[atlas:bill]

AN ACT Relating to authorizing tribal-state compacts in which the state retrocedes from motor fuel tax for fuel sold or distributed by a tribal government, a tribally owned enterprise, or a tribally licensed business; adding new sections to chapter 82.36 RCW; adding a new section to chapter 82.38 RCW; and repealing RCW 82.36.450 and 82.38.310.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.36 RCW to read as follows:

It is the intent of the legislature to promote and enhance government to government cooperation between the state of Washington and Indian tribes in the state by authorizing the governor to execute motor vehicle fuel tax compacts with tribal governments concerning the taxation of the use, distribution, and sales of motor vehicle fuels. It is the intent of the legislature through this act to provide the governor with flexibility in executing these cooperative compacts, if certain statutory requirements are met.

NEW SECTION. Sec. 2. A new section is added to chapter 82.36 RCW to read as follows:

The definitions set forth in this section apply throughout sections 1 through 5 of this act.

(1) "Indian reservation" means all lands within the exterior boundaries of an Indian reservation and all lands that are held in trust by the federal government and are under the jurisdiction of a federally recognized Indian tribe.

(2) "Motor vehicle fuel" means "motor vehicle fuel" as defined in RCW 82.36.010 and also includes "special fuels" as defined in RCW 82.38.020.

(3) "Motor vehicle fuel tax compact" means any compact entered into between the state of Washington and a tribal government under the authority of section 3 of this act.

(4) "Tribal government" means the governing body of a federally recognized Indian tribe.

(5) "Tribal government owned enterprise" means an enterprise that is at least fifty-one percent owned and operated by a tribal government.

(6) "Tribal member" means an enrolled member of a federally recognized Indian tribe.

(7) "Tribally licensed business" means a business that holds a current license from an Indian tribe to do business on the tribe's reservation. For the purposes of sections 1 through 5 of this act, a business is not considered "tribally licensed" if it is operating in violation of a compact executed under section 3 of this act.

NEW SECTION. Sec. 3. A new section is added to chapter 82.36 RCW to read as follows:

(1) The governor may execute individual compacts with each of the federally recognized Indian tribes in Washington concerning the sales and taxation of motor vehicle fuel. All cooperative compacts executed under the authority of this chapter must meet the requirements of this section. The governor may appoint the director of the department of licensing or any other appropriate agency as the governor's agent to negotiate and execute these compacts.

(2) In accordance with sections 4 and 5 of this act, the taxes under this chapter and chapter 82.38 RCW do not apply to motor fuel sold by a tribal government, a tribal government owned enterprise, or a tribally licensed business operating on the Indian reservation of a tribe that has executed a compact with the state.

(3) Compacts executed by the governor may provide for a tribal motor vehicle fuel tax in lieu of all state motor vehicle fuel taxes and all state and local sales and use taxes on the sale of motor vehicle fuel by tribal governments, tribal government owned enterprises, or tribally licensed businesses.

(4) Compacts executed by the governor may provide for payment by tribal governments to the state of Washington, on a postsale and quarterly basis, a portion of the tribal motor vehicle fuel tax collected by the tribe on sales to nontribal members. Revenues received under this subsection must be distributed in the same manner as other fuel tax revenues under this chapter and chapter 82.38 RCW.

(5) When negotiating the terms of a compact the governor must consider: (a) The tribe's economic, geographic, and other circumstances; (b) the costs to the tribe associated with administering the tax; (c) the percentage of state fuel tax revenue distributed to other local governments; and (d) the amount of the expenditure by the state on roads within the reservation.

(6) Compacts must provide that tribal governments, tribal government owned enterprises, and tribally licensed businesses only make sales of motor vehicle fuel where the physical transfer of possession of the motor vehicle fuel from the seller to the buyer occurs within the Indian reservation.

(7) Compacts may provide that the compact may be amended upon the agreement of both parties.

(8) Compacts may permit the submission of disputes regarding the interpretation and administration of their provisions to arbitration or judicial resolution, if a waiver of sovereign immunity by the state is conditioned upon a similar waiver of sovereign immunity by the tribal government.

NEW SECTION. Sec. 4. A new section is added to chapter 82.36 RCW to read as follows:

Subject to the conditions and limitations of a compact executed under section 3 of this act, the tax levied under this chapter does not apply to the sale, use, consumption, handling, possession, or distribution of motor fuels by a tribal government, tribal government owned enterprise, or tribally licensed business during the effective period of a motor vehicle fuel tax compact entered into between the tribal government and the state under section 3 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 82.38 RCW to read as follows:

Subject to the conditions and limitations of a compact executed under section 3 of this act, the tax levied under this chapter does not apply with respect to the use or sale of special fuels by a tribal government, tribal government owned enterprise, or tribally licensed business during the effective period of a motor vehicle fuel tax compact entered into between the tribal government and the state under section 3 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.36 RCW to read as follows:

Sections 1 through 5 of this act may be known and cited as the Tribal-State Motor Fuel Tax Compact Act.

NEW SECTION. Sec. 7. The following acts or parts of acts are each repealed:

(1) RCW 82.36.450 (Agreement with tribe for imposition, collection, use) and 1995 c 320 s 2; and

(2) RCW 82.38.310 (Agreement with tribe for imposition, collection, use) and 1995 c 320 s 3.