CERTIFICATION OF ENROLLMENT

ENGROSSED SUBSTITUTE HOUSE BILL 2231

Chapter 361, Laws of 2003

(partial veto)

58th Legislature
2003 Regular Session



TRANSPORTATION REVENUE



EFFECTIVE DATE: 7/27/03 - Except sections 201 and 202, which become effective 8/1/03; and sections 301 through 602, which become effective 7/1/03.

Passed by the House April 26, 2003
  Yeas 60   Nays 38

FRANK CHOPP
________________________________________    
Speaker of the House of Representatives


Passed by the Senate April 26, 2003
  Yeas 38   Nays 11


BRAD OWEN
________________________________________    
President of the Senate
 
CERTIFICATE

I, Cynthia Zehnder, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is ENGROSSED SUBSTITUTE HOUSE BILL 2231 as passed by the House of Representatives and the Senate on the dates hereon set forth.


CYNTHIA ZEHNDER
________________________________________    
Chief Clerk
Approved May 19, 2003, with the exception of section 705, which is vetoed.







GARY F. LOCKE
________________________________________    
Governor of the State of Washington
 
FILED
May 19, 2003 - 10:31 a.m.







Secretary of State
State of Washington


_____________________________________________ 

ENGROSSED SUBSTITUTE HOUSE BILL 2231
_____________________________________________

AS AMENDED BY THE SENATE

Passed Legislature - 2003 Regular Session
State of Washington58th Legislature2003 Regular Session

By House Committee on Transportation (originally sponsored by Representatives Murray, Wallace, Cooper, Clibborn, Rockefeller, Simpson, Hudgins and Hankins)

READ FIRST TIME 04/02/03.   



     AN ACT Relating to transportation and financing; amending RCW 46.16.070, 46.68.035, 82.08.020, 82.12.020, 82.12.045, 82.08.064, 82.38.030, 82.38.035, 82.38.047, 46.09.170, 46.10.170, 79A.25.070, and 46.16.233; reenacting and amending RCW 82.36.025, 46.68.090, 46.68.110, and 43.84.092; adding a new section to chapter 46.16 RCW; adding a new section to chapter 46.68 RCW; creating new sections; and providing effective dates.

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

PART I - INTENT

NEW SECTION.  Sec. 101   The legislature finds that the state's transportation system is in critical need of repair, restoration, and enhancement. The states economy, the ability to move goods to market, and the overall mobility and safety of the citizens of the state rely on the state's transportation system. The revenues generated by this act are dedicated to funds, accounts, and activities that are necessary to improve the delivery of state transportation projects and services.

PART II - LICENSE FEES

Sec. 201   RCW 46.16.070 and 1994 c 262 s 8 are each amended to read as follows:
     (1) In lieu of all other vehicle licensing fees, unless specifically exempt, and in addition to ((the excise tax prescribed in chapter 82.44 RCW and)) the mileage fees prescribed for buses and stages in RCW 46.16.125, there shall be paid and collected annually for each truck, motor truck, truck tractor, road tractor, tractor, bus, auto stage, or for hire vehicle with seating capacity of more than six, based upon the declared combined gross weight or declared gross weight ((thereof pursuant to the provisions of)) under chapter 46.44 RCW, the following licensing fees by such gross weight:

DECLARED GROSS WEIGHTSCHEDULE ASCHEDULE B
4,000 lbs. . . . . . . . . . . . . $37.00 . . . . . . . . . . . . $37.00
6,000 lbs. . . . . . . . . . . . . $44.00 . . . . . . . . . . . . $44.00
8,000 lbs. . . . . . . . . . . . . $55.00 . . . . . . . . . . . . $55.00
10,000 lbs. . . . . . . . . . . . . $62.00 . . . . . . . . . . . . $62.00
((12,000 lbs. . . . . . . . . . . . . $72.00 . . . . . . . . . . . . $72.00
14,000 lbs. . . . . . . . . . . . . $82.00 . . . . . . . . . . . . $82.00
16,000 lbs. . . . . . . . . . . . . $92.00 . . . . . . . . . . . . $92.00
18,000 lbs. . . . . . . . . . . . . $137.00 . . . . . . . . . . . . $137.00
20,000 lbs. . . . . . . . . . . . . $152.00 . . . . . . . . . . . . $152.00
22,000 lbs. . . . . . . . . . . . . $164.00 . . . . . . . . . . . . $164.00
24,000 lbs. . . . . . . . . . . . . $177.00 . . . . . . . . . . . . $177.00
26,000 lbs. . . . . . . . . . . . . $187.00 . . . . . . . . . . . . $187.00
28,000 lbs. . . . . . . . . . . . . $220.00 . . . . . . . . . . . . $220.00
30,000 lbs. . . . . . . . . . . . . $253.00 . . . . . . . . . . . . $253.00
32,000 lbs. . . . . . . . . . . . . $304.00 . . . . . . . . . . . . $304.00
34,000 lbs. . . . . . . . . . . . . $323.00 . . . . . . . . . . . . $323.00
36,000 lbs. . . . . . . . . . . . . $350.00 . . . . . . . . . . . . $350.00
38,000 lbs. . . . . . . . . . . . . $384.00 . . . . . . . . . . . . $384.00
40,000 lbs. . . . . . . . . . . . . $439.00 . . . . . . . . . . . . $439.00
42,000 lbs. . . . . . . . . . . . . $456.00 . . . . . . . . . . . . $546.00
44,000 lbs. . . . . . . . . . . . . $466.00 . . . . . . . . . . . . $556.00
46,000 lbs. . . . . . . . . . . . . $501.00 . . . . . . . . . . . . $591.00
48,000 lbs. . . . . . . . . . . . . $522.00 . . . . . . . . . . . . $612.00
50,000 lbs. . . . . . . . . . . . . $566.00 . . . . . . . . . . . . $656.00
52,000 lbs. . . . . . . . . . . . . $595.00 . . . . . . . . . . . . $685.00
54,000 lbs. . . . . . . . . . . . . $642.00 . . . . . . . . . . . . $732.00
56,000 lbs. . . . . . . . . . . . . $677.00 . . . . . . . . . . . . $767.00
58,000 lbs. . . . . . . . . . . . . $704.00 . . . . . . . . . . . . $794.00
60,000 lbs. . . . . . . . . . . . . $750.00 . . . . . . . . . . . . $840.00
62,000 lbs. . . . . . . . . . . . . $804.00 . . . . . . . . . . . . $894.00
64,000 lbs. . . . . . . . . . . . . $822.00 . . . . . . . . . . . . $912.00
66,000 lbs. . . . . . . . . . . . . $915.00 . . . . . . . . . . . . $1,005.00
68,000 lbs. . . . . . . . . . . . . $954.00 . . . . . . . . . . . . $1,044.00
70,000 lbs. . . . . . . . . . . . . $1,027.00 . . . . . . . . . . . . $1,117.00
72,000 lbs. . . . . . . . . . . . . $1,098.00 . . . . . . . . . . . . $1,188.00
74,000 lbs. . . . . . . . . . . . . $1,193.00 . . . . . . . . . . . . $1,283.00
76,000 lbs. . . . . . . . . . . . . $1,289.00 . . . . . . . . . . . . $1,379.00
78,000 lbs. . . . . . . . . . . . . $1,407.00 . . . . . . . . . . . . $1,497.00
80,000 lbs. . . . . . . . . . . . . $1,518.00 . . . . . . . . . . . . $1,608.00
82,000 lbs. . . . . . . . . . . . . $1,623.00 . . . . . . . . . . . . $1,713.00
84,000 lbs. . . . . . . . . . . . . $1,728.00 . . . . . . . . . . . . $1,818.00
86,000 lbs. . . . . . . . . . . . . $1,833.00 . . . . . . . . . . . . $1,923.00
88,000 lbs. . . . . . . . . . . . . $1,938.00 . . . . . . . . . . . . $2,028.00
90,000 lbs. . . . . . . . . . . . . $2,043.00 . . . . . . . . . . . . $2,133.00
92,000 lbs. . . . . . . . . . . . . $2,148.00 . . . . . . . . . . . . $2,238.00
94,000 lbs. . . . . . . . . . . . . $2,253.00 . . . . . . . . . . . . $2,343.00
96,000 lbs. . . . . . . . . . . . . $2,358.00 . . . . . . . . . . . . $2,448.00
98,000 lbs. . . . . . . . . . . . . $2,463.00 . . . . . . . . . . . . $2,553.00
100,000 lbs. . . . . . . . . . . . . $2,568.00 . . . . . . . . . . . . $2,658.00
102,000 lbs. . . . . . . . . . . . . $2,673.00 . . . . . . . . . . . . $2,763.00
104,000 lbs. . . . . . . . . . . . . $2,778.00 . . . . . . . . . . . . $2,868.00
105,500 lbs. . . . . . . . . . . . . $2,883.00 . . . . . . . . . . . . $2,973.00))
12,000 lbs. . . . . . . . . . . . . $79.00 . . . . . . . . . . . . $79.00
14,000 lbs. . . . . . . . . . . . . $90.00 . . . . . . . . . . . . $90.00
16,000 lbs. . . . . . . . . . . . . $102.00 . . . . . . . . . . . . $102.00
18,000 lbs. . . . . . . . . . . . . $154.00 . . . . . . . . . . . . $154.00
20,000 lbs. . . . . . . . . . . . . $171.00 . . . . . . . . . . . . $171.00
22,000 lbs. . . . . . . . . . . . . $185.00 . . . . . . . . . . . . $185.00
24,000 lbs. . . . . . . . . . . . . $200.00 . . . . . . . . . . . . $200.00
26,000 lbs. . . . . . . . . . . . . $211.00 . . . . . . . . . . . . $211.00
28,000 lbs. . . . . . . . . . . . . $249.00 . . . . . . . . . . . . $249.00
30,000 lbs. . . . . . . . . . . . . $287.00 . . . . . . . . . . . . $287.00
32,000 lbs. . . . . . . . . . . . . $346.00 . . . . . . . . . . . . $346.00
34,000 lbs. . . . . . . . . . . . . $368.00 . . . . . . . . . . . . $368.00
36,000 lbs. . . . . . . . . . . . . $399.00 . . . . . . . . . . . . $399.00
38,000 lbs. . . . . . . . . . . . . $438.00 . . . . . . . . . . . . $438.00
40,000 lbs. . . . . . . . . . . . . $501.00 . . . . . . . . . . . . $501.00
42,000 lbs. . . . . . . . . . . . . $521.00 . . . . . . . . . . . . $611.00
44,000 lbs. . . . . . . . . . . . . $532.00 . . . . . . . . . . . . $622.00
46,000 lbs. . . . . . . . . . . . . $572.00 . . . . . . . . . . . . $662.00
48,000 lbs. . . . . . . . . . . . . $596.00 . . . . . . . . . . . . $686.00
50,000 lbs. . . . . . . . . . . . . $647.00 . . . . . . . . . . . . $737.00
52,000 lbs. . . . . . . . . . . . . $680.00 . . . . . . . . . . . . $770.00
54,000 lbs. . . . . . . . . . . . . $734.00 . . . . . . . . . . . . $824.00
56,000 lbs. . . . . . . . . . . . . $775.00 . . . . . . . . . . . . $865.00
58,000 lbs. . . . . . . . . . . . . $806.00 . . . . . . . . . . . . $896.00
60,000 lbs. . . . . . . . . . . . . $859.00 . . . . . . . . . . . . $949.00
62,000 lbs. . . . . . . . . . . . . $921.00 . . . . . . . . . . . . $1,011.00
64,000 lbs. . . . . . . . . . . . . $941.00 . . . . . . . . . . . . $1,031.00
66,000 lbs. . . . . . . . . . . . . $1,048.00 . . . . . . . . . . . . $1,138.00
68,000 lbs. . . . . . . . . . . . . $1,093.00 . . . . . . . . . . . . $1,183.00
70,000 lbs. . . . . . . . . . . . . $1,177.00 . . . . . . . . . . . . $1,267.00
72,000 lbs. . . . . . . . . . . . . $1,259.00 . . . . . . . . . . . . $1,349.00
74,000 lbs. . . . . . . . . . . . . $1, 368.00 . . . . . . . . . . . . $1,458.00
76,000 lbs. . . . . . . . . . . . . $1,478.00 . . . . . . . . . . . . $1,568.00
78,000 lbs. . . . . . . . . . . . . $1,614.00 . . . . . . . . . . . . $1,704.00
80,000 lbs. . . . . . . . . . . . . $1,742.00 . . . . . . . . . . . . $1,832.00
82,000 lbs. . . . . . . . . . . . . $1,863.00 . . . . . . . . . . . . $1,953.00
84,000 lbs. . . . . . . . . . . . . $1,983.00 . . . . . . . . . . . . $2,073.00
86,000 lbs. . . . . . . . . . . . . $2,104.00 . . . . . . . . . . . . $2,194.00
88,000 lbs. . . . . . . . . . . . . $2,225.00 . . . . . . . . . . . . $2,315.00
90,000 lbs. . . . . . . . . . . . . $2,346.00 . . . . . . . . . . . . $2,436.00
92,000 lbs. . . . . . . . . . . . . $2,466.00 . . . . . . . . . . . . $2,556.00
94,000 lbs. . . . . . . . . . . . . $2,587.00 . . . . . . . . . . . . $2,677.00
96,000 lbs. . . . . . . . . . . . . $2,708.00 . . . . . . . . . . . . $2,798.00
98,000 lbs. . . . . . . . . . . . . $2,829.00 . . . . . . . . . . . . $2,919.00
100,000 lbs. . . . . . . . . . . . . $2,949.00 . . . . . . . . . . . . $3,039.00
102,000 lbs. . . . . . . . . . . . . $3,070.00 . . . . . . . . . . . . $3,160.00
104,000 lbs. . . . . . . . . . . . . $3,191.00 . . . . . . . . . . . . $3,281.00
105,500 lbs. . . . . . . . . . . . . $3,312.00 . . . . . . . . . . . . $3,402.00

     Schedule A applies to vehicles either used exclusively for hauling logs or that do not tow trailers. Schedule B applies to vehicles that tow trailers and are not covered under Schedule A.
     Every truck, motor truck, truck tractor, and tractor exceeding 6,000 pounds empty scale weight registered under chapter 46.16, 46.87, or 46.88 RCW shall be licensed for not less than one hundred fifty percent of its empty weight unless the amount would be in excess of the legal limits prescribed for such a vehicle in RCW 46.44.041 or 46.44.042, in which event the vehicle shall be licensed for the maximum weight authorized for such a vehicle or unless the vehicle is used only for the purpose of transporting any well drilling machine, air compressor, rock crusher, conveyor, hoist, donkey engine, cook house, tool house, bunk house, or similar machine or structure attached to or made a part of such vehicle.
     The following provisions apply when increasing gross or combined gross weight for a vehicle licensed under this section:
     (a) The new license fee will be one-twelfth of the fee listed above for the new gross weight, multiplied by the number of months remaining in the period for which licensing fees have been paid, including the month in which the new gross weight is effective.
     (b) Upon surrender of the current certificate of registration or cab card, the new licensing fees due shall be reduced by the amount of the licensing fees previously paid for the same period for which new fees are being charged.
     (2) The proceeds from the fees collected under subsection (1) of this section shall be distributed in accordance with RCW 46.68.035.

Sec. 202   RCW 46.68.035 and 2000 2nd sp.s. c 4 s 8 are each amended to read as follows:
     All proceeds from combined vehicle licensing fees received by the director for vehicles licensed under RCW 46.16.070 and 46.16.085 shall be forwarded to the state treasurer to be distributed into accounts according to the following method:
     (1) The sum of two dollars for each vehicle shall be deposited into the multimodal transportation account, except that for each vehicle registered by a county auditor or agent to a county auditor pursuant to RCW 46.01.140, the sum of two dollars shall be credited to the current county expense fund.
     (2) The remainder shall be distributed as follows:
     (a) ((23.677)) 21.963 percent shall be deposited into the state patrol highway account of the motor vehicle fund;
     (b) ((1.521)) 1.411 percent shall be deposited into the Puget Sound ferry operations account of the motor vehicle fund; ((and))
     (c) 7.240 percent shall be deposited into the transportation 2003 account (nickel account); and
     (d)
The remaining proceeds shall be deposited into the motor vehicle fund.

PART III - SALES AND USE TAX

Sec. 301   RCW 82.08.020 and 2000 2nd sp.s. c 4 s 1 are each amended to read as follows:
     (1) There is levied and there shall be collected a tax on each retail sale in this state equal to six and five-tenths percent of the selling price.
     (2) There is levied and there shall be collected an additional tax on each retail car rental, regardless of whether the vehicle is licensed in this state, equal to five and nine-tenths percent of the selling price. The revenue collected under this subsection shall be deposited in the multimodal transportation account created in RCW 47.66.070.
     (3) Beginning July 1, 2003, there is levied and collected an additional tax of three-tenths of one percent of the selling price on each retail sale of a motor vehicle in this state, other than retail car rentals taxed under subsection (2) of this section. The revenue collected under this subsection shall be deposited in the multimodal transportation account created in RCW 47.66.070.
     (4) For purposes of subsection (3) of this section, "motor vehicle" has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road and nonhighway vehicles as defined in RCW 46.09.020, and snowmobiles as defined in RCW 46.10.010.
     (5)
The taxes imposed under this chapter shall apply to successive retail sales of the same property.
     (((4))) (6) The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

Sec. 302   RCW 82.12.020 and 2003 c 5 (EHB 1977) s 2 are each amended to read as follows:
     (1) There is hereby levied and there shall be collected from every person in this state a tax or excise for the privilege of using within this state as a consumer: (a) Any article of tangible personal property purchased at retail, or acquired by lease, gift, repossession, or bailment, or extracted or produced or manufactured by the person so using the same, or otherwise furnished to a person engaged in any business taxable under RCW 82.04.280 (2) or (7); or (b) any canned software, regardless of the method of delivery, but excluding canned software that is either provided free of charge or is provided for temporary use in viewing information, or both.
     (2) This tax shall apply to the use of every service defined as a retail sale in RCW 82.04.050 (2)(a) or (3)(a) and the use of every article of tangible personal property, including property acquired at a casual or isolated sale, and including byproducts used by the manufacturer thereof, except as hereinafter provided, irrespective of whether the article or similar articles are manufactured or are available for purchase within this state.
     (3) The provisions of this chapter do not apply in respect to the use of any article of tangible personal property or service taxable under RCW 82.04.050(2)(a) or (3)(a) purchased at retail or acquired by lease, gift, or bailment if the sale to, or the use by, the present user or his bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by his bailor or donor.
     (4) Except as provided in this section, payment by one purchaser or user of tangible personal property or service of the tax imposed by chapter 82.08 or 82.12 RCW shall not have the effect of exempting any other purchaser or user of the same property or service from the taxes imposed by such chapters. If the sale to, or the use by, the present user or his or her bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by his or her bailor or donor; or in respect to the use of property acquired by bailment and the tax has once been paid based on reasonable rental as determined by RCW 82.12.060 measured by the value of the article at time of first use multiplied by the tax rate imposed by chapter 82.08 RCW or this chapter as of the time of first use; or in respect to the use of any article of tangible personal property acquired by bailment, if the property was acquired by a previous bailee from the same bailor for use in the same general activity and the original bailment was prior to June 9, 1961, the tax imposed by this chapter does not apply.
     (5) The tax shall be levied and collected in an amount equal to the value of the article used or value of the service used by the taxpayer multiplied by the rates in effect for the retail sales tax under RCW 82.08.020.

Sec. 303   RCW 82.12.045 and 1996 c 149 s 19 are each amended to read as follows:
     (1) In the collection of the use tax on motor vehicles, the department of revenue may designate the county auditors of the several counties of the state as its collecting agents. Upon such designation, it shall be the duty of each county auditor to collect the tax at the time an applicant applies for the registration of, and transfer of title to, the motor vehicle, except in the following instances:
     (a) Where the applicant exhibits a dealer's report of sale showing that the retail sales tax has been collected by the dealer;
     (b) Where the application is for the renewal of registration;
     (c) Where the applicant presents a written statement signed by the department of revenue, or its duly authorized agent showing that no use tax is legally due; or
     (d) Where the applicant presents satisfactory evidence showing that the retail sales tax or the use tax has been paid by ((him)) the applicant on the vehicle in question.
     (2) The term "motor vehicle," as used in this section means and includes all motor vehicles, trailers and semitrailers used, or of a type designed primarily to be used, upon the public streets and highways, for the convenience or pleasure of the owner, or for the conveyance, for hire or otherwise, of persons or property, including fixed loads, facilities for human habitation, and vehicles carrying exempt licenses.
     (3) It shall be the duty of every applicant for registration and transfer of certificate of title who is subject to payment of tax under this section to declare upon ((his)) the application the value of the vehicle for which application is made, which shall consist of the consideration paid or contracted to be paid therefor.
     (4) Each county auditor who acts as agent of the department of revenue shall at the time of remitting license fee receipts on motor vehicles subject to the provisions of this section pay over and account to the state treasurer for all use tax revenue collected under this section, after first deducting as ((his)) a collection fee the sum of two dollars for each motor vehicle upon which the tax has been collected. All revenue received by the state treasurer under this section shall be credited to the general fund. The auditor's collection fee shall be deposited in the county current expense fund. A duplicate of the county auditor's transmittal report to the state treasurer shall be forwarded forthwith to the department of revenue.
     (5) Any applicant who has paid use tax to a county auditor under this section may apply to the department of revenue for refund thereof if he or she has reason to believe that such tax was not legally due and owing. No refund shall be allowed unless application therefor is received by the department of revenue within the statutory period for assessment of taxes, penalties, or interest prescribed by RCW 82.32.050(3). Upon receipt of an application for refund the department of revenue shall consider the same and issue its order either granting or denying it and if refund is denied the taxpayer shall have the right of appeal as provided in RCW 82.32.170, 82.32.180 and 82.32.190.
     (6) The provisions of this section shall be construed as cumulative of other methods prescribed in chapters 82.04 to 82.32 RCW, inclusive, for the collection of the tax imposed by this chapter. The department of revenue shall have power to promulgate such rules as may be necessary to administer the provisions of this section. Any duties required by this section to be performed by the county auditor may be performed by the director of licensing but no collection fee shall be deductible by said director in remitting use tax revenue to the state treasurer.
     (7) The use tax revenue collected on the rate provided in RCW 82.08.020(3) shall be deposited in the multimodal transportation account under RCW 47.66.070.

Sec. 304   RCW 82.08.064 and 2000 c 104 s 3 are each amended to read as follows:
     (1) A sales and use tax rate change under this chapter or chapter 82.12 RCW shall be imposed (((1))) (a) no sooner than seventy-five days after its enactment into law and (((2))) (b) only on the first day of January, April, July, or October.
     (2) Subsection (1) of this section does not apply to the tax rate change in section 301 of this act.

PART IV - MOTOR AND SPECIAL FUEL TAXES

Sec. 401   RCW 82.36.025 and 1999 c 269 s 16 and 1999 c 94 s 29 are each reenacted and amended to read as follows:
     (1) A motor vehicle fuel tax rate of twenty-three cents per gallon ((shall apply)) applies to the sale, distribution, or use of motor vehicle fuel.
     (2) Beginning July 1, 2003, an additional and cumulative motor fuel tax rate of five cents per gallon applies to the sale, distribution, or use of motor vehicle fuel. This subsection (2) expires when the bonds issued for transportation 2003 projects are retired.

Sec. 402   RCW 82.38.030 and 2002 c 183 s 2 are each amended to read as follows:
     (1) There is hereby levied and imposed upon special fuel users a tax at the rate ((computed in the manner provided in RCW 82.36.025 on each)) 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) ((The tax)) 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 imposed on special fuel users. This subsection (2) expires when the bonds issued for transportation 2003 projects are retired.
     (3) Taxes are
imposed ((by subsection (1) of this section is 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 to a special fuel distributor 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 distributor 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 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 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) 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;
     (f) 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) Dyed special fuel is held for sale, sold, used, or is intended to be used in violation of this chapter;
     (h) Special fuel purchased by an international fuel tax agreement licensee under RCW 82.38.320 is used on a highway; and
     (i) Special fuel is sold by a licensed special fuel supplier to a special fuel distributor, special fuel importer, or special fuel blender and the special fuel is not removed from the bulk transfer-terminal system.
     (((3))) (4) The tax imposed by this chapter, if required to be collected by the licensee, is held in trust by the licensee until paid to the department, and a licensee who appropriates or converts the tax collected to his or her own use or to any use other than the payment of the tax to the extent that the money required to be collected is not available for payment on the due date as prescribed in this chapter is guilty of a felony, or gross misdemeanor in accordance with the theft and anticipatory provisions of Title 9A RCW. A person, partnership, corporation, or corporate officer who fails to collect the tax imposed by this section, or who has collected the tax and fails to pay it to the department in the manner prescribed by this chapter, is personally liable to the state for the amount of the tax.

Sec. 403   RCW 46.68.090 and 1999 c 269 s 2 and 1999 c 94 s 6 are each reenacted and amended to read as follows:
     (1) All moneys that have accrued or may accrue to the motor vehicle fund from the motor vehicle fuel tax and special fuel tax shall be first expended for purposes enumerated in (a) and (b) of this subsection. The remaining net tax amount shall be distributed monthly by the state treasurer in ((the proportions set forth in (c) through (l))) accordance with subsections (2), (3), and (4) of this ((subsection)) section.
     (a) For payment of refunds of motor vehicle fuel tax and special fuel tax that has been paid and is refundable as provided by law;
     (b) For payment of amounts to be expended pursuant to appropriations for the administrative expenses of the offices of state treasurer, state auditor, and the department of licensing of the state of Washington in the administration of the motor vehicle fuel tax and the special fuel tax, which sums shall be distributed monthly((;)).
     (((c))) (2) All of the remaining net tax amount collected under RCW 82.36.025(1) and 82.38.030(1) shall be distributed as set forth in (a) through (j) of this section.
     (a)
For distribution to the motor vehicle fund an amount equal to 44.387 percent to be expended for highway purposes of the state as defined in RCW 46.68.130;
     (((d))) (b) For distribution to the special category C account, hereby created in the motor vehicle fund, an amount equal to 3.2609 percent to be expended for special category C projects. Special category C projects are category C projects that, due to high cost only, will require bond financing to complete construction.
     The following criteria, listed in order of priority, shall be used in determining which special category C projects have the highest priority:
     (i) Accident experience;
     (ii) Fatal accident experience;
     (iii) Capacity to move people and goods safely and at reasonable speeds without undue congestion; and
     (iv) Continuity of development of the highway transportation network.
     Moneys deposited in the special category C account in the motor vehicle fund may be used for payment of debt service on bonds the proceeds of which are used to finance special category C projects under this subsection (((1)(d))) (2)(b);
     (((e))) (c) For distribution to the Puget Sound ferry operations account in the motor vehicle fund an amount equal to 2.3283 percent;
     (((f))) (d) For distribution to the Puget Sound capital construction account in the motor vehicle fund an amount equal to 2.3726 percent;
     (((g))) (e) For distribution to the urban arterial trust account in the motor vehicle fund an amount equal to 7.5597 percent;
     (((h))) (f) For distribution to the transportation improvement account in the motor vehicle fund an amount equal to 5.6739 percent and expended in accordance with RCW 47.26.086;
     (((i))) (g) For distribution to the cities and towns from the motor vehicle fund an amount equal to 10.6961 percent in accordance with RCW 46.68.110;
     (((j))) (h) For distribution to the counties from the motor vehicle fund an amount equal to 19.2287 percent: (i) Out of which there shall be distributed from time to time, as directed by the department of transportation, those sums as may be necessary to carry out the provisions of RCW 47.56.725; and (ii) less any amounts appropriated to the county road administration board to implement the provisions of RCW 47.56.725(4), with the balance of such county share to be distributed monthly as the same accrues for distribution in accordance with RCW 46.68.120;
     (((k))) (i) For distribution to the county arterial preservation account, hereby created in the motor vehicle fund an amount equal to 1.9565 percent. These funds shall be distributed by the county road administration board to counties in proportions corresponding to the number of paved arterial lane miles in the unincorporated area of each county and shall be used for improvements to sustain the structural, safety, and operational integrity of county arterials. The county road administration board shall adopt reasonable rules and develop policies to implement this program and to assure that a pavement management system is used;
     (((l))) (j) For distribution to the rural arterial trust account in the motor vehicle fund an amount equal to 2.5363 percent and expended in accordance with RCW 36.79.020.
     (((2))) (3) One hundred percent of the net tax amount collected under RCW 82.36.025(2) and 82.38.030(2) shall be distributed to the transportation 2003 account (nickel account).
     (4)
Nothing in this section or in RCW 46.68.130 may be construed so as to violate any terms or conditions contained in any highway construction bond issues now or hereafter authorized by statute and whose payment is by such statute pledged to be paid from any excise taxes on motor vehicle fuel and special fuels.

Sec. 404   RCW 46.68.110 and 1999 c 269 s 3 and 1999 c 94 s 9 are each reenacted and amended to read as follows:
     Funds credited to the incorporated cities and towns of the state as set forth in RCW 46.68.090(((1)(i))) (2)(g) shall be subject to deduction and distribution as follows:
     (1) One and one-half percent of such sums distributed under RCW 46.68.090(2)(g) shall be deducted monthly as such sums are credited and set aside for the use of the department of transportation for the supervision of work and expenditures of such incorporated cities and towns on the city and town streets thereof, including the supervision and administration of federal-aid programs for which the department of transportation has responsibility: PROVIDED, That any moneys so retained and not expended shall be credited in the succeeding biennium to the incorporated cities and towns in proportion to deductions herein made;
     (2) Thirty-three one-hundredths of one percent of such funds distributed under RCW 46.68.090(2)(g) shall be deducted monthly, as such funds accrue, and set aside for the use of the department of transportation for the purpose of funding the cities' share of the costs of highway jurisdiction studies and other studies. Any funds so retained and not expended shall be credited in the succeeding biennium to the cities in proportion to the deductions made;
     (3) One percent of such funds distributed under RCW 46.68.090(2)(g) shall be deducted monthly, as such funds accrue, to be deposited in the urban arterial trust account, to implement the city hardship assistance program, as provided in RCW 47.26.164. However, any moneys so retained and not required to carry out the program as of July 1st of each odd-numbered year thereafter, shall be provided within sixty days to the treasurer and distributed in the manner prescribed in subsection (5) of this section;
     (4) After making the deductions under subsections (1) through (3) of this section and RCW 35.76.050, 31.86 percent of the fuel tax distributed to the cities and towns in RCW 46.68.090(((1)(i))) (2)(g) shall be allocated to the incorporated cities and towns in the manner set forth in subsection (5) of this section and subject to deductions in subsections (1), (2), and (3) of this section, subject to RCW 35.76.050, to be used exclusively for: The construction, improvement, chip sealing, seal-coating, and repair for arterial highways and city streets as those terms are defined in RCW 46.04.030 and 46.04.120; the maintenance of arterial highways and city streets for those cities with a population of less than fifteen thousand; or the payment of any municipal indebtedness which may be incurred in the construction, improvement, chip sealing, seal-coating, and repair of arterial highways and city streets; and
     (5) The balance remaining to the credit of incorporated cities and towns after such deduction shall be apportioned monthly as such funds accrue among the several cities and towns within the state ratably on the basis of the population last determined by the office of financial management.

Sec. 405   RCW 82.38.035 and 2001 c 270 s 7 are each amended to read as follows:
     (1) A licensed supplier shall remit tax on special fuel to the department as provided in RCW 82.38.030(((2)(a))) (3)(a). On a two-party exchange, or buy-sell agreement between two licensed suppliers, the receiving exchange partner or buyer shall remit the tax.
     (2) A refiner shall remit tax to the department on special fuel removed from a refinery as provided in RCW 82.38.030(((2)(b))) (3)(b).
     (3) An importer shall remit tax to the department on special fuel imported into this state as provided in RCW 82.38.030(((2)(c))) (3)(c).
     (4) A blender shall remit tax to the department on the removal or sale of blended special fuel as provided in RCW 82.38.030(((2)(e))) (3)(e).
     (5) A dyed special fuel user shall remit tax to the department on the use of dyed special fuel as provided in RCW 82.38.030(((2)(f))) (3)(f).

Sec. 406   RCW 82.38.047 and 1998 c 176 s 55 are each amended to read as follows:
     A terminal operator is jointly and severally liable for remitting the tax imposed under RCW 82.38.030(((1))) if, in connection with the removal of special fuel that is not dyed or marked in accordance with internal revenue service requirements, the terminal operator provides a person with a bill of lading, shipping paper, or similar document indicating that the special fuel is dyed or marked in accordance with internal revenue service requirements.

Sec. 407   RCW 46.09.170 and 1995 c 166 s 9 are each amended to read as follows:
     (1) From time to time, but at least once each year, the state treasurer shall refund from the motor vehicle fund one percent of the motor vehicle fuel tax revenues collected under chapter 82.36 RCW, based on ((the)) a tax rate ((in effect January 1, 1990)) of: (a) Nineteen cents per gallon of motor vehicle fuel from July 1, 2003, through June 30, 2005; (b) twenty cents per gallon of motor vehicle fuel from July 1, 2005, through June 30, 2007; (c) twenty-one cents per gallon of motor vehicle fuel from July 1, 2007, through June 30, 2009; (d) twenty-two cents per gallon of motor vehicle fuel from July 1, 2009, through June 30, 2011; and (e) twenty-three cents per gallon of motor vehicle fuel beginning July 1, 2011, and thereafter, less proper deductions for refunds and costs of collection as provided in RCW 46.68.090. The treasurer shall place these funds in the general fund as follows:
     (((a))) (i) Forty percent shall be credited to the ORV and nonhighway vehicle account and administered by the department of natural resources solely for planning, maintenance, and management of ORV recreation facilities, nonhighway roads, and nonhighway road recreation facilities. The funds under this subsection shall be expended in accordance with the following limitations:
     (((i))) (A) Not more than five percent may be expended for information programs under this chapter;
     (((ii))) (B) Not less than ten percent and not more than fifty percent may be expended for ORV recreation facilities;
     (((iii))) (C) Not more than twenty-five percent may be expended for maintenance of nonhighway roads;
     (((iv))) (D) Not more than fifty percent may be expended for nonhighway road recreation facilities;
     (((v))) (E) Ten percent shall be transferred to the interagency committee for outdoor recreation for grants to law enforcement agencies in those counties where the department of natural resources maintains ORV facilities. This amount is in addition to those distributions made by the interagency committee for outdoor recreation under (((d)(i))) (e)(iv)(A) of this subsection;
     (((b))) (ii) Three and one-half percent shall be credited to the ORV and nonhighway vehicle account and administered by the department of fish and wildlife solely for the acquisition, planning, development, maintenance, and management of nonhighway roads and recreation facilities;
     (((c))) (iii) Two percent shall be credited to the ORV and nonhighway vehicle account and administered by the parks and recreation commission solely for the maintenance and management of ORV use areas and facilities; and
     (((d))) (iv) Fifty-four and one-half percent, together with the funds received by the interagency committee for outdoor recreation under RCW 46.09.110, shall be credited to the nonhighway and off-road vehicle activities program account to be administered by the committee for planning, acquisition, development, maintenance, and management of ORV recreation facilities and nonhighway road recreation facilities; ORV user education and information; and ORV law enforcement programs. The funds under this subsection shall be expended in accordance with the following limitations:
     (((i))) (A) Not more than twenty percent may be expended for ORV education, information, and law enforcement programs under this chapter;
     (((ii))) (B) Not less than an amount equal to the funds received by the interagency committee for outdoor recreation under RCW 46.09.110 and not more than sixty percent may be expended for ORV recreation facilities;
     (((iii))) (C) Not more than twenty percent may be expended for nonhighway road recreation facilities.
     (2) On a yearly basis an agency may not, except as provided in RCW 46.09.110, expend more than ten percent of the funds it receives under this chapter for general administration expenses incurred in carrying out this chapter.

Sec. 408   RCW 46.10.170 and 1994 c 262 s 4 are each amended to read as follows:
     From time to time, but at least once each four years, the department shall determine the amount of moneys paid to it as motor vehicle fuel tax that is tax on snowmobile fuel. Such determination shall use one hundred thirty-five gallons as the average yearly fuel usage per snowmobile, the number of registered snowmobiles during the calendar year under determination, and ((the)) a fuel tax rate ((in effect January 1, 1990)) of: (1) Nineteen cents per gallon of motor vehicle fuel from July 1, 2003, through June 30, 2005; (2) twenty cents per gallon of motor vehicle fuel from July 1, 2005, through June 30, 2007; (3) twenty-one cents per gallon of motor vehicle fuel from July 1, 2007, through June 30, 2009; (4) twenty-two cents per gallon of motor vehicle fuel from July 1, 2009, through June 30, 2011; and (5) twenty-three cents per gallon of motor vehicle fuel beginning July 1, 2011, and thereafter.

Sec. 409   RCW 79A.25.070 and 2000 c 11 s 73 are each amended to read as follows:
     Upon expiration of the time limited by RCW 82.36.330 for claiming of refunds of tax on marine fuel, the state of Washington shall succeed to the right to such refunds. The director of licensing, after taking into account past and anticipated claims for refunds from and deposits to the marine fuel tax refund account and the costs of carrying out the provisions of RCW 79A.25.030, shall request the state treasurer to transfer monthly from the marine fuel tax refund account an amount equal to the proportion of the moneys in the account representing ((the)) a motor vehicle fuel tax rate ((under RCW 82.36.025 in effect on January 1, 1990)) of: (1) Nineteen cents per gallon of motor vehicle fuel from July 1, 2003, through June 30, 2005; (2) twenty cents per gallon of motor vehicle fuel from July 1, 2005, through June 30, 2007; (3) twenty-one cents per gallon of motor vehicle fuel from July 1, 2007, through June 30, 2009; (4) twenty-two cents per gallon of motor vehicle fuel from July 1, 2009, through June 30, 2011; and (5) twenty-three cents per gallon of motor vehicle fuel beginning July 1, 2011, and thereafter, to the recreation resource account and the remainder to the motor vehicle fund.

PART V - OPTIONAL LICENSE PLATE FEE

Sec. 501   RCW 46.16.233 and 2000 c 37 s 1 are each amended to read as follows:
     (1) Except for those license plates issued under RCW 46.16.305(1) before January 1, 1987, under RCW 46.16.305(3), and to commercial vehicles with a gross weight in excess of twenty-six thousand pounds, effective with vehicle registrations due or to become due on January 1, 2001, all vehicle license plates must be issued on a standard background, as designated by the department. Additionally, to ensure maximum legibility and reflectivity, the department shall periodically provide for the replacement of license plates, except for commercial vehicles with a gross weight in excess of twenty-six thousand pounds. Frequency of replacement shall be established in accordance with empirical studies documenting the longevity of the reflective materials used to make license plates.
     (2) By November 1, 2003, in providing for the periodic replacement of license plates, the department shall offer to vehicle owners the option of retaining their current license plate numbers. The department shall charge a retention fee of twenty dollars if this option is exercised. Revenue generated from the retention fee must be deposited into the multimodal transportation account.

NEW SECTION.  Sec. 502   A new section is added to chapter 46.16 RCW to read as follows:
     The department shall offer license plate design services to organizations that are sponsoring a new special license plate series or are seeking to redesign the appearance of an existing special license plate series that they sponsored. In providing this service, the department must work with the requesting organization in determining the specific qualities of the new plate design and must provide full design services to the organization. The department shall collect from the requesting organization a fee of one thousand five hundred dollars for providing license plate design services. This fee includes one original license plate design and up to five additional renditions of the original design. If the organization requests the department to provide further renditions, in addition to the five renditions provided for under the original fee, the department shall collect an additional fee of five hundred dollars per rendition. All revenue collected under this section must be deposited into the multimodal transportation account.

PART VI - ACCOUNT CREATION

NEW SECTION.  Sec. 601   A new section is added to chapter 46.68 RCW to read as follows:
     (1) The transportation 2003 account (nickel account) is hereby 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 identified as transportation 2003 projects or improvements in the omnibus transportation budget and to pay the principal and interest on the bonds authorized for transportation 2003 projects or improvements. Upon completion of the projects or improvements identified as transportation 2003 projects or improvements, moneys deposited in this account must only be used to pay the principal and interest on the bonds authorized for transportation 2003 projects or improvements, and any funds in the account in excess of the amount necessary to make the principal and interest payments may be used for maintenance on the completed projects or improvements.
     (2) The "nickel account" means the transportation 2003 account.

Sec. 602   RCW 43.84.092 and 2002 c 242 s 2, 2002 c 114 s 24, and 2002 c 56 s 402 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:
     (a) 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 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 common school construction fund, 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 retirement systems expense 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 emergency reserve fund, the federal forest revolving account, the health services account, the public health services account, the health system capacity account, the personal health services account, the state higher education construction account, the higher education construction account, the highway infrastructure 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 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 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 Puyallup tribal settlement account, the regional transportation investment district account, the resource management cost account, the site closure 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 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 infrastructure account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the volunteer fire fighters' and reserve officers' relief and pension principal fund, the volunteer fire fighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and fire fighters' system plan 1 retirement account, the Washington law enforcement officers' and fire fighters' system 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)(a) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (b) The following accounts and funds shall receive eighty percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The aeronautics account, the aircraft search and rescue account, the county arterial preservation account, the department of licensing services account, the essential rail assistance account, the ferry bond retirement fund, the grade crossing protective fund, the high capacity transportation account, the highway bond retirement fund, the highway safety account, the motor vehicle fund, the motorcycle safety education account, the pilotage account, the public transportation systems account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the recreational vehicle account, the rural arterial trust account, the safety and education account, the special category C account, the state patrol highway 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, and the urban arterial trust account.
     (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.

PART VII - MISCELLANEOUS

NEW SECTION.  Sec. 701   Part headings used in this act are not any part of the law.

NEW SECTION.  Sec. 702   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. 703   Sections 301 through 602 of this act take effect July 1, 2003, and sections 201 and 202 of this act take effect August 1, 2003.

NEW SECTION.  Sec. 704   Section 201 of this act is effective with registrations that are due or will become due August 1, 2003, and thereafter.

     *NEW SECTION.  Sec. 705   Part V of this act is null and void if House Bill No. 2065 becomes law by June 30, 2003.
     *Sec. 705 was vetoed. See message at end of chapter.


         Passed by the House April 26, 2003.
         Passed by the Senate April 26, 2003.
         Approved by the Governor May 19, 2003, with the exception of certain items that were vetoed.
         Filed in Office of Secretary of State May 19, 2003.

     Note: Governor's explanation of partial veto is as follows:

"I am returning herewith, without my approval as to section 705, Engrossed Substitute House Bill No. 2231 entitled:

     "AN ACT Relating to transportation and financing;"

Engrossed Substitute House Bill No. 2231 is the transportation revenue bill that will support the new transportation projects and programs appropriated in Engrossed Substitute House Bill No. 1163, the 2003-05 transportation budget.

In approving and signing this bill, with the exception of section 705 as noted below, I am acting on the understanding that the Washington Constitution exempts this bill from a referendum petition, and that the legislature in enacting the bill did not intend that it be subject to referendum. The legislature could not have considered the bill subject to referendum because it declared most sections of the act effective on July 1, 2003. Any other view would be inconsistent with the Washington Constitution, which provides that no bill subject to referendum shall take effect until ninety days after adjournment of the session during which it was enacted.

In addition, the bill contains a legislative finding that the state's transportation system is in critical need of repair, restoration, and enhancement, and that the revenues generated by this act are necessary for state transportation projects and services. Although an initiative can propose new legislation on almost any subject, under the Washington Constitution a referendum petition cannot suspend the operation of a law necessary for the immediate preservation of the public peace, health or safety, or the support of state government and its existing public institutions.

Part V of this bill provides that for a fee of twenty dollars, vehicle owners may retain their current license plate number upon replacement. Part V also sets fees for the Department of Licensing design of special license plates. The fees generated by Part V are to be deposited into the multimodal transportation account. Section 705 of this bill would have provided that these provisions are null and void if House Bill No. 2065, an act relating to license plate technology, becomes law by June 30, 2003. Given that I prefer the distribution of the fee revenues in Part V of this bill to that prescribed by House Bill No. 2065, I have vetoed section 705.

For this reason, I have vetoed section 705 of Engrossed Substitute House Bill No. 2231.

With the exception of section 705, Engrossed Substitute House Bill No. 2231 is approved."