HOUSE BILL REPORT

HB 2205

BYRepresentatives Todd, Phillips, Wang, Prentice, Leonard, Cole, Nelson, Brekke and Crane

Relating to aircraft fuel taxes.

House Committe on Revenue

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (12)

      Signed by Representatives Wang, Chair; Pruitt, Vice Chair; Appelwick, Basich, Brumsickle, Fraser, Grant, Haugen, Morris, Phillips, Rust, and H. Sommers.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Holland, Ranking Republican Member; and Van Luven.

House Staff:Rick Wickman and Bob Longman (786-7136)

AS REPORTED BY COMMITTEE ON REVENUE MARCH 4, 1989

BACKGROUND:

Local governments and the state Department of Social and Health Services are the primary service providers for health, housing, and social services programs.  At the local level, counties are the primary conduit for most social service programs.  Often, the Department of Social and Health Services contracts with counties to provide many local programs.  Counties, in turn, are often responsible for developing countywide plans for spending state and local monies.  The local service providers are, in many cases, non-profit organizations as well as governmental agencies.

Last year, elected officials, and community and business leaders in King County organized a Human Services Roundtable Planning Project to focus on legislative, educational, and funding strategies for a wide variety of human services.  The main priorities were employment, training, housing, child care, family support, and health care.

The Roundtable Planning Project explored revenue sources for funding local needs.  The groups involved explored local option revenues as well as state imposed revenue sources for providing human services programs.  One local option source reviewed was a local option aircraft fuel tax.

The state taxes aircraft fuel at 5 cents per gallon.  Revenues are earmarked for the state aeronautics account of the general fund.  Fuel used for aircraft commercial or local commuter service is exempt from the tax.  State and local sales and use taxes are collected on sales of aircraft fuel.

SUMMARY:

SUBSTITUTE BILL:  An additional aircraft fuel tax of 10 cents per gallon is imposed by the state.  The additional tax applies to aircraft fuel used by air carriers operating under a certificate of public convenience and necessity or permit under federal law and to operation of aircraft in the operations of local commuter service.

The additional tax does not apply to aircraft fuel used for: 1) airline testing or experimental purposes; 2) training of airline crews; or 3) personal or non-commercial use.

Proceeds from the additional tax imposed on aircraft fuel shall be used for tourism, trade, economic development, human services, health care, housing, community facilities, economic opportunity programs, job training and retention, child care, and related services.  Proceeds of the additional tax are earmarked for the housing, human services, health and economic development account created in the state treasury.

It is the intention of the Legislature to appropriate 25 percent of the proceeds in the account to the state housing trust fund.  The remaining monies are intended to be distributed to cities, towns, and counties beginning with the second calendar quarter of 1990.  The Department of Community Development is to formulate a distribution plan and report such plan to the Legislature on or before January 1, 1990.

Monies allocated to cities, towns, and counties must be spent for human services, housing, health care, community facilities, economic opportunity programs, job training and retention, child care, and related services.  These monies shall be used in addition to, and not supplant existing monies being spent on these eligible programs by cities, towns, and counties.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The original was introduced by title and introductory section only.

Revenue:    The bill has a revenue impact.

Fiscal Note:      Requested March 6, 1989.

Effective Date:The bill takes effect on July 1, 1989.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.