Brief Description: Extending commute trip reduction incentives.

Sponsors: Representatives Murray, Wallace, Cooper, Clibborn, Simpson, Rockefeller, Hudgins and Hankins.

Hearing Date: 3/26/03

Staff: Gene Baxstrom (786-7303).

Background:

Major employers who employ 100 or more employees in the state's nine largest counties are currently required to implement commute trip reduction programs to reduce the number of their employees traveling by single-occupant vehicles to their work sites.

Until December 31, 2000, the Legislature authorized business and occupation and public utility tax credits for employers throughout the state if they provided financial incentives to their employees for ride sharing in car pools, public transportation and non-motorized commuting (CTR modes). The purpose of this credit was to help reduce congestion, improve air quality and assist employers in efforts to provide incentives for employees to use CTR modes. Employers were able to apply for a tax credit of up to $60 per person, per year or up to 50 percent of the financial incentive, whichever was less.

The general fund was originally reimbursed for the amount of credits by the air pollution control account when the annual cap on credits was $1.5 million. When the maximum annual credits were increased in 1999 to $2.25 million, the additional funds were from transportation-related accounts. The specific sources of reimbursement to the general fund were eliminated when the state motor vehicle tax was repealed.

In 1999 the Governor vetoed legislation extending the tax credit until 2006, citing concerns over the impact to the air pollution control account. In 2000 legislation proposed by the Governor to have the general fund absorb the amount of the tax credits until 2006 did not pass. Legislation was passed in 2002 to re-institute CTR tax credits; however that legislation was conditioned on voter approval of Referendum 51.

Summary of Bill:

A commute trip reduction tax credit is enacted from January 1, 2004 until June 30, 2013. Employers are allowed a business and occupation or public utility tax credit if they provide financial incentives to their employees for ride sharing in car pools, public transportation, using car sharing, and non-motorized commuting (CTR incentives). Employers may apply for a tax credit of up to $60 per employee per year or up to 50 percent of the financial CTR incentives, whichever is less. Property managers and other employers may claim a credit for incentives granted employees at their work sites.

There is a limit of $100,000 per employer per year and no tax credit can be greater than taxes due. Tax credits cannot be carried back or forward.

Until June 30, 2013, the Department of Transportation must administer a program for organizations not eligible to receive the tax credits, including public agencies, nonprofit organizations, developers and property managers for grants of up to $60 per person or 50 percent of those incentives paid, whichever is less, by employers and property managers for CTR incentives.

Grants are limited to $750,000 per calendar year and the combined limit for tax credits is $2.25 million. The General Fund is reimbursed for the amount of tax credits from the Multimodal Transportation Account. The tax credits and grants expire June 30, 2013. If additional funding is not provided for the Multimodal Transportation Account by January 1, 2004, the act is null and void.

Appropriation: None.

Fiscal Note: Not Requested.

Effective Date: This bill takes effect on January 1, 2004.