"Sec. 12   RCW 46.68.080 and 1961 c 12 s 46.68.080 are each amended to read as follows:
     ((All)) (1) Motor vehicle license fees ((and all)) collected and distributed to the motor vehicle account under RCW 46.16.0621 and 46.16.070 and twenty-three cents per gallon of the motor vehicle fuel tax directly or indirectly paid by the residents of those counties composed entirely of islands and which have neither a fixed physical connection with the mainland nor any state highways on any of the islands of which they are composed, shall be ((paid into)) distributed to the motor vehicle ((fund)) account of the state of Washington and shall monthly, as they accrue, and after deducting therefrom the expenses of issuing such licenses and the cost of collecting such motor vehicle fuel tax, be paid to the county treasurer of each such county to be by him disbursed as hereinafter provided.
     (2) One-half of ((all)) the motor vehicle license fees ((and)) collected and distributed to the motor vehicle account under RCW 46.16.0621 and 46.16.070 and one-half of the twenty-three cents per gallon of the motor vehicle fuel tax directly or indirectly paid by the residents of those counties composed entirely of islands and which have either a fixed physical connection with the mainland or state highways on any of the islands of which they are composed, shall be paid into the motor vehicle fund of the state of Washington and shall monthly, as they accrue, and after deducting therefrom the expenses of issuing such licenses and the cost of collecting such motor vehicle fuel tax, be paid to the county treasurer of each such county to be by him disbursed as hereinafter provided.
     (3) All funds paid to the county treasurer of the counties of either class ((above)) referred to ((as in this section provided)) in subsections (1) and (2) of this section, shall be by such county treasurer distributed and credited to the several road districts of each such county and paid to the city treasurer of each incorporated city and town within each such county, in the direct proportion that the assessed valuation of each such road district and incorporated city and town shall bear to the total assessed valuation of each such county.
     ((The amount of motor vehicle fuel tax paid by the residents of those counties composed entirely of islands shall, for the purposes of this section, be that percentage of the total amount of motor vehicle fuel tax collected in the state that the motor vehicle license fees paid by the residents of counties composed entirely of islands bears to the total motor vehicle license fees paid by the residents of the state.)) (4)(a) For the purposes of the motor vehicle fuel tax determination under subsection (1) of this section, a percentage shall be multiplied by the total amount of motor vehicle fuel tax collected in the state based on the rate of twenty-three cents per gallon. The percentage equals the total amount of motor vehicle license fees paid annually under RCW 46.16.0621 and 46.16.070 by the residents of the county described under subsection (1) of this section, divided by the total amount of motor vehicle license fees paid annually under RCW 46.16.0621 and 46.16.070 by all the residents of the state.
     (b)(i) The amount of motor vehicle fuel tax collected in the state multiplied by the product determined in (b)(ii) of this subsection shall be deposited into the Puget Sound ferry operations account.
     (ii) The product for the purposes of (b)(i) of this subsection is equal to the difference of the aggregate motor vehicle fuel tax rate imposed in RCW 82.36.025, and the rate of twenty-three cents per gallon, multiplied by the percentage calculated under (a) of this subsection.
     (5)(a) For the purposes of the motor vehicle fuel tax determination under subsection (2) of this section, a percentage shall be multiplied by the total amount of motor vehicle fuel tax collected in the state based on the rate of eleven and one-half cents per gallon. The percentage equals the total amount of motor vehicle license fees paid annually under RCW 46.16.0621 and 46.16.070 by the residents of the county described under subsection (2) of this section, divided by the total amount of motor vehicle license fees paid annually under RCW 46.16.0621 and 46.16.070 by all the residents of the state.
     (b)(i) The amount of motor vehicle fuel tax collected in the state multiplied by the product determined in (b)(ii) of this subsection shall be deposited into the Puget Sound ferry operations account.
     (ii) The product for the purposes of (b)(i) of this subsection is equal to the difference of the aggregate motor vehicle fuel tax rate imposed in RCW 82.36.025, and the rate of twenty-three cents per gallon, multiplied by one-half and then further multiplied by the percentage calculated under (a) of this subsection."