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BILL # SB 1332 |
TITLE: alternative fuel vehicles; VLT |
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SPONSOR: Livingston |
STATUS: Senate Engrossed |
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PREPARED BY: Ben Murphy |
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The bill would establish a modified alternative fuel vehicle VLT rate for AFVs initially registered in CY 2022 and apply the standard VLT rate to AFVs initially registered in CY 2023 and beyond.
Estimated Impact
The bill is estimated to result in increased VLT revenues of $1.8 million in FY 2022, $3.9 million in FY 2023, and $4.4 million in FY 2024 compared to the existing 2019 requirements. (Please see Table 1 for details on impact by VLT revenue recipient.)
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Table 1 |
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SB 1332 Revenue Impacts Compared to 2019 Requirements |
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FY 2022 |
FY 2023 |
FY 2024 |
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Highway User Revenue Fund |
$ 690,800 |
$1,470,800 |
$1,649,300 |
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County General Funds |
375,600 |
799,700 |
896,800 |
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County Transportation |
90,200 |
192,000 |
215,300 |
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Cities and Towns General Funds |
375,600 |
799,700 |
896,800 |
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State Highway Fund |
105,200 |
224,100 |
251,300 |
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General Fund |
199,300 |
424,300 |
475,800 |
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Total |
$1,836,700 |
$3,910,600 |
$4,385,300 |
Laws 2018, Chapter 265 made modifications to the alternative fuel vehicle (AFV) VLT calculation, effective CY 2020. The legislation directs the Arizona Department of Transportation (ADOT) Director to determine the assessed value calculation for AFVs purchased prior to CY 2020 and sets specific rates for AFVs purchased after CY 2020 based on gross vehicle weight. Since Chapter 265 makes the impact of AFV registrations dependent on a future administrative decision by the ADOT Director, our analysis compares the bill to the existing 2019 requirements.
Current law provides an AFV VLT rate. For both standard vehicles and AFVs, VLT is calculated by applying a rate to each $100 in a vehicle's assessed value. The main component of the reduced AFV VLT is its lower assessed value calculation. While standard vehicles have an assessed value set at 60% of manufacturer's base retail price, AFVs have an assessed value set at 1% of manufacturer's base retail price. This reduction is slightly offset by an AFV rate of $4 per $100 in value compared to $2.80 (original) or $2.89 (renewal) per $100 in value for standard vehicles and a slightly different depreciation rate. AFV VLT revenues also have a different distribution formula than standard VLT revenues.
(Continued)
Under the bill, AFVs registered in the state before January 1, 2022 would continue to pay the current AFV VLT rate. For AFVs initially registered between January 1, 2022 and December 31, 2022, the bill specifies that their assessed value will be 20% of base retail price rather than the 1% under current law. For AFVs initially registered from and after December 31, 2022, the bill specifies that the standard (current non-AFV) VLT rate will apply.
This analysis consists of comparison of yearly revenue estimates under current law and the bill. Those revenues would be generated from currently registered AFVs and estimated newly registered AFVs.
FY 2022
The 49,499 AFVs registered in Arizona generate a total of $2.4 million in yearly VLT revenues, at an average VLT per vehicle of $48. Using historical data, the JLBC Staff estimates a yearly growth in registered AFVs of 4,000. Under current law, the 4,000 additional AFVs initially registered in FY 2022 would generate $193,300 in additional revenue at an average VLT per vehicle of $48.
Under the bill, we estimate that the 2,000 AFVs initially registered in the first half of FY 2022 (July 2021 to January 2022) would generate $96,600 in additional revenue at an average VLT per vehicle of $48. The 2,000 AFVs initially registered in the second half of FY 2022 (January 2022 to June 2022) would generate $1.9 million in additional revenue at an average VLT per vehicle of $967 (the average AFV VLT per vehicle multiplied by 20). Combined, the 4,000 vehicles would generate $2.0 million in additional revenues under the amendment compared to $193,300 under current law, or an increase of $1.8 million.
FY 2023
Under current law, the 4,000 additional AFVs initially registered in FY 2023 would generate $193,300 in additional revenue at an average VLT per vehicle of $48.
Under the bill, we estimate that the 2,000 AFVs initially registered in the first half of FY 2023 (July 2022 to January 2023) would generate $1.9 million in additional revenue at an average VLT per vehicle of $967. The 2,000 AFVs initially registered in the second half of FY 2023 (January 2023 to June 2023) would generate $334,000 in additional revenue at an average VLT per vehicle of $167 (the average standard passenger vehicle VLT). Combined, the 4,000 vehicles would generate $2.3 million in additional revenues under the amendment compared to $193,300 under current law, or an increase of $2.1 million. Combined with the FY 2022 revenue increase of $1.8 million, FY 2023 revenues under the amendment would be $3.9 million above FY 2023 revenues under current law.
FY 2024
Under current law, the 4,000 additional AFVs initially registered in FY 2024 would generate $193,300 in additional revenue at an average VLT per vehicle of $48.
Under the bill, we estimate that the 4,000 AFVs initially registered in FY 2024 would generate $668,000 in additional revenue at an average VLT per vehicle of $167. This would result in additional revenue of $474,700. Combined with the FY 2022 revenue increase of $1.8 million and FY 2023 revenue increase of $2.1 million, FY 2024 revenues under the amendment would be $4.4 million above FY 2024 revenues under current law.
Local Government Impact
VLT revenues are distributed to HURF, county general funds, county transportation funds, and cities and towns' general funds. A total of 49.5% of HURF revenues are distributed to local governments. Please see Table 1 for revenue impacts, including those on local governments.
4/19/19