Assigned to TRANSIT AS
ENACTED
Assigned to TRANSIT AS
ENACTED
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
ENACTED
AMENDED
FACT SHEET FOR H.B. 2166/S.B. 1146
vehicle fees; alternative fuel VLT
Purpose
Requires an annual highway safety fee for registered vehicles to fund highway patrol. Modifies calculation of vehicle valuation for vehicle license tax (VLT) purposes for alternative fuel vehicles beginning January 1, 2020.
Background
VLT
A VLT is constitutionally required for each year of a vehicle's registration (Ariz. Const. art. 9, § 11). The VLT decreases with the age of the vehicle and a minimum VLT for a gasoline‑powered vehicle is $10 per year (A.R.S. Title 28, Chapter 16, Art. 3).
A vehicle powered by electricity, solar energy, alcohol fuel, certain approved gasses or certain fuel blends is classified as an alternative fuel vehicle for purposes of calculating VLT. For an alternative fuel vehicle, the VLT is $4 for each $100 of the vehicle's value, which is calculated as 1 percent of the manufacturer's base retail price, decreasing by 15 percent each year. The minimum VLT for alternative fuel vehicles is $5 per year (A.R.S. §§ 1-215 and 28-5805).
Monies collected from VLT are distributed to various sources, including the Highway User Revenue Fund (HURF), each county's general fund, municipality funds and to counties for transportation purposes (A.R.S. § 28-5808).
Highway Patrol
The Highway Patrol Division of the Arizona Department of Public Safety (DPS) is charged with patrolling the highways of the state, both day and night, and enforcing the laws of Arizona (A.R.S. § 41-1743). The Highway Patrol Division is funded by the Arizona Highway Patrol Fund, which statutorily consists of the following funding sources: 1) HURF monies appropriated by the Legislature; 2) miscellaneous service fees; 3) rewards; 4) awards; 5) insurance recoveries; 6) monies derived from the sale or disposal of highway patrol property; 7) excess monies collected from insurance premiums for the Public Safety Retirement System Highway Patrol Account; and 8) administrative charges collected for vehicles that were removed, immobilized or impounded and stored by DPS (A.R.S. § 41-1752).
There is no anticipated fiscal impact to the state General Fund (GF) associated with this legislation. According to a JLBC fiscal note, the modification to the alternative fuel VLT is estimated to generate additional funds to the state GF, State Highway Fund and local government distributions beginning in FY 2021. The fiscal note estimates that the owners of each of the 8,300,000 vehicles registered in Arizona would pay a highway safety fee of $18.06 in FY 2019 to generate an amount equal to 110 percent of the DPS Highway Patrol budget for FY 2018, less projected unencumbered balance.
Provisions
VLT
1. Requires, beginning January 1, 2020, the VLT for a previously purchased alternative fuel vehicle to be based on a value of the vehicle that is a percentage set by the Director of the Arizona Department of Transportation (ADOT) of the manufacturer's base retail price, decreasing by 15 percent of the manufacturer's base retail price for each year after the first year of registration.
2. Requires the VLT for an alternative fuel vehicle that is less than 10,000 pounds gross weight purchased on or after January 1, 2020, to be calculated as 30 percent of the manufacturer's base retail price, decreasing by 15 percent of the manufacturer's base retail price for each year after the first year of registration.
3. Removes alternative fuel vehicles with a gross weight of more than 10,000 pounds from the separate classification for alternative fuel vehicles for VLT calculation purposes for vehicles purchased on or after January 1, 2020.
Highway Patrol
4. Requires the registering officer to collect a highway safety fee in an amount annually set by the Director of ADOT to be deposited into the DPS Highway Patrol Fund.
5. Requires the highway safety fee to fully fund 110 percent of the highway patrol budget for each fiscal year, less any prior unencumbered balance exceeding 10 percent of the highway safety fee from the prior year.
6. Exempts ADOT from the rulemaking process for the purpose of annually setting the highway safety fee.
Miscellaneous
7. Contains a legislative intent clause.
8. Makes technical and conforming changes.
9. Becomes effective on the general effective date, with a delayed effective date as noted.
Amendments Adopted by Committee
1. Reinstates an alternative fuel vehicle classification for motor vehicles purchased before January 1, 2020, and outlines the process, beginning January 1, 2020, to calculate the VLT for previously purchased alternative fuel vehicles.
2. Adds a rulemaking exemption for ADOT to set the annual highway safety fee.
3. Delays the effective date of provisions relating to the alternative fuel vehicle classification to January 1, 2020.
4. Adds a legislative intent clause.
5. Makes technical and conforming changes.
Amendments Adopted by Committee of the Whole
1. Reinstates the alternative fuel vehicle classification for vehicle license tax (VLT) purposes for motor vehicles purchased beginning January 1, 2020, that are powered by alternative fuel and 10,000 pounds or less gross vehicle weight and calculates the valuation for VLT purposes as 30 percent of the base retail price, decreasing by 15% of the base retail price each year.
2. Reinstates the requirement that a VLT bill for a gasoline-powered vehicle include the comparable rate if the vehicle was powered by alternative fuel.
3. Makes technical and conforming changes.
House Action Senate Action
TI 2/7/18 DPA 7-1-0-0 TRANSIT 2/6/18 DPA 7-0-0
3rd Read 2/20/18 35-24-1 3rd Read 4/23/18 17-13-0
(H.B. 2166 was substituted for S.B. 1146 on 3rd Read)
Signed by the Governor 4/25/18
Chapter 265
Prepared by Senate Research
April 25, 2018
KN/lb