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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
transportation tax; election; gas tax
Purpose
Establishes a new 20-year transportation excise tax in Maricopa County subject to voter approval. Increases, beginning January 1, 2022, and ending December 31, 2045, the statewide gas tax by 1 cent annually and indexes the tax to annual inflation. Contains requirements for enactment and becomes effective on signature of the Governor (Proposition 108).
Background
In
2004 voters in Maricopa County approved a countywide transportation excise tax
to be levied at a rate of not more than 10 percent of the state transaction
privilege tax. Revenues from the excise tax are deposited into the Regional
Area Road Fund (RARF) and are distributed to transportation projects as
follows: 1) 56.2 percent for freeways and other routes in the state highway
system; 2) 10.5 percent for major arterial streets and intersection
improvements; and
3) 33.3 percent to public transportation. Legislation passed in 2003
established the Transportation Policy Committee (TPC) which is tasked with the
approval of a 20-year comprehensive, performance-based, multimodal and
coordinated regional transportation plan (RTP) in Maricopa County (Laws 2003, Chapter
217). The current transportation excise tax in Maricopa county is set to
expire on January 1, 2026.
Motor vehicle fuel that is possessed, used or consumed in Arizona is currently taxed at a rate of 18 cents per gallon. Use fuel that is used in the propulsion of light class motor vehicles is taxed at the same rate as motor vehicle fuel, while use fuel used in the propulsion of use class motor vehicles is taxed at 26 cents per gallon. An additional excise tax of 1 cent per gallon is imposed on motor vehicle fuel and other fuels for the operation of underground storage tanks (A.R.S. § 49-1031). Revenues collected from taxes on motor vehicle fuel are deposited into the Highway User Revenue Fund (HURF) and are distributed as follows: 1) 50.5 percent to the State Highway Fund (SHF); 2) 19 percent to counties; 3) 27.5 percent to incorporated cities and towns; and 4) 3 percent to incorporated cities with a population of 300,000 or more persons (A.R.S. §§ 28-5606 and 28-6538).
S.B. 1650 would result in greater HURF revenues due to the imposition of increased taxes on motor vehicle fuel and use fuel and new taxes on alternative fuel vehicles.
Provisions
Transportation Excise Tax
1. Establishes, effective January 1, 2026, and subject to voter approval, a transportation excise tax in Maricopa County at a rate of not more than 15 percent of the statewide transaction privilege tax.
2. States that the transportation excise tax is effective for a term of 20 years.
3. Requires net revenues collected from the transportation excise tax to be distributed to projects within the adopted RTP as follows:
a) 56.2 percent to the RARF for freeways and other routes in the state highway system;
b) 10.5 percent to the RARF for major arterial streets and intersection improvements; and
c) 33.3 percent to public transportation, which is to be further distributed as follows.
4. Requires revenues allocated to public transportation to be further distributed as follows:
a) 50 percent for bus operations, including bus circulators to facilitate service to unincorporated areas;
b) 20 percent for bus capital;
c) 20 percent for rail service; and
d) 10 percent for compliance with the Americans with Disabilities Act.
5. Specifies that the transportation excise tax is not effective unless approved by the voters of Maricopa County at an election held on November 8, 2022.
6. Exempts monies collected from the transportation excise tax from Maricopa County's expenditure limitation.
7. Specifies that the enactment of the transportation excise tax conditioned on the results of the election does not constitute a submission of the tax to the voters under the power of referendum.
8. Requires the Maricopa County Board of Supervisors (Maricopa County BOS) to call and conduct an election on November 8, 2022, for the extension and levy of a county transportation excise tax.
9. Requires the Maricopa County BOS to prepare and print a publicity pamphlet concerning the ballot question and mail the pamphlet to each household of a registered voter in Maricopa County.
10. Requires the pamphlet to contain:
a) a summary of the issue presented, including the transportation excise tax rate, the number of years the tax will be in effect and projected revenues to be raised;
b) purposes for which the transportation excise tax will be spent, including:
i. a summary of the RTP;
ii. a map of proposed routes and transportation corridors for all projects;
iii. an estimate of transportation excise tax revenues dedicated to each transportation mode, public transportation system and limitations;
iv. a summary of the conditions and prohibitions on redistributing transportation excise tax revenues; and
v. the Maricopa County Elections Department website address for additional information on the RTP;
c) the form of the ballot; and
d) arguments for and against the measure.
11. States that the deadline for submitting arguments for or against the measure is July 15, 2022.
12. Prescribes procedures for submitting an argument for or against the measure.
13. Prescribes specific text that must be present on the ballot measure.
14. Requires the Maricopa County election officer to account for costs specifically incurred from the transportation excise tax election and for these costs to be paid from the RARF.
Gas Tax Increase and Distribution
15. Increases, beginning January 1, 2022, and ending December 31, 2045, the tax levied on motor vehicle fuel by 1 cent annually.
16. Increases, beginning January 1, 2022, the tax levied on use fuel for light class and use class motor vehicles by 1 cent annually.
17. Requires, beginning July 1, 2022, the tax levied on motor vehicle fuel and use fuel to be adjusted annually to reflect the average annual change in the Consumer Price Index.
18. Requires, beginning January 1, 2022, new revenues collected from gas tax increases above the current gas tax rate to be distributed as follows:
a) 50.5 percent to the SHF; and
b) of the remaining 49.5 percent:
i. 40 percent to Maricopa County and cities and towns within Maricopa County; and
ii. 60 percent to all other counties and cities and towns within those counties.
Electric and Hybrid Vehicle Tax
19. Requires, beginning January 1, 2022, an annual tax to be imposed on a vehicle that is propelled by electricity or a combination of electricity and other fuels in the amount of:
a) $500 for a vehicle propelled only by alternative fuel; and
b) $300 for a vehicle propelled by a combination of alternative fuel and other fuels.
Maricopa County BOS and the TPC
20. Requires the Maricopa County BOS to appoint a transportation planning assistant who is required to streamline bus service between the incorporated and unincorporated areas of the County.
21. Requires the TPC to consist of two members, rather than one member, from the Maricopa County BOS.
22. Requires the additional TPC member from the Maricopa County BOS to represent the district that has the most persons residing in unincorporated areas of the County.
Transportation Project Specifications
23. Repeals the TPC on July 1, 2044, rather than July 1, 2024.
24. Requires a regional planning agency in Maricopa County to give a project in the RTP a higher priority for completion if:
a) the federal government provides federal monies for the project; or
b) a city or town makes a single sum contribution to the project of at least five percent of the total cost of the project.
25. Requires a regional planning agency in Maricopa County, when working on a project involving a highway intersection and if project conditions are appropriate, to widen the roadway that leads to the highway intersection for at least a quarter mile further than is routinely widened.
26. Requires a city, town or county, when performing a study of ways to improve public transit, to include autonomous vehicles in the study in the same manner as vehicles that require a human driver.
27. Requires the Arizona Department of Transportation (ADOT) to widen the following:
a) Interstate 17 to four lanes in each direction between State Route 74 and Black Canyon City;
b) Interstate 17 to three lanes in each direction from Black Canyon City to mile post 242;
c) Interstate 10 to four lanes in each direction between Verrado Way and at least State Route 85;
d) Interstate 10 to at least three lanes in each direction between State Route 85 and mile post 71; and
e) Interstate 10 to at least four lanes in each direction between mile post 162 and mile post 167.
28. Requires ADOT to construct a suspension bridge over a river when constructing State Route 30.
Miscellaneous
29. Makes technical and conforming changes.
30. Requires for enactment the affirmative vote of at least two-thirds of the members of each house of the Legislature (Proposition 108).
31. Becomes effective on signature of the Governor.
Prepared by Senate Research
February 11, 2021
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