SENATE BILL REPORT

                  SSB 5781

               As Passed Senate, March 15, 1999

Title:  An act relating to the commute trip reduction tax credit.

Brief Description:  Extending the commute trip tax reduction credit.

Sponsors:  Senate Committee on Transportation (originally sponsored by Senators Eide, Swecker, Fraser and Costa; by request of Department of Ecology).

Brief History:

Committee Activity:  Transportation:  2/18/99, 3/4/99 [DPS].

Passed Senate, 3/15/99, 43-3.

SENATE COMMITTEE ON TRANSPORTATION

Majority Report:  That Substitute Senate Bill No. 5781 be substituted therefor, and the substitute bill do pass.

  Signed by Senators Haugen, Chair; Gardner, Vice Chair; Goings, Vice Chair; Benton, Costa, Eide, Finkbeiner, Heavey, Horn, Jacobsen, Johnson, Morton, Oke, Sellar, Sheahan, T. Sheldon, Shin and Swecker.

Staff:  Gene Baxstrom (786-7303)

Background:  Major employers (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.

To help reduce congestion, improve air quality and assist employers in efforts to provide incentives for employees to carpool, the Legislature has authorized business and occupation and public utility tax credits for employers throughout the state if they provide financial incentives to their employees for ride sharing in car pools, public transportation and non-motorized commuting.  Employers may apply for a tax credit of up to $60 per person per year or up to 50 percent of the financial incentive, whichever is less.  The incentive provided to the employee by the employer must be at least double the tax credit claimed.  There is a limit of $100,000 per employer per year.

There is a cap on total credits of $1.5 million per year.  The tax credit is funded through the air pollution control account and the tax credit sunsets December 31, 2000.

Summary of Bill:  The tax credit for which employers are eligible, by providing financial incentives to their employees to rideshare or use other transportation alternatives to the single occupant vehicle, are extended from December 31, 2000, to December 31, 2006.

Funding for such incentives from the air pollution control account are not to exceed $750,000 per year. The maximum obligations of both accounts combined, for the business and occupation tax and the public utility tax credit, is increased from $1.5 million to $2.5 million each calendar year.

Other funds noted for reimbursing the general funds for tax credits are the high capacity transportation account, the central Puget Sound public transportation account, and the transportation account.  The use of the central Puget Sound public transportation account is broadened to include fund tax credits for commute trip reduction.  The sunset for the existing  authorization to use high capacity transportation account funds for such tax credits is repealed.

The tax credit is extended to property managers who provide financial incentives for commute trip reduction programs at their properties.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  The bill takes effect July 1, 1999.

Testimony For:  Additional funding sources are needed to supplement the air pollution account.  The program is very successful and encourages employers to aggressively advocate and support commute trip reduction programs.  The extension of tax credits to property managers would encourage the development of programs at sites where many small employers would be able to participate.

Testimony Against:  None.

Testified:  PRO:  Senator Eide, prime sponsor; Stu Clark, Dept. of Ecology; Brian Lagerberg, Dept. of Transportation (with amendments); Cathy Cole, Commuter Challenge; Jamie Mitchell, Korry Electronics; Katy Taylor, Weyerhaeuser Company.

House Amendment(s):  The House amendment changes funding sources for CTR tax credits to $1.5 million per year from the air pollution control account, $375,000 per year each from the transportation account and the public transportation systems account, with both accounts subject to appropriation.  It also reduces the total tax credits from $2.5 million per year to $2.25 million per year.