SENATE BILL REPORT

                            SB 5535

AS REPORTED BY COMMITTEE ON TRANSPORTATION, FEBRUARY 23, 1993

Brief Description:  Taxing large trucks.

SPONSORS: Senators Vognild, Prince and M. Rasmussen

SENATE COMMITTEE ON TRANSPORTATION

Majority Report:  That Substitute Senate Bill No. 5535 be substituted therefor, and the substitute bill do pass. 

     Signed by Senators Vognild, Chairman; Loveland, Vice Chairman; Skratek, Vice Chairman; Barr, Drew, Nelson, Oke, Prince, M. Rasmussen, Sellar, Sheldon, and Winsley.

Staff:  Roger Horn (786‑7839)

Hearing Dates: February 16, 1993; February 23, 1993

BACKGROUND:

Owners of any commercial trailer or semitrailer are required annually to pay a registration fee of $36 and motor vehicle excise tax at a rate of 2.2 percent of the vehicle value.  Unlike fees for trucks, fees for commercial trailers and semitrailers engaged in interstate commerce are not prorated.

SUMMARY:

The motor vehicle excise tax rate is increased from 2.2 percent of vehicle value to 2.78 percent for trucks and trailing units with gross vehicle weight of 40,000 pounds or more.

EFFECT OF PROPOSED SUBSTITUTE:

The motor vehicle excise tax (MVET) rate is increased from 2.2 percent to 2.78 percent for any truck-type power unit used in combination with a trailer to transport loads in excess of 40,000 pounds combined gross weight.  This increased fee does not apply to power units used exclusively for hauling logs.

For trailers hauled by the truck-type power units subject to this higher rate, the following provisions apply:

!Payment of MVET is no longer required;

!Annual renewal of the registration fee is no longer required;

!Upon payment of a $36 one-time fee, permanent license plates are issued and need not be replaced until the trailer vehicle is sold, permanently removed from the state, or otherwise disposed of by the registered owner; and

!Property tax may not be assessed.

The combined licensing fee for all vehicles with a gross vehicle weight of 42,000 pounds or more is increased by $90.

The tax changes in this bill are designed to be revenue neutral in regard to MVET and combined licensing fee revenue collected by the state.

Appropriation:  none

Revenue:  yes

Fiscal Note:  none requested

TESTIMONY FOR:

High taxes on commercial trailers put interstate truckers based in Washington at a competitive disadvantage.  Fees for commercial trailers went up substantially after proportional registration for nonmotor vehicles was eliminated in 1990.

TESTIMONY AGAINST:  None

TESTIFIED:  Larry A. Pursley, Washington Trucking Association (pro)