Aggregates Manager

February 2014

Aggregates Manager Digital Magazine

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by Therese Dunphy, Editor-in-Chief February 2014 Vol. 19, No. 2 A Taxing SITUATION /AggregatesManager @AggMan_editor Editorial Editor-in-Chief: Therese Dunphy Editorial Director: Marcia Gruver Doyle Online Editor: Wayne Grayson Online Managing Editor: Amanda Bayhi Design & Production Art Director: Sandy Turner, Jr. Production Designer: Timothy Smith Advertising Production Manager: Linda Hapner Construction Media Senior VP, Construction Media: Dan Tidwell VP of Sales, Construction Media: Joe Donald 3200 Rice Mine Rd NE Tuscaloosa, AL 35406 800-633-5953 Corporate Chairman/CEO: Mike Reilly President: Brent Reilly Chief Process Officer: Shane Elmore Chief Administration Officer: David Wright Senior Vice President, Sales: Scott Miller Senior Vice President, Editorial and Research: Linda Longton Vice President of Events: Alan Sims Vice President, Audience Development: Stacy McCants Vice President, Digital Services: Nick Reid Director of Marketing: Julie Arsenault For change of address and other subscription inquiries, please contact: C onventional wisdom dictates that most onerous local regulations are born in the West and migrate East. It was a bit of a surprise, therefore, when I read about a dispute involving taxes levied on aggregates. This particular gem cropped up in Johnston County, Okla. In mid-January, the Johnston County Commissioners endorsed Oklahoma Citizens for Aggregate Benefits. The Oklahoman reports that the organization is "designed to lobby for a tax on the production of silica, sand, gravel, and other aggregates." The group is encouraging local elected officials to support H.B. 1876, authored by Rep. Charles McCall (R-Atoka), which would allow counties to set up tax rates of up to 7 percent on the production of aggregates. A Senate version of the bill, sponsored by Frank Simpson (R-Springer), didn't make it out of committee last year. Jim Rodriguez, executive director for the Oklahoma Aggregates Association, quickly pointed out some of the bill's numerous flaws, including the fact that the tax rate could be set at different rates in different counties, creating a logistics nightmare for operators. He also noted that the only state that currently has a severance tax is Arkansas. Its tax is 4 cents per ton. The proposed tax, Rodriguez said could add up to 42 cents per ton. Let's reflect on average construction materials prices in Oklahoma. According to the U.S. Geological Survey's most recent quarterly production reports, the average price of sand and gravel there is $6.22 per metric ton, while crushed stone rates a slightly higher price of $7.58. These tax rates could reflect the difference between profit and loss for many operators. McCall claims that trucks hauling aggregate are damaging roads and infrastructure. That lever is being used to encourage support among county commissioners, but it fails to address two points: First, most operations have some sort of agreement with the local communities to upgrade the roads into and out of their operations; and second, most operations are in close proximity to highways (which are built to handle these loads) so they can efficiently transport their product to market. On the upside, new taxes in Oklahoma require a 75-percent vote from the state legislature. If the tax is passed, however, homeowners, business owners, and the state DOT may find that the cost of purchasing Oklahoma aggregates may increase… perhaps by as much as 42 cents per ton. 3 things I learned from this issue: Aggregates Manager TM magazine (ISSN 1552-3071) is published monthly by Randall-Reilly Publishing Company copyright 2014. Executive and Administrative offices, 3200 Rice Mine Rd. N.E., Tuscaloosa, AL 35406. Subscription rates: $24 annually, Non-domestic $125 annually. Single copies: $7. We assume no responsibility for the validity of claims of manufacturers in any advertisement or editorial product information or literature offered by them. Publisher reserves the right to refuse non-qualified subscriptions. Periodical circulation postage paid at Tuscaloosa, Alabama and additional entries. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by an information storage retrieval system, without written permission of the copyright owner. POSTMASTER: Send all UAA to CFS. (See DMM 707.4.12.5); NON-POSTAL AND MILITARY FACILITIES: send address corrections to Aggregates Manager, 3200 Rice Mine Road N.E.,  Tuscaloosa, AL  35406. 1 Manufacturer software can help calculate whether it's more efficient to rebuild or replace equipment, page 23. 2 Jaw dies should be flipped or replaced when corrugations get to about 20 percent of beginning dimensions (or irregular wear is detected), page 36. 3 While the definition of 'accident' has a more narrow scope in 30 C.F.R. Part 50, § 50.2(h), the FMSHRC allows a broader definition under § 103(k), page 42. AGGREGATES MANAGER February 2014 3

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