Washington State House of Representatives	BILL ANALYSIS
Transportation Committee

HB 2285

Brief Description:  Modifying fuel tax provisions.

Sponsors:  Representatives Fisher, Hatfield, Mitchell and Haigh; by request of Department of Licensing.

Brief Summary of Bill

$Clarifies application of fuel tax evasion law to persons who use or sell dyed special fuel unlawfully.

Hearing Date:  1/21/02

Staff:  Paul Neal (786‑7315).

Background:

The state levies a 23-cent-per-gallon tax on special fuel, i.e., diesel fuel.  The tax revenue must be spent for highway purposes.  Dyed special fuel is exempt from the special fuel tax.  A person may not operate a vehicle on a public road in this state with dyed special fuel in the vehicle's fuel supply tank, unless the use is authorized by the federal internal revenue code.

The penalty for using dyed special fuel to operate a vehicle upon the highways of the state is $10 for each gallon of dyed special fuel placed into the vehicle's supply tank or $1,000, whichever is greater.  The penalties apply only to the user of the dyed special fuel, not to the distributers or sellers.

The Department of Licensing has received legal advice that some changes to the provisions regarding dyed special fuel would assist it in enforcing the prohibition against use of dyed special fuel.

Summary of Bill:

HB 2285 clarifies the application of current law to persons who use dyed special fuel unlawfully.  It also extends penalties to persons who intentionally sell dyed special fuel for unlawful use.

The definition of tax "evasion" is expanded to include omissions of fact and the unlawful use of dyed special fuel.  Dyed special fuel held for sale, sold, used or intended to be used in violation of the law is subject to tax.   Persons engaging in the unauthorized use of dyed special fuel are subject to all presumptions, reporting, and record keeping requirements of the law.  The civil penalty for unlawful use of dyed fuel would attach to persons for "having fuel in the tank" rather than "using fuel for propulsion."  A person who stores dyed special fuel in bulk for intended sale or use in violation of the chapter is subject to a penalty of $10 per gallon or $1000, whichever is greater.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.