A.R.S. tit. 28 ch. 17 — Arizona Revised Statutes Title 28 Chapter 17 — Transportation Excise Tax Distribution

28-6301. Definitions In this article, unless the context otherwise requires: 1. "Air quality measures" means paving unpaved roads and procuring street sweepers to help meet the requirements of the clean air act as defined in section 49-401.01. 2. "Bond-related expenses" means: (a) Printing, publication or advertising expenses with respect to the sale and issuance of any bonds. (b) Fees, expenses and costs of registrars, paying agents and transfer agents retained by the board. (c) Fees, expenses and costs of attorneys, accountants, actuaries, feasibility consultants, computer programmers or other experts employed to aid in the sale and issuance of the bonds. (d) Other costs, fees and expenses incurred or reasonably related to the issuance, sale and administration of the bonds. 3. "Bond-related obligation" means any agreement or contractual relationship between the board and any bank, trust company, insurance company, surety bonding company, pension fund or other financial institution providing increased credit on, or security for, the bonds or liquidity for secondary market transactions. 4. "Bonds" means any bonds that are payable from the regional area road fund as provided in chapter 21, article 2 of this title. 5. "Construction interest" means a company whose primary function consists of building freeways, highways or major arterial streets. 6. "Controlled access highway" has the same meaning prescribed in section 28-601. 7. "Freight interest" means a company that derives a substantial portion of its revenue from transporting goods. 8. "Intersection improvements" means projects that are designed to decrease vehicle congestion, lower travel times or improve safety. 9. "Major arterial" means 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. 10. "Nonmotorized mobility infrastructure" means the improvement of safety, accessibility or connectivity through sidewalks, crosswalks, curb ramps, elements that are required by the Americans with disabilities act of 1990 (42 United States Code sections 12101 through 12213) or other components adjacent to streets or roadways for vulnerable road users as defined in 23 United States Code section 148(a)(15). 11. "Performance-based" means regional planning agency processes and practices that are consistent with federal law, including: (a) Requirements prescribed in 23 United States Code section 134 and 49 United States Code section 5303. (b) System performance factors set forth in section 28-505, as applicable. 12. "Plan" has the same meaning prescribed in section 28-6351. 13. "Population" means the population determined in the most recent United States decennial census or the most recent special census as provided in section 28-6532 and revisions to the decennial or special census certified by the United States bureau of the census. 14. "Public transportation" means moving passengers by means of a conveyance operated by or for a political subdivision of this state, including dial-a-ride transportation, special needs transportation and van pool transportation but excluding school buses. 15. "Public transportation system" means the combination of individuals, vehicles, physical facilities, structures and equipment that together provide, or facilitate providing, public transportation, including buses, high occupancy vehicle roadway lanes and ramps, bus pull-out lanes, bus and light rail waiting facilities, park and ride parking lots, intelligent transportation systems and ridesharing promotion. 16. "Regional transportation infrastructure" means transportation projects that are selected through a performance-based process for nonmotorized mobility infrastructure, emerging technologies and air quality measures. 17. "Regionwide business" means a company that provides goods or services throughout the county. 18. "Transit interest" means an individual with demonstrated interest and experience with public transportation. 28-6302. Transportation excise tax distribution; counties with three million or more persons; regional area road fund A. In a county with a population of three million or more persons, the officer collecting transportation excise tax monies pursuant to section 42-6105 or 42-6105.01 that are designated for deposit in the regional area road fund shall immediately transfer the monies to the state treasurer. The state treasurer shall deposit the monies in a fund designated for the county as the regional area road fund. The state treasurer shall hold monies in the regional area road fund as a trustee for the county. B. Except as provided in this article, the county in which the transportation excise taxes are levied has the beneficial interest in the regional area road fund. This state has no beneficial interest in the regional area road fund except as an obligee for reimbursement of state monies that are advanced as salaries or expenses by this state or the department and that are to be repaid by the regional area road fund. C. Monies and investments within the regional area road fund may be used and spent only as provided in this chapter. An appropriation of any nature shall not be required before the expenditure of monies from the regional area road fund. Monies in the bond proceeds account or construction account of a regional area road fund may be obligated for payment in future years for the purpose of right-of-way acquisition subject to the limitations prescribed in sections 28-7001 and 28-7002, section 42-6105, subsection D, paragraphs 1 and 2 and section 42-6105.01, subsection D, paragraphs 1 and 2. The state treasurer shall make payments from the regional area road fund by check, and a warrant or voucher is not necessary. Subject to the powers granted to the board in chapter 21, article 2 of this title, the director shall administer monies deposited in the regional area road fund. 28-6303. Regional area road fund; separate accounts A. The regional area road fund is divided into three separate accounts designated as the bond account, the construction account and the bond proceeds account. B. The state treasurer shall: 1. Account separately for each account. 2. Make transfers between accounts only as provided in this article or chapter 21, article 2 of this title. 3. Before any bonds are issued, deposit transportation excise tax revenues transferred to the state treasurer in the construction account. These revenues shall be expended as provided in this article. 4. After any bonds are issued, deposit transportation excise tax revenues transferred to the state treasurer in the bond account first until the bond account contains monies sufficient to meet all principal, interest or redemption requirements for the current period as required by any resolution of the board pertaining to the issuance of bonds. 5. After all current period requirements for all of the bonds are deposited in the bond account, deposit the balance of transportation excise tax revenues transferred to the state treasurer for the current period in the construction account. C. The state treasurer may: 1. Invest monies in any account of the regional area road fund in any securities or obligations authorized by title 35, chapter 2, article 2. 2. For the purpose of investments, commingle monies within the regional area road fund with state monies if all interest earned on the monies in the regional area road fund of a county is credited to the respective account of the regional area road fund in which the investment was made. D. The department shall separately account for the uses of transportation excise tax revenues deposited into the bond account and the construction account in order to identify how the transportation excise tax revenues are used pursuant to section 42-6105, subsection D, paragraphs 1 and 2, for: 1. Freeways and other routes in the state highway system. 2. Major arterial streets, intersection improvements and regional transportation infrastructure identified in the plan, including capital expense and implementation studies. E. The department shall separately account for the uses of transportation excise tax revenues deposited in the bond account and the construction account in order to identify how the transportation excise tax revenues are used pursuant to section 42-6105.01, subsection D, paragraphs 1 and 2 for: 1. Freeways and other routes in the state highway system. 2. Major arterial streets, intersection improvements and regional transportation infrastructure identified in the plan, including capital expense and implementation studies. 28-6304. Bond account; expenditures A. The state treasurer shall: 1. Hold monies in the bond account in trust for the owners of the bonds. 2. Pay monies in the bond account to the county, to paying agents or to the owners of the bonds directly in accordance with a resolution of the board authorizing the issuance of the bonds. B. Monies in the bond account may be used: 1. To pay bond-related expenses or recurring expenses pertaining to administration and payment of the bonds. 2. For funding reserves for the payment of the bonds. 3. For payment of fees, charges and expenses incurred with respect to bond-related obligations. C. Monies in the bond proceeds account may be obligated or spent as directed by the board, according to the plan, for the: 1. Payment of all bond-related expenses. 2. Establishment and funding of reserve monies or to pay interest on bonds during the expected period of construction. 3. Payment of fees, charges and expenses incurred with respect to bond-related obligations. 4. Design, right-of-way purchase or construction related to new, or improvements to, freeways and other routes in the state highway system that are included in the plan and that are accepted into the state highway system. 5. Design, right-of-way purchase or construction related to new, or improvements to, major arterial streets, intersections and regional transportation infrastructure that are included in the plan. 6. Payment of principal and interest on the bonds. 28-6305. Construction account; expenditures; construction contracts A. Except as provided in subsection B of this section, monies in the construction account of the regional area road fund shall be spent, pledged or accumulated for the purposes provided in section 28-6304, subsection C, paragraphs 4 and 5, including payment of interest on and repayment of bonds and obligations issued pursuant to chapter 21 of this title if the proceeds of the bonds or obligations are used for the purposes provided in section 28-6304, subsection C, paragraphs 4 and 5. B. Of the monies deposited in the construction account of the regional area road fund under section 28-6303, the state treasurer shall: 1. In each fiscal year, divide and equally distribute $5,000,000 to: (a) The public transportation fund established in that county under section 48-5103. (b) The regional planning agency in that county for planning and administering the plan approved pursuant to section 28-6308. The state treasurer shall distribute monies under this subdivision through the department on or before June 30 of each year. 2. Beginning with fiscal year 1987-1988, adjust the monies distributed under paragraph 1 of this subsection by the annual percentage change for the previous calendar year in the GDP price deflator as defined in section 41-563. C. The monies distributed under subsection B of this section shall only be spent for planning and administering the plan approved pursuant to section 28-6308 and the costs incurred by the auditor general relating to performance audits under section 28-6313. Before the beginning of each fiscal year, the respective governing bodies of the members of the regional planning agency and the board of directors of the regional public transportation authority shall explicitly identify and approve in budgets the monies to be spent under subsection B of this section for the purposes allowed under this subsection. These expenditures are subject to the annual audit of the governing bodies' financial transactions. D. The director may enter into construction contracts or contracts incidental to construction contracts payable from monies in either the bond proceeds account or the construction account or both the bond proceeds and construction accounts. 28-6306. Account expenditures; elections A. Except as provided in subsection B of this section, monies from any account in the regional area road fund shall not be spent to promote or advocate a position, alternative or outcome of an election, to influence public opinion or to pay or contract for consultants or advisors to influence public opinion with respect to an election regarding taxes or other sources of revenue for the fund or regarding the plan. B. Monies from any account in the regional area road fund may be spent: 1. As authorized by this article to determine public opinion before the election is called. 2. For costs specifically incurred with respect to a ballot issue relating to a county transportation excise tax in a county with a population of three million or more persons. 28-6308. Regional planning agency transportation policy committee A. The regional planning agency in the county shall establish a transportation policy committee consisting of the following members: 1. Eighteen members of the regional planning agency, including one member of the state transportation board who represents the county, one member of the county board of supervisors and one member who represents Indian communities in the county. 2. Six members who represent regionwide business interests, one of whom must represent transit interests, one of whom must represent freight interests and one of whom must represent construction interests. The president of the senate and the speaker of the house of representatives shall each appoint three members to the committee pursuant to this paragraph. Members who are appointed pursuant to this paragraph serve six-year terms. The chairperson of the regional planning agency may submit names to the president of the senate and the speaker of the house of representatives for consideration for appointment to the transportation policy committee. 3. Beginning fiscal year 2024-2025, two members who represent unincorporated areas of a county that has a population of three million or more persons. The president of the senate and the speaker of the house of representatives shall each appoint one member pursuant to this paragraph. Members who are appointed pursuant to this paragraph serve six-year terms. 4. Beginning fiscal year 2024-2025, one member who represents a taxpayer organization and who is appointed jointly by the president of the senate and the speaker of the house of representatives. The member who is appointed pursuant to this paragraph serves a six-year term. 5. Beginning fiscal year 2024-2025, one member who represents residential housing development and who is appointed jointly by the president of the senate and the speaker of the house of representatives. The member who is appointed pursuant to this paragraph serves a six-year term. 6. Beginning fiscal year 2024-2025, one member who represents resiliency interests and who is appointed by the governor. The member who is appointed pursuant to this paragraph serves a six-year term. B. Through the regional planning agency, the transportation policy committee by a majority vote of the members shall do all of the following: 1. Develop the plan in cooperation with the regional public transportation authority in the county and the department and in consultation with the county board of supervisors, Indian communities and cities and towns in the county. 2. Recommend approval, disapproval or modification of the plan. 3. Recommend approval, disapproval or modification of the budget processes identified by section 28-6352, subsection C. 4. Recommend approval, disapproval or modification of funding awarded through the regional transportation infrastructure process. 28-6313. Performance audits of proposed transportation projects and systems A. Beginning in 2010 and every fifth year thereafter, the auditor general shall conduct a performance audit, as defined in section 41-1278, of the plan and projects scheduled for funding during the next five years. B. With respect to light rail systems, the audit shall consider the criteria used by the federal transit administration pursuant to 49 United States Code section 5309(e)(1)(B) and the interrelationship among the criteria to provide federal funding for light rail systems. For light rail systems, the audit shall also consider: 1. Service levels. 2. Capital costs. 3. Operation and maintenance costs. 4. Transit ridership. 5. Farebox revenues. C. The audit shall: 1. Examine the plan and projects scheduled for funding within each transportation mode based on the performance factors established in section 28-505, subsection A, in the context of the transportation system. 2. Review past expenditures of the plan and examine the performance of the system in relieving congestion and improving mobility. 3. Make recommendations regarding whether further implementation of a project or transportation system is warranted, warranted with modifications or not warranted. D. The auditor general or the auditors contracted to conduct the audit shall periodically update the transportation policy committee regarding the progress of the audit. E. Within forty-five days after the release of the audit, the regional public transportation authority, the state transportation board and the county board of supervisors, by a majority vote of each entity, shall submit written recommendations to the transportation policy committee that the findings are agreed to or disagreed with and the recommendations should be implemented, be implemented with modification or not be implemented. F. Within forty-five days after the audit's release, the regional planning agency shall hold a public hearing on the audit findings and recommendations. G. The auditor general shall distribute copies of the audit to: 1. The regional planning agency. 2. The transportation policy committee. 3. The regional public transportation authority in the county. 4. The county board of supervisors. 5. The state transportation board. 6. The governor, secretary of state, president of the senate and speaker of the house of representatives. 7. Any other person who requests a copy pursuant to title 39, chapter 1, article 2. H. The state transportation board, regional planning agency, regional public transportation authority and county board of supervisors shall cooperate with and submit to the auditor general and the auditors contracted to conduct the audit information necessary to conduct the audits under this section. I. The cost incurred by the auditor general in contracting with independent auditors for conducting performance audits under subsection A of this section shall be paid from revenues of the county transportation excise tax under sections 42-6105 and 42-6105.01. When due, the payments have priority over any other distribution authorized by section 42-6105 or 42-6105.01. The auditor general shall deposit the payments in the audit services revolving fund established by section 41-1279.06. 28-6351. Definitions In this article, unless the context otherwise requires: 1. "Enhancement" means an addition that exceeds generally accepted engineering or design standards for the specific type of facility. 2. "Plan" means the comprehensive, performance-based, multimodal and coordinated regional strategic transportation infrastructure investment plan approved for the county pursuant to section 28-6308, as amended or otherwise modified. 28-6352. County transportation excise tax; budget process; annual report A. The regional planning agency in the county shall develop and adopt a plan. The plan shall be multimodal and shall be developed in cooperation with state and local public transportation authorities and operators and in coordination with the department. The regional planning agency shall consider truck parking availability when considering the construction, expansion or modification of freeways or other routes in the state highway system. On or before December 31, 2045, the regional planning agency shall 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. B. The plan shall allocate revenue collected under section 42-6105.01 as follows: 1. In the regional area road fund established by section 28-6302 for freeways and other routes in the state highway system, including capital expense and maintenance. 2. In the regional area road fund established by section 28-6302 for major arterial streets, intersection improvements and regional transportation infrastructure, including capital expense and implementation studies. 3. In the public transportation fund established by section 48-5103 for both: (a) Capital costs, maintenance and operation of public transportation mode classifications. (b) Capital rehabilitation costs associated with the light rail system. C. Beginning fiscal year 2023-2024, the regional planning agency shall adopt a budget process that ensures: 1. The estimated cost of the freeways and other routes in the region's state highway system does not exceed the total amount of revenues estimated to be available over the term of the transportation excise tax as prescribed by section 42-6105, subsection C and section 42-6105.01, subsection C. 2. The estimated cost of the public transportation system does not exceed the total amount of revenues estimated to be available over the term of the transportation excise tax as prescribed by section 42-6105, subsection C and section 42-6105.01, subsection C. 3. The estimated cost of major arterial streets, intersection improvements and regional transportation infrastructure does not exceed the total amount of revenues estimated to be available over the term of the transportation excise tax as prescribed by section 42-6105, subsection C and section 42-6105.01, subsection C. D. The regional planning agency shall coordinate with implementing partners on the budget process prescribed in subsection C of this section, including the department for freeways and other routes in the state highway system and the regional public transportation authority in the county for the public transportation system. E. The regional planning agency shall determine the use of the revenues collected under sections 42-6105 and 42-6105.01 for capital projects through the transportation improvement program. F. Any bonds issued against proceeds collected pursuant to sections 42-6105 and 42-6105.01 require consultation with the regional planning agency. G. The regional planning agency shall annually report on the status of the projects funded pursuant to section 42-6105 or 42-6105.01 and shall post the report on its website. H. Requests for changes to transportation projects funded in the plan that would materially increase costs shall be submitted to the regional planning agency for approval and submitted by the regional planning agency to the transportation policy committee and the board for consideration and approval. I. If a local authority requests an enhancement to a transportation project funded in the plan, the local authority shall pay all costs associated with the enhancement. J. The plan shall reflect the allocation of revenues collected under section 42-6105, subsection D through December 31, 2025. K. The budget process prescribed in subsection C of this section does not apply to the annual operating budget of the regional public transportation authority in the county. L. If monies are appropriated by the legislature for a project that is identified in the plan, the use of the monies for construction requires both of the following: 1. The project must be advanced as appropriate to reflect the estimated construction start date. 2. The monies must be used in the same modal classification specified in subsection B of this section. M. If a municipality pays for public transportation service in an adjacent municipality or unincorporated area of a county, the cost of the service shall be eligible for reimbursement from monies collected under section 42-6105 or 42-6105.01. For the purposes of this subsection: 1. "Municipality" means a city or town. 2. "Public transportation service" includes circulator service. 28-6353. Public transportation farebox recovery audit; ratio; exemption A. In a county with a population of three million or more persons, beginning fiscal year 2026-2027, the regional public transportation authority, in coordination with the regional planning agency, shall conduct a farebox recovery audit of operating costs and revenues for the previous fiscal year for all public transportation as defined in section 28-6301. The audit shall: 1. Document all revenue sources, including fares and funding generated from section 42-6105.01. 2. Determine a farebox recovery ratio calculated by the percentage of operating expenses paid for by fares as a measure of cost efficiency. 3. Detail the farebox recovery ratio for the entire regional public transportation system and by jurisdiction. 4. Be presented to the regional public transportation authority board and transportation policy committee. B. The annual farebox recovery ratio shall achieve the following percentages: 1. In fiscal year 2026-2027 through fiscal year 2027-2028, ten percent. 2. In fiscal year 2028-2029 through fiscal year 2030-2031, fifteen percent. 3. In fiscal year 2031-2032 and each subsequent fiscal year, twenty percent. C. If the systemwide farebox recovery ratio fails to meet the percentages prescribed by subsection B of this section, the regional public transportation authority must demonstrate through the farebox recovery audit that monies from sources other than section 42-6105.01 make up the difference between the farebox recovery ratio and the percentages prescribed by subsection B of this section. D. If the regional public transportation authority cannot satisfy the requirements prescribed by subsection C of this section, the excess costs shall be allocated between affected jurisdictions according to the proportion of service in that jurisdiction that falls below the percentage requirement prescribed by subsection B of this section. The affected jurisdictions shall pay monies from sources other than section 42-6105.01 to the public transportation fund established by section 48-5103 within two fiscal years following completion of the audit. The payments shall be documented as part of future audits. E. Vanpool services, ride choice and transportation service that are required by the Americans with disabilities act of 1990 (42 United States Code sections 12101 through 12213) are exempt from this section. 28-6391. Transportation excise tax distribution in counties with five hundred thousand persons or less; county regional area road fund A. In a county with a population of five hundred thousand persons or less, the officer collecting transportation excise tax monies pursuant to section 42-6107 shall immediately transfer the monies to the state treasurer. The state treasurer shall deposit the monies in a fund designated for the county as the county's regional area road fund. The state treasurer shall hold monies in the county's regional area road fund as a trustee for the county and the cities and towns in the county. B. The county and the cities and towns in the county that receive the transportation excise tax monies have the beneficial interests in the fund. 28-6392. County regional area road fund; distribution; repayment of misused monies; investment A. Each month the state treasurer shall distribute the monies in the county's regional area road fund to the individual county and to the individual cities and towns in the county in the manner that is determined by the board of supervisors before the election and that is described in the publicity pamphlet for the election. B. The jurisdiction receiving the revenues may use the revenues only for street and highway purposes or for transportation projects included in the regional transportation plan of the county as prepared by the county regional planning agency. If the auditor general reports to the state treasurer after conducting a performance audit pursuant to section 41-1279.03, subsection A, paragraph 6 that a jurisdiction has not used revenues as provided in this subsection: 1. The state treasurer shall require the jurisdiction to directly repay the fund the full amount of the misused monies beginning immediately as a lump sum or in consecutive annual payments of at least ten percent of the full amount each fiscal year. 2. If the jurisdiction fails to timely and fully repay the fund as required by paragraph 1 of this subsection, the state treasurer shall withhold the noncomplying jurisdiction's revenues until the noncomplying jurisdiction presents evidence that is satisfactory to the auditor general and that shows that the jurisdiction has spent monies for purposes prescribed in this subsection from another general revenue source equal to the amount of the revenues diverted from the uses prescribed in this subsection. C. The state treasurer shall invest and divest monies in the county's regional area road fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.