BILL REQ. #:  H-4182.1 

READ FIRST TIME 02/11/14.   

     AN ACT Relating to derelict and abandoned vessels; amending RCW 79.100.150, 79.100.130, 53.08.310, 84.56.440, 82.49.010, 79.100.060, 79.100.120, and 79.100.100; amending 2013 c 291 s 39 (uncodified); adding new sections to chapter 79.100 RCW; adding a new section to chapter 88.26 RCW; adding a new section to chapter 53.08 RCW; adding a new section to chapter 82.08 RCW; adding a new section to chapter 82.12 RCW; adding a new section to chapter 44.28 RCW; adding a new section to chapter 88.02 RCW; adding a new section to chapter 82.49 RCW; creating new sections; prescribing penalties; providing effective dates; and providing expiration dates.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that section 45, chapter 291, Laws of 2013 required the department of natural resources, in consultation with the department of ecology, to evaluate potential changes to laws and rules related to derelict and abandoned vessels that increase vessel owner responsibility and address challenges associated with the economics of removing vessels from the water.
     (2) The legislature further finds that, during the 2013 legislative interim, the two responsible agencies engaged in a thorough process to satisfy their legislative charge. This process involved exhausting in-state expertise on various topics and reaching out to experts in vessel deconstruction, surety bonding, letters of credit, marine insurance, taxation, federal regulation, similar programs in other states, and more. The process also involved two open invitation public meetings.
     (3) The legislature further finds that a significant number of various and competing options were discussed, analyzed, and ultimately dismissed during the process undertaken by the two agencies. It is the intent of the legislature to capture the recommendations for meeting the goals of increased vessel owner responsibility and addressing the challenges associated with the economics of removing vessels from the water that rose to the top from the process undertaken by the agencies.
     (4) It is the further intent of the legislature that this act serve as the final report due by the department of natural resources under section 45, chapter 291, Laws of 2013.

NEW SECTION.  Sec. 101   A new section is added to chapter 79.100 RCW to read as follows:
     (1) Any individual or company that purchases or otherwise receives a used vessel greater than sixty-five feet in length and more than forty years old must, prior to or concurrent with the transfer of ownership, secure a marine insurance policy consistent with this section. Proof of the marine insurance policy must be provided to:
     (a) The transferor of the vessel upon purchase; and
     (b) If applicable, the department of licensing upon registration or the department of revenue upon the payment of any taxes.
     (2) The transferor of a vessel greater than sixty-five feet in length and more than forty years old has an affirmative duty to ensure that any potential transferee has secured a marine insurance policy consistent with this section prior to or concurrent with the finalization of any sale. Nothing in this section prohibits the sale or other transfer of a vessel greater than sixty-five feet in length and more than forty years old to a transferee that fails to secure a marine insurance policy. However, a transferor that chooses to finalize a sale or other transfer with a transferee not in possession of a marine insurance policy assumes secondary liability for the vessel consistent with RCW 79.100.060 if the vessel is later abandoned by the transferee or becomes derelict prior to a subsequent ownership transfer.
     (3) The marine insurance policy required under this section must be secured by the transferee prior to, or concurrent with, assuming ownership of a vessel greater than sixty-five feet in length and more than forty years old. The marine insurance policy must satisfy the following conditions:
     (a) Have a term of at least twelve months following the transferee's assumption of vessel ownership;
     (b) Provide coverage of an amount that is, unless otherwise provided by the department by rule, at least three hundred thousand dollars;
     (c) Provide, unless otherwise provided by the department by rule, coverage for the removal of the vessel if it should sink and coverage should it cause a pollution event.
     (4) The purchaser of marine insurance under this section may satisfy the requirements of this section through the purchase of multiple policies as necessary.
     (5) The department may, by rule, provide for a purchaser of a vessel to also satisfy the insurance requirements of this section through the posting of adequate security with a financial institution.
     (6) It is a gross misdemeanor for a person required to show proof of insurance under this section to cancel a marine insurance policy obtained consistent with this section prior to the end of the twelfth month of vessel ownership or to a subsequent transfer of ownership, whichever occurs first, without obtaining a marine insurance policy in its place that satisfies the requirements of this section. The department may contact any vessel owner required by this section to have a marine insurance policy to ensure compliance with this section.

Sec. 102   RCW 79.100.150 and 2013 c 291 s 38 are each amended to read as follows:
     (1) A vessel owner must obtain a vessel inspection under this section prior to transferring a vessel that is:
     (a) More than sixty-five feet in length and more than forty years old; and
     (b) Either:
     (i) Is registered or required to be registered under chapter 88.02 RCW; or
     (ii) Is listed or required to be listed under chapter 84.40 RCW.
     (2) If the vessel inspection determines that the vessel is not seaworthy and that the value of the vessel is less than the anticipated costs required to return the vessel to seaworthiness, then the vessel owner may not sell or transfer ownership of the vessel unless:
     (a) The vessel is repaired to a seaworthy state prior to the transfer of ownership; or
     (b) The vessel is being sold for scrap, salvage, or another use that will remove the vessel from state waters.
     (3) Where required under subsection (1) of this section, a vessel owner must provide a copy of the vessel inspection documentation to the transferee and, if the department did not conduct the inspection, to the department prior to the transfer.
     (((3))) (4) Unless rules adopted by the department provide otherwise, the vessel inspection required under this section must be contained in a formal marine survey conducted by a third party to the transaction. The survey must include, at a minimum, a conclusion relating to the seaworthiness of the vessel, an estimate of the vessel's fair market value, and, if applicable, an estimate as to the anticipated cost of repairs necessary to return the vessel to seaworthiness.
     (5) The department may, by rule, allow other forms of vessel condition determinations, such as United States coast guard certificates of inspection, to replace the requirements for a formal marine survey under this section.
     (6) Failure to comply with the requirements of ((subsections (1) and (2) of)) this section will result in the transferor having secondary liability under RCW 79.100.060 if the vessel is later abandoned by the transferee or becomes derelict prior to a subsequent ownership transfer.
     (7) Nothing in this section prevents a vessel owner from removing, dismantling, and lawfully disposing of any vessel lawfully under the vessel owner's control.

Sec. 201   RCW 79.100.130 and 2013 c 291 s 4 are each amended to read as follows:
     (1) A private moorage facility owner, as those terms are defined in RCW 88.26.010, may contract with the department or a local government for the purpose of participating in the derelict vessel removal program.
     (2) If a contract is completed under this section, the department or local government shall serve as the authorized public entity for the removal of a derelict or abandoned vessel from the property of the private moorage facility owner. The contract must provide for the private moorage facility owner to be financially responsible for the removal and disposal costs that are not reimbursed by the department as provided under RCW 79.100.100, and any additional reasonable administrative costs incurred by the department or local government during the removal of the derelict or abandoned vessel.
     (3) Prior to the commencement of any removal ((which)) under this section for which a local government serves as the authorized public entity and that will seek reimbursement from the derelict vessel removal program, the contract and the proposed vessel removal shall be submitted to the department for review and approval. The local government shall use the procedure specified under RCW 79.100.100(((6))).
     (4) If the private moorage facility owner has already seized the vessel under chapter 88.26 RCW and title has reverted to the moorage facility, the moorage facility is not considered the owner under this chapter for purposes of cost recovery for actions taken under this section.
     (5)(a) The department and all local governments have the discretion as to whether to enter into contracts to serve as the authorized public entity under this section for vessels located at a private moorage facility.
     (b) The department may not enter into a contract to serve as the authorized public entity under this section for vessels located at a private moorage facility if the private moorage facility is not in compliance with the mandatory insurance requirements of section 202 of this act.

NEW SECTION.  Sec. 202   A new section is added to chapter 88.26 RCW to read as follows:
     (1) Every private moorage facility operator must:
     (a) Obtain and maintain insurance coverage for the private moorage facility;
     (b) Require, as a condition of moorage, all vessels other than transient vessels to display proof of marine insurance when a moorage agreement is finalized.
     (2) Unless rules adopted by the department require otherwise, insurance maintained by private moorage facility operators and required of moored vessels must:
     (a) Provide coverage at liability limits of at least three hundred thousand dollars per occurrence; and
     (b) Include, at a minimum, general, legal, and pollution liability coverage.
     (3) The purchaser of marine insurance under this section may satisfy the requirements of this section through the purchase of multiple policies as necessary.
     (4) The requirement under this section for private moorage facility operators to require proof of marine insurance from mooring vessels applies at the time a moorage agreement is entered into and at the time of any renewals of the agreement. The private moorage facility operator is not responsible for any change in insurance coverage applicable to the vessel that occurs after the initial agreement is entered into or in the time period between agreement renewals.
     (5) Any private moorage facility operator who fails to satisfy the requirements of this section incurs secondary liability under RCW 79.100.060 for any vessel located at the private moorage facility that meets the definition of derelict vessel or abandoned vessel as those terms are defined in RCW 79.100.010.

NEW SECTION.  Sec. 203   A new section is added to chapter 53.08 RCW to read as follows:
     (1) Every moorage facility operator must:
     (a) Obtain and maintain insurance coverage for the moorage facility;
     (b) Require, as a condition of moorage, all vessels other than transient vessels to display proof of marine insurance.
     (2) Unless rules adopted by the department require otherwise, insurance maintained by moorage facility operators and required of moored vessels must:
     (a) Provide coverage at liability limits of at least three hundred thousand dollars per occurrence; and
     (b) Include, at a minimum, general, legal, and pollution liability coverage.
     (3) The purchaser of marine insurance under this section may satisfy the requirements of this section through the purchase of multiple policies as necessary.
     (4) The requirement under this section for moorage facility operators to require proof of marine insurance from mooring vessels applies at the time a moorage agreement is entered into and at the time of any renewals of the agreement. The moorage facility operator is not responsible for any change in insurance coverage applicable to the vessel that occurs after the initial agreement is entered into or in the time period between agreement renewals.
     (5) Any moorage facility operator who fails to satisfy the requirements of this section incurs secondary liability under RCW 79.100.060 for any vessel located at the moorage facility that meets the definition of derelict vessel or abandoned vessel as those terms are defined in RCW 79.100.010.

Sec. 204   RCW 53.08.310 and 1986 c 260 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this section, section 203 of this act, and RCW 53.08.320.
     (1) "Port charges" mean charges of a moorage facility operator for moorage and storage, and all other charges owing or to become owing under a contract between a vessel owner and the moorage facility operator, or under an officially adopted tariff including, but not limited to, costs of sale and related legal expenses.
     (2) "Vessel" means every species of watercraft or other artificial contrivance capable of being used as a means of transportation on water and which does not exceed two hundred feet in length. "Vessel" includes any trailer used for the transportation of watercraft.
     (3) "Moorage facility" means any properties or facilities owned or operated by a moorage facility operator which are capable of use for the moorage or storage of vessels.
     (4) "Moorage facility operator" means any port district, city, town, metropolitan park district, or county which owns and/or operates a moorage facility.
     (5) "Owner" means every natural person, firm, partnership, corporation, association, or organization, or agent thereof, with actual or apparent authority, who expressly or impliedly contracts for use of a moorage facility.
     (6) "Transient vessel" means a vessel using a moorage facility and which belongs to an owner who does not have a moorage agreement with the moorage facility operator. Transient vessels include, but are not limited to: Vessels seeking a harbor of refuge, day use, or overnight use of a moorage facility on a space-as-available basis.

NEW SECTION.  Sec. 301   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 vessel deconstruction performed at:
     (a) A qualified vessel deconstruction facility; or
     (b) An area over water that has been permitted under section 402 of the clean water act of 1972 (33 U.S.C. Sec. 1342) for vessel deconstruction.
     (2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a)(i) "Vessel deconstruction" means permanently dismantling a vessel, including: Abatement and removal of hazardous materials; the removal of mechanical, hydraulic, or electronic components or other vessel machinery and equipment; and either the cutting apart or disposal, or both, of vessel infrastructure. For the purposes of this subsection, "hazardous materials" includes fuel, lead, asbestos, polychlorinated biphenyls, and oils.
     (ii) "Vessel deconstruction" does not include vessel modification or repair.
     (b) "Qualified vessel deconstruction facility" means structures, including floating structures, that are permitted under section 402 of the clean water act of 1972 (33 U.S.C. Sec. 1342) for vessel deconstruction.
     (3) Sellers making tax-exempt sales under this section must obtain from the purchaser an exemption certificate in a form and manner prescribed by the department. The seller must retain a copy of the certificate for the seller's files. In lieu of an exemption certificate, a seller may capture the relevant data elements as allowed under the streamlined sales and use tax agreement.

NEW SECTION.  Sec. 302   A new section is added to chapter 82.12 RCW to read as follows:
     (1) This chapter does not apply to the use of vessel deconstruction services performed at:
     (a) A qualified vessel deconstruction facility; or
     (b) An area over water that has been permitted under section 402 of the federal clean water act of 1972 (33 U.S.C. Sec. 1342) for vessel deconstruction.
     (2) The definitions in section 301(2) of this act apply to this section.

NEW SECTION.  Sec. 303   A new section is added to chapter 44.28 RCW to read as follows:
     (1) This section is the tax preference performance statement for the tax preference contained in sections 301 and 302 of this act. This performance statement is only intended to be used for subsequent evaluation of this tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
     (2) The legislature categorizes this tax preference as intended to induce certain designated behavior by taxpayers as indicated in RCW 82.32.808(2)(a).
     (3) It is the legislature's specific public policy objective to decrease the number of abandoned and derelict vessels by providing incentives to increase vessel deconstruction in Washington by lowering the cost of deconstruction. It is the legislature's intent to provide businesses engaged in vessel deconstruction a sales and use tax exemption for sales of vessel deconstruction. This incentive will lower the costs associated with vessel deconstruction and encourage businesses to make investments in vessel deconstruction facilities. Pursuant to chapter 43.136 RCW, the joint legislative audit and review committee must review the sales tax exemptions provided under sections 301 and 302 of this act by December 1, 2018.
     (4) If a review finds that the increase in available capacity to deconstruct derelict vessels or a reduction in the average cost to deconstruct vessels has resulted in an increase of the number of derelict vessels removed from Washington's waters as compared to before the effective date of this section, then the legislature intends for the legislative auditor to recommend extending the expiration date of the tax preference.
     (5) In order to obtain the data necessary to perform the review in subsection (3) of this section, the joint legislative audit and review committee should refer to data kept and maintained by the department of natural resources.
     (6) This section expires January 1, 2019.

NEW SECTION.  Sec. 304   Sections 301 and 302 of this act take effect October 1, 2014.

NEW SECTION.  Sec. 401   (1) The legislature finds that:
     (a) Derelict and abandoned vessels are a threat to the safety of the public waterways, an environmental hazard for humans and marine life, and an occupational danger for persons that make their living on the waters of this state;
     (b) Derelict vessel removal fees are imposed when recreational vessels are registered with the department of licensing. The accumulation of these fees is sufficient for the removal and disposal of recreational vessels that become derelict or abandoned;
     (c) Derelict vessel removal fees do not apply to commercial vessels. Former commercial vessels are among the most costly to remove from Washington waters and to dispose of in an environmentally responsible manner. The costs for removing and disposing of these vessels far exceeds the funding provided by the derelict vessel removal fees paid by recreational vessels;
     (d) According to the department of natural resources, as of the effective date of this section, there is a significant backlog of abandoned or derelict vessels that are former commercial vessels; and
     (e) The use of general fund revenue to pay for the removal and disposal of derelict or abandoned vessels places an undue burden on the nonboating public and reduces the revenue available to pay for necessary governmental services.
     (2) The legislature intends for either the owners or operators, or both, of commercial vessels to pay their fair share for the removal of abandoned or derelict vessels by imposing a fee for the moorage of commercial vessels.

NEW SECTION.  Sec. 402   A new section is added to chapter 79.100 RCW to read as follows:
     (1)(a) Except as otherwise provided in (b) of this subsection, an annual derelict vessel removal fee is imposed upon all persons required by RCW 84.40.065 to list any ship or vessel with the department of revenue for state property tax purposes.
     (b) The derelict vessel removal fee imposed in (a) of this subsection does not apply in any year that a person required to list a ship or vessel does not owe the state property tax levied for collection in that year with respect to that ship or vessel.
     (c) The annual derelict vessel removal fee is equal to three dollars per vessel foot measured by extreme length of the vessel, rounded up to the nearest whole foot.
     (2) Each year, the department of revenue must include the amount of the derelict vessel removal fee due under this section for that calendar year in the tax statement required in RCW 84.40.065.
     (3) The person listing a ship or vessel and the owner of the ship or vessel, if not the same person, are jointly and severally liable for the fee imposed in this section.
     (4) The department of revenue must collect the derelict vessel removal fee imposed in this section as provided in RCW 84.56.440.
     (5) All derelict vessel removal fees collected under this section must be deposited into the derelict vessel removal account created in RCW 79.100.100.

Sec. 403   RCW 84.56.440 and 2008 c 181 s 511 are each amended to read as follows:
     (1) The department of revenue shall collect the derelict vessel removal fee imposed under section 402 of this act and all ad valorem taxes upon ships and vessels listed with the department in accordance with RCW 84.40.065, and all applicable interest and penalties on such taxes and fees. The taxes and derelict vessel removal fee shall be due and payable to the department on or before the thirtieth day of April and shall be delinquent after that date.
     (2) If payment of the tax, derelict vessel removal fee, or both, is not received by the department by the due date, there shall be imposed a penalty of five percent of the amount of the unpaid tax and fee; and if the tax ((is)) and fee are not received within thirty days after the due date, there shall be imposed a total penalty of ten percent of the amount of the unpaid tax and fee; and if the tax ((is)) and fee are not received within sixty days after the due date, there shall be imposed a total penalty of twenty percent of the amount of the unpaid tax and fee. No penalty so added shall be less than five dollars.
     (3) Delinquent taxes under this section are subject to interest at the rate set forth in RCW 82.32.050 from the date of delinquency until paid. Delinquent derelict vessel removal fees are also subject to interest at the same rate and in the same manner as provided for delinquent taxes under RCW 82.32.050. Interest or penalties collected on delinquent taxes and derelict vessel removal fees under this section shall be paid by the department into the general fund of the state treasury.
     (4) If upon information obtained by the department it appears that any ship or vessel required to be listed according to the provisions of RCW 84.40.065 is not so listed, the department shall value the ship or vessel and assess against the owner of the vessel the taxes and derelict vessel removal fees found to be due and shall add thereto interest at the rate set forth in RCW 82.32.050 from the original due date of the tax and fee until the date of payment. The department shall notify the vessel owner by mail of the amount and the same shall become due and shall be paid by the vessel owner within thirty days of the date of the notice. If payment is not received by the department by the due date specified in the notice, the department shall add a penalty of ten percent of the tax and fee found due. A person who willfully gives a false listing or willfully fails to list a ship or vessel as required by RCW 84.40.065 shall be subject to the penalty imposed by RCW 84.40.130(2), which shall be assessed and collected by the department.
     (5) Delinquent taxes and fees under this section, along with all penalties and interest thereon, shall be collected by the department according to the procedures set forth in chapter 82.32 RCW for the filing and execution of tax warrants, including the imposition of warrant interest. In the event a warrant is issued by the department for the collection of taxes, derelict vessel removal fees, or both, under this section, the department shall add a penalty of five percent of the amount of the delinquent tax and fee, but not less than ten dollars.
     (6) ((The department shall also collect all delinquent taxes pertaining to ships and vessels appearing on the records of the county treasurers for each of the counties of this state as of December 31, 1993, including any applicable interest or penalties. The provisions of subsection (5) of this section shall apply to the collection of such delinquent taxes.
     (7))) During a state of emergency declared under RCW 43.06.010(12), the department, on its own motion or at the request of any taxpayer affected by the emergency, may grant extensions of the due date of any taxes and fees payable under this section as the department deems proper.
     (7) The department of revenue must withhold the decals required under RCW 88.02.570(10) for failure to pay the state property tax or derelict vessel removal fee collectible under this section.

NEW SECTION.  Sec. 404   Sections 401 through 403 of this act take effect January 1, 2015.

NEW SECTION.  Sec. 501   A new section is added to chapter 88.02 RCW to read as follows:
     (1) A moorage provider that provides long-term moorage must obtain the following information and documentation from persons entering into long-term moorage agreements with the moorage provider:
     (a) The name of the legal owner of the vessel;
     (b) A local contact person and that person's address and telephone number, if different than the owner;
     (c) The owner's address and telephone number;
     (d) The vessel's hull identification number;
     (e) If applicable, the vessel's coast guard registration;
     (f) The vessel's home port;
     (g) The date on which the moorage began;
     (h) The vessel's country or state of registration and registration number; and
     (i) Proof of vessel registration, a written statement of the lessee's intent to register a vessel, or an affidavit in a form and manner approved by the department certifying that the vessel is exempt from state vessel registration requirements as provided by RCW 88.02.570.
     (2) For moorage agreements entered into effective on or after July 1, 2014, a long-term moorage agreement for vessels not registered in this state must include, in a form and manner approved by the department and the department of revenue, notice of state vessel registration requirements as provided by this chapter and tax requirements as provided by chapters 82.08, 82.12, and 82.49 RCW and listing requirements as provided by RCW 84.40.065.
     (3) A moorage provider must maintain records of the information and documents required under this section for at least two years. Upon request, a moorage provider must:
     (a) Permit any authorized agent of a requesting agency to:
     (i) Inspect the moorage facility for vessels that are not registered as required by this chapter or listed as required under RCW 84.40.065; and
     (ii) Inspect and copy records identified in subsection (1) of this section for vessels that the requesting agency determines are not properly registered or listed as required by law; or
     (b) Provide to the requesting agency:
     (i) Information as provided in subsection (1)(a), (c), (d), and (e) of this section; and
     (ii) Information as provided in subsection (1)(b), (f), (g), (h), and (i) of this section for those vessels that the requesting agency subsequently determines are not registered as required by this chapter or listed as required under RCW 84.40.065.
     (4) Requesting agencies must coordinate their requests to ensure that a moorage provider does not receive more than two requests per calendar year. For the purpose of enforcing vessel registration and vessel listing requirements, requesting agencies may share the results of information requests with each other.
     (5) The information required to be collected under this section must be collected at the time the long-term moorage agreement is entered into and at the time of any renewals of the agreement. The moorage provider is not responsible for updating any changes in the information that occurs after the initial agreement is entered into or in the time period between agreement renewals.
     (6) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Long-term moorage" means moorage provided for more than thirty consecutive days.
     (b) "Moorage facility" means any properties or facilities located in this state that are used for the moorage of vessels and are owned or operated by a moorage provider.
     (c) "Moorage facility operator" has the same meaning as defined in RCW 53.08.310.
     (d) "Moorage provider" means any public or private entity that owns or operates any moorage facility, including a moorage facility operator, private moorage facility operator, the state of Washington, or any other person.
     (e) "Private moorage facility operator" has the same meaning as defined in RCW 88.26.010.
     (f) "Requesting agency" means the department, the department of revenue, or the department of natural resources.

NEW SECTION.  Sec. 502   A new section is added to chapter 82.49 RCW to read as follows:
     (1) An owner of a vessel that is not registered as required by chapter 88.02 RCW and for which watercraft excise tax is due under this chapter is liable for a penalty in the following amount:
     (a) One hundred dollars for the owner's first violation;
     (b) Two hundred dollars for the owner's second violation involving the same or any other vessel; or
     (c) Four hundred dollars for the owner's third and successive violations involving the same or any other vessel.
     (2) The department of revenue may collect this penalty under the procedures established in chapter 82.32 RCW. The penalty imposed under this section is in addition to any other civil or criminal penalty imposed by law.

Sec. 503   RCW 82.49.010 and 2010 c 161 s 1044 are each amended to read as follows:
     (1) An excise tax is imposed for the privilege of using a vessel upon the waters of this state, except vessels exempt under RCW 82.49.020. The annual amount of the excise tax is one-half of one percent of fair market value, as determined under this chapter, or five dollars, whichever is greater. Violation of this subsection is a misdemeanor.
     (2) ((Persons who are)) A person who is required under chapter 88.02 RCW to register a vessel in this state and who fails to register the vessel in this state or registers the vessel in another state or foreign country and avoids the Washington watercraft excise tax ((are)) is guilty of a gross misdemeanor and ((are)) is liable for such unpaid excise tax. The department of revenue may assess and collect the unpaid excise tax under chapter 82.32 RCW, including the penalty imposed in section 502 of this act and penalties and interest provided in chapter 82.32 RCW.
     (3) The excise tax upon a vessel registered for the first time in this state shall be imposed for a twelve-month period, including the month in which the vessel is registered, unless the director of licensing extends or diminishes vessel registration periods for the purpose of staggered renewal periods under RCW 88.02.560. A vessel is registered for the first time in this state when the vessel was not registered in this state for the immediately preceding registration year, or when the vessel was registered in another jurisdiction for the immediately preceding year.

Sec. 601   RCW 79.100.060 and 2013 c 291 s 40 are each amended to read as follows:
     (1) The owner of an abandoned or derelict vessel, or any person or entity that has incurred secondary liability ((under RCW 79.100.150)) for an abandoned or derelict vessel under this chapter or section 202 or 203 of this act, is responsible for reimbursing an authorized public entity for all reasonable and auditable costs associated with the removal or disposal of the owner's vessel under this chapter. These costs include, but are not limited to, costs incurred exercising the authority granted in RCW 79.100.030, all administrative costs incurred by the authorized public entity during the procedure set forth in RCW 79.100.040, removal and disposal costs, and costs associated with environmental damages directly or indirectly caused by the vessel. An authorized public entity that has taken temporary possession of a vessel may require that all reasonable and auditable costs associated with the removal of the vessel be paid before the vessel is released to the owner.
     (2) Reimbursement for costs may be sought from an owner, or any person or entity that has incurred secondary liability under ((RCW 79.100.150)) this chapter or section 202 or 203 of this act, who is identified subsequent to the vessel's removal and disposal.
     (3) If the full amount of all costs due to the authorized public entity under this chapter is not paid to the authorized public entity within thirty days after first notifying the responsible parties of the amounts owed, the authorized public entity or the department may bring an action in any court of competent jurisdiction to recover the costs, plus reasonable attorneys' fees and costs incurred by the authorized public entity.

Sec. 602   RCW 79.100.120 and 2013 c 291 s 32 are each amended to read as follows:
     (1) ((A person)) (a) An owner or lien holder seeking to contest an authorized public entity's decision to take temporary possession or custody of a vessel under this chapter, or to contest the amount of reimbursement owed to an authorized public entity under this chapter, may request a hearing in accordance with this section.
     (b) A transferor with secondary liability under this chapter or section 202 or 203 of this act may commence a lawsuit in the superior court for the county in which custody of the vessel was taken to contest the transferor's liability or the amount of reimbursement owed the authorized public entity under this chapter.
     (2)(a) If the contested decision or action was undertaken by a state agency, a written request for a hearing related to the decision or action must be filed with the pollution control hearings board and served on the state agency in accordance with RCW 43.21B.230 (2) and (3) within thirty days of the date the authorized public entity acquires custody of the vessel under RCW 79.100.040, or if the vessel is redeemed before the authorized public entity acquires custody, the date of redemption, or the right to a hearing is deemed waived and the vessel's owner is liable for any costs owed the authorized public entity. In the event of litigation, the prevailing party is entitled to reasonable attorneys' fees and costs.
     (b) Upon receipt of a timely hearing request, the pollution control hearings board shall proceed to hear and determine the validity of the decision to take the vessel into temporary possession or custody and the reasonableness of any towing, storage, or other charges permitted under this chapter. Within five business days after the request for a hearing is filed, the pollution control hearings board shall notify the vessel owner requesting the hearing and the authorized public entity of the date, time, and location for the hearing. Unless the vessel is redeemed before the request for hearing is filed, the pollution control hearings board shall set the hearing on a date that is within ten business days of the filing of the request for hearing. If the vessel is redeemed before the request for a hearing is filed, the pollution control hearings board shall set the hearing on a date that is within sixty days of the filing of the request for hearing.
     (c) Consistent with RCW 43.21B.305, a proceeding brought under this subsection may be heard by one member of the pollution control hearings board, whose decision is the final decision of the board.
     (3)(a) If the contested decision or action was undertaken by a metropolitan park district, port district, city, town, or county, which has adopted rules or procedures for contesting decisions or actions pertaining to derelict or abandoned vessels, those rules or procedures must be followed in order to contest a decision to take temporary possession or custody of a vessel, or to contest the amount of reimbursement owed.
     (b) If the metropolitan park district, port district, city, town, or county has not adopted rules or procedures for contesting decisions or actions pertaining to derelict or abandoned vessels, then ((a person)) an owner or lien holder requesting a hearing under this section must follow the procedure established in subsection (2) of this section.

Sec. 603   RCW 79.100.100 and 2013 c 291 s 2 are each amended to read as follows:
     (1)(a) The derelict vessel removal account is created in the state treasury. All receipts from RCW 79.100.050 and 79.100.060 and those moneys specified in RCW 88.02.640 must be deposited into the account. The account is authorized to receive fund transfers and appropriations from the general fund, deposits from the derelict vessel removal surcharge under RCW 88.02.640(4), deposits under section 402 of this act, as well as gifts, grants, and endowments from public or private sources as may be made from time to time, in trust or otherwise, for the use and benefit of the purposes of this chapter and expend the same or any income according to the terms of the gifts, grants, or endowments provided those terms do not conflict with any provisions of this section or any guidelines developed to prioritize reimbursement of removal projects associated with this chapter.
     (b) Moneys in the account may only be spent after appropriation. Expenditures from the account may only be used by the department for developing and administering the vessel turn-in program created in RCW 79.100.160 and to reimburse authorized public entities for up to ninety percent of the total reasonable and auditable administrative, removal, disposal, and environmental damage costs of abandoned or derelict vessels when the previous owner is either unknown after a reasonable search effort or insolvent. Reimbursement may not be made unless the department determines that the public entity has made reasonable efforts to identify and locate the party responsible for the vessel, or any other person or entity that has incurred secondary liability ((under RCW 79.100.150)) for the vessel under this chapter or section 202 or 203 of this act, regardless of the title of owner of the vessel.
     (c) Funds in the account resulting from transfers from the general fund or from the deposit of funds from the watercraft excise tax as provided for under RCW 82.49.030 must be used to reimburse one hundred percent of costs and should be prioritized for the removal of large vessels.
     (d) Costs associated with the removal and disposal of an abandoned or derelict vessel under the authority granted in RCW 53.08.320 also qualify for reimbursement from the derelict vessel removal account.
     (e) In each biennium, up to twenty percent of the expenditures from the derelict vessel removal account may be used for administrative expenses of the department of licensing and department of natural resources in implementing this chapter.
     (2) Priority for use of this account is for the removal of derelict and abandoned vessels that are in danger of sinking, breaking up, or blocking navigation channels, or that present environmental risks such as leaking fuel or other hazardous substances. The department must develop criteria, in the form of informal guidelines, to prioritize removal projects associated with this chapter, but may not consider whether the applicant is a state or local entity when prioritizing. The guidelines must also include guidance to the authorized public entities as to what removal activities and associated costs are reasonable and eligible for reimbursement.
     (3) The department must keep all authorized public entities apprised of the balance of the derelict vessel removal account and the funds available for reimbursement. The guidelines developed by the department must also be made available to the other authorized public entities. This subsection (3) must be satisfied by utilizing the least costly method, including maintaining the information on the department's internet web site, or any other cost-effective method.
     (4) An authorized public entity may contribute its ten percent of costs that are not eligible for reimbursement by using in-kind services, including the use of existing staff, equipment, and volunteers.
     (5) This chapter does not guarantee reimbursement for an authorized public entity. Authorized public entities seeking certainty in reimbursement prior to taking action under this chapter may first notify the department of their proposed action and the estimated total costs. Upon notification by an authorized public entity, the department must make the authorized public entity aware of the status of the fund and the likelihood of reimbursement being available. The department may offer technical assistance and assure reimbursement for up to two years following the removal action if an assurance is appropriate given the balance of the fund and the details of the proposed action.

Sec. 604   2013 c 291 s 39 (uncodified) is amended to read as follows:
     (1) By December 31, ((2013)) 2014, the department of natural resources shall adopt by rule initial procedures and standards for the vessel inspections required under ((section 38 of this act)) RCW 79.100.150. The procedures and standards must identify the public or private entities authorized to conduct inspections, the required elements of an inspection, and the manner in which inspection results must be documented. The vessel inspection required under this section must be designed to:
     (a) Provide the transferee with current information about the condition of the vessel, including the condition of its hull and key operating systems, prior to the transfer;
     (b) Provide the department of natural resources with information under (a) of this subsection for each applicable vessel and, more broadly, to improve the department's understanding of the condition of the larger, older boats in the state's waters;
     (c) Discourage the future abandonment or dereliction of the vessel; and
     (d) Maximize the efficiency and effectiveness of the inspection process, including with respect to the time and resources of the transferor, transferee, and the state.
     (2) The department of natural resources shall work with appropriate government agencies and stakeholders in designing the inspection process and standards under this section.
     (3) This section expires July 31, ((2014)) 2015.

NEW SECTION.  Sec. 605   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.