H-0149.2

HOUSE BILL 1084

ByRepresentatives Dent, Springer, and Keaton

AN ACT Relating to establishing tax exemptions for unleaded aircraft fuel; amending RCW 82.42.030, 82.21.040, and 82.23A.030; reenacting and amending RCW 82.42.010; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 82.23B RCW; creating new sections; providing an effective date; and providing expiration dates.

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

Sec. 2. RCW 82.42.010 and 2024 c 1 s 17 are each reenacted and amended to read as follows:

The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.

(1) "Air carrier" means any airline, air cargo carrier, air taxi, air commuter, or air charter operator, that provides routine air service to the general population for compensation or hire, and operates at least ((fifteen))15 round trips per week between two or more points and publishes flight schedules which specify the times, days of the week, and points between which it operates. Where it is doubtful that an operation is for "compensation or hire," the test applied is whether the air service is merely incidental to the person's other business or is, in itself, a major enterprise for profit.

(2) "Aircraft" means every contrivance now known or hereafter invented, used or designed for navigation of or flight in the air, operated or propelled by the use of aircraft fuel.

(3) "Aircraft fuel" means gasoline and any other inflammable liquid, by whatever name such liquid is known or sold, the chief use of which is as fuel for the propulsion of aircraft, except gas or liquid, the chief use of which as determined by the director, is for purposes other than the propulsion of aircraft.

(4) "Dealer" means any person engaged in the retail sale of aircraft fuel.

(5) "Deny" means to decline acceptance of an application for licensure or reinstatement.

(6) "Department" means the department of licensing.

(7) "Director" means the director of licensing.

(8) "Distributor" means any person engaged in the sale of aircraft fuel to any dealer and includes any dealer from whom the tax hereinafter imposed has not been collected.

(9) "Local service commuter" means an air taxi operator who operates at least five round-trips per week between two or more points; publishes flight schedules which specify the times, days of the week, and points between which it operates; and whose aircraft has a maximum capacity of 60 passengers or 18,000 pounds of useful load.

(10) "Person" means every natural person, firm, partnership, association, or private or public corporation.

(11) "Refuse" has the same meaning as "deny" in subsection (5) of this section.

(12) "Revoke" means to prohibit all authority granted by this chapter, including the display and use of credentials issued by the department for a period of one year or greater or for an indefinite period.

(13) "Suspend" means to restrict the grant of authority under this chapter for a period of less than one year.

Sec. 3. RCW 82.42.030 and 2013 c 225 s 303 are each amended to read as follows:

The provision of RCW 82.42.020 imposing the payment of an excise tax on each gallon of aircraft fuel sold, delivered or used in this state does not apply to:

(1) Aircraft fuel sold for export and exported from this state;

(2) Aircraft fuel imported into the state in interstate or foreign commerce and intended to be sold while in interstate or foreign commerce;

(3) Aircraft fuel sold to an agency of the United States government;

(4) Aircraft fuel delivered directly into the aircraft fuel tanks of equipment operated by an air carrier or supplemental air carrier operating under a certificate of public convenience and necessity under the provisions of the federal aviation act of 1958, P.L. 85-726, as amended;

(5) Aircraft fuel delivered directly into the aircraft fuel tanks of equipment operated by a local service commuter;

(6) Aircraft fuel sold to emergency medical air transport entities;

(7) Aircraft fuel sold to a licensed aircraft fuel distributor;

(8) Aircraft fuel delivered into the bulk storage tank of a certified user;

(9) Aircraft fuel used in the operation of aircraft for testing or experimental purposes; ((and))

(10) Aircraft fuel used in the operation of aircraft when such operation is for the training of crews in Washington state for purchasers of aircraft who are certified air carriers; and

(11) Unleaded aircraft fuel sold, delivered, or used in the state.

NEW SECTION.  Sec. 4. A new section is added to chapter 82.08 RCW to read as follows:

(1) The tax levied by RCW 82.08.020 does not apply to sales of unleaded aircraft fuel as defined in RCW 82.42.010.

(2) This section expires January 1, 2032.

NEW SECTION.  Sec. 5. A new section is added to chapter 82.12 RCW to read as follows:

(1) The provisions of this chapter do not apply with respect to the use of unleaded aircraft fuel as defined in RCW 82.42.010.

(2) This section expires January 1, 2032.

Sec. 6. RCW 82.21.040 and 2024 c 241 s 1 are each amended to read as follows:

The following are exempt from the tax imposed in this chapter:

(1) Any successive possession of a previously taxed hazardous substance. If tax due under this chapter has not been paid with respect to a hazardous substance, the department may collect the tax from any person who has had possession of the hazardous substance. If the tax is paid by any person other than the first person having taxable possession of a hazardous substance, the amount of tax paid shall constitute a debt owed by the first person having taxable possession to the person who paid the tax.

(2) Any possession of a hazardous substance by a natural person under circumstances where the substance is used, or is to be used, for a personal or domestic purpose (and not for any business purpose) by that person or a relative of, or person residing in the same dwelling as, that person.

(3) Any possession of a hazardous substance amount which is determined as minimal by the department of ecology and which is possessed by a retailer for the purpose of making sales to ultimate consumers. This exemption does not apply to pesticide or petroleum products.

(4) Any possession of alumina or natural gas.

(5)(a) Until January 1, 2028, any possession of a hazardous substance as defined in RCW 82.21.020(1)(c) that is solely for use by a farmer or certified applicator as an agricultural crop protection product and warehoused in this state or transported to or from this state, provided that the person possessing the substance does not otherwise use, manufacture, package for sale, or sell the substance in this state.

(b) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.

(i) "Agricultural crop protection product" means a chemical regulated under the federal insecticide, fungicide, and rodenticide act, 7 U.S.C. Sec. 136 as amended as of September 1, 2015, when used to prevent, destroy, repel, mitigate, or control predators, diseases, weeds, or other pests.

(ii) "Certified applicator" has the same meaning as provided in RCW 17.21.020.

(iii) "Farmer" has the same meaning as in RCW 82.04.213.

(iv) "Manufacturing" includes mixing or combining agricultural crop protection products with other chemicals or other agricultural crop protection products.

(v) "Package for sale" includes transferring agricultural crop protection products from one container to another, including the transfer of fumigants and other liquid or gaseous chemicals from one tank to another.

(vi) "Use" has the same meaning as in RCW 82.12.010.

(6) Any possession of unleaded aircraft fuel as defined in RCW 82.42.010.

(7) Persons or activities which the state is prohibited from taxing under the United States Constitution.

Sec. 7. RCW 82.23A.030 and 1989 c 383 s 17 are each amended to read as follows:

The following are exempt from the tax imposed in this chapter:

(1) Any successive possession of a previously taxed petroleum product. If tax due under this chapter has not been paid with respect to a petroleum product, the department may collect the tax from any person who has had possession of the petroleum product. If the tax is paid by any person other than the first person having taxable possession of a petroleum product, the amount of tax paid shall constitute a debt owed by the first person having taxable possession to the person who paid the tax.

(2) Any possession of a petroleum product by a natural person under circumstances where the substance is used, or is to be used, for a personal or domestic purpose (and not for any business purpose) by that person or a relative of, or person residing in the same dwelling as, that person.

(3) Persons or activities which the state is prohibited from taxing under the United States Constitution.

(4) Any persons possessing a petroleum product where such possession first occurred before July 1, 1989.

(5) Any possession of (a) natural gas, (b) petroleum coke, or (c) liquid fuel or fuel gas used in petroleum processing.

(6) Any possession of petroleum products that are exported for use or sale outside this state as fuel.

(7) Any possession of petroleum products packaged for sale to ultimate consumers.

NEW SECTION.  Sec. 8. A new section is added to chapter 82.23B RCW to read as follows:

(1) The provisions of this chapter do not apply with respect to the receipt of unleaded aircraft fuel as defined in RCW 82.42.010.

(2) This section expires January 1, 2032.

(2) The legislature categorizes these tax preferences as ones intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).

(3) It is the legislature's specific public policy objective to:

(a) Incentivize utilization of alternative 100 octane unleaded aircraft fuel by the aviation community; and

(b) Increase the availability of unleaded aircraft fuel in the marketplace.

(4) It is the legislature's intent to incentivize the adoption, utilization, and availability of unleaded aircraft fuel in order to facilitate the phaseout of 100LL aircraft fuel in Washington state.

(5) The legislature intends to extend the expiration date of the tax preferences in this act, if a review finds that:

(a) Aircraft operators or pilots of piston powered aircraft are transitioning from use of leaded aircraft fuel to use of unleaded aircraft fuel;

(b) Unleaded aircraft fuel is available for purchase at an increasing number of airports across Washington state; and

(c) Lead emissions from aircraft engines has decreased within Washington state.

(6) In order to obtain the data necessary to perform the review in subsection (5) of this section, the joint legislative audit and review committee must refer to reports or data issued by the environmental protection agency, federal aviation administration, eliminate aviation gasoline lead emissions initiative partnership, department of revenue, department of ecology, and other involved federal, state, or local agencies, or stakeholder groups aiding in the transition to lead-free aircraft fuel alternatives. The committee may also refer to data provided by individual aircraft fuel distributors, airports, pilots, aircraft operators, and any other data sources, as needed.

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