SENATE BILL REPORT

ESSB 5338

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

Modifying transportation tax rates and distributions.

Senate Committee on Transportation

Senate Hearing Date(s):February 7, 1989; April 10, 1989

Majority Report:  That Substitute Senate Bill No. 5338 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Patterson, Chairman; Nelson, Vice Chairman; Bender, Conner, McMullen, Murray, Sellar, Thorsness.

Senate Staff:Gene Schlatter (786-7316)

                  April 20, 1989

AS PASSED SENATE, APRIL 19, 1989

BACKGROUND:

The current gas tax is 18 cents per gallon.  There are two parts of the 18 cents allocation:  (a) 17 cents distributed to state and local jurisdictions; and (b) 1 cent which is divided into thirds and distributed to UAB, RAP and DOT.  Gross weight fees have not been adjusted for nearly 20 years.

Current law does not authorize any local option taxes for transportation purposes.

The motor vehicle excise tax (MVET) under current law is extremely difficult to administer.  No MVET revenues are currently allocated for transportation purposes.

SUMMARY:

The current rate of 18 cents per gallon is increased 5 cents per gallon, effective August 1, 1989 and an additional 2 cents per gallon August 1, 1990.

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

!tp1,2,1,1,1 !tj1!tl1ST YEAR!tl2ND YEAR

!tj1!tl5 CENTS!tl2 CENTS!tlTOTAL

DOT!tj1!tl1.50¢!tl .60¢!tl2.10¢

Special "C" !tj1!tl .75!tl   0!tl .75

Cities !tj1!tl .65!tl   0!tl .65

Counties !tj1!tl .45!tl   0!tl .45

County Arterials !tj1!tl .45!tl .30!tl .75

TIB!tj1!tl1.00!tl1.00!tl2.00

RAP !tj1!tl .20!tl .10!tl .30

!tlTOTAL!tl5.00¢!tl2.00¢!tl7.00¢

Special category "C" priority criteria are established.

Fee increases of 25 percent are imposed on gross weight and overloads, effective January 1, 1990.

Three local option transportation taxes, all of which are subject to voter approval, are authorized:

      --Fuel tax (10 percent of state rate)

      --Registration fees (limit $15)

      --Commercial parking tax

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 .2 percent is added on MVET and the revenue is placed in the newly created transportation fund for transportation purposes.

The MVET collections are aligned with annual registration fees.

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

The .1 percent MVET for the ferry operating budget is made permanent.

August 1, 1989 is the effective date for the 5 cents fuel tax increase and local option taxes; August 1, 1990 is the effective date for the 2 cents increase; January 1, 1990 is the effective date for the weight fee increases and MVET provisions.

Appropriation:    none

Revenue:    yes

Fiscal Note:      none requested

Senate Committee - Testified: No one