BILL REQ. #:  H-5070.2 

Read first time 02/12/10.   Referred to Committee on Finance.

     AN ACT Relating to excise taxes; amending RCW 82.08.020 and 82.08.020; reenacting and amending RCW 43.84.092; adding a new section to chapter 82.04 RCW; adding a new section to chapter 46.68 RCW; creating a new section; providing effective dates; and providing an expiration date.

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

NEW SECTION.  Sec. 1   An unprecedented shortfall in state general fund and transportation revenues has threatened the state's ability to fund vital services and provide adequate transportation infrastructure. Cities, counties, and public transportation systems have also been hurt by the downturn in the economy. For this reason, the legislature is enacting an excise tax equivalent to one percent that will be reduced to one-half of a percent when the state's unemployment decreases to six and five-tenths percent for four continuous months and is eliminated when the unemployment rate decreases to five percent for four continuous months. The additional funding will keep people working, strengthen the safety net for citizens by providing vital needed services, and adding jobs as the economy begins to rebound through investing in the state's economy and infrastructure. The intent is to help people and the economy through the economic crisis, but when the economy has recovered, this tax will no longer be required and will be replaced by revenue being automatically generated through the revitalized economic growth in the state.

Sec. 2   RCW 82.08.020 and 2009 c 469 s 802 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)) must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (3)(a) 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)) must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (((4))) (b) For purposes of this 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.
     (4)(a) Beginning June 30, 2010, there is levied and collected an additional tax of one percent of the selling price on each retail sale in this state. Of the revenue collected under this subsection:
     (i) Eighty percent of the revenue must be deposited in the general fund;
     (ii) Seventeen percent of the revenue must be deposited in the motor vehicle account and must be used for highway construction, preservation, and maintenance; and
     (iii) Three percent of the revenue must be deposited into the multimodal account and must be used for public transportation systems, which include only those systems defined as a "municipality" in RCW 35.58.272. Department of transportation public transportation jointly with public transportation systems must develop a grant program. The program grants must be awarded based upon mutually agreed performance-based outcome criteria. The department of transportation at the end of each biennium must report to the house and senate transportation committees on the performance of the grant program.
     (b)(i) When the state's unemployment rate decreases to six and five-tenths percent for four continuous months, the rate of one percent in this subsection (4) must be reduced to one-half of one percent.
     (ii) When the state's unemployment rate decreases to five percent for four continuous months, no additional tax may be imposed under this subsection (4).
     (5) Beginning on December 8, 2005, 0.16 percent of the taxes collected under subsection (1) of this section ((shall)) must be dedicated to funding comprehensive performance audits required under RCW 43.09.470. The revenue identified in this subsection ((shall)) must be deposited in the performance audits of government account created in RCW 43.09.475.
     (6) The taxes imposed under this chapter ((shall)) apply to successive retail sales of the same property.
     (7)(a) Until January 1, 2011, the tax imposed in subsection (3) of this section and the dedication of revenue provided for in subsection (5) of this section((,)) do not apply with respect to the sales of new passenger cars, light duty trucks, and medium duty passenger vehicles, which utilize hybrid technology and have a United States environmental protection agency estimated highway gasoline mileage rating of at least forty miles per gallon.
     (b) As used in this subsection, "hybrid technology" means propulsion units powered by both electricity and gasoline.
     (8) The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

Sec. 3   RCW 82.08.020 and 2006 c 1 s 3 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)) must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (3)(a) 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)) must be deposited in the multimodal transportation account created in RCW 47.66.070.
     (((4))) (b) For purposes of this 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.
     (4)(a) Beginning June 30, 2010, there is levied and collected an additional tax of one percent of the selling price on each retail sale in this state. Of the revenue collected under this subsection:
     (i) Eighty percent of the revenue must be deposited in the general fund;
     (ii) Seventeen percent of the revenue must be deposited in the motor vehicle account and must be used for highway construction, preservation, and maintenance; and
     (iii) Three percent of the revenue must be deposited into the multimodal account and must be used for public transportation systems, which include only those systems defined as a "municipality" in RCW 35.58.272. Department of transportation public transportation jointly with public transportation systems must develop a grant program. The program grants must be awarded based upon mutually agreed performance-based outcome criteria. The department of transportation at the end of each biennium must report to the house and senate transportation committees on the performance of the grant program.
     (b)(i) When the state's unemployment rate decreases to six and five-tenths percent for four continuous months, the rate of one percent in this subsection (4) must be reduced to one-half of one percent.
     (ii) When the state's unemployment rate decreases to five percent for four continuous months, no additional tax may be imposed under this subsection (4).
     (5) Beginning on December 8, 2005, 0.16 percent of the taxes collected under subsection (1) of this section ((shall)) must be dedicated to funding comprehensive performance audits required under RCW 43.09.470. The revenue identified in this subsection ((shall)) must be deposited in the performance audits of government account created in RCW 43.09.475.
     (6) The taxes imposed under this chapter ((shall)) apply to successive retail sales of the same property.
     (7) The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

NEW SECTION.  Sec. 4   A new section is added to chapter 82.04 RCW to read as follows:
     (1) Upon every person engaging within this state in the business of making sales at retail of motor vehicle fuel or special fuel; as to such persons the amount of tax with respect to the business is equal to the gross proceeds of sales of the business multiplied by the rate of 1.5 percent.
     (2) For the purposes of this section, the following definitions apply:
     (a) "Motor vehicle fuel" has the same meaning as provided in chapter 82.36 RCW; and
     (b) "Special fuel" has the same meaning as provided in chapter 82.38 RCW.
     (3)(a) 0.314 percent received from the excise tax imposed in this section must be distributed to the general fund and 0.686 percent must be distributed to the local government transportation account created in section 5 of this act and must be distributed as follows:
     (i) Fifty percent must be distributed to cities and towns monthly by the state treasurer based on the office of financial management's official population forecast. Funds must be used for transportation with a minimum of fifty percent of the funds dedicated to roadway preservation and maintenance;
     (ii) Fifty percent must be distributed to counties monthly by the state treasurer based on county road miles recognized by the county road administration board. Funds must be used for transportation with a minimum of fifty percent of the funds dedicated to roadway preservation and maintenance.
     (b)(i) When the state's unemployment rate decreases to six and five-tenths percent for four continuous months, the rate of one percent in this subsection (3) must be reduced to one-half of one percent.
     (ii) When the state's unemployment rate decreases to five percent for four continuous months, no additional tax may be imposed under this subsection (3).

NEW SECTION.  Sec. 5   A new section is added to chapter 46.68 RCW to read as follows:
     The local government transportation account is created in the motor vehicle fund. Expenditures from the account must be used by cities, towns, and counties for transportation purposes only.

Sec. 6   RCW 43.84.092 and 2009 c 479 s 31, 2009 c 472 s 5, and 2009 c 451 s 8 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:
     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 aeronautics account, the aircraft search and rescue account, the budget stabilization account, 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 cleanup settlement account, the Columbia river basin water supply development account, the common school construction fund, the county arterial preservation account, 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 licensing services account, the department of retirement systems expense account, the developmental disabilities community trust 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 education legacy trust account, the election account, the energy freedom account, the energy recovery act account, the essential rail assistance account, The Evergreen State College capital projects account, the federal forest revolving account, the ferry bond retirement fund, the freight congestion relief account, the freight mobility investment account, the freight mobility multimodal account, the grade crossing protective fund, the public health services account, the health system capacity account, the personal health services account, the high capacity transportation account, the state higher education construction account, the higher education construction account, the highway bond retirement fund, the highway infrastructure account, the highway safety account, the high occupancy toll lanes operations account, the industrial insurance premium refund account, the judges' retirement account, the judicial retirement administrative account, the judicial retirement principal account, the local government transportation 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 motor vehicle fund, the motorcycle safety education account, 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 pension funding stabilization 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 public transportation systems account, the public works assistance account, the Puget Sound capital construction account, the Puget Sound ferry operations account, the Puyallup tribal settlement account, the real estate appraiser commission account, the recreational vehicle account, the regional mobility grant program account, the resource management cost account, the rural arterial trust account, the rural Washington loan fund, the site closure account, the small city pavement and sidewalk account, the special category C 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 state patrol highway account, the state route number 520 corridor account, 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 2003 account (nickel account), the transportation equipment fund, the transportation fund, the transportation improvement account, the transportation improvement board bond retirement account, the transportation infrastructure account, the transportation partnership account, the traumatic brain injury account, the tuition recovery trust fund, the University of Washington bond retirement fund, the University of Washington building account, the urban arterial trust account, the volunteer firefighters' and reserve officers' relief and pension principal fund, the volunteer firefighters' and reserve officers' administrative fund, the Washington fruit express account, the Washington judicial retirement system account, the Washington law enforcement officers' and firefighters' system plan 1 retirement account, the Washington law enforcement officers' and firefighters' system plan 2 retirement account, the Washington public safety employees' 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) shall first be reduced by the allocation to the state treasurer's service fund pursuant to RCW 43.08.190.
     (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.

NEW SECTION.  Sec. 7   Sections 1, 2, and 4 through 6 of this act take effect July 1, 2010.

NEW SECTION.  Sec. 8   Section 2 of this act expires January 1, 2011.

NEW SECTION.  Sec. 9   Section 3 of this act takes effect January 1, 2011.