HOUSE BILL REPORT

SB 6668

As Amended by the House

BYSenator Nelson; by request of Department of Licensing

Revising special fuel bonding requirements.

House Committe on Transportation

Majority Report:  Do pass with amendment.  (24)

      Signed by Representatives Walk, Chair; Baugher, Vice Chair; Betrozoff, Cantwell, Cooper, Day, Fisher, Fox, Gallagher, Hankins, Haugen, Heavey, Jacobsen, Jones, Kremen, Patrick, Prince, Smith, D. Sommers, Sutherland, Todd, Vekich, J. Williams and S. Wilson.

House Staff:Terry Michalson (786-7315)

AS PASSED HOUSE MARCH 2, 1988

BACKGROUND:

A special committee of the National Governors' Association has recommended administrative uniformity of fuel tax laws among states whenever possible.

The Washington State Special Fuel Tax Act requires all licensed special fuel dealers and special fuel users who have out-of-state licensed vehicles or have an estimated tax liability of more than five hundred dollars per year to obtain and to keep in force a corporate surety bond payable to the state of Washington.  The amount of the bond is determined by multiplying the estimated monthly fuel tax by a factor of three or a minimum of five hundred dollars, whichever is more.  If a dealer or user maintains his special fuel license for five or more years, the amount of the bond required is reduced to the estimated monthly fuel tax multiplied by a factor of two or a minimum of five hundred dollars, whichever is more.

The maximum bond required is fifty thousand dollars.

In lieu of a bond, a dealer or user may provide money, United States bonds, or other obligations as per terms and conditions prescribed by the Department of Licensing and deposited with the State Treasurer.

Special fuel dealers who deliver exclusively to the tanks of marine vessels are exempt from the bonding requirement.

SUMMARY:

The Department of Licensing may accept security other than a bond or monetary deposit to satisfy the bonding requirement of special fuel users.

Licensed special fuel users are exempted from bonding requirements unless there has been a failure to file tax reports on time, a failure to pay taxes, or if there is evidence that problems as indicated through an investigation or audit are severe enough to warrant the bonding requirement be imposed.  Rules may be adopted by the Department, setting conditions that would require a bond to be filed to protect the interest of the state.

The provision to reduce the amount of a bond after five or more years is eliminated for special fuel users.

The Department of Licensing may recover collection agency fees, court costs and reasonable attorney fees expended in collection of delinquent taxes, interest or penalties from licensed special fuel dealers, users or suppliers.

Fiscal Note:      Requested February 23, 1988.

House Committee ‑ Testified For:    Donna Stringer, Department of Licensing; Marty Sangster, Washington Trucking Association.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Mandatory bonding for out-of-state carriers is eliminated, resulting in more uniformity with other states in the administration of fuel tax laws.  This change was recommended by the National Governors' Association and the Washington State Motor Carrier Advisory Committee.

House Committee - Testimony Against:      None Presented.