BILL REQ. #:  H-4453.1 

Read first time 01/19/10.   Referred to Committee on Finance.

     AN ACT Relating to adjusting the oil spill response tax and oil spill administration tax; amending RCW 82.23B.010, 82.23B.020, 82.23B.030, 82.23B.040, 82.23B.045, 82.23B.050, 90.56.500, 90.56.510, and 82.23B.901; adding a new section to chapter 82.23B RCW; creating a new section; decodifying RCW 82.23B.060, 82.23B.900, and 82.23B.902; and providing an effective date.

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

NEW SECTION.  Sec. 1   The legislature declares that Washington's waters are unique and have irreplaceable economic and environmental value for the citizens of the state. Washington's waters, including Puget Sound which is an estuary of national significance, provide critical habitat for numerous and diverse marine life and wildlife of which some are considered threatened or endangered. The waters also provide a major source of recreation, commercial fishing, tourism, and high quality of life for Washington's citizens. Washington's economy is highly dependent on the continued health of these waters and adjacent environments.
     The legislature finds that the transporting and handling of oil and petroleum products upon and near Washington's waters creates a serious potential hazard to these important natural resources and the economy. The state's oil spill prevention, preparedness, response, and environmental restoration programs have protected these waters since 1990. The legislature therefore finds that in order to maintain its priority focus on the goal of zero spills and further protect these waters when spills occur, continued adequate funding is necessary. It is the legislature's intent that the state's oil spill, prevention, preparedness, response, and environmental restoration activities be sufficiently funded to maintain a world-class capability.

Sec. 2   RCW 82.23B.010 and 1992 c 73 s 6 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Barrel" means a unit of measurement of volume equal to forty-two United States gallons of crude oil or petroleum product.
     (2) "Bulk oil terminal" means a marine terminal or facility of any kind, other than a waterborne vessel, that is used for transferring crude oil or petroleum products to or from a pipeline or waterborne vessel or barge.
     (3) "Crude oil" means any naturally occurring liquid hydrocarbons at atmospheric temperature and pressure coming from the earth, including condensate and natural gasoline.
     (((3))) (4) "Department" means the department of revenue.
     (((4))) (5) "Marine terminal" means a facility of any kind, other than a waterborne vessel, that is used for transferring crude oil or petroleum products to or from a waterborne vessel or barge.
     (((5))) (6) "Navigable waters" means those waters of the state and their adjoining shorelines that are subject to the ebb and flow of the tide, including the Columbia and Snake rivers.
     (((6))) (7) "Person" has the meaning provided in RCW 82.04.030.
     (((7))) (8) "Petroleum product" means any liquid hydrocarbons at atmospheric temperature and pressure that are the product of the fractionation, distillation, or other refining or processing of crude oil, and that are used as, useable as, or may be refined as a fuel or fuel blendstock, including but not limited to, gasoline, diesel fuel, aviation fuel, bunker fuel, and fuels containing a blend of alcohol and petroleum.
     (((8))) (9) "Pipeline" means any conveyance system capable of transporting ten thousand gallons or more per day of crude oil or petroleum products.
     (10) "Taxpayer" means the person owning crude oil or petroleum products immediately after receipt of the same into the storage tanks of a ((marine)) bulk oil terminal in this state from a waterborne vessel ((or)), barge, or pipeline and who is liable for the taxes imposed by this chapter.
     (((9))) (11) "Waterborne vessel or barge" means any ship, barge, or other watercraft capable of travelling on the navigable waters of this state and capable of transporting any crude oil or petroleum product in quantities of ten thousand gallons or more for purposes other than providing fuel for its motor or engine.

Sec. 3   RCW 82.23B.020 and 2006 c 256 s 2 are each amended to read as follows:
     (1) An oil spill response tax is imposed on ((the privilege of receiving)) crude oil or petroleum products received at a ((marine)) bulk oil terminal within this state from a pipeline or from a waterborne vessel or barge operating on the navigable waters of this state. The tax imposed in this section is levied upon the owner of the crude oil or petroleum products immediately after receipt of the same into the storage tanks of a ((marine)) bulk oil terminal from a pipeline or a waterborne vessel or barge at the rate of one cent per barrel of crude oil or petroleum product received.
     (2) In addition to the tax imposed in subsection (1) of this section, an oil spill administration tax is imposed on ((the privilege of receiving)) crude oil or petroleum products received at a ((marine)) bulk oil terminal within this state from a pipeline or a waterborne vessel or barge operating on the navigable waters of this state. The tax imposed in this section is levied upon the owner of the crude oil or petroleum products immediately after receipt of the same into the storage tanks of a ((marine)) bulk oil terminal from a pipeline or a waterborne vessel or barge at the rate of ((four)) six cents per barrel of crude oil or petroleum product.
     (3) The taxes imposed by this chapter ((shall)) must be collected by the ((marine)) bulk oil terminal operator from the taxpayer. If any person charged with collecting the taxes fails to bill the taxpayer for the taxes, or in the alternative has not notified the taxpayer in writing of the ((imposition of the)) taxes imposed, or having collected the taxes, fails to pay them to the department in the manner prescribed by this chapter, whether such failure is the result of the person's own acts or the result of acts or conditions beyond the person's control, he or she ((shall)), nevertheless, ((be)) is personally liable to the state for the amount of the taxes. Payment of the taxes by the owner to a ((marine)) bulk oil terminal operator ((shall)) relieves the owner from further liability for the taxes.
     (4) Taxes collected under this chapter ((shall)) must be held in trust until paid to the department. Any person collecting the taxes who appropriates or converts the taxes collected ((shall be)) is guilty of a gross misdemeanor if the money required to be collected is not available for payment on the date payment is due. The taxes required by this chapter to be collected ((shall)) must be stated separately from other charges made by the ((marine)) bulk oil terminal operator in any invoice or other statement of account provided to the taxpayer.
     (5) If a taxpayer fails to pay the taxes imposed by this chapter to the person charged with collection of the taxes and the person charged with collection fails to pay the taxes to the department, the department may, in its discretion, proceed directly against the taxpayer for collection of the taxes.
     (6) The taxes ((shall be)) are due from the ((marine)) bulk oil terminal operator, along with reports and returns on forms prescribed by the department, within twenty-five days after the end of the month in which the taxable activity occurs.
     (7) The amount of taxes, until paid by the taxpayer to the ((marine)) bulk oil terminal operator or to the department, ((shall)) constitutes a debt from the taxpayer to the ((marine)) bulk oil terminal operator. Any person required to collect the taxes under this chapter who, with intent to violate the provisions of this chapter, fails or refuses to do so as required and any taxpayer who refuses to pay any taxes due under this chapter, ((shall be)) is guilty of a misdemeanor as provided in chapter 9A.20 RCW.
     (8) Upon prior approval of the department, the taxpayer may pay the taxes imposed by this chapter directly to the department. The department ((shall)) must give its approval for direct payment under this section whenever it appears, in the department's judgment, that direct payment will enhance the administration of the taxes imposed under this chapter. The department ((shall)) must provide by rule for the issuance of a direct payment certificate to any taxpayer qualifying for direct payment of the taxes. Good faith acceptance of a direct payment certificate by a terminal operator ((shall)) relieves the ((marine)) bulk oil terminal operator from any liability for the collection or payment of the taxes imposed under this chapter.
     (9) All receipts from the tax imposed in subsection (1) of this section ((shall)) must be deposited into the state oil spill response account. All receipts from the tax imposed in subsection (2) of this section ((shall)) must be deposited into the oil spill prevention account.
     (10) Within forty-five days after the end of each calendar quarter, the office of financial management ((shall)) must determine the balance of the oil spill response account as of the last day of that calendar quarter. Balance determinations by the office of financial management under this section are final and ((shall)) may not be used to challenge the validity of any tax imposed under this chapter. The office of financial management ((shall)) must promptly notify the departments of revenue and ecology of the account balance once a determination is made. For each subsequent calendar quarter, the tax imposed by subsection (1) of this section ((shall)) must be imposed during the entire calendar quarter unless:
     (a) Tax was imposed under subsection (1) of this section during the immediately preceding calendar quarter, and the most recent quarterly balance is more than nine million dollars; or
     (b) Tax was not imposed under subsection (1) of this section during the immediately preceding calendar quarter, and the most recent quarterly balance is more than eight million dollars.

Sec. 4   RCW 82.23B.030 and 1992 c 73 s 9 are each amended to read as follows:
     The taxes imposed under this chapter ((shall)) only apply to the first receipt of crude oil or petroleum products at a ((marine)) bulk oil terminal in this state and not to the later transporting and subsequent receipt of the same oil or petroleum product, whether in the form originally received at a ((marine)) bulk oil terminal in this state or after refining or other processing.

Sec. 5   RCW 82.23B.040 and 1992 c 73 s 10 are each amended to read as follows:
     Credit ((shall)) must be allowed against the taxes imposed under this chapter for any crude oil or petroleum products received at a ((marine)) bulk oil terminal and subsequently exported ((from or sold for export)) from the state as a bulk commodity for resale. Petroleum product delivered into the fuel tanks of waterborne vessels or tug boats, airplanes, trains, and other vehicles is not considered as placed into the export stream and is not allowed a credit against the taxes imposed under this chapter.

Sec. 6   RCW 82.23B.045 and 1992 c 73 s 8 are each amended to read as follows:
     (1) Any person having paid the tax imposed by this chapter who uses petroleum products as a consumer for a purpose other than as a fuel may claim refund or credit against the tax imposed under this chapter. For this purpose, the term "consumer" ((shall be)) is defined as provided in RCW 82.04.190.
     (2) Any person having paid the tax imposed by this chapter who uses petroleum products as a component or ingredient in the manufacture of an item which is not a fuel may claim a refund or credit against the tax imposed by this chapter.
     (3) The amount of refund or credit claimed under this section may not exceed the amount of tax paid by the person making such claim on the petroleum products so consumed or used. The refund or credit allowed by this section ((shall)) must be claimed on ((such)) the forms and subject to ((such)) the requirements as the department may prescribe by rule.

Sec. 7   RCW 82.23B.050 and 1991 c 200 s 808 are each amended to read as follows:
     The department ((shall)) must adopt ((such)) rules as may be necessary to enforce and administer the provisions of this chapter. Chapter 82.32 RCW applies to the administration, collection, and enforcement of the taxes levied under this chapter.

Sec. 8   RCW 90.56.500 and 2009 c 11 s 9 are each amended to read as follows:
     (1) The state oil spill response account is created in the state treasury. All receipts from RCW 82.23B.020(1) ((shall)) must be deposited in the account. All costs reimbursed to the state by a responsible party or any other person for responding to a spill of oil ((shall)) must also be deposited in the account. Moneys in the account ((shall)) may be spent only after appropriation. The account is subject to allotment procedures under chapter 43.88 RCW.
     (2) The account ((shall)) must be used exclusively to pay for:
     (a) The costs associated with the response to spills of crude oil or petroleum products into the navigable waters of the state; and
     (b) The costs associated with the department's use of the emergency response towing vessel as described in RCW 88.46.135.
     (3) Payment of response costs under subsection (2)(a) of this section ((shall)) must be limited to spills which the director has determined are likely to exceed fifty thousand dollars.
     (4) Before expending moneys from the account, the director ((shall)) must make reasonable efforts to obtain funding for response costs under subsection (2) of this section from the person responsible for the spill and from other sources, including the federal government.
     (5) Reimbursement for response costs ((shall be)) are allowed only for costs which are not covered by other funds appropriated to the agencies responsible for response activities. Costs associated with the response to spills of crude oil or petroleum products ((shall)) include:
     (a) Natural resource damage assessment and related activities;
     (b) Spill related response, containment, wildlife rescue, cleanup, disposal, and associated costs;
     (c) Interagency coordination and public information related to a response; and
     (d) Appropriate travel, goods and services, contracts, and equipment.

Sec. 9   RCW 90.56.510 and 2000 c 69 s 22 are each amended to read as follows:
     (1) The oil spill prevention account is created in the state treasury. All receipts from RCW 82.23B.020(2) ((shall)) must be deposited in the account. Moneys from the account may be spent only after appropriation. The account is subject to allotment procedures under chapter 43.88 RCW. If, on the first day of any calendar month, the balance of the oil spill response account is greater than nine million dollars and the balance of the oil spill prevention account exceeds the unexpended appropriation for the current biennium, then the tax under RCW 82.23B.020(2) ((shall)) must be suspended on the first day of the next calendar month until the beginning of the following biennium, provided that the tax ((shall)) not be suspended during the last six months of the biennium. If the tax imposed under RCW 82.23B.020(2) is suspended during two consecutive biennia, the department ((shall)) must by November 1st after the end of the second biennium, recommend to the appropriate standing committees an adjustment in the tax rate. For the biennium ending June 30, 1999, and the biennium ending June 30, 2001, the state treasurer may transfer a total of up to one million dollars from the oil spill response account to the oil spill prevention account to support appropriations made from the oil spill prevention account in the omnibus appropriations act adopted not later than June 30, 1999.
     (2) Expenditures from the oil spill prevention account ((shall)) must be used exclusively for the administrative costs related to the purposes of this chapter, and chapters 90.48, 88.40, and 88.46 RCW. Starting with the 1995-1997 biennium, the legislature ((shall)) must give activities of state agencies related to prevention of oil spills priority in funding from the oil spill prevention account. Costs of prevention include the costs of:
     (a) Routine responses not covered under RCW 90.56.500;
     (b) Management and staff development activities;
     (c) Development of rules and policies and the statewide plan provided for in RCW 90.56.060;
     (d) Facility and vessel plan review and approval, drills, inspections, investigations, enforcement, and litigation;
     (e) Interagency coordination and public outreach and education;
     (f) Collection and administration of the tax provided for in chapter 82.23B RCW; and
     (g) Appropriate travel, goods and services, contracts, and equipment.

NEW SECTION.  Sec. 10   A new section is added to chapter 82.23B RCW to read as follows:
     (1) Beginning January 1, 2012, and on January 1st of each year thereafter, the department must adjust the tax imposed in RCW 82.23B.020(2) using the fiscal growth factor, as defined in chapter 43.135 RCW.
     (2) The department must calculate the adjusted tax rate no later than November 1st of the calendar year preceding the January 1st effective date of the adjusted tax.
     (3) To calculate the adjusted tax rate, the department must multiply the amount of the tax rate in effect for the calendar year preceding the January 1st effective date of the adjusted tax by the sum of one plus the fiscal growth factor, expressed as a decimal, for the previous fiscal year. The amount of the adjusted tax must be determined to the third decimal point.

Sec. 11   RCW 82.23B.901 and 1992 c 73 s 44 are each amended to read as follows:
     (1) The amendment of RCW 82.23B.010, 82.23B.020, 82.23B.030, and 82.23B.040 by chapter 73, Laws of 1992, ((shall)) may not be construed as affecting any existing right acquired or liability or obligation incurred under the sections or under any rule or order adopted under the sections, nor as affecting any proceeding instituted under the sections.
     (2) The amendment of RCW 82.23B.045, 82.23B.050, 90.56.500, and 90.56.510 by chapter . . ., Laws of 2010 (this act), may not be construed as affecting any existing right acquired or liability or obligation incurred under the sections or under any rule or order adopted under the sections, nor as affecting any proceeding instituted under the sections.

NEW SECTION.  Sec. 12   RCW 82.23B.060, 82.23B.900, and 82.23B.902 are decodified.

NEW SECTION.  Sec. 13   This act takes effect July 1, 2010.