READ FIRST TIME 04/02/03.   

     AN ACT Relating to transportation and financing; amending RCW 46.16.070, 46.68.035, 82.38.030, 82.38.035, 82.38.047, 46.09.170, 46.10.170, 79A.25.070, 46.16.233, 46.01.140, 70.95.510, and 70.95.535; reenacting and amending RCW 82.36.025, 46.68.090, and 46.68.110; adding a new section to chapter 82.44 RCW; adding new sections to chapter 70.94 RCW; adding new sections to chapter 46.16 RCW; adding a new section to chapter 70.95 RCW; creating new sections; repealing RCW 70.95.530; providing effective dates; providing expiration dates; and declaring an emergency.

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

NEW SECTION.  Sec. 101   The legislature finds that the state's transportation system is in critical need of repair, restoration, and enhancement. Bridges and major highway structures are at risk of failure during a seismic episode; ferry vessels are aged and nearing the end of their useful life; increased traffic congestion on state highways and local roadways threatens the state's economic vitality and quality of life; highways in some areas are experiencing high accident rates; and the mobility of persons with special needs or who live in rural areas has been greatly impaired by cuts in public transportation services, thus threatening our citizens' ability to access health care, job opportunities, and educational institutions. The revenues generated by this act are dedicated to funds, accounts, and activities that are critically necessary to improve the delivery of state transportation projects and services.

Sec. 201   RCW 46.16.070 and 1994 c 262 s 8 are each amended to read as follows:
     (1) In lieu of all other vehicle licensing fees, unless specifically exempt, and in addition to ((the excise tax prescribed in chapter 82.44 RCW and)) the mileage fees prescribed for buses and stages in RCW 46.16.125, there shall be paid and collected annually for each truck, motor truck, truck tractor, road tractor, tractor, bus, auto stage, or for hire vehicle with seating capacity of more than six, based upon the declared combined gross weight or declared gross weight thereof pursuant to the provisions of chapter 46.44 RCW, the following licensing fees by such gross weight:

Sec. 202   RCW 46.68.035 and 2000 2nd sp.s. c 4 s 8 are each amended to read as follows:
     All proceeds from combined vehicle licensing fees received by the director for vehicles licensed under RCW 46.16.070 and 46.16.085 shall be forwarded to the state treasurer to be distributed into accounts according to the following method:
     (1) The sum of two dollars for each vehicle shall be deposited into the multimodal transportation account, except that for each vehicle registered by a county auditor or agent to a county auditor pursuant to RCW 46.01.140, the sum of two dollars shall be credited to the current county expense fund.
     (2) The remainder shall be distributed as follows:
     (a) ((23.677)) 21.963 percent shall be deposited into the state patrol highway account of the motor vehicle fund;
     (b) ((1.521)) 1.411 percent shall be deposited into the Puget Sound ferry operations account of the motor vehicle fund; and
     (c) The remaining proceeds shall be deposited into the motor vehicle fund.

NEW SECTION.  Sec. 203   Revenues attributable to the increased gross weight fees under section 201 of this act must be expended solely on transportation projects that directly benefit the movement of freight.

NEW SECTION.  Sec. 204   The increased gross weight fees under section 201 of this act apply to registrations that become payable after July 1, 2003.

NEW SECTION.  Sec. 301   A new section is added to chapter 82.44 RCW to read as follows:
     (1) There is levied and there shall be collected a vehicle transfer tax on motor vehicles for the privilege of using the transportation system in this state. The tax authorized by this section shall be in addition to any other taxes authorized by law and shall be imposed on any retail sale, lease, or use of a motor vehicle upon which a state tax is imposed under chapter 82.08 or 82.12 RCW. However, the tax imposed by this section does not apply to the rental of a motor vehicle. The rate of the tax shall equal forty-six one-hundredths of one percent of the selling price when a state tax is imposed under chapter 82.08 RCW, or forty-six one-hundredths of one percent of the value of the article used when a state tax is imposed under chapter 82.12 RCW. The meaning ascribed to words and phrases in chapters 82.04, 82.08, and 82.12 RCW, insofar as applicable, have full force and effect with respect to the tax imposed by this section.
     (2) For the purposes of this section, "motor vehicle" has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road and nonhighway vehicles as defined in RCW 46.09.020, and snowmobiles as defined in RCW 46.10.010.
     (3) The tax imposed in this section shall be collected and remitted in the same manner as excise taxes collected under chapters 82.08 and 82.12 RCW. The department of revenue shall collect and administer the tax imposed by this section. All administrative provisions in chapters 82.08, 82.12, and 82.32 RCW, insofar as they are applicable, apply to the tax imposed under this section. The department of revenue has the power to adopt rules as may be necessary to administer the provisions of this section. In the collection of tax imposed by this section, the department of revenue may designate the county auditors of the several counties of the state as its collecting agents. The county auditors shall collect and remit the tax imposed by this section in the same manner as the tax collected under RCW 82.12.045. No additional collection fee shall be deductible by a county auditor remitting the tax collected under this section. Any duties required by this section to be performed by the county auditor may be performed by the director of licensing but no collection fee shall be deductible by said director in remitting the tax revenue to the state treasurer.
     (4) The revenue collected under this section shall be deposited into the multimodal transportation account created under RCW 47.66.070.

Sec. 401   RCW 82.36.025 and 1999 c 269 s 16 and 1999 c 94 s 29 are each reenacted and amended to read as follows:
     (1) A motor vehicle fuel tax rate of twenty-three cents per gallon ((shall apply)) applies to the sale, distribution, or use of motor vehicle fuel.
     (2)(a) Beginning July 1, 2003, an additional and cumulative motor fuel tax rate of one cent per gallon applies to the sale, distribution, or use of motor vehicle fuel.
     (b) Beginning July 1, 2004, an additional and cumulative motor fuel tax rate of one cent per gallon applies to the sale, distribution, or use of motor vehicle fuel.
     (c) Beginning July 1, 2005, an additional and cumulative motor fuel tax rate of one cent per gallon applies to the sale, distribution, or use of motor vehicle fuel.
     (d) Beginning July 1, 2006, an additional and cumulative motor fuel tax rate of one cent per gallon applies to the sale, distribution, or use of motor vehicle fuel.

Sec. 402   RCW 82.38.030 and 2002 c 183 s 2 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)) of twenty-three cents per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature.
     (2)(a) Beginning July 1, 2003, an additional and cumulative tax rate of one cent per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature shall be imposed on special fuel users.
     (b) Beginning July 1, 2004, an additional and cumulative tax rate of one cent per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature shall be imposed on special fuel users.
     (c) Beginning July 1, 2005, an additional and cumulative tax rate of one cent per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature shall be imposed on special fuel users.
     (d) Beginning July 1, 2006, an additional and cumulative tax rate of one cent per gallon of special fuel, or each one hundred cubic feet of compressed natural gas, measured at standard pressure and temperature shall be imposed on special fuel users.
     (3) The tax is 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
     (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))) (4) 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. 403   RCW 46.68.090 and 1999 c 269 s 2 and 1999 c 94 s 6 are each reenacted and amended to read as follows:
     (1) All moneys that have accrued or may accrue to the motor vehicle fund from the motor vehicle fuel tax and special fuel tax shall be first expended for purposes enumerated in (a) and (b) of this subsection. The remaining net tax amount shall be distributed monthly by the state treasurer in ((the proportions set forth in (c) through (l))) accordance with subsections (2), (3), and (4) of this ((subsection)) section.
     (a) For payment of refunds of motor vehicle fuel tax and special fuel tax that has been paid and is refundable as provided by law;
     (b) For payment of amounts to be expended pursuant to appropriations for the administrative expenses of the offices of state treasurer, state auditor, and the department of licensing of the state of Washington in the administration of the motor vehicle fuel tax and the special fuel tax, which sums shall be distributed monthly((;)).
     (((c))) (2) All of the remaining net tax amount collected under RCW 82.36.025(1) and 82.38.030(1) shall be distributed as set forth in (a) through (j) of this section.
     (a) For distribution to the motor vehicle fund an amount equal to 44.387 percent to be expended for highway purposes of the state as defined in RCW 46.68.130;
     (((d))) (b) For distribution to the special category C account, hereby created in the motor vehicle fund, an amount equal to 3.2609 percent to be expended for special category C projects. Special category C projects are category C projects that, due to high cost only, will require bond financing to complete construction.
     The following criteria, listed in order of priority, shall be used in determining which special category C projects have the highest priority:
     (i) Accident experience;
     (ii) Fatal accident experience;
     (iii) Capacity to move people and goods safely and at reasonable speeds without undue congestion; and
     (iv) Continuity of development of the highway transportation network.
     Moneys deposited in the special category C account in the motor vehicle fund may be used for payment of debt service on bonds the proceeds of which are used to finance special category C projects under this subsection (((1)(d))) (2)(b);
     (((e))) (c) For distribution to the Puget Sound ferry operations account in the motor vehicle fund an amount equal to 2.3283 percent;
     (((f))) (d) For distribution to the Puget Sound capital construction account in the motor vehicle fund an amount equal to 2.3726 percent;
     (((g))) (e) For distribution to the urban arterial trust account in the motor vehicle fund an amount equal to 7.5597 percent;
     (((h))) (f) For distribution to the transportation improvement account in the motor vehicle fund an amount equal to 5.6739 percent and expended in accordance with RCW 47.26.086;
     (((i))) (g) For distribution to the cities and towns from the motor vehicle fund an amount equal to 10.6961 percent in accordance with RCW 46.68.110;
     (((j))) (h) For distribution to the counties from the motor vehicle fund an amount equal to 19.2287 percent: (i) Out of which there shall be distributed from time to time, as directed by the department of transportation, those sums as may be necessary to carry out the provisions of RCW 47.56.725; and (ii) less any amounts appropriated to the county road administration board to implement the provisions of RCW 47.56.725(4), with the balance of such county share to be distributed monthly as the same accrues for distribution in accordance with RCW 46.68.120;
     (((k))) (i) For distribution to the county arterial preservation account, hereby created in the motor vehicle fund an amount equal to 1.9565 percent. These funds shall be distributed by the county road administration board to counties in proportions corresponding to the number of paved arterial lane miles in the unincorporated area of each county and shall be used for improvements to sustain the structural, safety, and operational integrity of county arterials. The county road administration board shall adopt reasonable rules and develop policies to implement this program and to assure that a pavement management system is used;
     (((l))) (j) For distribution to the rural arterial trust account in the motor vehicle fund an amount equal to 2.5363 percent and expended in accordance with RCW 36.79.020.
     (((2))) (3) One hundred percent of the net tax amount collected under RCW 82.36.025(2) and 82.38.030(2) shall be distributed to the motor vehicle account.
     (4) Nothing in this section or in RCW 46.68.130 may be construed so as to violate any terms or conditions contained in any highway construction bond issues now or hereafter authorized by statute and whose payment is by such statute pledged to be paid from any excise taxes on motor vehicle fuel and special fuels.

Sec. 404   RCW 46.68.110 and 1999 c 269 s 3 and 1999 c 94 s 9 are each reenacted and amended to read as follows:
     Funds credited to the incorporated cities and towns of the state as set forth in RCW 46.68.090(((1)(i))) (2)(g) shall be subject to deduction and distribution as follows:
     (1) One and one-half percent of such sums distributed under RCW 46.68.090(2)(g) shall be deducted monthly as such sums are credited and set aside for the use of the department of transportation for the supervision of work and expenditures of such incorporated cities and towns on the city and town streets thereof, including the supervision and administration of federal-aid programs for which the department of transportation has responsibility: PROVIDED, That any moneys so retained and not expended shall be credited in the succeeding biennium to the incorporated cities and towns in proportion to deductions herein made;
     (2) Thirty-three one-hundredths of one percent of such funds distributed under RCW 46.68.090(2)(g) shall be deducted monthly, as such funds accrue, and set aside for the use of the department of transportation for the purpose of funding the cities' share of the costs of highway jurisdiction studies and other studies. Any funds so retained and not expended shall be credited in the succeeding biennium to the cities in proportion to the deductions made;
     (3) One percent of such funds distributed under RCW 46.68.090(2)(g) shall be deducted monthly, as such funds accrue, to be deposited in the urban arterial trust account, to implement the city hardship assistance program, as provided in RCW 47.26.164. However, any moneys so retained and not required to carry out the program as of July 1st of each odd-numbered year thereafter, shall be provided within sixty days to the treasurer and distributed in the manner prescribed in subsection (5) of this section;
     (4) After making the deductions under subsections (1) through (3) of this section and RCW 35.76.050, 31.86 percent of the fuel tax distributed to the cities and towns in RCW 46.68.090(((1)(i))) (2)(g) shall be allocated to the incorporated cities and towns in the manner set forth in subsection (5) of this section and subject to deductions in subsections (1), (2), and (3) of this section, subject to RCW 35.76.050, to be used exclusively for: The construction, improvement, chip sealing, seal-coating, and repair for arterial highways and city streets as those terms are defined in RCW 46.04.030 and 46.04.120; the maintenance of arterial highways and city streets for those cities with a population of less than fifteen thousand; or the payment of any municipal indebtedness which may be incurred in the construction, improvement, chip sealing, seal-coating, and repair of arterial highways and city streets; and
     (5) The balance remaining to the credit of incorporated cities and towns after such deduction shall be apportioned monthly as such funds accrue among the several cities and towns within the state ratably on the basis of the population last determined by the office of financial management.

Sec. 405   RCW 82.38.035 and 2001 c 270 s 7 are each amended to read as follows:
     (1) A licensed supplier shall remit tax on special fuel to the department as provided in RCW 82.38.030(((2)(a))) (3)(a). On a two-party exchange, or buy-sell agreement between two licensed suppliers, the receiving exchange partner or buyer shall remit the tax.
     (2) A refiner shall remit tax to the department on special fuel removed from a refinery as provided in RCW 82.38.030(((2)(b))) (3)(b).
     (3) An importer shall remit tax to the department on special fuel imported into this state as provided in RCW 82.38.030(((2)(c))) (3)(c).
     (4) A blender shall remit tax to the department on the removal or sale of blended special fuel as provided in RCW 82.38.030(((2)(e))) (3)(e).
     (5) A dyed special fuel user shall remit tax to the department on the use of dyed special fuel as provided in RCW 82.38.030(((2)(f))) (3)(f).

Sec. 406   RCW 82.38.047 and 1998 c 176 s 55 are each amended to read as follows:
     A terminal operator is jointly and severally liable for remitting the tax imposed under RCW 82.38.030(((1))) if, in connection with the removal of special fuel that is not dyed or marked in accordance with internal revenue service requirements, the terminal operator provides a person with a bill of lading, shipping paper, or similar document indicating that the special fuel is dyed or marked in accordance with internal revenue service requirements.

Sec. 407   RCW 46.09.170 and 1995 c 166 s 9 are each amended to read as follows:
     (1) From time to time, but at least once each year, the state treasurer shall refund from the motor vehicle fund one percent of the motor vehicle fuel tax revenues collected under chapter 82.36 RCW, based on the tax rate ((in effect January 1, 1990)) of twenty cents per gallon of motor vehicle fuel, less proper deductions for refunds and costs of collection as provided in RCW 46.68.090. The treasurer shall place these funds in the general fund as follows:
     (a) Forty percent shall be credited to the ORV and nonhighway vehicle account and administered by the department of natural resources solely for planning, maintenance, and management of ORV recreation facilities, nonhighway roads, and nonhighway road recreation facilities. The funds under this subsection shall be expended in accordance with the following limitations:
     (i) Not more than five percent may be expended for information programs under this chapter;
     (ii) Not less than ten percent and not more than fifty percent may be expended for ORV recreation facilities;
     (iii) Not more than twenty-five percent may be expended for maintenance of nonhighway roads;
     (iv) Not more than fifty percent may be expended for nonhighway road recreation facilities;
     (v) Ten percent shall be transferred to the interagency committee for outdoor recreation for grants to law enforcement agencies in those counties where the department of natural resources maintains ORV facilities. This amount is in addition to those distributions made by the interagency committee for outdoor recreation under (d)(i) of this subsection;
     (b) Three and one-half percent shall be credited to the ORV and nonhighway vehicle account and administered by the department of fish and wildlife solely for the acquisition, planning, development, maintenance, and management of nonhighway roads and recreation facilities;
     (c) Two percent shall be credited to the ORV and nonhighway vehicle account and administered by the parks and recreation commission solely for the maintenance and management of ORV use areas and facilities; and
     (d) Fifty-four and one-half percent, together with the funds received by the interagency committee for outdoor recreation under RCW 46.09.110, shall be credited to the nonhighway and off-road vehicle activities program account to be administered by the committee for planning, acquisition, development, maintenance, and management of ORV recreation facilities and nonhighway road recreation facilities; ORV user education and information; and ORV law enforcement programs. The funds under this subsection shall be expended in accordance with the following limitations:
     (i) Not more than twenty percent may be expended for ORV education, information, and law enforcement programs under this chapter;
     (ii) Not less than an amount equal to the funds received by the interagency committee for outdoor recreation under RCW 46.09.110 and not more than sixty percent may be expended for ORV recreation facilities;
     (iii) Not more than twenty percent may be expended for nonhighway road recreation facilities.
     (2) On a yearly basis an agency may not, except as provided in RCW 46.09.110, expend more than ten percent of the funds it receives under this chapter for general administration expenses incurred in carrying out this chapter.

Sec. 408   RCW 46.10.170 and 1994 c 262 s 4 are each amended to read as follows:
     From time to time, but at least once each four years, the department shall determine the amount of moneys paid to it as motor vehicle fuel tax that is tax on snowmobile fuel. Such determination shall use one hundred thirty-five gallons as the average yearly fuel usage per snowmobile, the number of registered snowmobiles during the calendar year under determination, and the fuel tax rate ((in effect January 1, 1990)) of twenty cents per gallon of motor vehicle fuel.

Sec. 409   RCW 79A.25.070 and 2000 c 11 s 73 are each amended to read as follows:
     Upon expiration of the time limited by RCW 82.36.330 for claiming of refunds of tax on marine fuel, the state of Washington shall succeed to the right to such refunds. The director of licensing, after taking into account past and anticipated claims for refunds from and deposits to the marine fuel tax refund account and the costs of carrying out the provisions of RCW 79A.25.030, shall request the state treasurer to transfer monthly from the marine fuel tax refund account an amount equal to the proportion of the moneys in the account representing the motor vehicle fuel tax rate ((under RCW 82.36.025 in effect on January 1, 1990)) of twenty cents per gallon of motor vehicle fuel, to the recreation resource account and the remainder to the motor vehicle fund.

NEW SECTION.  Sec. 501   A new section is added to chapter 70.94 RCW to read as follows:
     In addition to other fees and taxes required under this chapter, registered owners of motor vehicles as defined in RCW 46.04.320 shall annually, upon renewal, pay a clean air fee of two dollars. The proceeds of this clean air fee must be deposited in a segregated subaccount of the air pollution control account created in RCW 70.94.015.

NEW SECTION.  Sec. 502   A new section is added to chapter 70.94 RCW to read as follows:
     (1) Money from the clean air fee under section 501 of this act may be used for any purpose under this chapter, including but not limited to the following:
     (a) Retrofitting motor vehicles, including school buses and transit fleets, with exhaust emission control devices;
     (b) Reducing air contaminant emissions and cleaning up air pollution;
     (c) Reducing and eliminating toxic air contaminants;
     (d) Providing funding for the differential costs of cleaner and alternative fuels and vehicles that reduce air emissions and allow advanced exhaust emission control devices to be used, including ultralow sulfur diesel fuel, biodiesel, and natural gas;
     (e) Providing funding for infrastructure necessary to allow fleets to use alternative, cleaner fuels; and
     (f) Administrative and operating costs of air pollution control authorities and, where there is no air pollution control agency, the department, to develop and oversee the air pollution cleanup programs identified in this section.
     (2) Money from the clean air fee under section 501 of this act is subject to distribution as follows:
     (a) Eighty percent of the money must be distributed to the air pollution control authorities created under this chapter. The money must be distributed in direct proportion with the amount of fees imposed under section 501 of this act that are collected within the boundaries of each authority. However, an amount in direct proportion with those fees collected in counties for which no air pollution control authority exists must be distributed to the department.
     (b) Twenty percent of the money from the fee under section 501 of this act must be distributed to the department and used by the department for the following purposes:
     (i) Retrofitting motor vehicles, including school buses and transit fleets, with exhaust emission control devices;
     (ii) Reducing air contaminant emissions and cleaning up air pollution;
     (iii) Reducing and eliminating toxic air contaminants;
     (iv) Providing funding for the differential costs of cleaner and alternative fuels and vehicles that reduce air emissions and allow advanced exhaust emission control devices to be used, including ultralow sulfur diesel fuel, biodiesel, and natural gas;
     (v) Providing funding for infrastructure necessary to allow fleets to use alternative, cleaner fuels; and
     (vi) Administrative and operating costs of air pollution control authorities and, where there is no air pollution control agency, the department, to develop and oversee the air pollution cleanup programs identified in this section.
     (3) Money in the air pollution control account may be spent by the department only after appropriation.

Sec. 601   RCW 46.16.233 and 2000 c 37 s 1 are each amended to read as follows:
     (1) Except for those license plates issued under RCW 46.16.305(1) before January 1, 1987, under RCW 46.16.305(3), and to commercial vehicles with a gross weight in excess of twenty-six thousand pounds, effective with vehicle registrations due or to become due on January 1, 2001, the appearance of the background of all vehicle license plates may vary in color and design, but must be ((issued on a standard background)) legible and clearly identifiable as a Washington state license plate, as designated by the department.
     (2) Additionally, to ensure maximum legibility and reflectivity, the department shall periodically provide for the replacement of license plates, except for commercial vehicles with a gross weight in excess of twenty-six thousand pounds. Frequency of replacement shall be established in accordance with empirical studies documenting the longevity of the reflective materials used to make license plates.
     (3) In providing for the periodic replacement of license plates, the department shall offer the vehicle's owner the option of retaining the current license plate number. The department shall charge a retention fee of twenty dollars if this option is exercised. Revenue generated from the retention fee must be deposited into the multimodal transportation account.

Sec. 602   RCW 46.01.140 and 2001 c 331 s 1 are each amended to read as follows:
     (1) The county auditor, if appointed by the director of licensing shall carry out the provisions of this title relating to the licensing of vehicles and the issuance of vehicle license number plates under the direction and supervision of the director and may with the approval of the director appoint assistants as special deputies and recommend subagents to accept applications and collect fees for vehicle licenses and transfers and to deliver vehicle license number plates.
     (2) A county auditor appointed by the director may request that the director appoint subagencies within the county.
     (a) Upon authorization of the director, the auditor shall use an open competitive process including, but not limited to, a written business proposal and oral interview to determine the qualifications of all interested applicants.
     (b) A subagent may recommend a successor who is either the subagent's sibling, spouse, or child, or a subagency employee, as long as the recommended successor participates in the open, competitive process used to select an applicant. In making successor recommendation and appointment determinations, the following provisions apply:
     (i) If a subagency is held by a partnership or corporate entity, the nomination must be submitted on behalf of, and agreed to by, all partners or corporate officers.
     (ii) No subagent may receive any direct or indirect compensation or remuneration from any party or entity in recognition of a successor nomination. A subagent may not receive any financial benefit from the transfer or termination of an appointment.
     (iii) (a) and (b) of this subsection are intended to assist in the efficient transfer of appointments in order to minimize public inconvenience. They do not create a proprietary or property interest in the appointment.
     (c) The auditor shall submit all proposals to the director, and shall recommend the appointment of one or more subagents who have applied through the open competitive process. The auditor shall include in his or her recommendation to the director, not only the name of the successor who is a relative or employee, if applicable and if otherwise qualified, but also the name of one other applicant who is qualified and was chosen through the open competitive process. The director has final appointment authority.
     (3)(a) A county auditor who is appointed as an agent by the department shall enter into a standard contract provided by the director, developed with the advice of the title and registration advisory committee.
     (b) A subagent appointed under subsection (2) of this section shall enter into a standard contract with the county auditor, developed with the advice of the title and registration advisory committee. The director shall provide the standard contract to county auditors.
     (c) The contracts provided for in (a) and (b) of this subsection must contain at a minimum provisions that:
     (i) Describe the responsibilities, and where applicable, the liability, of each party relating to the service expectations and levels, equipment to be supplied by the department, and equipment maintenance;
     (ii) Require the specific type of insurance or bonds so that the state is protected against any loss of collected motor vehicle tax revenues or loss of equipment;
     (iii) Specify the amount of training that will be provided by the state, the county auditor, or subagents;
     (iv) Describe allowable costs that may be charged to vehicle licensing activities as provided for in (d) of this subsection;
     (v) Describe the causes and procedures for termination of the contract, which may include mediation and binding arbitration.
     (d) The department shall develop procedures that will standardize and prescribe allowable costs that may be assigned to vehicle licensing and vessel registration and title activities performed by county auditors.
     (e) The contracts may include any provision that the director deems necessary to ensure acceptable service and the full collection of vehicle and vessel tax revenues.
     (f) The director may waive any provisions of the contract deemed necessary in order to ensure that readily accessible service is provided to the citizens of the state.
     (4)(a) At any time any application is made to the director, the county auditor, or other agent pursuant to any law dealing with licenses, registration, or the right to operate any vehicle or vessel upon the public highways or waters of this state, excluding applicants already paying such fee under RCW 46.16.070 or 46.16.085, the applicant shall pay to the director, county auditor, or other agent a fee of three dollars for each application in addition to any other fees required by law.
     (b) Counties that do not cover the expenses of vehicle licensing and vessel registration and title activities may submit to the department a request for cost-coverage moneys. The request must be submitted on a form developed by the department. The department shall develop procedures to verify whether a request is reasonable. Payment shall be made on requests found to be allowable from the licensing services account.
     (c) Applicants for certificates of ownership, including applicants paying fees under RCW 46.16.070 or 46.16.085, shall pay to the director, county auditor, or other agent a fee of four dollars in addition to any other fees required by law.
     (d) The fees under (a) and (c) of this subsection, if paid to the county auditor as agent of the director, or if paid to a subagent of the county auditor, shall be paid to the county treasurer in the same manner as other fees collected by the county auditor and credited to the county current expense fund. If the fee is paid to another agent of the director, the fee shall be used by the agent to defray his or her expenses in handling the application.
     (e) Applicants required to pay the three-dollar fee established under (a) of this subsection, must pay an additional ((fifty)) seventy-five cents on registrations that are due or are to become due November 1, 2003, which must be collected and remitted to the state treasurer ((for deposit)) and distributed as follows:
     (i) Fifty cents must be deposited into the department of licensing services account of the motor vehicle fund((. Revenue deposited into this account)) and must be used for agent and subagent support, which is to include but not be limited to the replacement of department-owned equipment in the possession of agents and subagents.
     (ii) Twenty-five cents must be deposited into the license plate technology account created under section 603 of this act.
     (5) A subagent shall collect a service fee of (a) eight dollars and fifty cents for changes in a certificate of ownership, with or without registration renewal, or verification of record and preparation of an affidavit of lost title other than at the time of the title application or transfer and (b) three dollars and fifty cents for registration renewal only, issuing a transit permit, or any other service under this section.
     (6) If the fee is collected by the state patrol as agent for the director, the fee so collected shall be certified to the state treasurer and deposited to the credit of the state patrol highway account. If the fee is collected by the department of transportation as agent for the director, the fee shall be certified to the state treasurer and deposited to the credit of the motor vehicle fund. All such fees collected by the director or branches of his office shall be certified to the state treasurer and deposited to the credit of the highway safety fund.
     (7) Any county revenues that exceed the cost of providing vehicle licensing and vessel registration and title activities in a county, calculated in accordance with the procedures in subsection (3)(d) of this section, shall be expended as determined by the county legislative authority during the process established by law for adoption of county budgets.
     (8) The director may adopt rules to implement this section.

NEW SECTION.  Sec. 603   A new section is added to chapter 46.16 RCW to read as follows:
     The license plate technology account is created in the state treasury. All receipts collected under RCW 46.01.140(4)(e)(ii) must be deposited into this account. Expenditures from this account must support current and future license plate technology and systems integration upgrades. Money in the account may be spent only after appropriation.

NEW SECTION.  Sec. 604   A new section is added to chapter 46.16 RCW to read as follows:
     The department shall offer license plate design services to organizations that are sponsoring a new special license plate series or are seeking to redesign the appearance of an existing special license plate series that they sponsored. In providing this service, the department must work with the requesting organization in determining the specific qualities of the new plate design and must provide full design services to the organization. The department shall collect from the requesting organization a fee of one thousand five hundred dollars for providing license plate design services. This fee includes one original license plate design and up to five additional renditions of the original design. If the organization requests the department to provide further renditions in addition to the five renditions provided under the original fee, the department shall collect an additional fee of five hundred dollars per rendition. All revenue collected under this section must be deposited into the multimodal transportation account.

Sec. 701   RCW 70.95.510 and 1989 c 431 s 92 are each amended to read as follows:
     (1) There is levied a ((one dollar)) seventy-five cents per tire fee on the retail sale of new replacement vehicle tires for a period of five years, beginning ((October 1, 1989)) on the effective date of this section. The fee imposed in this section shall be paid by the buyer to the seller, and each seller shall collect from the buyer the full amount of the fee. The fee collected from the buyer by the seller, less the ten percent amount retained by the seller as provided in ((RCW 70.95.535)) subsection (4) of this section, shall be paid to the department of revenue in accordance with RCW 82.32.045, and the proceeds remaining after the deposit required by subsection (3) of this section, must be deposited into the vehicle tire recycling account created under section 702 of this act. All other applicable provisions of chapter 82.32 RCW have full force and application with respect to the fee imposed under this section. The department of revenue shall administer this section.
     (2) For the purposes of this section, "new replacement vehicle tires" means tires that are newly manufactured for vehicle purposes and used tires available for resale, but does not include retreaded vehicle tires.
     (3) Of the seventy-five cent fee imposed in subsection (1) of this section, twenty-five cents must be deposited into the motor vehicle account and must be used by the department of transportation for road maintenance, which may incorporate the use of material derived from scrap tires.
     (4) Every person engaged in making retail sales of new replacement vehicle tires in this state shall retain ten percent of the collected seventy-five cent fee imposed in subsection (1) of this section. The moneys retained may be used for costs associated with the proper management of the waste vehicle tires by the retailer.

NEW SECTION.  Sec. 702   A new section is added to chapter 70.95 RCW to read as follows:
     (1) The vehicle tire recycling account is created within the state treasury. After the deposit of funds into the motor vehicle account as provided for in RCW 70.95.510(3), the remaining funds received under RCW 70.95.510(1) must be deposited in the vehicle tire recycling account and used by the department for purposes including but not limited to those specified in RCW 70.95.535. Expenditures from the account may occur only after appropriation by the legislature. The department of revenue shall deduct two percent from the funds collected under RCW 70.95.510 for the purpose of administering and collecting the fee from new replacement tire retailers.
     (2) Moneys in the vehicle tire recycling account may be appropriated to the department for the purposes identified in RCW 70.95.535.
     (3) To provide increased accountability, by January 1st of each year, the department shall submit a report to the legislature outlining how the revenues deposited into the vehicle tire recycling account were used over the previous twelve-month period. The report must include, but is not limited to, identifying the local jurisdictions that received grant funding, the location and description of any illegal tire piles cleaned up, a description of any scrap tire demonstration projects funded, and the status of the statewide tire carrier tracking system.

Sec. 703   RCW 70.95.535 and 1989 c 431 s 93 are each amended to read as follows:
     (1) ((Every person engaged in making retail sales of new replacement vehicle tires in this state shall retain ten percent of the collected one dollar fee. The moneys retained may be used for costs associated with the proper management of the waste vehicle tires by the retailer.
     (2))) The department of ecology ((will)) may administer the funds contained in the vehicle tire recycling account for ((the)) purposes ((specified in RCW 70.95.020(5))) including, but not limited to:
     (a) ((Making grants to local governments for pilot demonstration projects for on-site shredding and recycling of tires from unauthorized dump sites;
     (b))) Grants to local government for enforcement programs;
     (((c))) (b) Implementation of a public information and education program to include posters, signs, and informational materials to be distributed to retail tire sales and tire service outlets;
     (((d))) (c) Product marketing studies for recycled tires and alternatives to land disposal;
     (d) Scrap tire demonstration projects including those implemented by state agencies;
     (e) Except as provided in subsection (2) of this section, statewide unlawful tire pile cleanups and local citizen scrap tire amnesty events;
     (f) Statewide tire carrier tracking, reporting, and enforcement of the movement of tires within this state;
     (g) Except as provided in subsection (2) of this section, to provide for funding to state and local governments for the removal of discarded vehicle tires from unauthorized tire dump sites;
     (h) To accomplish the other purposes of RCW 70.95.020(6).
     (2) Prior to spending funds from the vehicle tire recycling account for the removal or cleanup of unlawfully disposed tires, the department must ensure that all legal remedies and cost recovery efforts available against the owner of the unlawfully disposed tires, or the property on which the unlawful tire piles are located, have been exhausted. The department should assist local jurisdictions, where appropriate, with enforcement actions against individuals unlawfully disposing of tires.
     (3)(a) Local governments that are recipients of grant funding for enforcement programs must submit an annual report to the department for each year the grant funding is expended, detailing the uses of the funds and including information on what enforcement activities were supported with the grant funds.
     (b) Local governments that are recipients of grant funding for illegal tire pile cleanups shall submit an annual report to the department for each year the grant funding is expended. The report must, at a minimum, identify the owners of the tire piles, the locations of the tire piles cleaned up, how many tires were removed, where and how the tires were disposed, and why cost recovery could not be obtained from the owners of the tire piles. The department shall forward this information to the legislature on an annual basis.
     (4) In spending funds in the account under this section, the department shall identify communities with the most severe problems with waste tires and provide funds first to those communities to remove accumulations of waste tires.
     (5) It is the intent of the legislature that in spending funds from the vehicle tire recycling account, the department will not implement a program or otherwise spend funds that competes with private businesses that engage in tire recycling.

NEW SECTION.  Sec. 704   (1) The department of ecology shall implement an educational campaign for a period of one year, beginning no later than twelve months following the effective date of this section, to inform and educate local jurisdictions and the various vehicle tire industries who sell, dispose of, and recycle vehicle tires, on the current laws related to vehicle tire disposal and recycling, and the current vehicle tire recycling program administered by the department.
     (2) By September 1, 2003, the department shall submit a report to the legislature on illegal tire piles located in the state. At a minimum, the report must include information identifying every known illegal tire pile in the state, the city and county where each illegal tire pile is located, the estimated number of tires in each illegal tire pile, and the expected cost associated with cleaning up each illegal tire pile.
     (3) Moneys from the vehicle tire recycling account may be used to fund this section.
     (4) This section expires December 31, 2005.

NEW SECTION.  Sec. 705   RCW 70.95.530 (Vehicle tire recycling account -- Use) and 1988 c 250 s 1 & 1985 c 345 s 7 are each repealed.

NEW SECTION.  Sec. 801   Part headings used in this act are not any part of the law.

NEW SECTION.  Sec. 802   Section 501 of this act expires June 30, 2030.

NEW SECTION.  Sec. 803   (1) Except for sections 601 through 604 of this act, this act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2003.
     (2) Sections 601 through 604 of this act take effect January 1, 2004.