BILL REQ. #:  H-2585.3 

Read first time 04/13/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to modifying tax refund and interest provisions; amending RCW 82.32.050, 82.32.060, 82.32.062, 82.45.100, 82.12.045, 83.100.130, 84.56.440, 35.102.080, 35.102.110, and 74.60.050; and creating a new section.

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

Sec. 1   RCW 82.32.050 and 2008 c 181 s 501 are each amended to read as follows:
     (1) If upon examination of any returns or from other information obtained by the department it appears that a tax or penalty has been paid less than that properly due, the department ((shall)) must assess against the taxpayer such additional amount found to be due and ((shall)) must add thereto interest on the tax only. The department ((shall)) must notify the taxpayer by mail, or electronically as provided in RCW 82.32.135, of the additional amount and the additional amount ((shall)) becomes due and ((shall)) must be paid within thirty days from the date of the notice, or within such further time as the department may provide.
     (a) For tax liabilities arising before January 1, 1992, interest ((shall be)) is computed at the rate of nine percent per annum from the last day of the year in which the deficiency is incurred until the earlier of December 31, 1998, or the date of payment. After December 31, 1998, the rate of interest ((shall be)) is variable and computed as provided in subsection (2) of this section. The rate so computed ((shall)) must be adjusted on the first day of January of each year for use in computing interest for that calendar year.
     (b) For tax liabilities arising after December 31, 1991, the rate of interest ((shall be)) is variable and computed as provided in subsection (2) of this section from the last day of the year in which the deficiency is incurred until the date of payment. The rate so computed ((shall)) must be adjusted on the first day of January of each year for use in computing interest for that calendar year.
     (c) Interest imposed after December 31, 1998, ((shall be)) is computed from the last day of the month following each calendar year included in a notice, and the last day of the month following the final month included in a notice if not the end of a calendar year, until the due date of the notice. If payment in full is not made by the due date of the notice, additional interest ((shall be)) is computed until the date of payment. The rate of interest ((shall be)) is variable and computed as provided in subsection (2) of this section. The rate so computed ((shall)) must be adjusted on the first day of January of each year for use in computing interest for that calendar year.
     (2) For the purposes of this section, the rate of interest to be charged to the taxpayer ((shall)) must be an average of the ((federal short-term rate as defined in 26 U.S.C. Sec. 1274(d) plus two percentage points)) rate for twenty-four month personal credit card plans as provided in the G.19 consumer credit report prepared by the federal reserve board. The rate set for each new year ((shall be)) is computed by taking an arithmetical average to the nearest percentage point of the ((federal short-term)) rate, compounded annually. That average ((shall)) must be calculated using the rates from ((four months: January, April, and July of the calendar year immediately preceding the new year, and October of the previous preceding year)) the most recent four calendar quarters included in the June report, which is released in August of each year, regardless of whether the rates posted in the June report are revised or preliminary.
     (3) During a state of emergency declared under RCW 43.06.010(12), the department, on its own motion or at the request of any taxpayer affected by the emergency, may extend the due date of any assessment or correction of an assessment for additional taxes, penalties, or interest as the department deems proper.
     (4) No assessment or correction of an assessment for additional taxes, penalties, or interest due may be made by the department more than four years after the close of the tax year, except (a) against a taxpayer who has not registered as required by this chapter, (b) upon a showing of fraud or of misrepresentation of a material fact by the taxpayer, or (c) where a taxpayer has executed a written waiver of such limitation. The execution of a written waiver ((shall)) also extends the period for making a refund or credit as provided in RCW 82.32.060(2).
     (5) For the purposes of this section, "return" means any document a person is required by the state of Washington to file to satisfy or establish a tax or fee obligation that is administered or collected by the department of revenue and that has a statutorily defined due date.

Sec. 2   RCW 82.32.060 and 2009 c 176 s 4 are each amended to read as follows:
     (1) If, upon receipt of an application by a taxpayer for a refund or for an audit of the taxpayer's records, or upon an examination of the returns or records of any taxpayer, it is determined by the department that ((within the statutory period for assessment of taxes, penalties, or interest prescribed by RCW 82.32.050)) any amount of tax, penalty, or interest has been paid in excess of that properly due, the excess amount paid ((within, or attributable to, such period)) must be credited to the taxpayer's account or must be refunded to the taxpayer, at the taxpayer's option. Except as provided in subsection (2) of this section, no refund or credit may be made for taxes, penalties, or interest paid more than ((four)) three years prior to the beginning of the calendar year in which the refund application is made or examination of records is completed. Notwithstanding the limitation on the time for making a refund or credit provided in this subsection, when the department conducts an audit or examination of the taxpayer's records or returns and identifies an overpayment of tax, penalty, or interest for a particular tax year within the scope of the audit or examination and for which a refund or credit may not be made because of the lapse of the three-year period in this subsection, the amount of any deficiency determined by the department for that same tax year must be reduced by the amount of the overpayment. However, if the overpayment exceeds the amount of the deficiency, the amount of the overpayment that exceeds the deficiency may not be refunded or credited against any deficiency for any other tax year.
     (2)(a) The execution of a written waiver under RCW 82.32.050 or 82.32.100 ((will)) extends the time for making a refund or credit of any taxes paid during, or attributable to, the years covered by the waiver if, prior to the expiration of the waiver period, an application for refund of such taxes is made by the taxpayer or the department discovers a refund or credit is due.
     (b) A refund or credit must be allowed for an excess payment resulting from the failure to claim a bad debt deduction, credit, or refund under RCW 82.04.4284, 82.08.037, 82.12.037, 82.14B.150, or 82.16.050(5) for debts that became bad debts under 26 U.S.C. Sec. 166, as amended or renumbered as of January 1, 2003, less than ((four)) three years prior to the beginning of the calendar year in which the refund application is made or examination of records is completed.
     (3) Any such refunds must be made by means of vouchers approved by the department and by the issuance of state warrants drawn upon and payable from such funds as the legislature may provide. However, taxpayers who are required to pay taxes by electronic funds transfer under RCW 82.32.080 must have any refunds paid by electronic funds transfer if the department has the necessary account information to facilitate a refund by electronic funds transfer.
     (4) Any judgment for which a recovery is granted by any court of competent jurisdiction, not appealed from, for tax, penalties, and interest which were paid by the taxpayer, and costs, in a suit by any taxpayer must be paid in the same manner, as provided in subsection (3) of this section, upon the filing with the department of a certified copy of the order or judgment of the court.
     (((a) Interest at the rate of three percent per annum must be allowed by the department and by any court on the amount of any refund, credit, or other recovery allowed to a taxpayer for taxes, penalties, or interest paid by the taxpayer before January 1, 1992. This rate of interest applies for all interest allowed through December 31, 1998. Interest allowed after December 31, 1998, must be computed at the rate as computed under RCW 82.32.050(2). The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year.
     (b) For refunds or credits of amounts paid or other recovery allowed to a taxpayer after December 31, 1991, the rate of interest must be the rate as computed for assessments under RCW 82.32.050(2) less one percent. This rate of interest applies for all interest allowed through December 31, 1998. Interest allowed after December 31, 1998, must be computed at the rate as computed under RCW 82.32.050(2). The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year.))
     (5) Interest allowed on a credit notice or refund issued after December 31, 2003, must be computed as follows:
     (a) If all overpayments for each calendar year and all reporting periods ending with the final month included in a notice or refund were made on or before the due date of the final return for each calendar year or the final reporting period included in the notice or refund:
     (i) Interest must be computed from January 31st following each calendar year included in a notice or refund; or
     (ii) Interest must be computed from the last day of the month following the final month included in a notice or refund.
     (b) If the taxpayer has not made all overpayments for each calendar year and all reporting periods ending with the final month included in a notice or refund on or before the dates specified by RCW 82.32.045 for the final return for each calendar year or the final month included in the notice or refund, interest must be computed from the last day of the month following the date on which payment in full of the liabilities was made for each calendar year included in a notice or refund, and the last day of the month following the date on which payment in full of the liabilities was made if the final month included in a notice or refund is not the end of a calendar year.
     (c) Interest included in a credit notice must accrue up to the date the taxpayer could reasonably be expected to use the credit notice, as defined by the department's rules. If a credit notice is converted to a refund, interest must be recomputed to the date the refund is issued, but not to exceed the amount of interest that would have been allowed with the credit notice.
     (6) For the purposes of this section, the rate of interest allowed under this section for a credit or refund must be an average of the federal short-term rate as defined in 26 U.S.C. Sec. 1274(d) plus two percentage points. The rate set for each new year must be computed by taking an arithmetical average to the nearest percentage point of the federal short-term rate, compounded annually. That average must be calculated using the rates from four months: January, April, and July of the calendar year immediately preceding the new year, and October of the previous preceding year. The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year.
     (7) This section does not limit the time in which a credit notice issued by the department to a taxpayer may be used or converted into a refund.

Sec. 3   RCW 82.32.062 and 2002 c 57 s 1 are each amended to read as follows:
     In addition to the procedure set forth in RCW 82.32.060 and as an exception to the ((four-year)) three-year period explicitly set forth in RCW 82.32.060, an offset for a tax that has been paid in excess of that properly due may be taken under the following conditions: (1) The tax paid in excess of that properly due was sales tax paid on the purchase of property acquired for leasing; (2) the taxpayer was at the time of purchase entitled to purchase the property at wholesale under RCW 82.04.060; and (3) the taxpayer substantiates that sales tax was paid at the time of purchase and that there was no intervening use of the equipment by the taxpayer. The offset is applied to and reduced by the amount of retail sales tax otherwise due from the beginning of lease of the property until the offset is extinguished.

Sec. 4   RCW 82.45.100 and 2010 1st sp.s. c 23 s 211 are each amended to read as follows:
     (1) Payment of the tax imposed under this chapter is due and payable immediately at the time of sale, and if not paid within one month thereafter will bear interest from the time of sale until the date of payment.
     (a) Interest imposed before January 1, 1999, is computed at the rate of one percent per month.
     (b) Interest imposed after December 31, 1998, is computed on a monthly basis at the rate as computed under RCW 82.32.050(2). The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year. The department must provide written notification to the county treasurers of the variable rate on or before December 1st of the year preceding the calendar year in which the rate applies.
     (2) In addition to the interest described in subsection (1) of this section, if the payment of any tax is not received by the county treasurer or the department of revenue, as the case may be, within one month of the date due, there is assessed a penalty of five percent of the amount of the tax; if the tax is not received within two months of the date due, there will be assessed a total penalty of ten percent of the amount of the tax; and if the tax is not received within three months of the date due, there will be assessed a total penalty of twenty percent of the amount of the tax. The payment of the penalty described in this subsection is collectible from the seller only, and RCW 82.45.070 does not apply to the penalties described in this subsection.
     (3) If the tax imposed under this chapter is not received by the due date, the transferee is personally liable for the tax, along with any interest as provided in subsection (1) of this section, unless an instrument evidencing the sale is recorded in the official real property records of the county in which the property conveyed is located.
     (4) If upon examination of any affidavits or from other information obtained by the department or its agents it appears that all or a portion of the tax is unpaid, the department must assess against the taxpayer the additional amount found to be due plus interest and penalties as provided in subsections (1) and (2) of this section. The department must notify the taxpayer by mail, or electronically as provided in RCW 82.32.135, of the additional amount and the same becomes due and must be paid within thirty days from the date of the notice, or within such further time as the department may provide.
     (5)(a) If, upon receipt of an application by a taxpayer for a refund, or upon examination of any affidavits or from other information obtained by the department or its agents, the department determines that the taxpayer has overpaid the tax due under this chapter, the department must refund the amount of the overpayment, together with interest as provided in (b) of this subsection (5).
     (b) Interest on refunds must be allowed at the rate provided in RCW 82.32.060. The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year. Interest must be refunded from the date of overpayment until the date the refund is mailed. No refund may be made by the department more than three years after the date of sale.
     (6) No assessment ((or refund)) may be made by the department more than four years after the date of sale except upon a showing of:
     (a) Fraud or misrepresentation of a material fact by the taxpayer;
     (b) A failure by the taxpayer to record documentation of a sale or otherwise report the sale to the county treasurer; or
     (c) A failure of the transferor or transferee to report the sale under RCW 82.45.090(2).
     (((6))) (7) Penalties collected on taxes due under this chapter under subsection (2) of this section and RCW 82.32.090 (2) through (8) must be deposited in the housing trust fund as described in chapter 43.185 RCW.

Sec. 5   RCW 82.12.045 and 2010 c 161 s 904 are each amended to read as follows:
     (1) In the collection of the use tax on vehicles, the department of revenue may designate the county auditors of the several counties of the state as its collecting agents. Upon such designation, it ((shall be)) is the duty of each county auditor to collect the tax at the time an applicant applies for transfer of certificate of title to the vehicle, except when the applicant:
     (a) Exhibits a dealer's report of sale showing that the retail sales tax has been collected by the dealer;
     (b) Presents a written statement signed by the department of revenue, or its duly authorized agent showing that no use tax is legally due; or
     (c) Presents satisfactory evidence showing that the retail sales tax or the use tax has been paid by the applicant on the vehicle in question.
     (2) As used in this section, "vehicle" has the same meaning as in RCW 46.04.670.
     (3) It ((shall be)) is the duty of every applicant for registration and transfer of certificate of title who is subject to payment of tax under this section to declare upon the application the value of the vehicle for which application is made, which ((shall)) consists of the consideration paid or contracted to be paid therefor.
     (4) Each county auditor who acts as agent of the department of revenue ((shall)) must at the time of remitting vehicle license fee receipts on vehicles subject to the provisions of this section pay over and account to the state treasurer for all use tax revenue collected under this section, after first deducting as a collection fee the sum of two dollars for each motor vehicle upon which the tax has been collected. All revenue received by the state treasurer under this section ((shall)) must be credited to the general fund. The auditor's collection fee ((shall)) must be deposited in the county current expense fund. A duplicate of the county auditor's transmittal report to the state treasurer ((shall)) must be forwarded ((forthwith)) immediately to the department of revenue.
     (5) Any applicant who has paid use tax to a county auditor under this section may apply to the department of revenue for refund thereof if he or she has reason to believe that such tax was not legally due and owing. No refund ((shall be)) is allowed unless application therefor is received by the department of revenue within the statutory period ((for assessment of taxes, penalties, or interest prescribed by RCW 82.32.050(4))) for refunds provided in RCW 82.32.060. Upon receipt of an application for refund the department of revenue ((shall)) must consider the same and issue its order either granting or denying it and if refund is denied the taxpayer ((shall have)) has the right of appeal as provided in RCW 82.32.170, 82.32.180, and 82.32.190.
     (6) The provisions of this section ((shall)) must be construed as cumulative of other methods prescribed in chapters 82.04 through 82.32 RCW, inclusive, for the collection of the tax imposed by this chapter. The department of revenue ((shall have)) has power to promulgate such rules as may be necessary to administer the provisions of 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)) may be deductible by said director in remitting use tax revenue to the state treasurer.
     (7) The use tax revenue collected on the rate provided in RCW 82.08.020(3) ((shall)) must be deposited in the multimodal transportation account under RCW 47.66.070.

Sec. 6   RCW 83.100.130 and 2005 c 516 s 10 are each amended to read as follows:
     (1) If, upon receipt of an application by a taxpayer for a refund, or upon examination of the returns or records of any taxpayer, the department determines that ((within the statutory period for assessment of taxes, penalties, or interest prescribed by RCW 83.100.095)) a person required to file the Washington return under RCW 83.100.050 has overpaid the tax due under this chapter, the department ((shall)) must refund the amount of the overpayment, together with interest as provided in subsection (2) of this section. If the application for refund, with supporting documents, is filed within one hundred twenty days after an adjustment or final determination of federal tax liability, the department ((shall)) must pay interest until the date the refund is mailed. If the application for refund, with supporting documents, is filed after one hundred twenty days after the adjustment or final determination, the department ((shall)) must pay interest only until the end of the one hundred twenty-day period.
     (2) Interest refunded under this section ((for periods before January 2, 1997, shall be computed at the rate provided in RCW 83.100.070(1). Interest refunded under this section for periods after January 1, 1997, through December 31, 1998, shall be computed on a daily basis at the rate as computed under RCW 82.32.050(2) less one percentage point. Interest allowed for periods after December 31, 1998, shall be)) is computed at the rate as computed under RCW ((82.32.050(2))) 82.32.060. Except as provided in subsection (1) of this section, interest ((shall)) must be refunded from the date of overpayment until the date the refund is mailed. The rate so computed ((shall)) must be adjusted on the first day of January of each year.
     (3) Except as otherwise provided in subsection (4) of this section and RCW 83.100.090, no refund ((shall)) may be made for taxes, penalties, or interest paid more than ((four)) three years prior to the beginning of the calendar year in which the refund application is made or an examination of records is complete.
     (4) The execution of a written waiver under RCW 83.100.095 ((shall)) extends the time for making a refund if, prior to the expiration of the waiver period, an application for refund is made by the taxpayer or the department discovers a refund is due.
     (5) An application for refund ((shall)) must be on a form prescribed by the department and ((shall)) must contain any information and supporting documents the department requires.

Sec. 7   RCW 84.56.440 and 2008 c 181 s 511 are each amended to read as follows:
     (1)(a) The department of revenue ((shall)) must collect all ad valorem taxes upon ships and vessels listed with the department in accordance with RCW 84.40.065 and all applicable interest and penalties.
     (b) The taxes ((shall be)) are due and payable to the department on or before the thirtieth day of April and ((shall be)) are delinquent after that date.
     (2) If payment of the tax is not received by the department by the due date, there ((shall be)) is imposed a penalty of five percent of the amount of the tax; and if the tax is not received within thirty days after the due date, there ((shall be)) is imposed a total penalty of ten percent of the amount of the tax; and if the tax is not received within sixty days after the due date, there ((shall be)) is imposed a total penalty of twenty percent of the amount of the tax. No penalty so added ((shall)) may be less than five dollars.
     (3) Delinquent taxes under this section are subject to interest at the rate set forth in RCW 82.32.050 from the date of delinquency until paid. Interest or penalties collected on delinquent taxes under this section ((shall)) must be paid by the department into the general fund of the state treasury.
     (4) If upon information obtained by the department it appears that any ship or vessel required to be listed according to the provisions of RCW 84.40.065 is not so listed, the department ((shall)) must value the ship or vessel and assess against the owner of the vessel the taxes found to be due and ((shall)) must add thereto interest at the rate set forth in RCW 82.32.050 from the original due date of the tax until the date of payment. The department ((shall)) must notify the vessel owner by mail of the amount and the same ((shall)) becomes due and ((shall)) must be paid by the vessel owner within thirty days of the date of the notice. If payment is not received by the department by the due date specified in the notice, the department ((shall)) must add a penalty of ten percent of the tax found due. A person who willfully gives a false listing or willfully fails to list a ship or vessel as required by RCW 84.40.065 ((shall be)) is subject to the penalty imposed by RCW 84.40.130(2), which ((shall)) must be assessed and collected by the department.
     (5) Delinquent taxes under this section, along with all penalties and interest thereon, ((shall)) must be collected by the department according to the procedures set forth in chapter 82.32 RCW for the filing and execution of tax warrants, including the imposition of warrant interest. In the event a warrant is issued by the department for the collection of taxes under this section, the department ((shall)) must add a penalty of five percent of the amount of the delinquent tax, but not less than ten dollars.
     (6) The department ((shall)) must also collect all delinquent taxes pertaining to ships and vessels appearing on the records of the county treasurers for each of the counties of this state as of December 31, 1993, including any applicable interest or penalties. The provisions of subsection (5) of this section ((shall)) apply to the collection of such delinquent taxes.
     (7) During a state of emergency declared under RCW 43.06.010(12), the department, on its own motion or at the request of any taxpayer affected by the emergency, may grant extensions of the due date of any taxes payable under this section as the department deems proper.
     (8)(a) If, upon receipt of an application by a vessel owner for a refund, or upon examination of any information obtained by the department, the department determines that the vessel owner has overpaid the tax due under this section, the department must refund the amount of the overpayment, together with interest as provided in (b) of this subsection (8).
     (b) Interest on refunds must be allowed at the rate provided in RCW 82.32.060. The rate so computed must be adjusted on the first day of January of each year for use in computing interest for that calendar year. Interest must be refunded from the date of overpayment until the date the refund is mailed. No refund may be made by the department more than three years prior to the beginning of the calendar year in which the refund application is made or the department's examination of information is complete.

Sec. 8   RCW 35.102.080 and 2003 c 79 s 8 are each amended to read as follows:
     (1) A city that imposes a business and occupation tax ((shall)) must compute interest charged a taxpayer on an underpaid tax or penalty in accordance with RCW 82.32.050, as that statute existed on January 1, 2011.
     (2) A city that imposes a business and occupation tax ((shall)) must compute interest paid on refunds or credits of amounts paid or other recovery allowed a taxpayer in accordance with RCW 82.32.060.

Sec. 9   RCW 35.102.110 and 2003 c 79 s 11 are each amended to read as follows:
     The provisions relating to the time period allowed for a refund of taxes paid ((shall)) must be in accordance with chapter 82.32 RCW, as that chapter existed on January 1, 2011.

Sec. 10   RCW 74.60.050 and 2010 1st sp.s. c 30 s 6 are each amended to read as follows:
     (1) The department, in cooperation with the office of financial management, ((shall)) must develop rules for determining the amount to be assessed to individual hospitals, notifying individual hospitals of the assessed amount, and collecting the amounts due. Such rule making ((shall)) must specifically include provision for:
     (a) Transmittal of quarterly notices of assessment by the department to each hospital informing the hospital of its nonmedicare hospital inpatient days and the assessment amount due and payable. Such quarterly notices ((shall)) must be sent to each hospital at least thirty calendar days prior to the due date for the quarterly assessment payment.
     (b) Interest on delinquent assessments at the rate specified in RCW 82.32.050, as that statute existed on January 1, 2011.
     (c) Adjustment of the assessment amounts as follows:
     (i) For each fiscal year beginning July 1, 2010, the assessment amounts under RCW 74.60.030 (1) and (3) may be adjusted as follows:
     (A) If sufficient other funds for hospitals, excluding any extension of section 5001 of P.L. No. 111-5, are available to support the reimbursement rates and other payments under RCW 74.60.080, 74.60.090, 74.60.100, 74.60.110, or 74.60.120 without utilizing the full assessment authorized under RCW 74.60.030 (1) or (3), the department shall reduce the amount of the assessment for prospective payment system, psychiatric, and rehabilitation hospitals proportionately to the minimum level necessary to support those reimbursement rates and other payments.
     (B) Provided that none of the conditions set forth in RCW 74.60.150(2) have occurred, if the department's forecasts indicate that the assessment amounts under RCW 74.60.030 (1) and (3), together with all other available funds, are not sufficient to support the reimbursement rates and other payments under RCW 74.60.080, 74.60.090, 74.60.100, 74.60.110, or 74.60.120, the department ((shall)) must increase the assessment rates for prospective payment system, psychiatric, and rehabilitation hospitals proportionately to the amount necessary to support those reimbursement rates and other payments, plus a contingency factor up to ten percent of the total assessment amount.
     (C) Any positive balance remaining in the fund at the end of the fiscal year ((shall)) must be applied to reduce the assessment amount for the subsequent fiscal year.
     (ii) Any adjustment to the assessment amounts pursuant to this subsection, and the data supporting such adjustment, including but not limited to relevant data listed in subsection (2) of this section, must be submitted to the Washington state hospital association for review and comment at least sixty calendar days prior to implementation of such adjusted assessment amounts. Any review and comment provided by the Washington state hospital association ((shall)) may not limit the ability of the Washington state hospital association or its members to challenge an adjustment or other action by the department that is not made in accordance with this chapter.
     (2) By November 30th of each year, the department ((shall)) must provide the following data to the Washington state hospital association:
     (a) The fund balance;
     (b) The amount of assessment paid by each hospital;
     (c) The annual medicaid fee-for-service payments for inpatient hospital services and outpatient hospital services; and
     (d) The medicaid healthy options inpatient and outpatient payments as reported by all hospitals to the department on disproportionate share hospital applications. The department ((shall)) must amend the disproportionate share hospital application and reporting instructions as needed to ensure that the foregoing data is reported by all hospitals as needed in order to comply with this subsection (2)(d).
     (3) The department ((shall)) must determine the number of nonmedicare hospital inpatient days for each hospital for each assessment period.
     (4) To the extent necessary, the department ((shall)) must amend the contracts between the managed care organizations and the department and between regional support networks and the department to incorporate the provisions of RCW 74.60.120. The department ((shall)) must pursue amendments to the contracts as soon as possible after April 27, 2010. The amendments to the contracts ((shall)) must, among other provisions, provide for increased payment rates to managed care organizations in accordance with RCW 74.60.120.

NEW SECTION.  Sec. 11   (1) The interest rate provisions of this act apply only to interest imposed after December 31, 2011, regardless of whether the interest relates to tax liabilities incurred before the effective date of this section.
     (2) The provisions of this act that reduce the time period for granting credits and refunds of state taxes apply only to overpayments discovered by the department of revenue and applications for refund or credit submitted to the department of revenue on and after the effective date of this section, regardless of whether the overpayments or purported overpayments were made before the effective date of this section.

NEW SECTION.  Sec. 12   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.