ((shall)) must charge a fee of ten dollars per set of international fuel tax agreement decals issued to each applicant or licensee. The department ((shall)) must transmit the fee to the state treasurer for deposit in the motor vehicle fund.

Sec. 4   RCW 82.36.230 and 1998 c 176 s 34 are each amended to read as follows:
     (1)(a) The provisions of this chapter requiring the payment of taxes do not apply to motor vehicle fuel imported into the state in interstate or foreign commerce and intended to be sold while in interstate or foreign commerce, nor to motor vehicle fuel exported from this state ((by a licensee nor)) to a destination outside the United States to any motor vehicle fuel sold by a licensee to the armed forces of the United States or to the national guard for use exclusively in ships or for export from this state.
     (b) A credit against the tax imposed by this chapter is provided to the motor vehicle fuel exporter of record for motor vehicle fuel exported for use in interstate commerce as follows:
     (i) When exporting fuel to a state where the state motor vehicle fuel tax rate is equal to or less than thirty-five cents per gallon, the credit is equal to thirty-five cents per gallon of motor vehicle fuel exported.
     (ii) When exporting motor vehicle fuel to a state where the state motor vehicle fuel tax rate is greater than thirty-five cents per gallon, the credit per gallon of fuel exported is equal to the per gallon motor vehicle fuel tax rate of the state to which the fuel is exported but not to exceed thirty-seven and one-half cents.
     (c) The licensee shall report such imports, exports to destinations outside the United States to claim a credit for Washington state motor vehicle fuel taxes paid, and sales to the department at such times, on such forms, and in such detail as the department may require, otherwise the exemption granted in this section is null and void, and all fuel shall be considered distributed in this state fully subject to the provisions of this chapter. Each invoice covering exempt sales ((shall)) must have the statement "Ex Washington Motor Vehicle Fuel Tax" clearly marked thereon.
     (2) To claim any exemption from taxes or tax credit under this section on account of sales by a licensee of motor vehicle fuel for export, the purchaser ((shall)) must obtain from the selling licensee, and such selling licensee must furnish the purchaser, an invoice giving such details of the sale for export as the department may require, copies of which ((shall)) must be furnished to the department and the entity of the state or foreign jurisdiction of destination which is charged by the laws of that state or foreign jurisdiction with the control or monitoring, or both, of the sales or movement of motor vehicle fuel in that state or foreign jurisdiction. For the purposes of this section, motor vehicle fuel distributed to a federally recognized Indian tribal reservation located within the state of Washington is not considered exported outside this state.
     (3) To claim any refund of taxes previously paid on account of sales of motor vehicle fuel to the armed forces of the United States or to the national guard, the licensee ((shall be)) is required to execute an exemption certificate in ((such)) the form ((as shall be)) furnished by the department, containing a certified statement by an authorized officer of the armed forces having actual knowledge of the purpose for which the exemption is claimed. The provisions of this section exempting motor vehicle fuel sold to the armed forces of the United States or to the national guard from the tax imposed hereunder do not apply to any motor vehicle fuel sold to contractors purchasing such fuel either for their own account or as the agents of the United States or the national guard for use in the performance of contracts with the armed forces of the United States or the national guard.
     (4) The department may at any time require of any licensee any information the department deems necessary to determine the validity of the claimed exemption or credit, and failure to supply such data will constitute a waiver of all right to the exemption claimed. The department is hereby empowered with full authority to promulgate rules and regulations and to prescribe forms to be used by licensees in reporting to the department so as to prevent evasion of the tax imposed by this chapter.
     (5) Upon request from the officials to whom are entrusted the enforcement of the motor vehicle fuel tax law of any other state, the District of Columbia, the United States, its territories and possessions, the provinces, or the Dominion of Canada, the department may forward to such officials any information which the department may have relative to the import or export of any motor vehicle fuel by any licensee((: PROVIDED, That)). However, such governmental unit must also furnish like information to this state.

Sec. 5   RCW 82.36.280 and 1998 c 176 s 36 are each amended to read as follows:
     Any person who uses any motor vehicle fuel for the purpose of operating any internal combustion engine not used on or in conjunction with any motor vehicle licensed to be operated over and along any of the public highways of this state, and as the motive power thereof, upon which motor vehicle fuel excise tax has been paid, ((shall be)) is entitled to and ((shall)) must receive a refund of the amount of the motor vehicle fuel excise tax paid on each gallon of motor vehicle fuel so used, whether such motor vehicle excise tax has been paid either directly to the vendor from whom the motor vehicle fuel was purchased or indirectly by adding the amount of such excise tax to the price of such fuel. No refund ((shall)) may be made for motor vehicle fuel consumed by any motor vehicle as herein defined that is required to be registered and licensed as provided in chapter 46.16 RCW; and is operated over and along any public highway except that a refund ((shall be)) is allowed for motor vehicle fuel consumed:
     (1) In a motor vehicle owned by the United States that is operated off the public highways for official use; and
     (2) By auxiliary equipment not used for motive power, provided such consumption is accurately measured by a metering device that has been specifically approved by the department or is established by either of the following formulae:
     (a) For fuel used in pumping fuel or heating oils by a power take-off unit on a delivery truck, ((refund shall be allowed)) claimant is allowed a refund for tax paid on fuel purchased at the rate of three-fourths of one gallon for each one thousand gallons of fuel delivered((: PROVIDED, That)). However, claimant when presenting his or her claim to the department in accordance with the provisions of this chapter, ((shall)) must provide ((to said claim,)) invoices of fuel oil delivered, or such other appropriate information as may be required by the department to substantiate his or her claim; or
     (b) For fuel used in operating a power take-off unit on a cement mixer truck or load compactor on a garbage truck, claimant ((shall be)) is allowed a refund of twenty-five percent of the tax paid on all fuel used in such a truck; and
     (c) The department is authorized to establish by rule additional formulae for determining fuel usage when operating other types of equipment by means of power take-off units when direct measurement of the fuel used is not feasible. The department is also authorized to adopt rules regarding the usage of on board computers for the production of records required by this chapter.

Sec. 6   RCW 82.36.300 and 1998 c 176 s 37 are each amended to read as follows:
     Every person who ((shall)) exports any motor vehicle fuel for use outside of ((this state)) the United States and who has paid the motor vehicle fuel excise tax upon such motor vehicle fuel ((shall be)) is entitled to and ((shall)) must receive a refund of the amount of the motor vehicle fuel excise tax paid on each gallon of motor vehicle fuel so exported. For the purposes of this section, motor vehicle fuel distributed to a federally recognized Indian tribal reservation located within the state of Washington is not considered exported outside this state.

NEW SECTION.  Sec. 7   A new section is added to chapter 82.36 RCW to read as follows:
     (1) Refunds, exemptions, and credits in this chapter are not applicable to motor vehicle fuel or blended motor vehicle fuel exported within the United States.
     (2) This section does not apply to the credit in RCW 82.36.230.

Sec. 8   RCW 82.38.030 and 2007 c 515 s 21 are each amended to read as follows:
     (1) There is ((hereby)) levied and imposed upon special fuel licensees, other than special fuel distributors, a tax at the rate of twenty-three cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature.
     (2) Beginning July 1, 2003, an additional and cumulative tax rate of five cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature ((shall be)) is imposed on special fuel licensees, other than special fuel distributors. This subsection (2) expires when the bonds issued for transportation 2003 projects are retired.
     (3) Beginning July 1, 2005, an additional and cumulative tax rate of three cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature ((shall be)) is imposed on special fuel licensees, other than special fuel distributors.
     (4) Beginning July 1, 2006, an additional and cumulative tax rate of three cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature ((shall be)) is imposed on special fuel licensees, other than special fuel distributors.
     (5) Beginning July 1, 2007, an additional and cumulative tax rate of two cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature ((shall be)) is imposed on special fuel licensees, other than special fuel distributors.
     (6) Beginning July 1, 2008, an additional and cumulative tax rate of one and one-half cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature ((shall be)) is imposed on special fuel licensees, other than special fuel distributors.
     (7) Taxes are imposed when:
     (a) Special fuel is removed in this state from a terminal ((if the special fuel is removed at the rack)) unless the removal is to a licensed exporter for direct delivery to a destination outside of the ((state, or the removal is by)) United States or to a special fuel supplier for direct delivery to an international fuel tax agreement licensee under RCW 82.38.320;
     (b) Special fuel is removed in this state from a refinery if either of the following applies:
     (i) The removal is by bulk transfer and the refiner or the owner of the special fuel immediately before the removal is not a licensee; or
     (ii) The removal is at the refinery rack ((unless the removal is to a licensed exporter for direct delivery to a destination outside of the state, or the removal is)) to a special fuel supplier for direct delivery to an international fuel tax agreement licensee under RCW 82.38.320;
     (c) Special fuel enters into this state for sale, consumption, use, or storage, unless the fuel enters this state for direct delivery to an international fuel tax agreement licensee under RCW 82.38.320, if either of the following applies:
     (i) The entry is by bulk transfer and the importer is not a licensee; or
     (ii) The entry is not by bulk transfer;
     (d) Special fuel is removed at the refinery rack or by bulk transfer unless the removal is to a licensed exporter for direct delivery to a destination outside of the United States;
     (e) Special fuel is sold or removed in this state to an unlicensed entity unless there was a prior taxable removal, entry, or sale of the special fuel;
     (((e))) (f) Blended special fuel is removed or sold in this state by the blender of the fuel. The number of gallons of blended special fuel subject to tax is the difference between the total number of gallons of blended special fuel removed or sold and the number of gallons of previously taxed special fuel used to produce the blended special fuel. Blended special fuel exported from this state to another state is taxed at the fuel tax rate imposed by this chapter;
     (((f))) (g) Dyed special fuel is used on a highway, as authorized by the internal revenue code, unless the use is exempt from the special fuel tax;
     (((g))) (h) Dyed special fuel is held for sale, sold, used, or is intended to be used in violation of this chapter;
     (((h))) (i) Special fuel purchased by an international fuel tax agreement licensee under RCW 82.38.320 is used on a highway; and
     (((i))) (j) Special fuel is sold by a licensed special fuel supplier to a special fuel distributor, special fuel importer, special fuel exporter, or special fuel blender and the special fuel is not removed from the bulk transfer-terminal system.
     (8) Blended motor vehicle fuel exported from this state to another is taxed at the fuel tax rate imposed by this chapter.

Sec. 9   RCW 82.38.080 and 2009 c 352 s 1 are each amended to read as follows:
     (1) There is exempted from the tax imposed by this chapter, the use of fuel for:
     (a) Street and highway construction and maintenance purposes in motor vehicles owned and operated by the state of Washington, or any county or municipality;
     (b) Publicly owned firefighting equipment;
     (c) Special mobile equipment as defined in RCW 46.04.552;
     (d) Power pumping units or other power take-off equipment of any motor vehicle which is accurately measured by metering devices that have been specifically approved by the department or which is established by any of the following formulae:
     (i) Pumping propane, or fuel or heating oils or milk picked up from a farm or dairy farm storage tank by a power take-off unit on a delivery truck, at a rate determined by the department((: PROVIDED, That)). However, a claimant when presenting his or her claim to the department in accordance with this chapter, ((shall)) must provide ((to the claim,)) invoices of propane, or fuel or heating oil delivered, or such other appropriate information as may be required by the department to substantiate his or her claim;
     (ii) Operating a power take-off unit on a cement mixer truck or a load compactor on a garbage truck at the rate of twenty-five percent of the total gallons of fuel used in such a truck; or
     (iii) The department is authorized to establish by rule additional formulae for determining fuel usage when operating other types of equipment by means of power take-off units when direct measurement of the fuel used is not feasible. The department is also authorized to adopt rules regarding the usage of on board computers for the production of records required by this chapter;
     (e) Motor vehicles owned and operated by the United States government;
     (f) Heating purposes;
     (g) Moving a motor vehicle on a public highway between two pieces of private property when said moving is incidental to the primary use of the motor vehicle;
     (h) Transportation services for persons with special transportation needs by a private, nonprofit transportation provider regulated under chapter 81.66 RCW;
     (i) Vehicle refrigeration units, mixing units, or other equipment powered by separate motors from separate fuel tanks;
     (j) The operation of a motor vehicle as a part of or incidental to logging operations upon a highway under federal jurisdiction within the boundaries of a federal area if the federal government requires a fee for the privilege of operating the motor vehicle upon the highway, the proceeds of which are reserved for constructing or maintaining roads in the federal area, or requires maintenance or construction work to be performed on the highway for the privilege of operating the motor vehicle on the highway; ((and))
     (k) Waste vegetable oil as defined under RCW 82.08.0205 if the oil is used to manufacture biodiesel; and
     (l) Special fuel exported for direct delivery to a destination outside the United States.
     (2) There is exempted from the tax imposed by this chapter the removal or entry of special fuel under the following circumstances and conditions:
     (a) If it is the removal from a terminal or refinery of, or the entry or sale of, a special fuel if all of the following apply:
     (i) The person otherwise liable for the tax is a licensee other than a dyed special fuel user or international fuel tax agreement licensee;
     (ii) For a removal from a terminal, the terminal is a licensed terminal; and
     (iii) The special fuel satisfies the dyeing and marking requirements of this chapter;
     (b) If it is an entry or removal from a terminal or refinery of taxable special fuel transferred to a refinery or terminal within the state and the persons involved, including the terminal operator, are licensed; and
     (c)(i) If it is a special fuel that, under contract of sale, is shipped to a point outside ((this state)) the United States by a supplier by means of any of the following:
     (A) Facilities operated by the supplier;
     (B) Delivery by the supplier to a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to the ((out-of-state)) out-of-country point;
     (C) Delivery by the supplier to a vessel clearing from port of this state for a port outside ((this state)) the United States and actually exported from this state in the vessel.
     (ii) For purposes of this subsection (2)(c):
     (A) "Carrier" means a person or firm engaged in the business of transporting for compensation property owned by other persons, and includes both common and contract carriers; and
     (B) "Forwarding agent" means a person or firm engaged in the business of preparing property for shipment or arranging for its shipment.
     (3) A credit against the tax imposed by this chapter is provided to the special fuel exporter of record for special fuel exported for use in interstate commerce as follows:
     (a) When exporting special fuel to a state where the state fuel tax rate is equal to or less than thirty-five cents per gallon, the credit is equal to thirty-five cents per gallon of motor vehicle fuel exported.
     (b) When exporting special fuel to a state where the state fuel tax rate is greater than thirty-five cents per gallon, the credit per gallon of fuel exported is equal to the per gallon fuel tax rate of the state to which the fuel is exported but not to exceed thirty-seven and one-half cents.
     (4)(a) Notwithstanding any provision of law to the contrary, every privately owned urban passenger transportation system and carriers as defined by chapters 81.68 and 81.70 RCW ((shall be)) is exempt from the provisions of this chapter requiring the payment of special fuel taxes. For the purposes of this section "privately owned urban passenger transportation system" means every privately owned transportation system having as its principal source of revenue the income from transporting persons for compensation by means of motor vehicles or trackless trolleys, each having a seating capacity for over fifteen persons over prescribed routes in such a manner that the routes of such motor vehicles or trackless trolleys, either alone or in conjunction with routes of other such motor vehicles or trackless trolleys subject to routing by the same transportation system, ((shall)) may not extend for a distance exceeding twenty-five road miles beyond the corporate limits of the county in which the original starting points of such motor vehicles are located((: PROVIDED, That)) . However, no refunds or credits ((shall)) may be granted on special fuel used by any privately owned urban transportation vehicle, or vehicle operated pursuant to chapters 81.68 and 81.70 RCW, on any trip where any portion of the trip is more than twenty-five road miles beyond the corporate limits of the county in which the trip originated.
     (b) Every publicly owned and operated urban passenger transportation system is exempt from the provisions of this chapter that require the payment of special fuel taxes. For the purposes of this subsection, "publicly owned and operated urban passenger transportation systems" include public transportation benefit areas under chapter 36.57A RCW, metropolitan municipal corporations under chapter 36.56 RCW, city-owned transit systems under chapter 35.58 RCW, county public transportation authorities under chapter 36.57 RCW, unincorporated transportation benefit areas under chapter 36.57 RCW, and regional transit authorities under chapter 81.112 RCW.

Sec. 10   RCW 82.38.180 and 2007 c 515 s 29 are each amended to read as follows:
     (1) Any person who has purchased special fuel on which tax has been paid may file a claim with the department for a refund of the tax for:
     (((1))) (a) Taxes previously paid on special fuel used for purposes other than for the propulsion of motor vehicles upon the public highways in this state.
     (((2))) (b) Taxes previously paid on special fuel exported for use outside of ((this state)) the United States. ((Special fuel carried from this state in the fuel tank of a motor vehicle is deemed to be exported from this state.)) Special fuel distributed to a federally recognized Indian tribal reservation located within the state of Washington is not considered exported outside this state.
     (((3))) (c) Tax, penalty, or interest erroneously or illegally collected or paid.
     (((4))) (d) Taxes previously paid on all special fuel which is lost or destroyed, while the licensee ((shall be)) is the owner thereof, through fire, lightning, flood, wind storm, or explosion.
     (((5))) (e) Taxes previously paid on all special fuel of five hundred gallons or more which is lost or destroyed while the licensee ((shall be)) is the owner thereof, through leakage or other casualty except evaporation, shrinkage, or unknown causes.
     (((6))) (f) Taxes previously paid on special fuel that is inadvertently mixed with dyed special fuel.
     (2) Recovery for such loss or destruction under either subsection (((4))) (1)(d), (((5))) (e), or (((6))) (f) of this section must be susceptible to positive proof thereby enabling the department to conduct such investigation and require such information as it may deem necessary. In the event that the department is not satisfied that the fuel was lost, destroyed, or contaminated as claimed because information or proof as required hereunder is not sufficient to substantiate the accuracy of the claim, it may deem such as sufficient cause to deny all right relating to the refund or credit for the excise tax paid on special fuel alleged to be lost or destroyed.
     (3) No refund or claim for credit ((shall)) may be approved by the department unless the gallons of special fuel claimed as nontaxable satisfy the conditions specifically set forth in this section and the nontaxable event or use occurred during the period covered by the refund claim. Refunds or claims for credit ((shall)) are not ((be)) allowed for anticipated nontaxable use or events.

NEW SECTION.  Sec. 11   A new section is added to chapter 82.38 RCW to read as follows:
     (1) Refunds, exemptions, and credits in this chapter are not applicable to special fuel or blended special fuel exported within the United States.
     (2) This section does not apply to the credit in RCW 82.38.080.

Sec. 12   RCW 82.04.090 and 2001 c 20 s 1 are each amended to read as follows:
     (1) Except as otherwise provided in this section, "value proceeding or accruing" means the consideration, whether money, credits, rights, or other property expressed in terms of money, actually received or accrued. The term shall be applied, in each case, on a cash receipts or accrual basis according to which method of accounting is regularly employed in keeping the books of the taxpayer. However, persons operating grain warehouses licensed under chapter 22.09 RCW may elect to report the value proceeding or accruing from grain warehouse operations on either a cash receipts or accrual basis. The department of revenue may provide by regulation that the value proceeding or accruing from sales on the installment plan under conditional contracts of sale may be reported as of the dates when the payments become due.
     (2)(a) For persons primarily engaged in petroleum refining, the "value proceeding or accruing" for the manufacturing, wholesale sale, or retail sale of fuel means the leveled fuel price multiplied by the volume of fuel sold.
     (b) For the purposes of this subsection (2), the following definitions apply.
     (i) "Fuel" means motor gasoline, diesel fuel, and aviation gasoline.
     (ii) "Leveled fuel price" means the average of the wholesale or retail fuel price for the west coast for the prior forty-eight months as published by the federal energy information administration or its successor agency.
     (iii) "Petroleum refining" means refining crude petroleum into refined petroleum by fractionation, straight distillation of crude oil, cracking, or similar methods.

NEW SECTION.  Sec. 13   A new section is added to chapter 82.36 RCW to read as follows:
     (1) A motor vehicle special fuel importer of record for crude oil imported for use only in Washington state may be credited against the export tax imposed by this chapter, an amount equal to two and one-half cents per gallon.
     (2) The amount of the credit provided in subsection (1) of this section may not exceed the tax otherwise due under this chapter for the tax reporting period.
     (3) A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year. Credit may not be claimed against taxes due for any tax reporting period ending before the credit was earned.
     (4) No refunds may be granted for credits under this section.
     (5) A credit under this section must be claimed through the tax reports required under RCW 82.38.150.

NEW SECTION.  Sec. 14   A new section is added to chapter 82.38 RCW to read as follows:
     (1) A motor vehicle fuel importer of record for crude oil imported for use only in Washington state may be credited against the export tax imposed by this chapter, an amount equal to two and one-half cents per gallon.
     (2) The amount of the credit provided in subsection (1) of this section may not exceed the tax otherwise due under this chapter for the tax reporting period.
     (3) A credit earned during one calendar year may be carried over to be credited against taxes incurred in the subsequent calendar year. Credit may not be claimed against taxes due for any tax reporting period ending before the credit was earned.
     (4) No refunds may be granted for credits under this section.
     (5) A credit under this section must be claimed through the tax reports required under RCW 82.38.150.

NEW SECTION.  Sec. 15   A new section is added to chapter 46.68 RCW to read as follows:
     (1) The Columbia river crossing account is created in the motor vehicle fund. Money in the account may be spent only after appropriation. Expenditures from the account must be used only for projects or improvements on the Columbia river crossing between Oregon and Washington and to pay the principal and interest on the bonds authorized for construction or improvements.
     (2) Upon completion of the project, moneys deposited in this account must only be used to pay the principal and interest on the bonds authorized, and any funds in the account in excess of the amount necessary to make the principal and interest payments may be used for preservation on the Columbia river bridge.
     (3) After fiscal year 2017, any excess funds in the account may also be used for high capacity transportation to relieve congestion on the state's roadways.

Sec. 16   RCW 43.84.092 and 2009 c 479 s 31, 2009 c 472 s 5, and 2009 c 451 s 8 are each reenacted and amended to read as follows:
     (1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
     (2) The treasury income account shall be utilized to pay or receive funds associated with federal programs as required by the federal cash management improvement act of 1990. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for refunds or allocations of interest earnings required by the cash management improvement act. Refunds of interest to the federal treasury required under the cash management improvement act fall under RCW 43.88.180 and shall not require appropriation. The office of financial management shall determine the amounts due to or from the federal government pursuant to the cash management improvement act. The office of financial management may direct transfers of funds between accounts as deemed necessary to implement the provisions of the cash management improvement act, and this subsection. Refunds or allocations shall occur prior to the distributions of earnings set forth in subsection (4) of this section.
     (3) Except for the provisions of RCW 43.84.160, the treasury income account may be utilized for the payment of purchased banking services on behalf of treasury funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasury and affected state agencies. The treasury income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments shall occur prior to distribution of earnings set forth in subsection (4) of this section.
     (4) Monthly, the state treasurer shall distribute the earnings credited to the treasury income account. The state treasurer shall credit the general fund with all the earnings credited to the treasury income account except:
     The following accounts and funds shall receive their proportionate share of earnings based upon each account's and fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the budget stabilization account, the capitol building construction account, the Cedar River channel construction and operation account, the Central Washington University capital projects account, the charitable, educational, penal and reformatory institutions account, the cleanup settlement account, the Columbia river basin water supply development account, the Columbia river crossing account, the common school construction fund, the county arterial preservation account, the county criminal justice assistance account, the county sales and use tax equalization account, the data processing building construction account, the deferred compensation administrative account, the deferred compensation principal account, the department of licensing services account, the department of retirement systems expense account, the developmental disabilities community trust account, the drinking water assistance account, the drinking water assistance administrative account, the drinking water assistance repayment account, the Eastern Washington University capital projects account, the education construction fund, the education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the personal health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local leasehold excise tax account, the local real estate excise tax account, the local sales and use tax account, the medical aid account, the mobile home park relocation fund, the motor vehicle fund, the motorcycle safety education account, the multimodal transportation account, the municipal criminal justice assistance account, the municipal sales and use tax equalization account, the natural resources deposit account, the oyster reserve land account, the pension funding stabilization account, the perpetual surveillance and maintenance account, the public employees' retirement system plan 1 account, the public employees' retirement system combined plan 2 and plan 3 account, the public facilities construction loan revolving account beginning July 1, 2004, the public health supplemental account, the public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk account, the special category C account, the special wildlife account, the state employees' insurance account, the state employees' insurance reserve account, the state investment board expense account, the state investment board commingled trust fund accounts, the state patrol highway account, the state route number 520 corridor account, the supplemental pension account, the Tacoma Narrows toll bridge account, the teachers' retirement system plan 1 account, the teachers' retirement system combined plan 2 and plan 3 account, the tobacco prevention and control account, the tobacco settlement account, the transportation 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the urban arterial trust account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' plan 2 retirement account, the Washington school employees' retirement system combined plan 2 and 3 account, the Washington state health insurance pool account, the Washington state patrol retirement account, the Washington State University building account, the Washington State University bond retirement fund, the water pollution control revolving fund, and the Western Washington University capital projects account. Earnings derived from investing balances of the agricultural permanent fund, the normal school permanent fund, the permanent common school fund, the scientific permanent fund, and the state university permanent fund shall be allocated to their respective beneficiary accounts. All earnings to be distributed under this subsection (4) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (5) In conformance with Article II, section 37 of the state Constitution, no treasury accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION.  Sec. 17   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 18   This act takes effect August 1, 2010.