Arizona Trucking Association 2017 Legislative Report

By Tony Bradley, President and CEO

On Wednesday, May 10, 2017 the Arizona Legislature adjourned sine die.

The adjournment came as a small surprise to many who expected that the legislature would have to wait for the return of Sen. John Kavanagh, R-Fountain Hills, to vote on a bill to consolidate election dates for votes on taxes at the municipal level. Kavanagh was out of town and expected to return on Thursday, when Sen. Brophy-McGee, R-Phoenix, announced an agreement that would allow her to support the measure. This issue was agreed upon during budget negotiations and needed every vote it could muster in the Senate. With that issue resolved, the legislature voted on its final bills and adjourned just before sunset. This is the first time since 2003 that the legislature adjourned with the sun still shining.

As always, the Arizona Trucking Association was your voice at the State Capitol on trucking and other issues that affect your bottom line.

In all, ATA had a successful session on your behalf. I would have liked to have a little more movement on transportation funding, but with the education debate taking front and center at the State Capitol, there was little appetite for any significant changes to our transportation revenue sources. Having said that, it is not insignificant that several transportation-funding bills were actually heard in committee this year. That is a first in my tenure at ATA.

This year the session lasted 122 days, there were 1079 bills introduced, 353 of them passed both chambers, and as of this writing, 5 were vetoed and 312 have been signed into law.

ATA tracked more than 64 bills this session. Here is a rundown on some of the bills important to trucking:

Ensuring uniformity by local jurisdictions for our specialized carriers (HB2371)
For the past few years, ATA’s specialized carriers have had to deal with a variety of problems associated with local jurisdictions passing ordinances regulating special permit truckloads. With this in mind, ATA approached Rep. Drew John, R-Safford, and asked him to run a bill that would require local authorities to use the state rules (AAC Title 17, Ch. 6) for special permitted loads, instead of establishing or using its own rules. If the local authority has restrictions (e.g. bridge, time of day, or other infrastructure restrictions), it must publish those restrictions to ADOT who in turn has to notify the Oversize Over-dimensional Council. After addressing the concerns from the local jurisdictions, the bill passed the Arizona House and Senate with ease and was signed by the Governor on March 22, 2017. The law will take effect on the general effective date August 9, 2017.

Once again stopped additional reporting requirements at the Department of Liquor (HB2337)
ATA stopped efforts to establish mandatory reporting requirements on common carriers that deliver alcohol directly to consumers. This is the second year in a row that ATA has stopped the liquor wholesalers from inserting these new reporting requirements on common carriers into Title 4 (the liquor statutes). This time they tried inserting the reporting language in the Liquor Omnibus Bill HB2337. The reporting requirements being sought by the wholesalers would provide little, if any, assistance to the department in finding people who are selling alcohol across state lines illegally. I am hopeful that this issue is put to rest for good; I guess we’ll find out next January when the new legislative session begins.

Protected trucking from future environment regulations as a result of emissions trading (HB2152)
In a David vs. Goliath type scenario, the ATA stood up for commercial trucking during negotiations to expand the Arizona Emissions Bank to include mobile sources. Under the current Arizona law, traditional sources can purchase credits from other traditional sources in order to build or expand a plant that needs an environmental permit. (See example here.) Trading credits is pretty straightforward when you are trading between two traditional sources. However, things get complicated when you allow mobile sources to be sold to traditional sources. In simple terms, our concerns were 1) that allowing traditional sources to purchase mobile emissions source credits could lead to additional emission regulations against commercial trucking in the near or long term and 2) that at least one proposal to buy mobile source credits could have negative safety implications for the trucking industry. Despite overwhelming support for the bill in its original form, ATA was able to get the two protection measures into the bill. First, is a provision that requires a rulemaking authority to “consider and make reasonable attempts to mitigate any adverse impact on the commercial trucking industry…”. Second, ATA was able to include a notwithstanding clause that prevents the State from establishing new or more stringent emissions regulations as a result of this legislation. While it would have been near impossible to “kill the bill” these were significant victories for ATA.

Protecting the carrier lien, stopping “hostage loads” (HB2145)
Even well intentioned bills often have unintended consequences. Such was the case with HB2145, which was an effort by the Arizona Attorney General’s office to prevent abuses a few unscrupulous businesses engaged in household goods moving. These “rogue movers” essentially were putting in low-ball bids to get customers. Once they loaded the truck and got to the final destination, the rogue mover would take the load “hostage” and tell the customer they had to pay 2-3 times the original quote to get their stuff unloaded. Unfortunately, the solution as first proposed, would have prohibited carrier liens for household good movers, which could have had wide spread implications for both the moving industry and potentially other commercial trucking segments. After extensive negotiations with the Attorney General’s office, ATA was able to protect the carrier liens for household goods mover who complies with the requirements established under the new law. These requirements are already standard business practices for most reputable household goods movers. Working with the Attorney General’s office, ATA did its part to help protect consumers, stop hostage loads, and protect the carrier lien for legitimate businesses.

Helped stop a diesel tax increase that would not have gone to improving our roads (HB2093)
For a number of years there has been an effort to get rid of Arizona’s two tiered diesel system. (Light duty diesel vehicle with two axles that are less than 26,000 GVW are taxed at 18¢ per gallon, while diesel vehicle with more than two axles or over 26,000 GVW pay the heavy use diesel tax of 26¢ per gallon.) While the two- tiered system has it challenges, nobody has been able to come up with a solution to eliminate it in Arizona that doesn’t negatively affect a large user base. ATA was part of a large coalition to bring these issues to lawmakers’ attention and effectively killed the bill.

Supported multiple measures to increase transportation-funding revenue:

• HCR2011 would have referred a 10¢ fuel and diesel tax increase to the ballot for a vote of the people. Passed House Transportation Committee. Passed House Transportation Committee. Held/died in House Ways and Means Committee.
• SB1270 would have given Maricopa County and Pima County the authority to extend their current transaction privilege tax that support transportation. Died in House Ways and Means Committee by a vote of 3-6.
• SB1147 would have given the counties and regional transportation authorities the ability to, after a vote of the people, levy its own gas tax, up to 10¢ per gallon. Passed the Senate. Failed in House Transportation Committee. Was not heard in House Ways and Means Committee.
• One of the biggest obstacles I deal with when talking about raising the fuel tax is the complaint that lawmakers don’t want to do anything until those electric vehicles start paying to use the roads. SB1146 would have brought parody to electric and natural gas vehicles that also do not pay a state fuel tax. Under SB1146, electric vehicle owners would pay an annual fee roughly equivalent to the annual fuel tax paid by the average Arizona driver and a state fuel tax would be added to natural gas vehicles at the pump. If the bill had stopped there, it might have had a chance. However, additional components were also included that in the end likely led to the bills demise. Those components included: a vehicle license tax that would have been used to fund the highway patrol and the authorization of Tax Increment Financing (TIF) for transportation reinvestment zone. TIFs are very controversial at the State Capitol. SB1146 passed the Senate Transportation Committee and the Senate Committee of the Whole, but was ultimately held by leadership from going to a final vote in the Senate.

Again, while we were disappointed that none of these bills reached the Governor’s desk, we were pleased that so many were actually introduced and got a public hearing, which is something that has not happened in a long-time. We are moving the needle.

Other bills worth noting:

• SB1080 prohibits instructional permit holders and class G license holders (read under 18) from operating a motor vehicle while using a wireless communication device. Violations can only occur as a secondary offense. Prior to passage of this bill, Arizona was one of two states that did not have any sort of ban on texting and driving, not counting local ordinances. This was a controversial bill that many conservatives see as the camel’s nose under the tent.
• SB1111 would have increased the minimum insurance liability coverage for motorists. Of note, TRALA and rental vehicle companies oppose increasing the minimum limits. The bill passed the Senate and died in the House.

As I sent out last week, the budget did not have very many surprises in regard to transportation funding. With the exception of reinstituting the HELP loan program, the budget for transportation is inline with previous years. Here is my write-up from last week on the budget:

Arizona Budget Breakdown for Transportation
For transportation, the budget uses roughly $112 million in transportation-related funding to pay for DPS highway patrol operations. (Essentially the same as last year’s levels.)

The breakdown is as follows:

• $99.4 million from the Highway User Revenue Fund (HURF)
• $7.6 million from the State Highway Fund (SHF) which is ADOT’s portion of HURF
• $3.3 million for the DPS Parity Compensation Fund which is funded by SHF
• $1.6 million from the Safety Enforcement & Transportation Infrastructure Fund (SETIF), which is funded thru commercial trucking fees at the international border.

The budget restores $30 million to the HELP Loan Program, which is a state infrastructure bank that provides loan and financial assistance for highway projects. The ADOT HELP loan program can be utilized by ADOT and local governments but has not been funded since 2008.

If you would like to view a full list of bills that ATA tracked during the 2017 legislative session, you can do so by going here: https://arizonatrucking.com/wp-content/uploads/2017/05/ATA-2017-Legislative-Tracking-Lists.pdf

As always, the Arizona Trucking Association is here to promote, advocate, and defend the trucking industry in Arizona. Should you have a problem, please feel reach out to me directly at tbradley [at] aztrucking.com or 602-850-6000.

Stay safe.

Sincerely,
Tony Bradley
President & CEO
Arizona Trucking Association