Inflation Adjustment Will Increase Two State Gas Taxes If Bill Passes

Inflation Adjustment Will Increase Two State Gas Taxes If Bill Passes

By Terri Jo Neff |

The House Committee on Transportation is slated to consider a bill on Wednesday which would require an inflation adjustment for two state fuel taxes, prompting worries about the financial impact on drivers of what is essentially a tax increase.

Arizona Revised Statutes 28-5606A currently calls for an $.18 per gallon “motor fuel tax” on such fuel that is possessed, used, or consumed in the state, while ARS 28-5606B applies a $.18 per gallon “use fuel tax” for fuel used to propel light-class motor vehicles.

HB2436 would amend state law to mandate an annual adjustment to each tax beginning July 1, 2022, to “reflect the average annual change in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics.”

The annual inflation adjustment would also apply to the current $.26 per gallon use fuel tax for a use-class motor vehicle, defined in state law as a road tractor, truck tractor, truck or passenger carrying vehicle having a declared gross vehicle weight of more than twenty-six thousand pounds or having more than two axles.

HB2436 leaves in place a current $.09 per gallon use fuel tax for vehicles propelled by non-alternative fuels for the transport forest products without adjusting for inflation. That provision of ARS 28-5606 expires in Dec. 2024.

The two state fuel taxes are in addition to optional taxes that each of Arizona’s 15 counties can enact for roadway and transportation needs. State use fuel taxes does not apply to alternative fuels.

The bill introduced by committee chairman Rep. Frank Carroll (R-LD22) and co-sponsored by committee vice-chair Rep. Justin Wilmeth (R-LD15).

Bill Would Likely Trigger Higher Prices For Service Contracts, Warranties, And Retail Sale Of Stocks

Bill Would Likely Trigger Higher Prices For Service Contracts, Warranties, And Retail Sale Of Stocks

At a time when more Arizonans are trading stocks online and are choosing to protect big-ticket purchases with service contracts and extended warranties, several Democrats want to amend the state law that keeps those sales from being calculated into a retailer’s gross income tax basis.

Rep. Pamela Powers Hannley (D-LD9) and five co-sponsors have introduced HB2245 which deals with Arizona Revised Statute 42-5061A, the classifications of retail sales of tangible personal property. The tax base for such classifications is the gross proceeds of sales or gross income, but state law currently includes 57 exempted retail categories.

One of those exemptions is the retail sale of warranty and service contracts. Another is the retail sale of stocks and bonds.

There is no requirement for retailers to pass along their higher costs if the bill passes, but the current economic reality is that the majority of businesses will not be able to absorb the increased tax base. The result, economists say, will be higher costs to customers.

HB2245’s likely higher costs for online retail traders in Arizona comes as companies like Charles Schwab and E*Trade experienced record-high retail business in 2020. The average daily volume of the largest e-brokers in December 2020 was 6.6 million shares and jumped to 8.1 million shares in January, CNBC reported.

“This influx has been driven by millions of Americans with more time on their hands, and in some cases out of work, due to the impact of the coronavirus pandemic,” according to a 2020 report by Jeremy Moses, Lead Industry Research Analyst for ISISWorld.

Moses noted that the pandemic accelerated “the rise of individual day traders participating in the market” in part driven by the popularity of app-based brokerages, particularly those offering commission-free trades.

The co-sponsors of the legislation are Reps. Richard Andrade, Charlene Fernandez, Stephanie Stahl Hamilton, Athena Salman, Raquel Teran. HB2245 has been assigned by House Speaker to the Committee on Ways & Means, but the committee has not yet taken up the legislation.

The other 55 exemption categories to the retail classification tax base will remain unaffected by HB2245. Some of those categories include livestock and poultry for ranching, lottery tickets, prescriptions, natural gas used to propel a motor vehicle, food service items sold to a commercial airline, and sales of fine art shipped by a gallery to an out of state buyer.

In Wake Of Florence Escape Legislation Introduced To Toughen Penalties For Prison Escapees

In Wake Of Florence Escape Legislation Introduced To Toughen Penalties For Prison Escapees

PHOENIX – In response to the escape of two inmates from the prison in Florence last month, State Rep. David Cook has introduced new legislation that would toughen penalties for correctional facility escapees.

“Following the recent successful capture of two dangerous escaped state prison inmates, I was dismayed to learn that they could only be charged with a Class 4 felony,” said Cook in a press release. “It is only by the grace of God that nobody was injured, or worse, while these criminals were at large. The penalty needs to fit the crime and this change in statue does exactly that.”

Inmates John B. Charpiot and David T. Harmon escaped from a medium security unit at Arizona State Prison Complex-Florence on January 23. The two men managed to break into a tool room and steal tools to cut through the outside fence. After they escaped, the men attempted to rob an employee at a nearby hotel. They were captured on January 28, in Coolidge.

Cook’s bill, HB 2790, cosigned by Representatives Kevin Payne (R-21), Frank Pratt (R-8), Bret Roberts (R-11), Ben Toma (R-22), and John Fillmore and Jacqueline Parker (R-16), as well as Senators Vince Leach (R-11), T.J. Shope (R-8), and Kelly Townsend (R-16) increases the penalty for escape from a Class 4 to a Class 2 felony.

Cook says his bill gives prosecutors and judges a “wider array of options and greater discretion when charging or sentencing an offender.”

A Class 2 felony is the highest non-murder felony classification in state law and carries a sentencing range of anywhere from 3-35 years imprisonment, depending on the offender’s prior criminal history and whether a weapon was used. Under the law, any sentence for an escape conviction must be served consecutively to the sentence that the inmate was serving at the time of their escape.

“I commend the tremendous efforts by state and local law enforcement to protect the public and quickly apprehend the two escapees. HB 2790 respects their efforts and those of all who uphold public safety in our state. Moreover, it respects those who have been crime victim and their families who are likely to endure additional traumatic stress if their perpetrator escapes,” concluded Cook.

Legislature Wants A Say In How Their Election Laws Are Carried Out

Legislature Wants A Say In How Their Election Laws Are Carried Out

The Arizona Legislature may currently enact the laws which serve as the framework for elections in the state, but the nitty gritty details of how those laws are carried out is spelled out in the Arizona Election Procedure Manual (EPM), a 544-page set of rules and instructions all 15 counties must follow.

Changes to the EPM are usually recommended by those who do the majority of the work in an election – county recorders and their election department counterparts. The changes themselves, however, have to be implemented by the Arizona Secretary of State (SOS) with the approval of the Arizona Attorney General and governor.

On Feb. 1, the Senate Committee on Government is slated to take up SB1068 introduced by Sen. Michelle Ugenti-Rita (R-LD12). The bill would amend three election-related statutes dealing with the EPM, and if passed, the legislature will have a much bigger say in how their laws are put into effect courtesy of the Legislative Council.

The Legislative Council, comprised of the President of the Senate, the Speaker of the House of Representatives, and six members from each legislative chamber, would have a seat at the review and approval table, as would the Governor’s six-member Regulatory Review Council (GRRC).

The governor and attorney general would be removed from the approval process if the bill passes.

According to the Senate Research Department, there is no anticipated fiscal impact to the state General Fund associated with SB1068. The main concern expressed by the Arizona Association of Counties has been the timeline for getting review and approval passed through two councils.

The American Civil Liberties Union of Arizona and the Leadership Conference for Civil and Human Rights have come out in opposition of the bill.

Inflation Adjustment Will Increase Two State Gas Taxes If Bill Passes

Bill Would Prohibit All Fracking Operations In Arizona Despite Current Test Wells

A Tucson legislator wants to outlaw hydraulic fracturing in Arizona, despite long-standing efforts by the Arizona Department of Environmental Quality (ADEQ) and the Bureau of Land Management (BLM) to facilitate energy projects in the state that utilize the practice.

Hydraulic fracturing, commonly known as fracking, is a method of extracting oil, natural gas, CO2, and helium by injecting fluid into subterranean rock formations at high pressure. The pressure dissolve dense underground rocks, creating “fractures” from which the valuable gas can be extracted.

Arizona has about 30 active oil and natural gas wells, nearly all in Apache County in the northeastern part of the state where test-fracking operations have primarily focused on extracting CO2 and helium. Fracking is already governed by a number of federal laws and regulations, including the Clean Air Act and the Clean Water Act, while state regulations are supervised by ADEQ.

And according to the Arizona Geological Survey, part of the 90-million-year-old Mancos Shale lies under northeastern Arizona, making its 60-billion-barrel formation a valuable future domestic energy source which may be best accessed by fracking methods. But HB2199 as introduced by Rep. Andres Cano (D-LD3) would add a statute outright banning hydraulic fracturing anywhere in the state.

Cano is a member of the House Committee on Natural Resources, Energy & Water (NREW) to which the bill is currently assigned although it has yet to appear on a committee agenda for further discussion.

Fracking has come under fire in some states over concerns of groundwater contamination and air pollution. However, supporters of the method in Arizona point to the fact Apache County covers more than 11,000 square miles with less than 72,000 residents, making it possible to address environmental and public health concerns through ever improving technologies while creating much needed jobs.

Cano’s bill makes no provision for any test fracking operations in place or for projects in the permitting stage. It would also make it unlawful for a person to collect, store, or treat water that has been used in or is a by-product of fracking. The bill includes no exception in the legislation for storage of residual fracking water for scientific studies or even for collecting the water for transportation.