2013 Session Update: Tax and Revenue – Transportation Related Legislation

The General Assembly is now in its final week of the Legislative Session and bills have started moving to their ultimate end.  While it is still possible for a bill still sitting in its committee of origin to pass, it is more likely that bills still in this status are not going to move and those that have moved to the opposite chamber will continue to be worked towards final passage.

This post summarizes the status of tax and revenue bills related to transportation that MACo either considered or took a position on.

Exemption from Vessel Excise Tax: HB 412 / SB 451 would exempt commercial vessels from the vessel excise tax if the vessel is subject to the local admissions and amusement tax and if the amount of the local admission and amusement excise tax collected equals at least 50% of the value of the exemption. MACo opposed this legislation raising concerns with the precedent it would set and questioning the linkage between the vessel excise tax and the admissions and amusement tax. MACo also raised concerns with the fiscal impact on the Waterway Improvement Fund, which is administered by the Department of Natural Resources (DNR) to provide financial support for local governments, federal agencies, and DNR for capital projects and services for the boating public. Status: HB 412 has passed the House  and has a hearing scheduled in the Senate Budget and Taxation Committee on April 4, 2012.  No action has been taken on SB 451 in the Senate Budget and Taxation Committee.

Vessel Excise Tax – Maximum TaxHB 548 / SB 90 would limit the amount of the vessel excise tax to no more than $10,000 for any vessel purchased. MACo opposed the legislation due to its impact on the Waterway Improvement Fund, which provides financial support for local governments, federal agencies, and DNR for capital projects and services for the boating public. Limiting the amount of the excise tax to $10,000 would further reduce revenue going into the Fund affecting the number of important and necessary waterway improvement projects to be funded each year. The Fund has a backlog of $54 million. Status:  No action has been taken on HB 548 in the House Ways and Means Committee.  SB 90 was amended by the Senate to do away with capping the vessel excise tax and instead fund the Waterway Improvement Fund through motor fuel tax revenues as done in the past. A hearing has not yet been scheduled in the House Ways and Means Committee.

County Motor Fuel Tax ExemptionHB 668 / SB 574 would grant county governments a tax exemption from the motor fuel tax for motor fuel purchased in bulk by a county and dispensed at a county-owned fuel station for use in county-owned vehicles.  One of MACo’s initiatives this session, MACo supported this legislation as it would give counties parity with the State and eliminate the requirement of one taxpayer-supported fund subsidizing another. Status:  No action has been taken on either bill in the House Ways and Means Committee or the Senate Budget and Taxation Committee.

Transportation Infrastructure Investment: HB 1515, introduced by the Administration, would raise an estimated $4.4 billion over six years by indexing the motor fuel tax for inflation and phasing in up to a 5% sales tax on the wholesale price of gasoline. The bill would also require the Mass Transit Administration to increase base fare prices beginning in fiscal 2015 and the Governor to include in the operating or capital budget appropriations to SHA for use in complying with Watershed Implementation Plans. In addition, the bill would prohibit a transfer of funds from the Transportation Trust Fund to the general fund or a special fund unless the transfer is approved through legislation passed by a three-fifths majority. Lastly, the bill creates a Task Force to study and make recommendations on the feasibility of creating regional transit financing entities and local-option transportation revenues. MACo did not take a position on this bill.  Instead it adopted a broader statement expressing its views on transportation funding. Status: HB 1515 has passed both the House and Senate and is awaiting the Governor’s signature.

Lock-box for Transportation Funding: SB 829 proposes a Constitutional Amendment to protect the Transportation Trust Fund from transfers to the general fund or a special fund. The constitutional amendment would not protect against diversions of Highway User Revenues.  MACo did not take a position on this bill.Instead it adopted a broader statement expressing its views on transportation funding. Status:  SB  829 has passed the Senate and is currently assigned to the House Rules and Executive Nominations Committee.

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