AN ACT Relating to the motor vehicle excise tax and vehicle fuel economy; and amending RCW 82.44.010 and 82.44.020.

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

Sec. 1. Section 82.44.010, chapter 15, Laws of 1961 as last amended by section 10, chapter 107, Laws of 1979 and RCW 82.44.010 are each amended to read as follows:

For the purposes of this chapter, unless context otherwise requires:

"Motor vehicle" means all motor vehicles, trailers and semitrailers used, or of the type designed primarily to be used, upon the public streets and highways, for the convenience or pleasure of the owner, or for the conveyance, for hire or otherwise, of persons or property, including fixed loads and facilities for human habitation; but shall not include (1) vehicles carrying exempt licenses, (2) dock and warehouse tractors and their cars or trailers, lumber carriers of the type known as spiders, and all other automotive equipment not designed primarily for use upon public streets, or highways, (3) motor vehicles or their trailers used entirely upon private property, (4) mobile homes and travel trailers as defined in RCW 82.50.010, or (5) motor vehicles owned by nonresident military personnel of the armed forces of the United States stationed in the state of Washington provided personnel were also nonresident at the time of their entry into military service.

"Personal motor vehicle" means automobiles and light trucks used by registered owners, or persons authorized by them, for personal use.

"Personal use" means use for pleasure, commuting, or for conveyance of persons or property other than for hire.

Sec. 2. Section 1, chapter 191, Laws of 1988 and RCW 82.44.020 are each amended to read as follows:

(1) An excise tax is imposed for the privilege of using in the state any motor vehicle, except those operated under reciprocal agreements, the provisions of RCW 46.16.160 as now or hereafter amended, or dealer's licenses. The annual amount of such excise tax shall be two percent of the fair market value of such vehicle.

(2) An additional excise tax is imposed, in addition to any other tax imposed by this section, for the privilege of using in the state any such motor vehicle, and the annual amount of such additional excise shall be two-tenths of one percent of the fair market value of such vehicle.

(3) Effective with January, 1989, motor vehicle license expirations, and ending after December, 1991, expirations, an additional excise tax is imposed, in addition to any other tax imposed by this section, for the privilege of using in the state any such motor vehicle, and the annual amount of such additional excise tax shall be one-tenth of one percent of the fair market value of such vehicle.

(4) The department of licensing and county auditors shall collect the additional tax imposed by subsections (2) and (3) of this section for any registration year for the months of that registration year in which such additional tax is effective, and in the same manner and at the same time as the tax imposed by subsection (1) of this section.

(5) In no case shall the total tax be less than two dollars except for proportionally registered vehicles.

(6) An additional tax is imposed equal to the taxes payable under subsections (1) and (2) of this section multiplied by the rate specified in RCW 82.02.030.

(7) The tax levied on a personal motor vehicle shall be increased or decreased in relation to the fuel use efficiency of the vehicle. The state energy office shall adopt by rule a reference fuel efficiency standard. The standard shall be based on the federal corporate average fuel economy standard or other appropriate criteria as determined by the office. All electric, propane, and natural gas-powered vehicles, and those rated at three or more miles per gallon greater than the reference fuel efficiency standard shall pay fifty percent of the tax. Vehicles rated at less than three miles per gallon more through two miles per gallon less than the reference fuel efficiency standard shall pay one hundred percent of the tax. Vehicles rated at greater than two miles per gallon less through five miles per gallon less than the reference fuel efficiency standard shall pay one hundred and twenty-five percent of the tax. Vehicles rated at greater than five miles per gallon less than the reference fuel efficiency standard shall pay one hundred and seventy-five percent of the tax.

(8) Washington residents, as defined in RCW 46.16.028, who license motor vehicles in another state or foreign country and avoid Washington motor vehicle excise taxes are liable for such unpaid excise taxes. The department of revenue may assess and collect the unpaid excise taxes under chapter 82.32 RCW, including the penalties and interest provided therein.