SB 5955 and HB 2201, Sen. Patty Kuderer (D-Bellevue) and Rep. Mike Pellicciotti (D-Federal Way), seek to address the rising car tab fees faced by drivers in the Puget Sound region after the passage of Sound Transit 3 (ST3).

Voters passed the ST3 ballot initiative in 2016 to complete major mass transit extensions every few years over a 25-year period in the Puget Sound region. After passage, controversy arose among the public and legislators over the formula used to calculate how much a car is worth, and how much the owner should therefore be taxed. The valuation schedule was taken from legislation passed years earlier that values a car on the tax base of the manufacturer's base suggested retail price when the vehicle is first offered for sale, multiplied by a depreciation schedule.

This valuation schedule has frustrated many, as it does not reflect the Kelly Blue Book price of a vehicle. Many argue it instead inflates the value of the car, thus driving up car tab fees. Legislators have introduced a number of bills over the past two years to address this perceived inflation. During this session, two bills, one in the Senate and one in the House, appear to have the most momentum.

Both SB 5955 and HB 2201 would require a Sound Transit to implement a market value adjustment program, which calculates a credit on motor vehicle excise taxes (MVET). Under the Senate version, the program must allow additional, one-time credits between July 1, 2019 and the end of June 2020. These credits would be calculated in the same way as the ongoing credit program for a taxpayer who paid the MVET before September 1, 2018.

AWC has not taken a position on these bills. We are monitoring their progress closely. ST3 is a multi-billion-dollar transit package, and buy-downs for drivers will be costly. With revenues already spoken for in the 2015 Connecting Washington transportation package, AWC is concerned that large, new funding responsibilities could have an adverse impact on Connecting Washington projects.

AWC will continue to monitor the progress of these bills and provide updates as they become available.