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EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Action: An Ordinance Concerning Motor Vehicle Fuel Dealer's Business Licenses; and Amending Sections 3.465, 3.467, 3.474, 3.480, 3.483, and 3.484 of the Eugene Code, 1971 Meeting Date: January 24, 2005 Agenda Item: 7 Department: Public Works Staff Contact: Kurt Corey www. cl. eugene, or. us Contact Telephone Number: 682-5241 ISSUE STATEMENT This is an opportunity for the council to discuss and adopt an ordinance amending sections of the Eugene City Code dealing with the Business License Tax on Motor Vehicle Fuel Dealers. The proposed amendments would make effective a two-cent increase in the existing local motor vehicle fuel tax, provide for an 80% refund of motor vehicle fuel tax (MVFT) paid by specified diesel users and implement various minor housekeeping amendments. BACKGROUND Previous Council Action and History In October 2001, the Citizen Budget Subcommittee on Transportation System Funding presented its recommendation that the council implement a transportation funding package consisting of a combination local motor vehicle fuel tax and transportation system maintenance fee for the purpose of generating an additional $9 million annually to address the City's critical transportation system funding needs. On January 27, 2003, the council approved the local motor vehicle fuel tax at the three-cent level. On September 27, 2004, the council reviewed the progress to date on pavement preservation program funding efforts, heard updates on cooperative efforts with partner agencies, and discussed the potential implementation of additional funding options, as well as a potential increase in the level of the existing local fuel tax. At that meeting, the council directed staff to bring back draft ordinances increasing the local motor vehicle fuel tax (MVFT) by an additional two cents (to five cents-per-gallon) and establishing a transportation system maintenance fee. The council also requested at that time that staff bring back information on possible bonding options for funding pavement preservation needs. On October 27, 2004, the council reviewed and discussed the two draft ordinances and also reviewed bonding alternatives for funding the backlog of pavement preservation projects. At that meeting, the council directed that the amendments to the fuel tax code be moved forward to public hearing with no amount specified on the level of tax at this time. The council further determined by majority vote to discontinue efforts to establish a transportation system maintenance fee. A public hearing on December 6, 2004, provided additional public input on the proposed changes to the MVFT. L:\CMO\2005 Council Agendas\M050124\S0501247.doc