HOUSE BILL REPORT

HB 1063

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As Reported by House Committee On:

Community Development, Housing & Tribal Affairs

Title: An act relating to allowing federally recognized tribes with lands held in trust in a county that is west of the Cascade mountain range that borders Puget Sound with a population of at least one hundred eighteen thousand, but less than two hundred fifty thousand, persons to enter into agreements regarding fuel taxes.

Brief Description: Allowing federally recognized tribes with lands held in trust in a county that is west of the Cascade mountain range that borders Puget Sound with a population of at least one hundred eighteen thousand, but less than two hundred fifty thousand, persons to enter into agreements regarding fuel taxes.

Sponsors: Representatives Morris, Lytton, Fitzgibbon, Appleton and Sawyer.

Brief History:

Committee Activity:

Community Development, Housing & Tribal Affairs: 1/25/17, 1/26/17 [DP], 1/23/18, 2/1/18 [DPS];

Transportation: 2/22/17, 2/23/17 [DP].

Brief Summary of Substitute Bill

Allows the Department of Licensing to enter into fuel tax agreements with certain federally recognized tribes with lands held in trust.
Restricts the trust lands that federally recognized tribes with lands held in trust may operate retail stations on to property held in trust on the effective date of the act.

HOUSE COMMITTEE ON COMMUNITY DEVELOPMENT, HOUSING & TRIBAL AFFAIRS

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 4 members: Representatives Ryu, Chair; Macri, Vice Chair; Reeves and Sawyer.

Minority Report: Do not pass. Signed by 3 members: Representatives Barkis, Ranking Minority Member; McCabe, Assistant Ranking Minority Member; Jenkin.

Staff: Kirsten Lee (786-7133).

Background:

Under federal law, absent explicit congressional authorization, states may not impose taxes on a tribe or its members for sales made on tribal lands. In 2007 state legislation was enacted that authorized the Governor to enter into a motor vehicle fuel tax agreement with any federally recognized Indian tribe with a reservation in Washington. The Governor has delegated this authority to the Department of Licensing (DOL).

There are two types of fuel tax agreements: the 75 Percent Refund/25 Percent (75/25) State Tax Agreement, and the Per Capita Agreement.

Seventy-five Percent Refund/25 Percent (75/25) State Tax Agreement.

Under a 75/25 state tax agreement, tribes agree to purchase the fuel sold at tribally owned retail stations from state-licensed fuel distributors with the state fuel tax included. Tribes report their purchases to the DOL and receive 75 percent of the state fuel tax revenue collected as a refund, and the state retains 25 percent as state tax.

Per Capita Agreement.

A per capita agreement is a computational formula resulting in an estimate of the amount of fuel tax most likely paid by tribal members purchasing fuel on the reservation. This formula provides an annual amount of fuel tax to be refunded to each tribe. All per capita agreements were entered into prior to the 2007 legislation.

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Summary of Substitute Bill:

The Governor may enter into fuel tax agreements with federally recognized Indian tribes with trust lands in certain counties. The federally recognized tribe must have trust lands located in a county that is west of the Cascade mountain range that borders the Puget Sound, and has a population of at least 118,000, but less than 250,000 people. These federally recognized tribes may only operate retail stations, per the agreement, on property held in trust on the effective date of this act.

Substitute Bill Compared to Original Bill:

The substitute bill: (1) limits qualifying trust lands to lands held in trust on the effective date of the act; and (2) amends the emergency clause to take effect immediately.

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Appropriation: None.

Fiscal Note: Available. New fiscal note requested on February 2, 2018.

Effective Date of Substitute Bill: The bill contains an emergency clause and takes effect immediately.