SENATE BILL REPORT

SB 6358

BYSenators 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)

                  February 27, 1990

AS REPORTED BY COMMITTEE ON TRANSPORTATION, FEBRUARY 22, 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 fuel tax is increased by three cents per gallon on April 1, 1990, followed by one-cent increases on July 1, 1991 and on July 1, 1992, for a total of five cents per gallon.

The motor vehicle excise tax (MVET) base rate is restructured to 2.0 percent using straight line depreciation, and imposes a 0.2 percent surtax on the MVET.  The surtax is deposited in the transportation fund and is assumed to be appropriated to the Department of Transportation (DOT). 

The transfer of 0.2 percent of the MVET from the general fund to the transportation fund is phased in (July 1, 1991 and July 1, 1993).  Revenues are assumed to remain unappropriated until certain studies have been completed.

Gross weight fees are increased by 25 percent, and the distribution formula is simplified.

The following local option taxes are authorized:  1) fuel tax--10 percent of state rate (voter approval required); 2) vehicle registration fee--$15 maximum (subject to referendum); and 3) commercial parking tax (subject to referendum).

The 0.1 percent MVET for ferry operations is made permanent.  Category C program (reduced from $160 million to $85 million in 89-91 and from $220 million to $200 million in 91-93) is fully funded.  Special C projects (1st Avenue South Bridge, SR 18 and Spokane North-South Corridor) are funded.  The county arterial preservation account is created and funded.

Tolls on the Maple Street Bridge and Hood Canal Bridge are eliminated.  The $11.16 million payback from the ferries to the motor vehicle fund is forgiven.

Full-year motor vehicle registration is provided.  Proportional registration for trailers, semi-trailers, and converter gears provided they are properly registered in their home jurisdictions is eliminated.

EFFECT OF PROPOSED SUBSTITUTE:

The current rate of 18 cents per gallon is increased 5 cents per gallon, effective April 1, 1990.

Proceeds of the new gas tax revenues are distributed as follows:

!tp2,1,2,1,1,1 !tj2!tl5 CENTS

!tlDOT!tj1!tl1.50¢

!tlSpecial "C" !tj1!tl .60

!tlCities !tj1!tl .40

!tlCounties !tj1!tl .30

!tlCounty Arterials !tj1!tl .60

!tlTIB!tj1!tl1.40

!tlRAP !tj1!tl .20

!tlTOTAL!tj1!tl5.00¢

Special category "C" priority criteria are established.

Fee increases of 25 percent are imposed on gross weight and overloads, effective January 1, 1991.

Four local option transportation taxes are authorized:

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

      --Registration fees (limit $15) (subject to voter approval)

      --Commercial parking tax (subject to voter approval)

      --Street utility charge (subject to referendum)

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 MVET and the revenue is placed in the newly created transportation fund for transportation purposes.

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

Effective July 1991, MVET distributions to transits and cities (police and fire protection) are limited to consumer price index increases for six years.

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

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 (SHB 2201).  Requirements for the Marine Division to repay loans from the Puget Sound ferry operating account to motor vehicle fund totaling $11.6 are eliminated.

The County Road Administration Board (CRAB) is authorized to use data to establish cost per mile on a regional basis in determining the counties' share of the fuel tax distribution.

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); replace the bridge deck in the 1991-93 biennium with federal, state, and local matching funds; and bridge tolls are eliminated as soon as all bonds are retired.  An appropriation to retire the bond debt will be contained in the transportation appropriation bill.

All sections of the bill are null and void if all of SSB 6358 does not become law.

Appropriation:    none

Revenue:    yes

Fiscal Note:      none requested

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: No one