2013 End of Session Wrap Up: Tax and Revenue – Transportation Related

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.

Final Status: HB 412 passed the House. No action was taken on either HB 412 or SB 451 by 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.

Final Status:  SB 90 passed the General Assembly with amendments to cap the vessel excise tax at $15,000 and provide funding for the Waterway Improvement Fund through motor fuel tax revenues as done in the past. The bill also establishes a Task Force to Study Enhancing Boating and the Boating Industry in Maryland. Both the vessel excise cap and the Task Force will remain in effect for three years.  No action was taken on HB 548 by the House Ways and Means Committee. Based on the amendments, MACo dropped its opposition to the bill.

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.

Final Status:  No action was taken on either bill by their respective House and Senate Committees.

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.

Final Status: HB 1515 passed the General Assembly. Prior coverage of this legislation can be found on Conduit Street.

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.

Final Status:  SB  829 passed the General Assembly and will be on the ballot for the November 2014 election. 

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