HOUSE BILL REPORT

HB 2528

BYRepresentatives R. Fisher, Schmidt, R. Meyers, Dorn, Horn, Scott, Sayan, May, Forner and Wood; by request of Governor Gardner

Modifying transportation tax rates and distributions.

House Committe on Transportation

Majority Report:  Do pass as amended.  (18)

      Signed by Representatives R. Fisher, Chair; R. Meyers, Vice Chair, Western Washington; Schmidt, Ranking Republican Member; Wood, Assistant Ranking Republican Member; Basich, Betrozoff, Cantwell, Cooper, Day, G. Fisher, Forner, Gallagher, Jones, Kremen, Nelson, Prentice, Todd and Zellinsky.

Minority Report:  Do not pass.  (9)

      Signed by Representatives Baugher, Vice Chair, Eastern Washington; Bennett, Hankins, Haugen, Heavey, Smith, D. Sommers, Walker and S. Wilson.

House Staff:Gene Schlatter (786-7316)

AS REPORTED BY COMMITTEE ON TRANSPORTATION FEBRUARY 22, 1990

BACKGROUND:

The current state fuel tax is 18 cents per gallon.  Nearly one half of the revenues collected are distributed to cities and counties for their road purposes.  The remaining revenues are appropriated to state agencies such as the Department of Transportation and Department of Licensing.  Gross weight fees, which also are deposited in the Motor Vehicle Fund, have not been increased for almost 20 years.

The motor vehicle excise tax (MVET) is included in the annual billing for license tabs.  The amount of taxation for MVET is calculated at 2.454 percent of the fair market value for the vehicle.  Most of the revenues generated by the MVET are distributed to cities, counties, the state ferry system and transit districts, with the remainder going to the general fund.

SUMMARY:

BILL AS AMENDED:  The current fuel tax is increased by three cents per gallon on April 1, 1990, followed by one-cent increases on July 1, 1991 and on July 1, 1992, for a total of five cents per gallon.

The bill restructures the motor vehicle excise tax (MVET) base rate to 2.0 percent using straight line depreciation, and imposes a 0.2 percent surtax on the MVET.  The surtax is deposited in the Transportation Fund and is assumed to be appropriated to the Department of Transportation (DOT).  The 0.1 percent MVET for ferry operations is made permanent and is included in the basic 2.0 percent

0.2 percent of the MVET is transferred from the General Fund to the Transportation Fund in two increments (July 1, 1991 and July 1, 1993).  Revenues are assumed to remain unappropriated until certain studies have been completed.

Gross weight fees are increased by 25 percent, and the distribution formula is simplified.

The following local option taxes are authorized:  1) fuel tax--10 percent of state rate (voter approval required); 2) vehicle registration fee--$15 maximum (subject to referendum); and 3) commercial parking tax (subject to referendum).

The revenues generated in this bill will fully fund the Category C program (reduced from $160 million to $85 million in 89-91 and from $220 million to $200 million in 91-93).  In addition, Special C projects (1st Avenue South Bridge, SR 18 and Spokane North-South Corridor) are funded.  The county arterial preservation account is created and funded.

Tolls on the Maple Street Bridge and Hood Canal Bridge are eliminated.  The $11.16 million payback from the ferries to the Motor Vehicle Fund is forgiven.

Full-year motor vehicle registration is provided.  Proportional registration for trailers, semi-trailers, and converter gears provided they are properly registered in their home jurisdictions is eliminated.

AMENDED BILL COMPARED TO ORIGINAL:  Technical changes are made to correct drafting errors, and obsolete language is deleted.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Renee Montgelas, Governor's office; Al Rosellini, State Transportation Commission; Duane Berentson, Department of Transportation; Tim Hill, King County Executive; Cathy Pearsall-Stipek, Pierce County Council; Ernie Geissler, County Road Administration Board; Jerry Fay, Transportation Improvement Board; Ben Dysart, Washington State Ferry Riders Coalition; George Benson, Seattle City Council; Stan Finkelstein, Association of Washington Cities; Anita Frankel, Puget Sound Air Pollution Control Authority; Barbara Singleton, Evergreen State Specialized Transportation Association; Steve Lindstrom, Washington State Transit Association; Tom Gibbs, King County Citizens for Improved Transportation/Seattle Chamber of Commerce/Washington Citizens for Improved Transportation; Reidun Crowley, Bellevue Chamber of Commerce; Roy Maus, Snohomish County Citizens for Improved Transportation; Bruce Nurse, Eastside Transportation Committee; Roy Moore, Valley Area Transportation Alliance; Kay Harlan, Tacoma/Pierce County Chamber of Commerce; and Fred Jarrett, Seattle METRO Council.

House Committee - Testified Against:      Paul W. Locke, citizen; and Norbert Mueller, citizen.

House Committee - Testimony For:    Transportation revenues are not sensitive to inflation.  Therefore, cities, counties and the state are unable to maintain and preserve their streets, roads and highways.  Furthermore, new revenues are needed to deal with increased congestion and the impacts of rail abandonment and high cost projects.

House Committee - Testimony Against:      Cities, counties and the state have enough money.  They only need to use it more efficiently.