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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
VETOED
AMENDED
electronic certificates
of title
(NOW: election; transportation tax; Maricopa County)
As passed the Senate, S.B. 1246 prohibited the Director of the Arizona Department of Transportation (ADOT) from prohibiting an authorized third party from using an electronic certificates of title system to print an electronic certificate of title or a registration card.
The House of Representatives adopted a strike-everything amendment that does the following:
Purpose
Directs the board of supervisors (BOS) in a county with a population of 3,000,000 persons or more (Maricopa County) to call a countywide election for the continuation of the .495 cents of the current .5 cents county transportation excise tax (transportation tax). Prescribes the levy and distribution of the transportation tax if approved by the voters and outlines requirements for participants and agencies.
Background
In 2004, Maricopa County voters approved a countywide transportation tax levied at a rate of up to 10 percent of the state transaction privilege tax (one-half cent transportation tax). Revenues from the one-half cent transportation tax are deposited into the Regional Area Road Fund (RARF) and 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. 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 (Plan) for Maricopa County. The current one-half cent transportation tax in Maricopa County expires on January 1, 2026.
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. MAG is the designated metropolitan planning organization for transportation planning in the greater Phoenix metropolitan region, including the Phoenix urbanized area and the contiguous urbanized area in Pinal County (MAG). Monies collected from voter-approved transportation taxes are deposited into MAG's RARF to be used by MAG for the maintenance and capital expenses of freeways and the state highway system (A.R.S. § 42-6105).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Maricopa County Transportation Tax
(Effective if approved by the qualified electors at an election)
1. Requires, beginning January 1, 2026, if approved by the qualified electors voting at a countywide election, Maricopa County to levy, and ADOT to collect, a transportation tax relating to freeways, public transit and arterial streets (transportation tax) for a term of 20 years.
2. Requires the transportation tax to be levied and collected:
a) at a rate of up to 8.6 percent of the state transaction privilege tax (TPT) rate on January 1, 1990;
b) at a rate of up to 8.6 percent 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 of up to 8.6 percent of the state TPT rate that applies to persons engaging in the county in the utilities TPT classification.
3. Directs the annual net revenues of the transportation tax to be distributed and deposited for use as specified by the Plan, as follows:
a) 53.5 percent to the RARF for freeways and other routes in the state highway system, including capital expense and maintenance;
b) 18.5 percent to the RARF for major arterial streets, intersection improvements and regional programs, including capital expense and implementation studies; and
c) 28 percent to the Public Transportation Fund (PTF) for capital costs, maintenance and operation of public transportation mode classifications.
4. Requires at least 13.5 percent of the 18.5 percent distribution to the RARF to be distributed for major arterial streets and intersection improvements.
5. Prohibits the following transportation tax distributions from being decreased:
a) 53.5 percent distribution to the RARF; and
b) 18.5 percent distribution to the RARF and the dedicated 13.5 percent minimum of the 18.5 percent distribution.
6. Prohibits any transportation tax revenues from being:
a) used for any light rail, commuter rail, street cars or trollies;
b) used to influence the outcome of an election;
c) spent on polling;
d) spent on any project that will result in a reduction in existing lane miles on a highway or state highway;
e) spent 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 that a lane mile reduction is necessary to reduce congestion and the findings are presented in a public hearing;
f) spent on active transportation projects; and
g) used to extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix.
7. Reestablishes, beginning January 1, 2026, the Maricopa County Regional Public Transportation Authority (RPTA), if a transportation tax has been approved.
Maricopa County Public Transit Tax
(Effective if approved by the qualified electors at an election)
8. Requires, beginning January 1, 2026, if approved by the qualified electors voting at a countywide election, Maricopa County to levy, and ADOT to collect, a transportation tax relating to expanding public transit offerings, including light rail (public transit tax) for a term of 20 years.
9. Requires the public transit tax to be levied and collected:
a) at a rate of up to 1.3 percent of the state TPT rate on January 1, 1990;
b) at a rate of up to 1.3 percent 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 of up to 1.3 percent of the state TPT rate that applies to persons engaging in the county in the utilities TPT classification.
10. Directs the annual net revenues of the public transit tax to be distributed and deposited in the PFT 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.
11. Caps, at 25 percent, the amount of public transit revenues that may be used for capital rehabilitation of the light rail system.
12. Prohibits public transit tax revenues from being:
a) used to influence the outcome of an election;
b) spent on polling;
c) spent on any project that will result in a reduction in existing lane miles on a highway or state highway, unless a third-party engineering study determines that a lane mile reduction is necessary to reduce congestion and the findings are presented in a public hearing;
d) used for any light rail extension or commuter rail, street cars or trollies; and
e) used to extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix.
Countywide Election
13. Directs the Maricopa County BOS to call a countywide election for the continuation of the transportation tax and public transit tax, during the year-long period beginning four years before the existing transportation tax would otherwise be discontinued and ending two years before the existing transportation tax would otherwise be discontinued, which is between January 1, 2022, and January 1, 2024.
14. Requires Maricopa County to conduct an election on a consolidated election date at least one year before the existing transportation tax would otherwise be discontinued, which is January 1, 2025.
15. Prescribes printed ballot requirements, including:
a) the designation of the measure as relating to county transportation excise (sales) taxes;
b) the title of the measure as Regional Strategic Transportation Infrastructure Investment Plan;
c) a description of the ballot measure;
d) instructions directing the voter to the full text of the official and descriptive titles containing the summary, as printed in the sample ballot and posted in the polling place; and
e) the ballot questions submitted to the voters that explain the effect that the approval or disapproval of the continuation of .43 cents for transportation projects and .07 cents for public transit projects of the current .5 cents transportation tax would have.
16. Stipulates that the description of the ballot measure must read:
"A measure continuing .495 cents of the current .5 cents transportation excise (sales) tax to address the regional transportation system.
.43 cents of the current .5 cents transportation excise (sales) tax will address building new freeways, expanding existing freeways with additional access and capacity, constructing streets and intersections, continuing transit offerings and expanding transit frequency and coverage based on demand. Revenues from this portion of the tax will be allocated as follows:
(a) 53.5 percent to freeways.
(b) 28 percent to public transit.
(c) 18.5 percent to arterial streets.
.065 cents of the current .5 cents transportation excise (sales) tax will address expanding public transit offerings, including maintenance and extension of light rail. Revenues from this portion of the tax will be allocated for those purposes."
17. Allows the ballot to include a summary of the Plan.
18. Requires the Maricopa County BOS to prepare, print and mail a publicity pamphlet concerning the ballot question and directs the mailing of the pamphlet.
19. Requires the publicity pamphlet to contain:
a) a summary of the principal provisions of the issue, including the transportation tax and public transit tax rates, the number of years the taxes will be in effect and the projected annual and cumulative revenues for each tax;
b) a statement describing the purposes for which the revenues of each tax may be spent, including:
i. a summary of the Plan;
ii. a map of proposed routes and transportation corridors of all major projects;
iii. the estimated amount of tax's revenues, together with other identified revenues, dedicated for each transportation mode; and
iv. the Maricopa County Elections Department website address for additional information on the Plan;
c) the form of the ballot; and
d) arguments for each questions on the measure in the order received, followed by arguments against each questions on the measure in the order received.
20. Allows a person, at a time determined by Maricopa County, to file with the Maricopa County Elections Director (Director) a signed argument of no more than 300 words for or against the ballot measure.
21. Requires the person submitting an argument to pay a publication fee prescribed by the Maricopa County BOS to the Director, which constitutes sponsorship of the argument.
22. Requires an argument that is sponsored by one or more:
a) individuals, to be signed by each sponsoring individual;
b) organizations, to be signed by two executive officers of each organization;
c) political committees, to be signed by each committee's chairperson or treasurer.
23. Require the Maricopa County Elections Officer to account for costs specifically incurred with respect to the ballot issue.
24. Requires the State Treasurer, on submission of the bill by the Elections Officer and regardless of the election outcome, to pay the costs incurred with request to the ballot issue from RARF monies, including:
a) costs of mailing, publishing, posting and printing ballots, publicity pamphlets, notices, election materials and other matters concerning the election;
b) legal and other consulting fees and costs;
c) telecommunications costs;
d) compensation of the Election Board, County Election Officers and employees and other labor costs incurred to administer, hold, canvass and announce the results of the election; and
e) any other costs attributable to the election.
25. Specifies that the election for the continuation of the transportation tax must be:
a) conducted as nearly as practicable in the manner of a general election; and
b) except as specifically provided, in accordance with the general laws relating to elections.
26. States that the prescribed election requirements do not constitute a submission of any provision of law to the people for approval under the power of the referendum.
County Transportation Excise Tax
27. Raises the population threshold, from 1,200,000 to 3,000,000 or more persons, over which a county must collect a transportation excise tax.
28. Prohibits transportation tax revenues for a county with a population of 1,200,000 or more persons from being used to extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix.
29. Allows the 10.5 percent distribution of transportation tax revenues to the RARF for a county with a population of 1,200,000 or more persons to be used for regional programs.
30. Requires the SBT to separately account for transportation tax and public transit tax revenues allocated to the PFT for:
a) a light rail public transit system;
b) capital costs for other public transportation; and
c) operation and maintenance costs for other public transportation.
Maricopa County Regional Planning Agency (RPA)
31. Requires the RPA to develop and adopt a Plan in cooperation with state and local transportation authorities and operators and in coordination with ADOT.
32. Directs, beginning FY 2024, the RPA to adopt a budget process that ensures the estimated cost of each transportation mode classification does not exceed the total amount of revenues estimated to be available over the 20-year term of the transportation and public transit taxes.
33. Requires the RPA to coordinate with implementing partners on the budget process, including:
a) ADOT for freeways and other routes in the state highway system; and
b) the county RPTA for the public transportation system.
35. Requires the RPA to:
a) determine the use of transportation tax and public transit tax revenues collected for capital projects through the Transportation Improvement Program;
b) consult on any bond issued against the proceeds of transportation tax and public transit tax collections; and
c) annually report on the status of projects funded by the transportation and public transit taxes and post the report on the RPA's website.
36. Requires the RPA to consider truck parking availability when considering the construction, expansion or modification of freeways or other routes in the state highway system.
37. Requires the RPA, by December 31, 2045, to allocate at least $90,000,000 for the implementation of commercial motor vehicle parking that is consistent with a regionally adopted truck parking plan, including funding for construction, land acquisition, lease, maintenance or operations or entry into a public-private partnership agreement.
Transportation Planning Committee (TPC)
38. Directs the TPC, through the RPA and by a majority vote of TPC members, to develop the Plan in cooperation with the RPTA and ADOT and in consultation with the Maricopa County BOS, Indian communities and cities and town in the county.
39. Requires TPC, through the RPA and by a majority vote of TPC members, to recommend approval, disapproval or modification of:
a) the Plan;
b) changes to the allocations of transportation excise tax revenues between RARF for freeways, RARF for arterial streets and PTF for public transit;
c) the RPA-adopted budget process; and
d) funding awarded through the regional programs process.
40. Increases the number, from 6 to 12, of the TPC members who represent regionwide business interest, including:
a) 2 members, rather than 1 member, who represent transit interests;
b) 2 members, rather than 1 member, who represent freight interests;
c) 2 members who represent commercial real estate interest; and
d) 2 members, rather than 1 member, who represent construction interests.
41. Adds, beginning in FY 2025, the following members to the TPC to serve six-year terms:
a) two members who represent unincorporated areas of Maricopa County and who are appointed jointly by the Senate President and the Speaker of the House;
b) two members who represent taxpayer organizations and are jointly appointed by the President and Speaker; and
c) one member who represents residential housing development interests and is jointly appointed by the President and Speaker.
Transportation Tax Plan
42. Redefines Plan as the comprehensive, performance-based, multimodal and coordinated regional strategic transportation infrastructure investment plan approved for the county, as amended or otherwise modified.
43. Requires the Plan to:
a) reflect the allocation of transportation tax and public transit tax revenues collected through December 31, 2025; and
b) specify the distribution of transportation taxes in the RARF or the PTF.
44. Removes the following as required components of the Plan:
a) the provision of a suggested construction schedule for the transportation projects contained in the Plan; and
b) to be developed to meet federal air quality requirements.
45. Requires the transportation element of the Plan to include:
a) a farebox operating ratio standard for existing bus route extensions that are in existence on the effective date of this legislation and are funded in whole or in part from transportation tax and public transit tax revenues that are distributed to the PFT; and
b) a farebox recovery ratio standard for existing bus routes that are in existence on the effective date of this legislation and are funded in whole or in part from transportation tax and public transit tax revenues that are distributed to the PFT.
46. Requires the farebox operating ratio standard for bus route extensions and bus routes to:
a) be presented on an annual basis; and
b) by any measures necessary, achieve the following percentages for each existing bus route that is in existence on the effective date of this legislation:
i. 13 percent for FYs 2026 through 2028;
ii. 16 percent for FYs 2029 through 2031; and
iii. 19 percent for FY 2032 and all subsequent fiscal years.
47. Requires, if the RPTA fails to meet the prescribed farebox ratio performance standards, the:
a) excess costs to be allocated among the affected member municipalities according to the proportion of the bus route that is located in each municipality; and
b) the affected member municipalities to pay the monies from their respective general funds to the PTF in the fiscal year following the fiscal year in which the shortfall was incurred.
48. Requires, if the RPTA fails to meet the farebox ratio performance standard of 19 percent for FY 2032 and all subsequent fiscal years, the RPTA to:
a) proceed with a public bid for operation of the failing bus route; and
b) be prohibited from submitted a proposal to bid.
49. Requires the RPTA, for all new bus routes identified in the Plan, to conduct a public bid to contract the operations, according to the statutory requirements for competitive sealed bidding.
50. Requires the bid to require prospective operators to demonstrate compliance with the following farebox operating ratio standards:
a) 13 percent within the first year of operating;
b) 16 percent within the fourth year of operation; and
c) 19 percent within the seventh year of operation and every subsequent year.
51. Authorizes, if an operator fails to meet the performance standard of 19 percent within the seventh year of operation and every subsequent year, any of the following:
a) conducting a new public bid;
b) eliminating the failing bus route; or
c) redesigning a new bus route followed by a public bid.
52. Excludes the prescribed farebox recovery ratio standards from being applied to transportation services mandated by the Americans with Disabilities Act of 1990.
53. Requires the Plan to allocate $0.43 transportation tax revenues:
a) in the Regional Area Road Fund for freeways and other routes in the state highway system, including capital expense and maintenance;
b) in the Regional Area Road Fund for major arterial streets, intersection improvements and regional programs, including capital expense and implementation studies; and
c) in the Public Transportation Fund for capital costs, maintenance and operation of public transportation mode classifications.
54. Requires the Plan to allocate public transit tax revenues in the PTF for both:
a) capital costs, maintenance and operation of public transportation mode classifications; and
b) capital costs and utility relocation costs associated with the light rail system.
55. Requires the Auditor General to conduct a performance audit of the Plan and projects scheduled during the next five years.
56. Removes the Arizona State Library, Archives and Public Records from the entities required to receive a copy of the performance audit.
a) to the RPA for approval; and
b) by the RPA to the TPC and the State Transportation Board for approval.
58. Requires the RPA to:
a) post on the RPA's website a public notice on any proposed amendment to the Plan that requires a new air quality conformity determination; and
b) make the results of the air quality conformity analysis publicly available.
RARF
59. Requires the Five-Year Transportation Facilities Construction Program to include a plan for the use of monies expected to be deposited in a county RARF that is:
a) consistent with the Plan;
b) consistent with the RPA-adopted budget process for freeway and other route projects; and
c) annually updated.
60. Allows monies in the Bond Proceeds Account to be obligated or spent as directed by the State Transportation Board, according to the Plan, for the design, right-of-way purchase or construction related to new, or improvements to, regional programs included in the Plan.
61. Requires ADOT to separately account for transportation tax revenues deposited in the Bond Account and Construction Account to identify how revenues are used for:
a) freeways and 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.
62. Requires the State Treasurer to divide the monies deposited in the Construction Account of the RARF and annually distribute:
a) $2,500,000 to the PTF; and
b) $1,625,000 to the local RPA for planning and administering the Plan.
63. Requires, beginning FY 2025, the annual distribution of Construction Account monies to be adjusted by the annual percentage change for the previous calendar year in the GDP price deflator.
64. Removes the requirement for RARF Construction Account budgets to be approved annually.
65. Removes determining public opinion before the election is called as an authorized use of monies from any Account in the RARF.
Definitions
66. Removes the definition of major amendment.
67. Defines major arterial as an interconnected thoroughfare whose primary function is to link areas in the region and to distribute traffic to and from controlled access highways, generally of regionwide significance and of varying capacity depending on the travel demand for the specific direction and adjacent land uses.
68. Defines capital rehabilitation of the light rail system as capital maintenance, repair or improvements that ensure that ensure regional assets remain in a state of good repair to preserve the safety and reliability of the light rail system.
a) paving unpaved roads; and
b) procuring street sweepers.
70. Defines performance-based as RPA processes and practices that are consistent with federal metropolitan transportation planning requirements and state law, including transportation system performance factors.
71. Defines farebox operating ratio as the performance standard determined by the approximate percentage of the RPTA's operating expenses paid for by passenger fare revenue and fare reimbursements.
72. Defines farebox recovery ratio as the performance standard determined by the percentage of operating and long-term expenses paid for by passenger fare revenue and fare reimbursements.
73. Defines long-term expenses as including depreciation for equipment and facilities, interest expenses on bonds and capital rehabilitation.
Miscellaneous
74. Requires, if monies are appropriated by the Legislature for a Plan project, the use of construction monies to be:
a) advanced as appropriate to reflect the estimated construction start date; and
b) used in the same modal classification specified in the Plan.
75. Requires, if a city or town pays for public transportation service in an adjacent municipality or unincorporated area of a county, the cost of the service to be eligible for reimbursement from transportation tax or public transit tax revenues.
76. Specifies that public transportation service includes circulator service.
77. Prohibits public monies from being used to extend light rail between Seventh Avenue and 19th Avenue and Adams Street and Jefferson Street in Phoenix.
78. Restricts the speed limit for all types of motor vehicles to at least 65 miles per hour on the interstate system highways located in a county that has a population of 3,000,000 million or more persons.
79. Prohibits the state or a city, town, county or political subdivision of the state from restricting the use or sale of a device based on the energy source that is used to power the device or consumed by the device.
80. Stipulates that a device is powered by or consumes an energy source if any significant function of the device uses or consumes that energy source to accomplish the function.
81. Declares the Legislature's intent that:
a) the development of State Route 30 between State Route 85 and Loop 303 will begin in the first phase of the Plan to allow right-of-way acquisition and construction of the facility to advance as monies become available; and
b) the freeway allocations will fund repavement of State Route 51 where need is identified.
82. States that this legislation does not invalidate an action by an RPTA formed before the effective date.
83. Contains a severability clause.
84. Makes technical and conforming changes.
85. Becomes effective on the general effective date, except as otherwise noted.
Amendments Adopted by the House of Representatives
· Adopted the strike-everything amendment relating to a Maricopa County Transportation Tax.
Governor's Veto Message
The Governor indicates in her veto message that S.B. 1246 fails to meet the everyday needs of Arizonans by excluding the plan put forth by mayors and community leaders across Maricopa County and jeopardizes not only Maricopa County's economic vitality, but that of the state, setting Arizona back for decades.
House Action
TI 3/16/23 DPA/SE 7-4-0-0
3rd Read 6/13/23 31-26-3
Vetoed by the Governor 6/20/23
Prepared by Senate Research
June 29, 2023
KJA/sr