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ARIZONA HOUSE OF REPRESENTATIVESFifty-sixth Legislature First Regular Session |
Senate: TAT DPA 6-0-1-0 | 3rd Read 29-0-1-0
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SB
1246: electronic certificates of title
NOW: election; transportation tax; Maricopa County
Sponsor: Senator Farnsworth, LD 10
Transmitted to the Governor
Overview
Requires Maricopa County, beginning on January 1, 2026, if approved by qualified electors voting in a countywide election, to levy and the Arizona Department of Transportation (ADOT) to collect a County Transportation Excise Tax and County Public Transportation Excise Tax, both to be in effect for 20 years. Additionally, if approved by the voters, establishes a transportation excise tax Plan.
History
In 2004, Maricopa County voters approved a countywide transportation tax levied at a rate up to 10% of the state transaction privilege tax (one-half-cent transaction tax). Revenues from the half-cent transportation tax are deposited into the Regional Area Road Fund (RARF). Laws 2003, Chapter 217 established the Regional Planning Agency Transportation Policy Committee (TPC) which is tasked with the approval of a 20-year comprehensive, performance-based, multimodal and coordinated regional transportation plan in Maricopa County. The tax will end on December 31, 2025.
The Maricopa Association of Governments (MAG) is a council of governments that serves as the regional planning and policy agency for the metropolitan Phoenix area. Monies collected from the voter-approved transportation taxes are deposited into MAG's RARF to be used by MAG for maintenance and capital expenses of freeways and the state highway system (A.R.S. § 42-6106).
House Bill 2685 required Maricopa County to hold a county-wide election to continue the half-cent transportation tax. The bill was passed by the Legislature and transmitted to the Governor on June 24th, 2022. The Governor vetoed House Bill 2685 on July 6th, 2022.
Provisions
County Transportation Excise Tax
1. Requires, if approved by the qualified electors voting at a county-wide election, a county with a population of 3,000,000 or more people to levy, and ADOT to collect a transportation excise (County Transportation Excise Tax) tax beginning January 1, 2026. (Sec. 26)
2. Directs County Transportation Excise Tax to be levied and collected:
a) At a rate of up to 8.6% ($ 0.43) of the state transaction privilege tax (TPT) rate on January 1, 1990;
b) At a rate of up to 8.6% of the jet fuel excise tax rate; and
c) On the use or consumption of electricity or natural gas by customers in the county who are subject to use tax, at a rate equal to the state TPT rate that applies to customers engaging in the county in the utilities TPT classification. (Sec. 26)
3. States that the Plan adopted by the regional planning agency will specify the distribution of the collected monies and requires the Plan to distribute the revenues as follows:
a) 53.5% to the RARF for freeways and other routes in the state highway system, including maintenance and capital expense;
b) 18.5% to the RARF for major arterial streets, intersection improvements and regional programs, including capital expense and implementation studies. At least 13.5% is required to be distributed for major arterial streets and intersection improvements; and
c) 28% to the Public Transportation Fund for capital costs, maintenance and operation of public transportation mode classifications. (Sec. 26)
4. Prohibits the RARF distribution for freeways and other routes in the state highway system and the distribution for major arterials and intersection improvements from being decreased. (Sec. 26)
5. Prohibits County Transportation Excise Tax revenue from being used:
a) For any light rail, commuter rail, street cars or trollies;
b) To influence the outcome of an election;
c) For polling;
d) On any project that will result in a reduction in existing lane miles on a highway or a state highway;
e) On any project that will result in a reduction in existing lane miles on a street or roadway unless a third-party engineering study determines the reduction is necessary to reduce congestion, and the findings are presented in a public hearing;
f) On active transportation projects; and
g) For extending light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix. (Sec. 26)
6. Requires the County Transportation Excise Tax to be in effect for 20 years. (Sec. 26)
County Public Transportation Excise Tax
7. Requires, if approved by the qualified electors voting at a county-wide election, a county with a population of 3,000,000 or more people to levy, and ADOT to collect a transportation excise tax for public transportation (County Public Transportation Excise Tax) beginning January 1, 2026. (Sec. 26)
8. Directs the County Public Transportation Excise Tax to be levied and collected:
a) At a rate of up to 1.3% ($ .065) of the TPT rate on January 1, 1990;
b) At a rate of up to 1.3% of the jet fuel excise tax rate; and
c) On the use or consumption of electricity or natural gas by customers in the county who are subject to use tax, at a rate equal to the state TPT rate that applies to customers engaging in the county in the utilities TPT classification. (Sec. 26)
9. Requires the net revenues collected by the Public Transportation Excise Tax to be distributed and deposited in the Public Transportation Fund for:
a) Capital costs, maintenance and operation of public transportation mode classifications; and
b) Capital costs and utility relocation costs associated with a light rail public transit system. (Sec. 26)
10. States that no more than 25% of County Public Transportation Excise Tax revenues may be used for capital rehabilitation of the light rail system. (Sec. 26)
11. Defines capital rehabilitation of the light rail system as capital maintenance, repair or improvements that ensure regional assets remain in a state of good repair to preserve the safety and reliability of the system. (Sec. 26)
12. States the Public Transportation Excise Tax will be in effect for 20 years. (Sec. 26)
13. Prohibits Public Transportation Excise Tax revenues from being used:
a) For any light rail extension, commuter rail, street cars or trollies
b) To influence the outcome of an election;
c) For polling;
d) For any project that will reduce existing lane miles on a highway or state highway, unless a third-party engineering study determines the reduction is necessary to reduce congestion, and the findings are presented in a public hearing; and
e) To extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix. (Sec. 26)
Countywide Election
14. Describes processes for the county to call a countywide election for the levy of the County Transportation Excise Tax and the County Public Transportation Excise Tax. (Sec. 31)
15. Requires the county to conduct the election on a consolidated election date at least one year before the date on which an existing county excise tax would otherwise be discontinued. (Sec. 31)
16. Modifies population requirements for highly populated counties from 1,200,000 to 3,000,000 or more. (Sec. 5)
17. Removes the ability for monies from any account in the RARF to be spent to determine public opinion before the election is called. (Sec. 9)
Regional Planning Agency and Transportation Infrastructure Investment Plan
18. Requires the regional planning agency in the county to develop and adopt a Plan in cooperation with state and local public transportation authorities and coordination with ADOT. (Sec. 17)
19. Defines Plan as a comprehensive, performance-based, multimodal and coordinated regional strategic transportation infrastructure investment Plan approved for a county. (Sec. 17)
20. Directs the regional planning agency to consider truck parking availability when considering the construction, expansion or modification of freeways or other routes in the state highway system. (Sec. 15)
21. Requires the regional planning agency to allocate at least $90,000,000 for the implementation of commercial motor vehicle parking that is consistent with the adopted truck parking plan on or before December 31, 2045. (Sec. 17)
22. Requires the Plan to allocate County Transportation Excise Tax revenues in the:
a) RARF for freeways and other routes in the state highway system;
b) RARF for major arterial streets, intersection improvements and regional programs; and
c) Public Transportation Fund for capital costs, maintenance and operation of public transportation mode classifications. (Sec. 17)
23. Requires the Plan to allocate Public Transportation Excise Tax revenues in the Public Transportation Fund for:
a) Capital costs, maintenance and operation of public transportation mode classifications; and
b) Capital costs and utility relocation costs associated with a light rail public transit system. (Sec. 17)
24. Directs the regional planning agency, beginning FY 2024, to adopt a budget process and outlines requirements for the budget process. (Sec. 17)
25. Stipulates that the regional planning agency must coordinate with implementing partners on the budget process including ADOT for freeways and other routes in the state highway system and the regional public transportation authority in the county for the public transportation system. (Sec. 17)
26. Specifies the budget process does not apply to the annual operating budget of the regional public transportation authority in the county. (Sec. 17)
27. Requires the regional planning agency to determine the use of revenues collected for capital projects through the transportation improvement program. (Sec. 17)
28. States that any bonds issued against proceeds collected through the transportation excise taxes require consultation with the regional planning agency. (Sec. 17)
29. Directs the regional planning agency to annually report on the status of the funded projects and requires the report to be posted on the agency's website. (Sec. 17)
30. Stipulates requests for changes to transportation projects funded in the Plan that would materially increase costs must be submitted to the regional planning agency for approval and then submitted by the agency to the TPC and the State Transportation Board for consideration and approval. (Sec. 17)
31. Requires a local authority that requests an enhancement to a transportation project funded by the Plan to pay for all costs associated with the enhancement. (Sec. 17)
32. States that if monies are appropriated by the Legislature for a project that is identified by the Plan, the use of the monies for construction requires:
a) That the project must be advanced as appropriate to reflect the estimated construction start date; and
b) The monies be used in the same modal classification as transportation tax revenues. (Sec. 17)
33. Allows a municipality that pays for public transportation service in an adjacent municipality or unincorporated area to be eligible for reimbursement from monies collected under the transportation tax. (Sec.17)
34. Requires the regional planning agency to post a public notice on any proposed amendments to the Plan that requires a new air quality conformity determination and to make the results of the air quality conformity analysis publicly available. (Sec. 17)
Farebox Operating and Recovery Ratio Performance Standards
35. Directs the public transportation element of the regional transportation Plan to include the following performance standards:
a) A farebox operating ratio standard for existing bus route extensions that are in existence on the effective date and that are funded in whole or in part by the revenues of either transportation excise tax; and
b) A farebox recovery ratio standard for existing bus routes that are in existence on the effective date and that are funded in whole or in part by the revenues of either transportation excise tax. (Sec. 30)
36. Requires the outlined performance standards to be presented each fiscal year and to achieve the following percentages for each bus route in existence on the effective date:
a) For FY 2026 through FY 2028, 13%;
b) For FY 2029 through FY 2031, 16%; and
c) For FY 2032 and thereafter, 19%. (Sec. 30)
37. Directs the excess costs to be allocated among affected member municipalities according to the proportion of the bus route that is in each municipality if the regional public transportation authority (authority) fails to meet the outlined performance standards. (Sec. 30)
38. Requires member municipalities to pay their owed amounts from their perspective general funds to the Public Transportation Fund in the fiscal year following the fiscal year the shortfall occurred. (Sec. 30)
39. States that if the authority fails to meet the outlined 19% performance standard for FY 2032 and onward, the authority is required to proceed with a public bid for the operation of the failing bus route and is prohibited from submitting a proposal to bid. (Sec. 30)
40. Requires the authority to conduct a public bid to contract the operations for all new bus routes identified in the Plan. The bid must require the perspective operators to demonstrate compliance with the following farebox operating ratio standards;
a) 13% within the first year of operating;
b) 16% within the fourth year of operating; and
c) 19% within the seventh year of operating and every subsequent year. (Sec. 30)
41. States that if the operator fails to meet the performance standards:
a) A new public bid may be conducted;
b) The failing bus route may be eliminated; or
c) A new bus route may be redesigned followed by a new public bid. (Sec. 30)
42. Exempts transportation services required by the 'Americans with Disabilities Act of 1990' U.S.C §§ 12101-12213 from the farebox recovery ratio performance standards. (Sec. 30)
Transportation Policy Committee
43.
Adds the following members to the TPC
beginning FY 2025, all appointed jointly by the Speaker of the House of
Representatives and the President of the Senate to serve six-year terms:
a) Two members representing unincorporated areas of Maricopa County;
b) Two members representing taxpayer organizations; and
c) One member who represents residential housing development interests. (Sec. 11)
44. Modifies the membership of the TPC by increasing the number of members who represent regionwide business interests from 6 to 12, of whom:
a) Two, instead of one, represent transit interests;
b) Two, instead of one, represent freight interests;
c) Two represent commercial real estate interests; and
d) Two, instead of one, represent construction interests. (Sec. 11)
45. Directs the TPC to develop the Plan in cooperation with the regional public transportation authority in the county and ADOT and in consultation with the board of supervisors, Indian communities and cities and towns in the county. (Sec. 11)
46. Requires the TPC to recommend approval, disapproval or modification of:
a) The Plan;
b) Changes to the allocation of transportation tax revenues;
c) Budget processes; and
d) Funding awarded through the regional program's process. (Sec.11)
Miscellaneous
47. Requires the State Treasurer, instead of dividing and equally distributing $5,000,000 to the Public Transportation Fund and Regional Planning Agency, to distribute every fiscal year from the Construction Fund;
a) $2,500,000 to the Public Transportation Fund; and
b) $1,625,000 to the regional planning agency for planning and administering the Plan. (Sec. 8)
48. Requires ADOT to separately account for the uses of the transportation excise tax revenues deposited in the bond account and the construction account to identify how the revenues are used for:
a) Freeways or other routes in the state highway system; and
b) Major arterial streets, intersection improvements and regional programs identified in the Plan, including capital expense and implementation studies. (Sec. 6)
49. Restricts this state or a city, town, county or political subdivision of this state from restricting the use of or sale of a device based on the energy source consumed by the device or used to power the device. (Sec. 1)
50. Prohibits public monies and tax revenues from the current county transportation excise tax from being used to extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix. (Sec. 24-25)
51. Requires the speed limit for all types of motor vehicles to be at least 65 miles per hour on interstate system highways located in a county with a population of 3,000,000 or more people. (Sec. 3)
52. Modifies what monies in the bond account may be used for. (Sec. 7)
53. Removes the requirement that the Director of ADOT develops and annually updates, as a component of the five-year transportation facilities construction program, a plan for the use of monies expected to be deposited in the county's regional area road fund. (Sec. 8)
54. Requires the Auditor General to every five years internally conduct a performance audit of the Plan and projects scheduled for funding during the next five years and modifies the reporting requirements for the audit. (Sec. 13)
55. Establishes beginning January 1, 2026, a regional public transportation authority in a county with a population of 3,000,000 or more people that approved a county transportation excise tax. (Sec. 27)
56. Requires the five-year transportation facilities construction program to include a plan that is updated annually for the use of monies expected to be deposited in a county's RARF that is consistent with the Plan adopted by the regional planning agency and consistent with the planning agency's budget process. (Sec. 20)
57. Specifies that this act does not invalidate any action by a regional public transportation authority formed before the effective date. (Sec. 32)
58. States that the Legislature intends that:
a) The development of State Route 30 between State Route 85 and Loop 303 to begin in the first phase of the Plan; and
b) The freeway allocations fund the repavement of State Route 51. (Sec. 33)
59. Contains a severability clause. (Sec. 34)
60. Contains a conditional enactment clause. (Sec. 35)
61. Repeals statute. (Sec. 10, 12, 16, 18, 29)
62. Defines terms. (Sec. 4, 15, 17, 30)
63. Makes technical changes. (Sec. 2, 4-8, 11, 13, 15, 19, 22, 25, 28)
64. Makes conforming changes. (Sec. 2-9, 11, 13-15, 19, 21-23, 25, 28)
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SB 1246
Initials JB Page 0 Transmitted
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