BILL REQ. #:  H-2000.3 

READ FIRST TIME 02/24/05.   

     AN ACT Relating to incentives for the use of clean-burning alternative fuels and equipment in student transportation programs; amending RCW 82.38.080; adding new sections to chapter 82.08 RCW; adding new sections to chapter 82.12 RCW; providing an effective date; providing a contingent expiration date; and declaring an emergency.

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

Sec. 1   RCW 82.38.080 and 1998 c 176 s 60 are each amended to read as follows:
     (1) There is exempted from the tax imposed by this chapter, the use of fuel for:
     (a) Street and highway construction and maintenance purposes in motor vehicles owned and operated by the state of Washington, or any county or municipality;
     (b) Publicly owned fire fighting equipment;
     (c) Special mobile equipment as defined in RCW 46.04.552;
     (d) Power pumping units or other power take-off equipment of any motor vehicle which is accurately measured by metering devices that have been specifically approved by the department or which is established by any of the following formulae:
     (i) Pumping propane, or fuel or heating oils or milk picked up from a farm or dairy farm storage tank by a power take-off unit on a delivery truck, at a rate determined by the department: PROVIDED, That claimant when presenting his or her claim to the department in accordance with this chapter, shall provide to the claim, invoices of propane, or fuel or heating oil delivered, or such other appropriate information as may be required by the department to substantiate his or her claim;
     (ii) Operating a power take-off unit on a cement mixer truck or a load compactor on a garbage truck at the rate of twenty-five percent of the total gallons of fuel used in such a truck; or
     (iii) The department is authorized to establish by rule additional formulae for determining fuel usage when operating other types of equipment by means of power take-off units when direct measurement of the fuel used is not feasible. The department is also authorized to adopt rules regarding the usage of on board computers for the production of records required by this chapter;
     (e) Motor vehicles owned and operated by the United States government;
     (f) Heating purposes;
     (g) Moving a motor vehicle on a public highway between two pieces of private property when said moving is incidental to the primary use of the motor vehicle;
     (h) Transportation services for persons with special transportation needs by a private, nonprofit transportation provider regulated under chapter 81.66 RCW;
     (i) Vehicle refrigeration units, mixing units, or other equipment powered by separate motors from separate fuel tanks; and
     (j) The operation of a motor vehicle as a part of or incidental to logging operations upon a highway under federal jurisdiction within the boundaries of a federal area if the federal government requires a fee for the privilege of operating the motor vehicle upon the highway, the proceeds of which are reserved for constructing or maintaining roads in the federal area, or requires maintenance or construction work to be performed on the highway for the privilege of operating the motor vehicle on the highway.
     (2) There is exempted from the tax imposed by this chapter the removal or entry of special fuel under the following circumstances and conditions:
     (a) If it is the removal from a terminal or refinery of, or the entry or sale of, a special fuel if all of the following apply:
     (i) The person otherwise liable for the tax is a licensee other than a dyed special fuel user or international fuel tax agreement licensee;
     (ii) For a removal from a terminal, the terminal is a licensed terminal; and
     (iii) The special fuel satisfies the dyeing and marking requirements of this chapter;
     (b) If it is an entry or removal from a terminal or refinery of taxable special fuel transferred to a refinery or terminal and the persons involved, including the terminal operator, are licensed; and
     (c)(i) If it is a special fuel that, under contract of sale, is shipped to a point outside this state by a supplier by means of any of the following:
     (A) Facilities operated by the supplier;
     (B) Delivery by the supplier to a carrier, customs broker, or forwarding agent, whether hired by the purchaser or not, for shipment to the out-of-state point;
     (C) Delivery by the supplier to a vessel clearing from port of this state for a port outside this state and actually exported from this state in the vessel.
     (ii) For purposes of this subsection (2)(c):
     (A) "Carrier" means a person or firm engaged in the business of transporting for compensation property owned by other persons, and includes both common and contract carriers; and
     (B) "Forwarding agent" means a person or firm engaged in the business of preparing property for shipment or arranging for its shipment.
     (3) Notwithstanding any provision of law to the contrary, every urban passenger transportation system and carriers as defined by chapters 81.68 and 81.70 RCW shall be exempt from the provisions of this chapter requiring the payment of special fuel taxes. For the purposes of this section "urban passenger transportation system" means every transportation system, publicly or privately owned, having as its principal source of revenue the income from transporting persons for compensation by means of motor vehicles and/or trackless trolleys, each having a seating capacity for over fifteen persons over prescribed routes in such a manner that the routes of such motor vehicles and/or trackless trolleys, either alone or in conjunction with routes of other such motor vehicles and/or trackless trolleys subject to routing by the same transportation system, shall not extend for a distance exceeding twenty-five road miles beyond the corporate limits of the county in which the original starting points of such motor vehicles are located: PROVIDED, That no refunds or credits shall be granted on special fuel used by any urban transportation vehicle or vehicle operated pursuant to chapters 81.68 and 81.70 RCW on any trip where any portion of said trip is more than twenty-five road miles beyond the corporate limits of the county in which said trip originated.
     (4)(a) Notwithstanding any provision of law to the contrary, every student transportation program, whether operated by a school district or a commercial chartered bus service, is exempt from the provisions of this chapter requiring the payment of special fuel taxes on the biodiesel fuel portion of a biodiesel blend, on natural gas, and on liquefied petroleum gas.
     (b) For the purposes of this section, the following definitions apply:
     (i) "Biodiesel fuel" means a mono alkyl ester of long chain fatty acids derived from vegetable oils or animal fats for use in compression-ignition engines and that meets the requirements of the American society of testing and materials specification D 6751 in effect as of January 1, 2003.
     (ii) "Biodiesel blend" means fuel that contains at least twenty percent biodiesel fuel by volume.

NEW SECTION.  Sec. 2   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 new alternative fuel vehicles to be used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (2) The tax levied by RCW 82.08.020 does not apply to sales of tangible personal property, or for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the property, including repair and replacement parts, if:
     (a) The property is used to convert vehicles for the purpose of operating on alternative fuels;
     (b) The conversion is performed on a vehicle or engine for which a United States environmental protection agency certificate of conformity or a certification from the California air resources board has been issued for the model year and exhaust and evaporative emissions test groups of the vehicle or engine; and
     (c) The vehicles are used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (3) For the purposes of this section, the following definitions apply:
     (a) "Alternative fuel" means natural gas (compressed or liquid) or liquefied petroleum gas (commonly called propane).
     (b) "New alternative fuel vehicle" means a new motor vehicle, as defined in RCW 46.96.020, originally designed and equipped by the manufacturer to operate exclusively on an alternative fuel.
     (c) "Primarily" means at least fifty percent of total use.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use of new alternative fuel vehicles to be used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (2) The provisions of this chapter do not apply in respect to the use of tangible personal property, or of labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the property, if:
     (a) The property is used to convert vehicles for the purpose of operating on alternative fuels;
     (b) The conversion is performed on a vehicle or engine for which a United States environmental protection agency certificate of conformity or a certification from the California air resources board has been issued for the model year and exhaust and evaporative emissions test groups of the vehicle or engine; and
     (c) The vehicles are used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (3) For the purposes of this section, the definitions in section 2 of this act apply.

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 emissions control equipment, or for labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment, including repair and replacement parts, if the equipment is used to retrofit diesel vehicles that are used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (2) For the purposes of this section, the following definitions apply:
     (a) "Emissions control equipment" means a device with an oxidation catalyst, particulate filter, crankcase ventilation filter, or other means of reducing emissions from diesel vehicles, and that has been verified under the federal environmental protection agency's voluntary diesel retrofit program.
     (b) "Primarily" has the same meaning as provided in section 2 of this act.

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 in respect to the use of emissions control equipment, or of labor and services rendered in respect to installing, repairing, cleaning, altering, or improving the equipment, if the equipment is used to retrofit vehicles that are used primarily in a student transportation program, whether operated by a school district or a commercial chartered bus service.
     (2) For the purposes of this section, the definitions in section 4 of this act apply.

NEW SECTION.  Sec. 6   (1) This act expires the earlier of July 1, 2015, or July 1st of the year following the year in which the department of licensing estimates that the aggregate volume of alternative fuels sold at retail for vehicular purposes represents twenty percent of the aggregate volume of all fuels sold at retail for vehicular purposes.
     (2) In order to calculate the percentage of alternative fuel sales in subsection (1) of this section, the department of licensing may use as a proxy the estimated portion of the tax base of the special fuels tax under chapter 82.38 RCW relating to fuels other than diesel fuel. If exact volumes are unknown, the department may use reasonable methods to derive estimates of volumes. To make the calculation, the department shall convert fuel volumes to gasoline-equivalent gallons, using the method utilized by the United States department of energy in reporting such comparisons as of January 1, 2005.
     (3) The department of licensing is authorized to promulgate rules necessary to implement this section.

NEW SECTION.  Sec. 7   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 July 1, 2005.