AN ACT
Relating to taxation of gasohol; amending 1994 c 225 s 3 (uncodified);
reenacting and amending RCW 82.36.2251; adding a new section to chapter 225,
Laws of 1994; creating new sections; providing an effective date; and declaring
an emergency.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
NEW
SECTION. Sec. 1. A new
section to read as follows is added to chapter 225, Laws of 1994, as section
1.5 thereof, to appear between sections 1 and 2, if that act is submitted to a
vote of the people under the operation of section 3 thereof:
The
gasohol exemption and credit was created in 1980 to help in-state producers of
alcohol. The legislature finds that, for the following reasons, the gasohol
exemption and credit granted to motor fuel distributors is not in the best
interest of the citizens of the state of Washington:
(1)
The federal Clean Air Act requires the use of gasohol or other oxygenated fuels
in King, Pierce, Snohomish, Clark, and Spokane counties during fall and winter
months, thereby diminishing the need to provide incentives to alcohol
producers;
(2)
The federal government also provides a fuel tax exemption of up to 5.4 cents
per gallon of gasohol;
(3) If
continued, the state exemption will cost the state about thirty million dollars
per year, the equivalent of a one-cent gasoline tax;
(4)
Only three of the seventeen alcohol producers certified to benefit from the
exemption in 1993 are located in Washington;
(5)
Over ninety percent of the alcohol qualifying for the exemption is provided by
out-of-state firms, including several from outside the country;
(6)
Gas tax revenue lost because of the exemption is badly needed for state, city,
and county transportation projects.
NEW
SECTION. Sec. 2. For the
reasons enumerated in section 1 of this act, the legislature repealed the tax
exemption and credit benefiting gasohol producers by passing ESHB 2326 in
1994. The legislature's position is that section 1 of ESHB 2326, which is the
portion of the bill that repealed the tax exemption enjoyed by foreign and
domestic companies producing gasohol, is not subject to the requirements of
section 13, chapter 2, Laws of 1994 (commonly known as section 13 of I-601)
because, among other reasons, existing law RCW 43.135.020(2) excludes highway
trust fund revenue from its provisions.
The
legislature hereby provides a refund system to be used in lieu of the gasohol
tax exemption and credit. Refunds will be disbursed only if an appellate or
supreme court of this state invalidates section 1 of ESHB 2326 and the people
reject the measure at the November general election.
Sec.
3. RCW
82.36.2251 and 1993 c 268 s 2 are each reenacted and amended to read as
follows:
(1) In
lieu of the former tax exemption and credit, a distributor is eligible for a
refund of the motor fuel tax paid under this chapter on alcohol of any
proof that is sold in this state for use as fuel in motor vehicles, farm
implements and machines, or implements of husbandry ((is exempt from the
motor vehicle fuel tax under this chapter)) if such alcohol was
manufactured by a company that has been verified by the department as having
sold less than eight million gallons of alcohol for use as motor fuel in the
prior calendar year.
(2) In
addition, a tax ((credit)) refund of sixty percent of the tax
rate imposed by RCW 82.36.025 shall be given for every gallon of alcohol
receiving ((the exemption)) a refund under subsection (1) of this
section and used in an alcohol-gasoline blend which contains at least nine and
one-half percent or more by volume of alcohol: PROVIDED, That in no case may
the tax ((credit)) refund claimed be greater than the tax due on
the gasoline portion of the blended fuel: AND PROVIDED FURTHER, That no
refunds may be issued to distributors who fail to remit taxes owed under this
chapter.
(3) Any
tax refunds provided under this section must be made from the gasohol exemption
holding account, created under RCW 46.68.090(1)(l). The tax exemption refund
will be based upon the difference between the amount of tax collected on the
original taxable sale invoice and the rebilled taxable sale invoice that
reflects the alcohol that is exempt from the motor fuel tax.
(4)
This section shall expire on December 31, 1999.
Sec.
4. 1994 c
225 s 3 (uncodified) is amended to read as follows:
(1) If
a court enters a final order invalidating or remanding section 1, chapter 225,
Laws of 1994 on the grounds that it does not comply with section 13, chapter 2,
Laws of 1994, it is the intent of the legislature that ((this measure)) chapter
225, Laws of 1994 as amended be submitted to the people for their adoption,
ratification, or rejection, at the next succeeding general election to be held
in this state, in accordance with Article II, section 1 of the state
Constitution, as amended, and the laws adopted to facilitate the operation
thereof.
(2) If
a court remands this act for a vote of the people, the ballot title shall be
substantially as follows: "Shall the alcohol fuel tax exemption given to
fuel distributors be eliminated?"
(3)
If the voters approve the repeal as provided in section 1 of this act, the
repeal shall be made retroactive to May 1, 1994.
NEW
SECTION. Sec. 5. No
refunds authorized under this act shall be provided until 1994 c 225 is
rejected by the people at the next November general election. Any funds
received as taxes paid subject to refunds authorized in section 3 of this act
shall be deposited in the gasohol exemption holding account. The department of
licensing is authorized to issue refunds after 1994 c 225 has been rejected by
the people at the next November general election.
NEW
SECTION. Sec. 6. If
section 1, chapter 225, Laws of 1994 is upheld by order of the court of appeals
or the supreme court of this state, this act is null and void.
NEW
SECTION. Sec. 7. 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. 8. This act
is necessary for the immediate preservation of the public peace, health, or
safety, or support of the state government and its existing public
institutions, and takes effect immediately, except for section 3 of this act,
which takes effect July 1, 1995.
