Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Transportation Committee

HB 1225

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background:

Transportation funding in Washington is supported by a variety of taxes and fees. The majority of statewide transportation revenue comes from a tax on motor vehicle and special fuel, vehicle licensing fees, and gross weight fees. Vehicle fuels are taxed under the Motor Vehicle Fuel Tax Act or the Special Fuel Tax Act. The rate for both the motor vehicle and special fuel tax is 37.5 cents per gallon. The special fuel tax applies to all combustible gases and liquids suitable for generating power to propel motor vehicles, except gasoline. The main types of fuels subject to the special fuel tax are diesel, natural gas, propane, butane, and a certain dyed fuel prescribed by federal law. Several categories of uses are exempt from the special fuel tax, including using such fuel for street and highway construction and maintenance purposes in government-owned or operated motor vehicles, in publicly-owned fire fighting equipment, and in special mobile equipment related to construction.In addition, urban passenger transportation systems and other specially-defined carriers are exempt from paying the special fuel tax. "Urban passenger transportation system" means every publicly or privately-owned transportation system that has bus fares as its principal source of revenue, transports passengers in vehicles with a seating capacity of more than 15 people, and travels over routes that do not extend more than 25 road miles beyond the corporate limits of the county in which the trip originated.

All public transportation systems, like city-owned transit agencies and public transportation benefit areas, meet the basic definition of an urban passenger transportation system. However, bus fares are typically not the principal source of revenue for a public transportation system. In addition, some public transportation systems contract with other service providers to provide bus service that extends 25 miles or more beyond the county in which the buses originated.

Summary of Bill:

The definition of "urban passenger transportation system" is modified to address privately-owned systems separately from publicly-owned and operated systems, however both types of systems remain exempt from the special fuel tax. Existing requirements and limitations included in the definition for urban passenger transportation systems are made applicable only to those privately-owned systems. The requirements and limitations applicable only to privately-owned systems include: having fare revenue as a principal source of revenue; and transporting passengers on routes that do not extend 25 miles beyond the boundaries of the county in which the trip originated.

A publicly-owned and operated urban passenger transportation system is defined to include public transportation benefit areas, metropolitan municipal corporations, city-owned transit systems, county public transportation authorities, unincorporated transportation benefit areas, and regional transportation authorities.