AN
ACT Relating to dyed special fuel; amending RCW 82.38.020, 82.38.030,
82.38.065, and 82.38.170; and prescribing penalties.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
82.38.020 and 2001 c 270 s 4 are each amended to read as follows:
The
definitions in this section apply throughout this chapter unless the context
clearly requires otherwise.
(1)
"Blended special fuel" means a mixture of undyed diesel fuel and another
liquid, other than a de minimis amount of the liquid, that can be used as a
fuel to propel a motor vehicle.
(2)
"Blender" means a person who produces blended special fuel outside
the bulk transfer-terminal system.
(3)
"Bond" means a bond duly executed with a corporate surety qualified
under chapter 48.28 RCW, which bond is payable to the state of Washington
conditioned upon faithful performance of all requirements of this chapter,
including the payment of all taxes, penalties, and other obligations arising
out of this chapter.
(4)
"Bulk transfer-terminal system" means the special fuel distribution
system consisting of refineries, pipelines, vessels, and terminals. Special
fuel in a refinery, pipeline, vessel, or terminal is in the bulk transfer-terminal
system. Special fuel in the fuel tank of an engine, motor vehicle, or in a
railcar, trailer, truck, or other equipment suitable for ground transportation
is not in the bulk transfer-terminal system.
(5)
"Bulk transfer" means a transfer of special fuel by pipeline or
vessel.
(6)
"Bulk storage" means the placing of special fuel into a receptacle
other than the fuel supply tank of a motor vehicle.
(7)
"Department" means the department of licensing.
(8)
"Dyed special fuel user" means a person authorized by the internal
revenue code to operate a motor vehicle on the highway using dyed special fuel,
in which the use is not exempt from the special fuel tax.
(9)
"Evasion" or "evade" means to diminish or avoid the
computation, assessment, or payment of authorized taxes or fees through:
(a)
A knowing: False statement; omission; misrepresentation of fact; or
other act of deception; ((or))
(b)
An intentional: ((Omission;)) Failure to file a return or
report; or other act of deception; or
(c)
The unlawful use of dyed special fuel.
(10)
"Export" means to obtain special fuel in this state for sales or
distribution outside the state.
(11)
"Highway" means every way or place open to the use of the public, as
a matter of right, for the purpose of vehicular travel.
(12)
"Import" means to bring special fuel into this state by a means of
conveyance other than the fuel supply tank of a motor vehicle.
(13)
"International fuel tax agreement licensee" means a special fuel user
operating qualified motor vehicles in interstate commerce and licensed by the
department under the international fuel tax agreement.
(14)
"Lessor" means a person: (a) Whose principal business is the bona
fide leasing or renting of motor vehicles without drivers for compensation to
the general public; and (b) who maintains established places of business and
whose lease or rental contracts require the motor vehicles to be returned to
the established places of business.
(15)
"Licensee" means a person holding a license issued under this
chapter.
(16)
"Motor vehicle" means a self-propelled vehicle designed for operation
upon land utilizing special fuel as the means of propulsion.
(17)
"Natural gas" means naturally occurring mixtures of hydrocarbon gases
and vapors consisting principally of methane, whether in gaseous or liquid
form.
(18)
"Person" means a natural person, fiduciary, association, or
corporation. The term "person" as applied to an association means
and includes the partners or members thereof, and as applied to corporations,
the officers thereof.
(19)
"Position holder" means a person who holds the inventory position in
special fuel, as reflected by the records of the terminal operator. A person
holds the inventory position in special fuel if the person has a contractual
agreement with the terminal for the use of storage facilities and terminating
services at a terminal with respect to special fuel. "Position
holder" includes a terminal operator that owns special fuel in their
terminal.
(20)
"Rack" means a mechanism for delivering special fuel from a refinery
or terminal into a truck, trailer, railcar, or other means of nonbulk transfer.
(21)
"Refiner" means a person who owns, operates, or otherwise controls a
refinery.
(22)
"Removal" means a physical transfer of special fuel other than by
evaporation, loss, or destruction.
(23)
"Special fuel" means and includes all combustible gases and liquids
suitable for the generation of power for propulsion of motor vehicles, except
that it does not include motor vehicle fuel as defined in chapter 82.36 RCW, nor
does it include dyed special fuel as defined by federal regulations, unless
the use is in violation of this chapter. ((However, if the federal
regulations authorize dyed special fuel to be used in highway vehicles, that
usage is considered taxable under this chapter, unless otherwise exempted.))
If a person holds for sale, sells, purchases, or uses any dyed special fuel
in violation of this chapter, all dyed special fuel held for sale, sold,
purchased, stored, or used by that person is considered special fuel, and the
person is subject to all presumptions, reporting, and recordkeeping
requirements and other obligations which apply to special fuel, along with
payment of any applicable taxes, penalties, or interest for illegal use.
(24)
"Special fuel distributor" means a person who acquires special fuel
from a supplier, distributor, or licensee for subsequent sale and distribution.
(25)
"Special fuel exporter" means a person who purchases special fuel in
this state and directly exports the fuel by a means other than the bulk
transfer-terminal system to a destination outside of the state.
(26)
"Special fuel importer" means a person who imports special fuel into
the state by a means other than the bulk transfer-terminal system. If the
importer of record is acting as an agent, the person for whom the agent is
acting is the importer. If there is no importer of record, the owner of the
special fuel at the time of importation is the importer.
(27)
"Special fuel supplier" means a person who holds a federal certificate
issued under the internal revenue code and authorizes the person to tax-free
transactions on special fuel in the bulk transfer-terminal system.
(28)
"Special fuel user" means a person engaged in uses of special fuel
that are not specifically exempted from the special fuel tax imposed under this
chapter.
(29)
"Terminal" means a special fuel storage and distribution facility
that has been assigned a terminal control number by the internal revenue
service, is supplied by pipeline or vessel, and from which reportable special
fuel is removed at a rack.
(30)
"Terminal operator" means a person who owns, operates, or otherwise
controls a terminal.
(31)
"Two-party exchange" or "buy-sell agreement" means a
transaction in which taxable special fuel is transferred from one licensed
supplier to another licensed supplier under an exchange or buy-sell agreement
whereby the supplier that is the position holder agrees to deliver taxable
special fuel to the other supplier or the other supplier's customer at the rack
of the terminal at which the delivering supplier is the position holder.
Sec.
2. RCW
82.38.030 and 2001 c 270 s 6 are each amended to read as follows:
(1)
There is hereby levied and imposed upon special fuel users a tax at the rate
computed in the manner provided in RCW 82.36.025 on each gallon of special
fuel, or each one hundred cubic feet of compressed natural gas, measured at
standard pressure and temperature.
(2)
The tax imposed by subsection (1) of this section is imposed when:
(a)
Special fuel is removed in this state from a terminal if the special fuel is
removed at the rack unless the removal is to a licensed exporter for direct
delivery to a destination outside of the state, or the removal is to a special
fuel distributor for direct delivery to an international fuel tax agreement
licensee under RCW 82.38.320;
(b)
Special fuel is removed in this state from a refinery if either of the
following applies:
(i)
The removal is by bulk transfer and the refiner or the owner of the special
fuel immediately before the removal is not a licensee; or
(ii)
The removal is at the refinery rack unless the removal is to a licensed
exporter for direct delivery to a destination outside of the state, or the
removal is to a special fuel distributor for direct delivery to an
international fuel tax agreement licensee under RCW 82.38.320;
(c)
Special fuel enters into this state for sale, consumption, use, or storage if
either of the following applies:
(i)
The entry is by bulk transfer and the importer is not a licensee; or
(ii)
The entry is not by bulk transfer;
(d)
Special fuel is sold or removed in this state to an unlicensed entity unless
there was a prior taxable removal, entry, or sale of the special fuel;
(e)
Blended special fuel is removed or sold in this state by the blender of the
fuel. The number of gallons of blended special fuel subject to tax is the
difference between the total number of gallons of blended special fuel removed
or sold and the number of gallons of previously taxed special fuel used to
produce the blended special fuel;
(f)
Dyed special fuel is used on a highway, as authorized by the internal revenue
code, unless the use is exempt from the special fuel tax;
(g)
Dyed special fuel is held for sale, sold, used, or is intended to be used in
violation of this chapter;
(h)
Special fuel purchased by an international fuel tax agreement licensee under
RCW 82.38.320 is used on a highway; and
(((h)))
(i) Special fuel is sold by a licensed special fuel supplier to a
special fuel distributor, special fuel importer, or special fuel blender and
the special fuel is not removed from the bulk transfer-terminal system.
(3)
The tax imposed by this chapter, if required to be collected by the licensee,
is held in trust by the licensee until paid to the department, and a licensee
who appropriates or converts the tax collected to his or her own use or to any
use other than the payment of the tax to the extent that the money required to
be collected is not available for payment on the due date as prescribed in this
chapter is guilty of a felony, or gross misdemeanor in accordance with the
theft and anticipatory provisions of Title 9A RCW. A person, partnership,
corporation, or corporate officer who fails to collect the tax imposed by this
section, or who has collected the tax and fails to pay it to the department in
the manner prescribed by this chapter, is personally liable to the state for
the amount of the tax.
Sec.
3. RCW
82.38.065 and 1998 c 176 s 56 are each amended to read as follows:
A
person may ((not)) operate or maintain a licensed or required to be
licensed motor vehicle ((on a public highway of this state)) with
dyed special fuel in the fuel supply tank ((unless)) only if the
use is authorized by the internal revenue code and the person is either
the holder of an uncanceled dyed special fuel user license issued ((to him
or her by the department)) or the use is exempt from the special fuel
tax. A person may maintain dyed special fuel for a taxable use in bulk storage
if the person is the holder of an uncanceled dyed special fuel user license
issued under this chapter. The special fuel tax set forth in RCW 82.38.030
is imposed on users of dyed special fuel authorized by the internal revenue
code to operate on-highway motor vehicles using dyed special fuel, unless the
use is exempt from the special fuel tax. It is unlawful for any person to
sell, use, hold for sale, or hold for intended use dyed special fuel in a
manner in violation of this chapter.
Sec.
4. RCW
82.38.170 and 1998 c 176 s 70 are each amended to read as follows:
(1)
If any licensee fails to pay any taxes collected or due the state of Washington
within the time prescribed by RCW 82.38.150 and 82.38.160, the licensee shall
pay in addition to such tax a penalty of ten percent of the amount thereof.
(2)
If it be determined by the department that the tax reported by any licensee is
deficient it may proceed to assess the deficiency on the basis of information
available to it and there shall be added to this deficiency a penalty of ten
percent of the amount of the deficiency.
(3)
If any licensee, whether or not he or she is licensed as such, fails, neglects,
or refuses to file a special fuel tax report required under this chapter, the
department may, on the basis of information available to it, determine the tax
liability of the licensee for the period during which no report was filed, and
to the tax as thus determined, the department shall add the penalty and
interest provided in subsection (2) of this section. An assessment made by the
department pursuant to this subsection or to subsection (2) of this section
shall be presumed to be correct, and in any case where the validity of the
assessment is drawn in question, the burden shall be on the person who
challenges the assessment to establish by a fair preponderance of the evidence
that it is erroneous or excessive as the case may be.
(4)
If any licensee establishes by a fair preponderance of evidence that his or her
failure to file a report or pay the proper amount of tax within the time
prescribed was due to reasonable cause and was not intentional or willful, the
department may waive the penalty prescribed in subsections (1), (2), and (3) of
this section.
(5)
If any licensee files a false or fraudulent report with intent to evade the tax
imposed by this chapter, there shall be added to the amount of deficiency
determined by the department a penalty equal to twenty-five percent of the
deficiency, in addition to the penalty provided in subsection (2) of this
section and all other penalties prescribed by law.
(6)
Any special fuel tax, penalties, and interest payable under this chapter shall
bear interest at the rate of one percent per month, or fraction thereof, from
the first day of the calendar month after the amount or any portion thereof
should have been paid until the date of payment: PROVIDED, That the department
may waive the interest when it determines that the cost of processing the
collection of the interest exceeds the amount of interest due.
(7)
Except in the case of violations of filing a false or fraudulent report, if the
department deems mitigation of penalties and interest to be reasonable and in
the best interests of carrying out the purpose of this chapter, it may mitigate
such assessments upon whatever terms the department deems proper, giving
consideration to the degree and extent of the lack of records and reporting
errors. The department may ascertain the facts regarding recordkeeping and
payment penalties in lieu of more elaborate proceedings under this chapter.
(8)
Except in the case of a fraudulent report or of neglect or refusal to make a
report, every deficiency shall be assessed under subsection (2) of this section
within five years from the twenty-fifth day of the next succeeding calendar
month following the reporting period for which the amount is proposed to be
determined or within five years after the return is filed, whichever period
expires the later.
(9)
Any licensee against whom an assessment is made under the provisions of
subsection((s)) (2) or (3) of this section may petition for a
reassessment thereof within thirty days after service upon the licensee of
notice thereof. If such petition is not filed within such thirty day period,
the amount of the assessment becomes final at the expiration thereof.
If
a petition for reassessment is filed within the thirty day period, the
department shall reconsider the assessment and, if the licensee has so requested
in his or her petition, shall grant such licensee an oral hearing and give the
licensee ten days' notice of the time and place thereof. The department may
continue the hearing from time to time. The decision of the department upon a
petition for reassessment shall become final thirty days after service upon the
licensee of notice thereof.
Every
assessment made by the department shall become due and payable at the time it
becomes final and if not paid to the department when due and payable, there shall
be added thereto a penalty of ten percent of the amount of the tax.
(10)
Any notice of assessment required by this section shall be served personally or
by certified or registered mail; if by mail, service shall be made by
depositing such notice in the United States mail, postage prepaid addressed to
the licensee at his or her address as the same appears in the records of the
department.
(11)
Any licensee who has had the licensee's special fuel license revoked shall pay
a one hundred dollar penalty prior to the issuance of a new license.
(12)
Any person who, upon audit or investigation by the department, is found to have
not paid special fuel taxes as required by this chapter shall be subject to
cancellation of all vehicle registrations for vehicles utilizing special fuel
as a means of propulsion. Any unexpired Washington tonnage on the vehicles in
question may be transferred to a purchaser of the vehicles upon application to
the department who shall hold such tonnage in its custody until a sale of the
vehicle is made or the tonnage has expired.
(13)
Unless the use is exempt from the special fuel tax, or expressly
authorized by the internal revenue code and this chapter, a person ((using))
having dyed special fuel in the ((propulsion)) fuel supply
tank of a motor vehicle ((upon the highways of this state)) that
is licensed or required to be licensed is subject to a civil penalty of ten
dollars for each gallon of dyed special fuel placed into the supply tank of the
motor vehicle, or one thousand dollars, whichever is greater. The civil
penalty collected as a result of this subsection must be deposited in the motor
vehicle fund. The penalties must be collected and administered under this
chapter.
(14)
A person who maintains dyed special fuel in bulk storage for an intended
sale or use in violation of this chapter is subject to a civil penalty of ten
dollars for each gallon of dyed special fuel, or one thousand dollars,
whichever is greater, currently or previously maintained in bulk storage by the
person. The civil penalty collected as a result of this subsection must be
deposited in the motor vehicle fund. The penalties must be collected and
administered under this chapter.
(15)
For the purposes of enforcement of this section, the Washington state patrol or
other commercial vehicle safety alliance-certified officers may inspect,
collect, and secure samples of special fuel used in the propulsion of a vehicle
operated upon the highways of this state to detect the presence of dye or other
chemical compounds.
(((15)))
(16) The Washington state patrol shall, by January 1, 1999, develop and
implement procedures for collection, analysis, and storage of fuel samples
collected under this chapter.
(((16)))
(17) RCW 43.05.110 does not apply to the civil penalties imposed under
subsection (13) of this section.
