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    Western Regional Report

    A neat hat trick in Washington state flips a gas tax law into the win column for all parties involved, while efforts are under way to derail an impending "train wreck" in California involving its vapor recovery program. Meanwhile, Oregon is facing a constitutional amendment that would raise tobacco taxes, and Utah closes a loophole used by retail theft gangs.

    By Hank Behar

    Washington State

    The hat trick -- that rare athletic feat when a single player scores three goals in one game -- is no longer exclusive to the soccer field or hockey rink. Not since the Washington Oil Marketers Association (WOMA) triumphantly pulled one off this summer when the state legislature passed bill SB 5272, scoring a win-win-win situation for the state, the state’s tribal entities and the state’s petroleum distributors.

    "It took us two-and-a-half years to get that law passed, but it was worth the effort and the wait because it brought the marketing of petroleum in the state of Washington to a level playing field," said Lea Wilson, WOMA's executive director.

    "With this new law petroleum marketers won't have to worry about losing business to tribal entities, who, under federal regulations, can sell fuel without charging the state’s 36-cent gas tax," said Wilson. "Under SB 5272, known as the Native American Gas Tax Law, they're required to charge the tax, which they're happy to do since it allows them to keep 75 percent of the taxes they collect. Score one win for the tribal entities.

    "The second win belongs to the state, because a new revenue stream has been generated by the remaining 25 percent of the tax collected by the tribal entities," Wilson said. "And the third win goes to the state’s petroleum marketers, since what many considered an unfair competitive advantage has been eliminated."

    Charlie Brown, Esq., a lawyer and lobbyist for WOMA, was one of those instrumental in overcoming opposition to the law.

    "Some legislators thought that allowing the tribal entities to keep 75 percent of the tax was cutting off funds to the state, but we were able to point out that without SB 5272, there would have been zero taxes collected from tribal sales, and zero percent of nothing is a great deal less than 25 percent of something," he said.


    "A train wreck is approaching in California," warned Jay McKeeman, executive vice president of CIOMA, the California Independent Oil Marketers Association, "and it has to do with the state's gasoline dispensers.

    "CARB, the California Air Resources Board, wants every dispenser retrofitted with a vapor recovery system by April 2009, but only one system has been certified for the job and it's a vac-assist system. The problem is that 90 percent of the state's dispensers are balance-type systems, which makes April 2009 an impossible goal to reach because there isn't enough equipment to retrofit the 600 dispensers that have to be done monthly to meet the deadline. So unless CARB readjusts its schedule there's going to be a train wreck of penalties, increased costs, and delays involving, financing, purchasing, installation and inspection, and the fuel consumer is the one who will pay the price," said McKeeman.

    McKeeman emphasized that CIOMA is in full agreement with CARB on the need for the dispensers, notwithstanding the fact that it's going to cost between $50,000 and $100,000 per station to comply with the new regulation.

    "We only want CARB to stretch the deadline slightly and provide owners of balance systems four years to comply, starting from the time it approves a retrofit system that can be used with balance systems. That will likely extend the deadline to September 2011," he said.

    As of press time, CARB was considering CIOMA's request.


    In case anyone was wondering, there's more than one way to skin the taxpayer. The latest attempt is called Measure 50, a constitutional amendment that's been placed on the Nov. 6 Special Election ballot in Oregon to increase tobacco taxes. It follows a failed attempt in the state legislature to achieve the 3/5 majority required for a tax increase, so it decided to amend its highest legislative document instead.

    The tax is designed to fund the Healthy Kids Program by promoting children's health insurance, so on its surface Measure 50 has everything going for it: everyone is against tobacco and everyone is for children's health insurance.

    Except the Oregon Neighborhood Store Association (ONSA) stated it's not that simple.

    First, ONSA points out, 71 percent of the tax revenues expected from Measure 50 will not be going to the Healthy Kids Program. Other entities such as Special Transit, the State General Fund and the expansion of the Oregon Health Plan to low income adults are in line for some of the revenue.

    Second, it's financially unsustainable, because state budget analysts predict program costs for the Healthy Kids Program will nearly triple in two years as population increases boost case loads, medical premiums go up, and families shift from employee-provided insurance to the Healthy Kids program -- all while revenues from tobacco taxes decline.

    They will decline because if Measure 50 passes, Oregon will have the third highest cigarette tax in the nation at $2.025 a pack, placing it at a disadvantage with neighboring Idaho, Nevada and California. In 2002, when Oregon boosted its cigarette tax 60 cents a pack, cigarette sales dropped 15 percent. Measure 50 raises it another 84.5 cents a pack, so it is estimated that revenues will drop almost 18 percent more. An Oregonian, for example, will be able to save $14.55 on a carton if he buys it in Idaho. Oregon convenience stores will also be hit, as each one is expected to lose $14,000 a year in profits.

    Ballots will be mailed to Oregon voters between Oct. 19 and 23 for voting on Nov. 6.

    ONSA is encouraging voters to visit www.stopmeasure50.com and www.canthetax.com, and the legislative fiscal office at www.leg.state.or.us/comm/lfo


    Thanks to a vigilant legislature and the efforts of the Utah Food Industry Association (UFIA), a loophole through which shoplifting rings have been escaping has been closed -- at least, in Utah.

    "Shoplifting is bad enough," said Jim Olsen, UFIA president. "But it escalates when a shoplifting ring is involved. These organized retail theft gangs often steal easily hidden, small household items that have high value, such as over-the-counter drugs, razor blades, baby formula and batteries.

    "The problem has been that in our state the law was unable to connect all the offenses to put these criminals in jail. Instead, they were routinely given individual shoplifting citations, which are similar to traffic tickets, and then sent on their way. They simply moved their operations to another community, and by the time they were scheduled to appear in court on shoplifting charges, they were long gone out of state."

    The remedy called for elevating the crimes by these gangs to felonies, which would close the loophole and open the doors to prison.

    "As a result of efforts by the retail community, law enforcement and public prosecutors, the Utah legislature passed H.B. 4 in its 2007 session, which modifies the criminal code to include the criminal offense of retail theft in the pattern of unlawful activity," said Olsen. "Anyone found guilty is subject to second-degree felony charges, and may be ordered to pay restitution in addition to serving time in jail. Utah is no longer safe territory for these retail gangs."

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