CORRECTED

 

ARIZONA STATE SENATE

RESEARCH STAFF

 

BRAD GLENN

LEGISLATIVE INTERN

TODD MADEKSZA

LEGISLATIVE  RESEARCH ANALYST

BANKING & INSURANCE COMMITTEE

Telephone: (602) 542-3171

Facsimile: (602) 542-7833

 

TO:                  MEMBERS OF THE SENATE

                        BANKING & INSURANCE COMMITTEE             

DATE:             March 5, 2001

 

SUBJECT:       Strike Everything Amendment to S.B. 1229

                       

                                                                                                                                                           

 

Purpose

 

            Phases out the current vehicle license tax portion to the Arizona highway users revenue fund (HURF) over a three-year period and assesses an additional phased-in motor vehicle fuel tax.

 

Background

 

            Vehicle license tax (VLT) is assessed on new and used vehicles registered in Arizona, and is distributed to local governments and HURF. HURF monies are further divided among the state highway fund, counties, cities and towns. Until December 1, 2000, VLT monies were also collected for the state highway fund.

 

            The amendment reduces VLT for both new and used vehicles by approximately 45 percent by January 2004. Specifically, the amendment phases out VLT assessments for HURF, which are currently $1.26 and $1.30 per $100 of assessed valuation for new and used vehicles repectively.

 

            VLT allocations to local governments are unchanged. The amendment also increases motor vehicle fuels taxes deposited into HURF, over the same three-year period.

 

            According to the Arizona Department of Transportation, the ten-year cumulative fiscal impact of this bill on HURF will be $1.2 billion.

 

Provisions

 

Additional Motor Vehicle Fuel Tax

 

1.      Establishes an additional phased-in motor vehicle fuel tax to be paid by consumers on motor vehicle fuel possessed, used or consumed in the state as follows:

 

  1. beginning on January 1, 2002, $0.04 per gallon;
  2. beginning on January 1, 2003, $0.08 per gallon;
  3. beginning on January 1, 2004, $0.12 per gallon;

 

 

2.      Requires motor vehicles fuel suppliers to collect and remit the tax.

 

3.      Imposes the tax when motor vehicle fuel, as measured by invoiced gallons, is either imported into Arizona for delivery here or removed from an Arizona bulk transfer terminal system or qualified terminal.

 

VLT

 

4.      Phases out the HURF VLT assessment charged on the initial registration of a new vehicle using the following schedule:

 

  1. through December 31, 2001, $1.26;
  2. beginning on January 1, 2002, $0.84;
  3. beginning on January 1, 2003, $0.42;
  4. beginning on January 1, 2004, zero.

 

5.      Phases out the HURF VLT assessment charged on the registration of used vehicles using the following schedule:

 

a.       through December 31, 2001, $1.30;

b.      beginning on January 1, 2002, $0.87;

c.       beginning on January 1, 2003, $0.44;

d.      beginning on January 1, 2004, zero.

 

6.      Removes obsolete language relating to the state highway fund portions of VLT on new and used vehicles registrations. As of December 1, 2000, the state highway fund portions of VLT were eliminated and replaced with state general fund appropriations.

 

7.      Makes technical and conforming changes.

 

8.      Provides for a general effective date.

 

 

BG/TM/ac