SENATE BILL REPORT

ESSB 6358

BYSenate Committee on Transportation (originally sponsored by Senators Patterson, Bender, Thorsness, Patrick and Nelson; by request of Governor)

Modifying transportation tax rates and distributions.

Senate Committee on Transportation

Senate Hearing Date(s):February 22, 1990

Majority Report:  That Substitute Senate Bill No. 6358 be substituted therefor, and the substitute bill be referred to Committee on Rules without recommendation.

      Signed by Senators Patterson, Chairman; Thorsness, Vice Chairman; von Reichbauer, Vice Chairman; Barr, Benitz, Nelson, Patrick, Sellar.

Senate Staff:Louise Bray Sandison (786-7322)

                  March 2, 1990

AS PASSED SENATE, MARCH 1, 1990

BACKGROUND:

The current state fuel tax is 18 cents per gallon.  Nearly one half of the revenues collected are distributed to cities and counties for their road purposes.  The remaining revenues are appropriated to state agencies such as the Department of Transportation and Department of Licensing.  Gross weight fees, which also are deposited in the motor vehicle fund, have not been increased for almost 20 years.

The motor vehicle excise tax (MVET) is included in the annual billing for license tabs.  The amount of taxation for MVET is calculated at 2.454 percent of the fair market value for the vehicle.  Most of the revenues generated by the MVET are distributed to cities, counties, the state ferry system and transit districts, with the remainder going to the general fund.

SUMMARY:

The current state fuel tax rate of 18 cents per gallon is increased five cents per gallon in two steps (four cents on April 1, 1990 and an additional one cent on April 1, 1991).

The special category "C" account is created and priority criteria are established.

Truck gross weight and overload fees are increased by 40 percent, effective September 1, 1990.

Four local option transportation taxes are authorized:

-- Fuel tax (10 percent of state rate) (subject to voter approval);

-- Vehicle registration fees (limit $15) (subject to referendum);

-- Commercial parking tax (subject to referendum); and

-- Street utility charge (proceeds limited to 50 percent of annual maintenance and operations budget for streets).

The current motor vehicle excise tax (MVET) is reduced from 2.454 percent to 2.0 percent based on a new depreciation schedule, and the statute is simplified.

A surtax of 0.2 percent is added on the MVET and the revenue is placed in the newly-created transportation fund for transportation purposes.  (The transportation fund is not subject to 18th Amendment restrictions on use of funds.)

The MVET paid on initial registration is for a full calendar year.

Effective July 1991, MVET transit match residuals are transferred from the general fund to the transportation fund.  Beginning January 1, 1993, 0.1 percent of the MVET is transferred from the general fund to the transportation fund.  The transit MVET match rate is reduced from 1 percent (in King, Pierce, Snohomish and Thurston Counties, from .96 percent) to .89 percent, effective January 1993. The revenues resulting from these reductions are deposited in separate accounts in the transportation fund and are set aside for high occupancy vehicle (HOV), Transportation Improvement Board (TIB) match, high capacity transportation and other transit-related roadway improvements.

The temporary 0.1 percent MVET for the ferry operating budget is made permanent.

Revenues distributed to the off-road vehicle and nonhighway account, the outdoor recreation account (boating fuel) and the snowmobile account are limited to current law levels.

A statutory requirement for the Department of Transportation to collect tolls on the Hood Canal Bridge is eliminated.  Tolls are not required so long as sufficient funds from the Puget Sound construction account are available to pay debt service. Requirements for the Marine Division to repay Hood Canal Bridge disaster funds, totalling $11.6 million, from the Puget Sound ferry operating account to the motor vehicle fund are eliminated.

The Department of Transportation is authorized to retire the remaining bond debt of $2.5 million on the Spokane River toll bridge (Maple Street Bridge) and replace the bridge deck in the 1991-93 biennium with federal, state and local matching funds. Bridge tolls are eliminated as soon as all bonds are retired.

The Puyallup Indian settlement account is created for deposit of monies appropriated for the settlement.

Appropriation:    none

Revenue:    yes

Fiscal Note:      none requested

Effective Date:Sections 101-104, 115-117, 201-214, 405-411 and 503 take effect on April 1, 1990.  Sections 105-114, 301-303, 305-328, and 401-404 take effect September 1, 1990.  Section 304 takes effect July 1, 1991.

Senate Committee - Testified: No one