A.R.S. tit. 28 ch. 20 — Arizona Revised Statutes Title 28 Chapter 20 — State Highways And Routes

28-6901. Definitions In this chapter, unless the context otherwise requires: 1. "Budget" means the annual highway program prepared by the department. 2. "Division" means the highway division of the department of transportation. 3. "State engineer" means the assistant director for the division. 28-6921. State engineer; qualifications; compensation A. The director shall appoint a state engineer to administer the division. B. The state engineer shall be both: 1. A civil engineer registered to practice in this state. 2. Familiar with the theory of and experienced in the practice of highway construction, maintenance, design or engineering. C. The state engineer: 1. Shall have either: (a) A thorough knowledge of modern business methods. (b) At least ten years of experience in a business or profession of which at least four years was in a responsible administrative capacity. All or part of the experience may have been with the United States government, a state or a political subdivision of a state. 2. Shall devote full time to the duties of the office. 3. Shall not engage directly or indirectly in an occupation that conflicts with the state engineer's duties. 4. Is the executive and administrative officer of the division. 5. Has charge of the administration of all highway affairs as authorized by the director. 6. Is eligible to receive compensation pursuant to section 38-611. 28-6922. Director; powers and duties A. The director of the department of transportation or the director's authorized and bonded agent shall administer all highway and maintenance work and has the following powers and duties: 1. Direct the preparation of all plans and specifications for work on state highways or state routes. 2. Advertise for competitive bids for work on state highways or state routes and, on authorization of the transportation board, award and enter into contracts for the work. 3. Direct the supervision of all construction work on state highways and state routes and is in charge of maintenance and upkeep of these highways and routes. 4. Approve payment for work done by the state on or in connection with state highways or state routes, except that the director of the department of administration shall not allow a claim for work without the approval of the director of the department of transportation or the director's authorized and bonded agent. 5. Negotiate and award contracts to private consulting engineers or consulting engineering firms if deemed in the public interest by the director and the transportation board for the performance of engineering work that is required to formulate and complete highway construction contracts. B. The director shall: 1. Direct the organization of the division. 2. Appoint, suspend, discharge and fix the duties of employees. 3. Make monthly reports to the transportation board of all expenditures of the division, of the work accomplished and other applicable information. 4. On request of the transportation board, assign clerks or other employees to the board. 5. Prescribe procedures for the use of division personnel, facilities, equipment, supplies and other resources in assisting search or rescue operations. 6. Exercise other powers necessary to carry out the work of the division and perform other duties prescribed by law for the division. 28-6923. Bid requirements; procedure; bond A. All items of construction or reconstruction of department facilities involving an expenditure of $189,000 or more shall be called for by advertising in a newspaper of general circulation published in this state for either: 1. Two consecutive publications if it is a weekly newspaper. 2. Two publications at least six but not more than ten days apart if it is a daily newspaper. B. In fiscal year 2008-2009 and each fiscal year thereafter, the amount provided in subsection A of this section shall be adjusted by the annual percentage change in the GDP price deflator as defined in section 41-563. C. The advertisement shall state specifically the character of the work to be done and where a person may obtain copies of the plans, specifications and complete information as to the proposed work. D. The bidding information provided shall state specifically the character of the work to be performed and the kind, quantity and quality of materials or supplies to be furnished. The plans and specifications: 1. Shall be sufficiently complete, definite and explicit to allow informed, free, open and competitive bidding on a common basis. 2. May require performance on the basis of either means and methods specifications or end result specifications. 3. If end result specifications are used, shall provide an objective or standard to be achieved with the successful bidder expected to exercise the bidder's skill and ingenuity in achieving that objective or standard of performance by selecting the means and manner of performance and by assuming a corresponding responsibility for that selection. E. If contractor insurance is required for construction or reconstruction pursuant to this section, the insurance shall be placed with an insurer authorized to transact insurance in this state pursuant to title 20, chapter 2, article 1 or a surplus lines insurer approved and identified by the director of the department of insurance and financial institutions pursuant to title 20, chapter 2, article 5. F. A bid shall be accompanied by a certified check, cashier's check or surety bond for ten percent of the amount of the bid included in the proposal as a guarantee that the contractor will enter into a contract to perform the proposal pursuant to the plans and specifications. G. The certified check, cashier's check or surety bond shall be returned to the contractors whose proposals are not accepted and to the successful contractor on the execution of a satisfactory bond and contract as provided in this article. H. The surety bond provided pursuant to subsection F of this section shall be executed and furnished as required by title 34, chapter 2, and the conditions and provisions of the surety bid bond regarding the surety's obligations shall follow the form required under section 34-201, subsection A, paragraph 3. I. If a bid that is satisfactory to the board is received, it shall let a contract to the lowest responsible bidder, on the contractor giving performance and payment bonds that follow the form and include the provisions required by title 34, chapter 2, article 2. J. If the bids received for construction or reconstruction are not satisfactory to the board, a second call shall be made. If they are again rejected by the board, it may authorize the state engineer to construct or reconstruct the item as it deems most advantageous. K. In determining the lowest responsible bidder under this section, the department and the board may consider the time of completion proposed by the bidder if the department and the board determine that this procedure will serve the public interest by providing a substantial fiscal benefit or that the use of the traditional awarding of contracts is not practicable for meeting desired construction standards or delivery schedules and if the formula for considering the time of completion is specifically stated in the bidding information. L. This section does not prohibit a change to a construction contract that either: 1. Does not alter the scope of the work under a contract and the cost of the change does not exceed ten percent of the contract amount or $50,000, whichever is greater. 2. Does alter the scope of the work if the cost of the change does not exceed ten percent of the contract amount or $50,000, whichever is greater, and the changed work is within twenty percent of the total project length. M. If a project is funded completely with private monies, the private entity is not required to comply with subsections A through L of this section if the private entity complies with all of the following: 1. Before advertising for bids, submits to the department a bond that is issued by a surety insurer authorized to do business in this state and that is in an amount equal to one hundred twenty-five percent of the anticipated construction cost of the project, including construction management and contractor costs. 2. Solicits sealed bids from at least four contractors who are prequalified by the department to perform a contract of the anticipated dollar amount of the construction. 3. Awards the contract to the best bidder taking into account price and other criteria as provided in the bid documents. 4. Obtains bonds from the selected contractor that provide the same coverage as performance and payment bonds issued under title 34, chapter 2, article 2. 5. Uses department construction standards. 6. Pays all costs of department reviews of the contract and inspections of the project. N. For the purposes of this section, a project is funded completely with private monies if all of the following apply: 1. The contractor is paid entirely with monies from private entities. 2. The private entities hire a competent construction manager and contractor who do not have an affiliation with each other. 3. The private entities either pay all costs of design or reimburse the department for all costs of design. 28-6924. Progress payments; changed or additional work; attorney fees; definitions A. The following apply to the department's highway construction projects awarded pursuant to section 28-6923, 28-7365 or 28-7366: 1. Progress payments may be made by the department to the contractor on the basis of a duly certified and approved estimate of the work performed during a preceding period of time. The progress payments shall be paid on or before fourteen days after the estimate of the work is certified and approved. The estimate of the work shall be deemed received by the department on submission to the person designated by the department for the submission, review or approval of the estimate of the work. An estimate of the work submitted under this section shall be deemed approved and certified seven days after the date of submission unless before that time the department prepares and issues a specific written finding detailing those items in the estimate of the work that are not approved and certified under the contract. The department may withhold an amount from the progress payment that is sufficient to pay the expenses the department reasonably expects to incur in correcting the deficiency set forth in the written finding. On completion and acceptance of separate divisions of the contract on which the price is stated separately in the contract, payment may be made in full including retained percentages, less deductions, unless a substitute security has been provided. 2. The contractor shall pay to the contractor's subcontractors or material suppliers and each subcontractor shall pay to the subcontractor's subcontractors or material suppliers, within seven days after receipt of each progress payment, unless otherwise agreed in writing by the parties, the respective amounts allowed the contractor or subcontractor on account of the work performed by the contractor's or subcontractor's subcontractors or material suppliers, to the extent of each subcontractor's or material supplier's interest in the amount. These payments to subcontractors or material suppliers shall be based on payments received pursuant to this section. Any diversion by the contractor or subcontractor of payment received for work performed on a contract or failure to reasonably account for the application or use of the payments constitutes grounds for disciplinary action by the registrar of contractors. A subcontractor or material supplier shall notify the registrar of contractors and the department in writing of any payment less than the amount of percentage approved for the class or item of work as set forth in this section. 3. A subcontractor may notify the department in writing requesting that the subcontractor be notified by the department in writing within five days after payment of each progress payment that is made to the contractor. The subcontractor's request under this paragraph remains in effect for the duration of the subcontractor's work on the project. 4. If any payment to a contractor is delayed after the date due, interest shall be paid at the rate of one percent per month or a fraction of the month on the unpaid balance. 5. If any periodic or final payment to a subcontractor or material supplier is delayed by more than seven days after receipt of the periodic or final payment by the contractor or subcontractor, the contractor or subcontractor shall pay the subcontractor or material supplier interest, beginning on the eighth day, at the rate of one percent per month or a fraction of a month on the unpaid balance. B. A contract for construction shall not materially alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely payment as provided under this section. C. This section does not prevent a contractor or subcontractor, at the time of application and certification to the department or contractor, from withholding the application and certification to the department or contractor for payment to the subcontractor or material supplier for unsatisfactory job progress, defective construction work or materials not remedied, disputed work or materials, third-party claims filed or reasonable evidence that a claim will be filed, failure of a subcontractor to make timely payments for labor, equipment and materials, damage to the contractor or another subcontractor, reasonable evidence that the subcontract cannot be completed for the unpaid balance of the subcontract amount or a reasonable amount for retention that does not exceed the annual percentage retained by the department. D. This section does not create a duty of the department to a subcontractor or material supplier other than the duty to notify pursuant to subsection A, paragraph 3 of this section and does not create a cause of action in favor of a subcontractor or material supplier against this state, the department or any state employee or agent. E. If the department directs the contractor in writing to perform changed or additional work in accordance with the terms of the construction contract and the contractor submits to the department a reasonable cost estimate of the changed or additional work as may be required under the construction contract, pending a final determination of the total amount to be paid for the changed or additional work, the contractor may request payment for changed or additional work that the contractor completed during the preceding calendar month in monthly pay estimates based on the costs the contractor incurred to perform that work. The person designated in the construction contract to certify and approve the monthly payment estimate shall make an interim determination for purposes of approval for payment of those costs and certify for payment the amount that person determines to be reasonably justified. Either party may disagree with the interim determination and may assert a claim in accordance with the terms of the construction contract. F. If the department directs the contractor in writing to perform changed or additional work in accordance with the construction contract and the contractor submits to the department a reasonable cost estimate of the changed or additional work as may be required under the construction contract and if the contractor directs the subcontractor to perform the changed or additional work in accordance with the terms of the agreement between the contractor and subcontractor and the subcontractor submits to the contractor a reasonable cost estimate of the changed or additional work as may be required under the construction contract, pending a final determination of the total amount to be paid for the changed or additional work, the subcontractor may request payment from the contractor for the changed or additional work that the subcontractor completed during the preceding calendar month in monthly pay estimates based on the costs the subcontractor incurred to perform that work. Either party may disagree with the interim determination and may assert a claim in accordance with the terms of the agreement between the contractor and subcontractor. G. In any action or arbitration brought pursuant to this section, the successful party shall be awarded reasonable attorney fees and costs. H. For the purposes of this section: 1. "Construction contract" means a written agreement relating to constructing, altering or repairing all work on state highways. 2. "Contractor": (a) Means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that has a direct contract with the department to perform work under a construction contract. (b) Does not include an agricultural improvement district formed pursuant to title 48, chapter 17, an electric cooperative formed pursuant to title 10, chapter 19, article 2 or 4 or a domestic water improvement district or a domestic wastewater improvement district formed pursuant to title 48, chapter 6, article 4. 3. "Costs" means the aggregate costs of all labor, materials, equipment and services. 4. "Subcontractor": (a) Means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that has a direct contract with a contractor or another subcontractor to perform a portion of the work under a construction contract. (b) Does not include an agricultural improvement district formed pursuant to title 48, chapter 17, an electric cooperative formed pursuant to title 10, chapter 19, article 2 or 4 or a domestic water improvement district or a domestic wastewater improvement district formed pursuant to title 48, chapter 6, article 4. 5. "Work" means the labor, materials, equipment and services to be provided by a contractor or subcontractor under a construction contract. 28-6925. Contract counsel fund; appropriation; exemptions; disbursements; reimbursement A. The sum of thirty thousand dollars is appropriated from the state highway fund to the department for deposit in a special fund designated as the contract counsel fund. The department of transportation shall spend monies in the fund to reimburse the attorney general for department of law services. B. The appropriation made by this section is limited to the hiring of attorneys for condemnation cases pertaining to the purchase and acquisition of rights-of-way on federal aid projects. C. The department of administration shall transfer and replenish the sum appropriated under this section from monies in the state highway fund appropriated for construction of state highways to the contract counsel fund. On receipt of itemized verified statements accompanied by proper receipts and vouchers showing in detail the expenditures from the contract counsel fund, the department of administration shall issue a warrant to fully replenish the contract counsel fund from monies appropriated for construction of state highways, except that the total of the warrants shall not exceed thirty thousand dollars at any time. D. The appropriation under this section is exempt from the provisions of section 35-190 relating to lapsing of appropriations. 28-6926. Construction contracts; void provisions A provision, covenant, clause or understanding in, collateral to or affecting a construction contract that makes the contract subject to the laws of another state or that requires any litigation, arbitration or other dispute resolution proceeding arising from the contract to be conducted in another state is against this state's public policy and is void and unenforceable. 28-6951. Five year transportation facilities construction program; departmental committee A. The director shall develop a five year transportation facilities construction program according to the policies established by the board. B. To aid in the development of the five year transportation facilities construction program, the director shall appoint a departmental committee that is responsible to the director. The departmental committee is subject to title 38, chapter 3, article 3.1. C. The departmental committee shall: 1. Recommend priorities on transportation facilities construction projects to be constructed by this state that may include any relevant criteria for the development of priority recommendations for the construction and development of transportation facilities to be constructed by this state. 2. Update and prepare annually a long-range statewide transportation facilities construction program covering the following five fiscal years for submission to the board as follows: (a) The first year of the five year program shall consist of the highest priority transportation facilities construction projects that with reasonable certainty can be advertised for public bidding. (b) The committee shall group proposed projects for the four remaining years of the five year program by the year it is estimated construction will begin and in order of their priorities. (c) The committee shall provide the estimated cost of the program for each year that is approximately equal to the revenues estimated to be available for transportation facilities construction purposes during that year. 3. Review priority changes in or introduction of new projects to a proposed or an adopted five year program that the board has requested and make recommendations in a written report to the board on the requested priority changes or introduction of new projects based on a study of the criteria and policy that establish the priorities of projects. 4. Review the adopted five year transportation facilities construction program from time to time during the fiscal year and make recommendations in a written report to the board for priority changes in or introduction of new projects to the program based on a study of the criteria and policy that establish the priorities of projects. 5. Review and make recommendations to the board for applications submitted pursuant to section 28-339. 6. Fully document its recommendations in the written reports required by this section. 28-6952. Five year transportation facilities construction program; publication; hearing A. On or before April 1 of each year, the board shall review the updated five year transportation facilities construction program prepared by the director. B. On or before May 1 of each year, the board shall publish a notice in a newspaper of general circulation in each county in which construction projects are planned under the statewide five year transportation facilities construction program for the following five fiscal years. The notice shall specify the date of the public hearing at which the board will consider the projects planned under the five year transportation facilities construction program. The public hearing shall allow the public to review the five year transportation facilities construction program and make any comments to the board related to the projects planned. C. After the public hearing, the board may make priority changes in or introduce new projects to the proposed five year transportation facilities construction program pursuant to section 28-6955. 28-6953. Updated program; annual report A. Except as provided in subsection C of this section, on or before June 30 of each year, the board shall: 1. Adopt an updated five year transportation facilities construction program for the following five fiscal years. 2. File a written report with the director and the governor outlining the updated program and explaining any priority changes made pursuant to section 28-6955. 3. File a copy of the program with the director of the department of administration and the state treasurer. B. On or before the first Monday in August of each year, the board shall prepare and make available to the public an annual report that summarizes the updated five year statewide transportation facilities construction program. The report shall contain: 1. The name of each proposed transportation facilities construction project. 2. The anticipated year each project will be advertised for bidding. 3. The location, description and total estimated cost of each project. 4. An explanation of the project's priority. 5. Other data the board deems necessary. C. Notwithstanding sections 28-304 and 28-6955, the five year transportation facilities construction program in effect on June 30, 2000, and the regional freeway program scheduled for completion by 2007 and in effect on June 30, 2000, shall not be delayed or postponed and shall remain in effect without change in priority or programming until the projects planned or programmed in the five year transportation facilities construction program and regional freeway program scheduled for completion by 2007 are substantially complete. 28-6954. Program requirements A. The five year transportation facilities construction program shall: 1. Set forth estimated expenditures by project for engineering, rights-of-way and construction. 2. Include detailed information by project as to location, description and the reasons for the project's assigned priority. 3. List projects by priority and group them in the fiscal year during which it is estimated construction can begin. 4. For the first year of the program, consist of projects that can with reasonable certainty be advertised for public bidding. 5. Include a plan for the use of monies expected to be deposited in a county's regional area road fund as provided in chapter 17, article 1 of this title that is all of the following: (a) Consistent with the plan as defined in section 28-6351. (b) Consistent with the project budget process specified in section 28-6352, subsection C, paragraph 1. (c) Annually updated. 6. Include a plan for the use of monies that are expected to accrue in a county's regional transportation fund as provided in section 48-5310, that are dedicated for street and highway purposes and that are in the state highway system. B. The department shall develop and use detailed criteria designed to meet the transportation system performance measures adopted by the board pursuant to section 28-304 in identifying projects for the five year transportation facilities construction program. The project selection process shall also conform to state and regional growth policies. 28-6955. Five year program changes A. The board may change a proposed or an adopted five year transportation facilities construction program. B. If the board desires to change the priority of a project or to introduce a new project into a proposed or an adopted five year program that would result in changed priorities, the board shall require the director to study the requested change and make a recommendation to the board based on the criteria and policy provided in section 28-6951. If the board changes the priority of projects of a proposed or an adopted five year program, the board shall: 1. Make the change only in an open meeting. 2. Specifically document and explain in a written report the reasons and justifications for changes and for any deviations from the recommendations of the director. 3. Include the written report with the updated five year program to be filed with the director and the governor the next fiscal year. 4. Immediately incorporate any priority changes approved by the board into the five year program. C. Any changes in an adopted five year transportation facilities construction program other than changes affecting the priorities are not required to be reported in writing. 28-6991. State highway fund; sources The state highway fund is established that consists of: 1. Monies distributed from the Arizona highway user revenue fund pursuant to chapter 18 of this title. 2. Monies appropriated by the legislature. 3. Monies received from donations for the construction, improvement or maintenance of state highways or bridges. These monies shall be credited to a special account and shall be spent only for the purpose indicated by the donor. 4. Monies received from counties or cities under cooperative agreements, including proceeds from bond issues. The state treasurer shall deposit these monies to the credit of the fund in a special account on delivery to the treasurer of a concise written agreement between the department and the county or city stating the purposes for which the monies are surrendered by the county or city, and these monies shall be spent only as stated in the agreement. 5. Monies received from the United States under an act of Congress to provide aid for the construction of rural post roads, but monies received on projects for which the monies necessary to be provided by this state are wholly derived from sources mentioned in paragraphs 2 and 3 of this section shall be allotted by the department and deposited by the state treasurer in the special account within the fund established for each project. On completion of the project, on the satisfaction and discharge in full of all obligations of any kind created and on request of the department, the treasurer shall transfer the unexpended balance in the special account for the project into the state highway fund, and the unexpended balance and any further federal aid thereafter received on account of the project may be spent under the general provisions of this title. 6. Monies in the custody of an officer or agent of this state from any source that is to be used for the construction, improvement or maintenance of state highways or bridges. 7. Monies deposited in the state general fund and arising from the disposal of state personal property belonging to the department. 8. Receipts from the sale or disposal of any or all other property held by the department and purchased with state highway monies. 9. Monies generated pursuant to section 28-410. 10. Monies distributed pursuant to section 28-5808, subsection B, paragraph 2, subdivision (d). 11. Monies deposited pursuant to sections 28-1143, 28-2353 and 28-3003. 12. Except as provided in section 28-5101, the following monies: (a) Monies deposited pursuant to section 28-2206 and section 28-5808, subsection B, paragraph 2, subdivision (e). (b) $1 of each registration fee and $1 of each title fee collected pursuant to section 28-2003. (c) $2 of each late registration penalty collected by the director pursuant to section 28-2162. (d) The air quality compliance fee collected pursuant to section 49-542. (e) The special plate administration fees collected pursuant to sections 28-2404, 28-2407, 28-2412 through 28-2416, 28-2416.01, 28-2417 through 28-2470.61 and 28-2514. (f) Monies collected pursuant to sections 28-372, 28-2155 and 28-2156 if the director is the registering officer. 13. Monies deposited pursuant to chapter 5, article 5 of this title. 14. Donations received pursuant to section 28-2269. 15. Dealer and registration monies collected pursuant to section 28-4304. 16. Abandoned vehicle administration monies deposited pursuant to section 28-4804. 17. Monies deposited pursuant to section 28-710, subsection D, paragraph 2. 18. Monies deposited pursuant to section 28-2065. 19. Monies deposited pursuant to section 28-7311. 20. Monies deposited pursuant to section 28-7059. 21. Monies deposited pursuant to section 28-1105. 22. Monies deposited pursuant to section 28-2448, subsection D. 23. Monies deposited pursuant to section 28-3415. 24. Monies deposited pursuant to section 28-3002, subsection A, paragraph 14. 25. Monies deposited pursuant to section 28-7316. 26. Monies deposited pursuant to section 28-4302. 27. Monies deposited pursuant to section 28-3416. 28. Monies deposited pursuant to section 28-4504. 29. Monies deposited pursuant to section 28-2098. 30. Monies deposited pursuant to sections 28-2321, 28-2324, 28-2325, 28-5474, 28-5739, 28-5863 and 28-5864. 28-6992. Director of department of administration; comptroller of fund A. The director of the department of administration is the comptroller of all expenditures from the state highway fund. B. The duties of the director of the department of administration under this section are supervisory. The director of the department of administration shall not approve a claim or demand for a purpose that is not authorized. C. On request, the director of the department of transportation shall submit to the director of the department of administration the facts and circumstances connected with a claim or demand. 28-6993. State highway fund; authorized uses A. Except as provided in subsection B of this section and section 28-6538, the state highway fund shall be used for any of the following purposes in strict conformity with and subject to the budget as provided by this section and by sections 28-6997 through 28-7003: 1. To pay salaries, wages, necessary travel expenses and other expenses of officers and employees of the department and the incidental office expenses, including telegraph, telephone, postal and express charges and printing, stationery and advertising expenses. 2. To pay for both: (a) Equipment, supplies, machines, tools, department offices and laboratories established by the department. (b) The construction and repair of buildings or yards of the department. 3. To pay the cost of both: (a) Engineering, construction, improvement and maintenance of state highways and parts of highways forming state routes. (b) Highways under cooperative agreements with the United States that are entered into pursuant to this chapter and an act of Congress providing for the construction of rural post roads. 4. To pay land damages incurred by reason of establishing, opening, altering, relocating, widening or abandoning portions of a state route or state highway. 5. To reimburse the department revolving account. 6. To pay premiums on authorized indemnity bonds and on compensation insurance under the workers' compensation act. 7. To defray lawful expenses and costs required to administer and carry out the intent, purposes and provisions of this title, including repayment of obligations entered into pursuant to this title, payment of interest on obligations entered into pursuant to this title, repayment of loans and other financial assistance, including repayment of advances and interest on advances made to the department pursuant to section 28-7677, and payment of all other obligations and expenses of the board and department pursuant to chapter 21 of this title. 8. To pay lawful bills and charges incurred by the state engineer. 9. To acquire, construct or improve entry roads to state parks or roads within state parks. 10. To acquire, construct or improve entry roads to state prisons. 11. To pay the cost of relocating a utility facility pursuant to section 28-7156. 12. For the purposes provided in subsections C, D and E of this section and sections 28-1143, 28-2353 and 28-3003. 13. To pay the cost of issuing an Arizona centennial special plate pursuant to section 28-2448. 14. To pay for all of the following: (a) The enforcement by the department of public safety and the department of transportation of vehicle safety requirements within twenty-five miles of the border between this state and Mexico. (b) Costs related to procuring electronic equipment, automated systems or improvements to existing electronic equipment or automated systems for relieving vehicle congestion at ports of entry on the border between this state and Mexico. (c) Constructing, maintaining and upgrading transportation facilities, including roads, streets and highways, approved by the board within twenty-five miles of the border between this state and Mexico. (d) As approved by the board, constructing and maintaining transportation facilities in the CANAMEX high priority corridor as defined in section 332 of the national highway system designation act of 1995 (P.L. 104-59; 109 Stat. 568). (e) Activities of the department that include collecting transportation and trade data in the United States and Mexico for the purposes of constructing transportation facilities, improving public safety, improving truck processing time and relieving congestion at ports of entry on the border between this state and Mexico. The department may enter into an agreement with the Arizona-Mexico commission and provide funding to the commission for the purposes of this subdivision. (f) A commitment or investment necessary for the department or another agency of this state to obtain federal monies that are designated for expenditure pursuant to this section. B. For each fiscal year, the department of transportation shall allocate and transfer monies in the state highway fund to the department of public safety for funding a portion of highway patrol costs in eight installments in each of the first eight months of a fiscal year that do not exceed $10,000,000. C. Subject to legislative appropriation, the department may use the monies in the state highway fund as prescribed in section 28-6991, paragraph 12 to carry out the duties imposed by this title for registration or titling of vehicles, to operate joint title, registration and driver licensing offices, to cover the administrative costs of issuing the air quality compliance sticker, modifying the year validating tab and issuing the windshield sticker and to cover expenses and costs in issuing special plates pursuant to sections 28-2404, 28-2407, 28-2412 through 28-2470.61 and 28-2514. D. The department shall use monies deposited in the state highway fund pursuant to chapter 5, article 5 of this title only as prescribed by that article. E. Monies deposited in the state highway fund pursuant to section 28-2269 shall be used only as prescribed by that section. F. Monies deposited in the state highway fund pursuant to section 28-710, subsection D, paragraph 2 shall only be used for state highway work zone traffic control devices. G. The department may exchange monies distributed to the state highway fund pursuant to section 28-6538, subsection A, paragraph 1 for local government surface transportation program federal monies suballocated to councils of government and metropolitan planning organizations if the local government scheduled to receive the federal monies concurs. An exchange of state highway fund monies pursuant to this subsection shall be in an amount that is at least equal to ninety percent of the federal obligation authority that exists in the project for which the exchange is proposed. H. The department shall use monies deposited in the state highway fund pursuant to section 28-1105, subsection A, paragraph 2, subdivision (a) only for a transportation facility that is located within twenty drivable miles of the international port of entry and shall spend the monies proportionally based on the amount of total monies collected pursuant to section 28-1105, subsection A, paragraph 2, subdivision (a). For the purposes of this subsection, "transportation facility" means a highway or a state route or a county, city or town road that is used by a commercial vehicle or a commercial vehicle combination for which an axle fee is paid pursuant to section 28-5474. 28-6994. Highway damage recovery account A. The highway damage recovery account is established as a separate account in the state highway fund established by section 28-6991. The department shall deposit, pursuant to sections 35-146 and 35-147, all monies received for damage caused to state highways, portions of highways forming state routes, fixtures and other state property in the right-of-way into the account. Subject to legislative appropriation, the department shall use monies in the account for maintenance of state highways, portions of highways and state routes. B. On notice from the department, the state treasurer shall invest and divest monies in the highway damage recovery account as provided by section 35-313, and monies earned from investment shall be credited to the account. 28-6995. Preferences A. In spending monies from the state highway fund, the department shall give preference to the requirements of the budget in the following order: 1. Constructing highways in cooperation with the United States. 2. Taking over and constructing other state highways. B. Reconstruction or replacement of existing highways that are damaged or destroyed by acts of God or other sudden or unexpected causes shall be given preference accorded for maintenance expenditures pursuant to the order named in subsection A. 28-6996. State highway fund; investment On notice from the director the state treasurer shall invest and divest monies in the state highway fund in obligations issued or guaranteed by the United States or any of the senior debt of its agencies, sponsored agencies, corporations, sponsored corporations or instrumentalities, and monies earned from investment shall be credited to the fund. 28-6997. Fiscal year; budget A. The fiscal year of the department begins on July 1 of each year and ends the following June 30. B. The department shall operate strictly under a budget provided and authorized by the legislature. 28-6998. Public monies; expenditure A. The department is subject to the provisions of title 35, chapter 1 relating to public finances and to all other acts of the legislature applicable to the expenditure of public monies. B. The department shall conform to the state budget system and shall not make expenditures unless both: 1. The department is authorized to make the expenditure by the legislature. 2. The money is appropriated for the expenditure. 28-6999. Expenditure; appropriation limitation; violation; classification; civil action A. Except for repayment of loan repayment agreements and interest on loan repayment agreements pursuant to section 28-7676, advances and interest on advances made to the department pursuant to section 28-7677, principal of and interest on board funding obligations delivered pursuant to section 28-7678 and bonds and obligations issued pursuant to chapter 21 of this title, the board and the director shall not make or authorize an expenditure for any purpose during a fiscal year in excess of the amount appropriated by the legislature for that purpose. B. A member of the board or an employee or agent of the department who knowingly approves for expenditure or who knowingly causes to be expended any amount in violation of this section is both: 1. Guilty of a class 2 misdemeanor. 2. Liable for the amount on the person's official bond to be recovered in a civil action in the name of this state brought by either: (a) The attorney general. (b) On the failure or refusal of the attorney general to act, any citizen of this state for the benefit of this state. 28-7000. Contracts; exceptions A. Notwithstanding section 28-6999, the department may enter into: 1. Construction contracts the performance of which may extend beyond the close of the fiscal year. 2. Contracts or agreements for the purpose of right-of-way acquisitions that may obligate state monies for payment up to ten years before the estimated completion date of construction. 3. Contracts or agreements for the purpose of compensating a utility for damages to the utility's facilities if the damages result from an increase in the cost of maintenance, repair or replacement of the facilities due to changes in the configuration or location of the utility's facilities that are required to accommodate a transportation facility. This paragraph applies to any contract or agreement in effect on August 9, 2001. For the purposes of this paragraph, "utility" includes the owner of the utility facilities and any person other than the owner who is responsible for the cost of maintenance, repair or replacement of the facilities. B. Notwithstanding subsection A, paragraph 2 of this section, the department may purchase rights-of-way for projects identified in the long-range statewide transportation plan pursuant to sections 28-307 and 28-506. 28-7001. Right-of-way purchase; financing A. If the department elects to enter into a contract or agreement for the purchase of right-of-way and in addition to other methods of acquisition prescribed by law, at the discretion of the property owner, the department may enter into a contract or agreement for the purchase of right-of-way utilizing one or more of the following financing methods: 1. Cash to mortgage purchase agreement. 2. Seller financing. 3. Assumption of existing financing. 4. Lease-purchase agreement. 5. Any other term purchase agreement. B. A contract or agreement authorized by section 28-7000 or this section shall not contain a financing method that would result in the creation of a debt pursuant to article IX, section 5, Constitution of Arizona. C. The department may negotiate regarding the terms of purchase and enter into a contract with the property owner regarding the financing and terms of purchase. The contract between the department and the property owner regarding financing and the terms of purchase is binding in the event of condemnation. 28-7002. Right-of-way acquisitions; applicability; limitation A. Sections 28-7000 and 28-7001 relating to right-of-way acquisitions apply only to advance acquisition of rights-of-way and do not apply to any other means of right-of-way acquisition. B. The department shall not initiate financing as prescribed in sections 28-7000 and 28-7001 after a condemnation action is filed. 28-7003. Construction program account transfers The director of the department of transportation may certify to the director of the department of administration the transfer of amounts from one construction program account to another construction program account only as follows: 1. Construction program items involving urban projects constructed with federal urban monies and state highway monies may be transferred to other urban projects. 2. If a construction program item or account in the first year of its adopted long-range construction program does not contain sufficient monies for awarding or completing a contract, additional monies may be transferred to it from other construction program items from either: (a) A construction program item or account in which there are excess monies after the completion of the work and there is a complete discharge and satisfaction of all liabilities incurred on that account. (b) A construction program item or account with a priority not falling within the first year of its adopted long-range construction program. 28-7004. Payroll preparation The department of administration shall prepare or delegate the duty of preparing the payroll of officers and employees of the department of transportation. 28-7005. Revolving account; small expenses A. The director of the department of administration may issue a warrant in an amount of not more than five hundred thousand dollars on claims properly certified by the department of transportation to establish a revolving account to facilitate only the payment of small expenditures, payrolls and expense accounts in connection with the operation of the department of transportation. Claims authorized by this subsection shall be paid from any monies appropriated to the department of transportation. B. If the director of the department of administration has issued a warrant pursuant to this section, the director of the department of administration shall not issue another like warrant until an itemized verified statement and proper receipts and vouchers showing in detail the expenditure and distribution of the amount previously advanced for the revolving account under this section and the account to which each item of the statement shall be charged is filed with the director of the department of administration. On receipt of the statement, the director of the department of administration shall charge each item to the proper account and may issue a further warrant, on claims, to replenish the revolving account, but the total shall not exceed five hundred thousand dollars at any time. 28-7006. Department fleet operations fund; definitions A. The department fleet operations fund is established that consists of: 1. Monies appropriated by the legislature to the department for the purchase, maintenance, service or repair of equipment and consumable material, including monies appropriated to pay salaries, wages and benefits of department employees engaged in maintaining, servicing or repairing equipment or supervising these activities. 2. Monies received by the department from the sale of equipment and consumable material at public auction or by other disposal methods provided by law. 3. Monies credited and transferred to the fund pursuant to subsection C of this section for using consumable material and using or servicing equipment. 4. Monies received from insurance recoveries for equipment and consumable material losses. 5. Monies received from donations. 6. Monies received from the United States as reimbursement to provide aid for the use of equipment and consumable materials in constructing, maintaining and repairing transportation improvements. 7. Earnings on any monies in the department fleet operations fund that are invested pursuant to section 28-6996. B. The director shall establish and from time to time modify or adjust the equipment rental schedule and the other fee schedule to reflect all current costs of owning, maintaining, operating and servicing equipment, including the costs of labor and supervision and consumable materials used in the equipment. C. Department equipment shall not be used for any purpose and the department shall not incur an expense in maintaining, servicing or repairing equipment unless within thirty days after the end of any month in which equipment is used or the expenses are incurred both: 1. The appropriate project, program, section, division, activity or budget unit is charged for the use pursuant to the equipment rental schedule or other fee schedule. 2. The department fleet operations fund is credited and the monies are transferred to that fund. D. Monies in the department fleet operations fund are subject to legislative appropriation and shall be spent only to: 1. Purchase equipment and consumable materials. 2. Rent equipment. 3. Pay salaries, wages and employee related costs and benefits and operating expenses for employees engaged in repairing, maintaining or servicing equipment or administering these activities. 4. Pay salaries, wages, employee related costs and benefits and the operating expenses of the department motor pool. E. Monies in the department fleet operations fund are subject to legislative appropriation and shall be spent in conformity with the laws governing state financial operations, except that balances remaining at the end of the fiscal year do not revert to the state general fund or the state highway fund. F. For the purposes of this section: 1. "Consumable material" means motor vehicle fuel, lubricants, tires, batteries, replacement or repair parts, automotive accessories and any other necessary article of supply or material consumed in operating, improving, repairing or maintaining equipment. 2. "Equipment" means any automobile, truck, tractor, trailer, motor driven vehicle, aircraft or other piece of equipment used by the department in enforcing traffic laws and in administering, maintaining, constructing or repairing the state transportation system and any necessary shop tool or device used in improving, repairing or maintaining equipment. 3. "Equipment rental schedule" means the list of rental rates for each piece of rental equipment owned or rented by the department and used as the basis of reimbursing the department fleet operations fund for using any equipment owned by the department. 4. "Other fee schedule" means the list of all costs and expenses that is used as the basis of reimbursing the department fleet operations fund for an expenditure for labor or consumable material that is not reflected in the equipment rental schedule but which cost or expense is nevertheless incurred by the department in maintaining, servicing or repairing equipment. 28-7007. State highway fund; claims; payment Monies in the state highway fund shall be paid only on an itemized and verified claim by the director of the department of transportation or any other bonded agent authorized by the director of the department of transportation. A claim shall be presented to and filed with the director of the department of administration disclosing the authority for the claim. If the director of the department of administration approves the claim, the director of the department of administration shall charge it to the proper account and pay the claim in accordance with the provisions of section 35-185 and shall charge the claim to the proper account. 28-7008. State highway fund reimbursement; nonhighway costs A. To limit the expenditures of monies in the state highway fund established by section 28-6991, pursuant to article IX, section 14, Constitution of Arizona, to highway purposes, the department of transportation shall: 1. Maintain a strict account of all costs incurred by each function of the department. The department of transportation shall determine and allocate the costs between highway and nonhighway functions, including the costs of wages, salaries, materials, supplies and equipment or facility use. 2. Concurrently with or immediately after the determination of all of the costs prescribed in paragraph 1, certify to the department of administration the full amount of all of the costs relating to nonhighway functions. B. On receiving the certification by the department of transportation pursuant to subsection A of this section, the department of administration shall authorize and transfer the full amount of the nonhighway costs from any monies appropriated to the department of transportation from nonhighway user revenues to the state highway fund. 28-7009. Statewide transportation acceleration needs account; establishment; definition A. The statewide transportation acceleration needs account is established as a separate account in the state highway fund. The account consists of all of the following, except that the source of monies in the fund shall not be a consent agreement or any type of negotiated settlement by any state or local agency or any donation made in place of a consent agreement or any type of settlement: 1. Monies appropriated by the legislature. 2. Monies designated for deposit in the account by the transportation board, a state agency or a political subdivision. 3. Monies received from the United States government for the purpose of accelerating transportation projects. 4. Monies received from political subdivisions, Indian tribes or this state or its agencies for the purpose of accelerating transportation projects. 5. Interest and other income received from investing monies in the account. 6. Gifts, grants, donations or other amounts received from any public or private source for deposit in the account for the purpose of accelerating transportation projects. B. On notice from the transportation board, the state treasurer shall invest and divest monies in the statewide transportation acceleration needs account as provided by section 35-313, and monies earned from investment shall be credited to the account. C. The transportation board may establish any subaccount in the statewide transportation acceleration needs account that the board determines is necessary or appropriate to carry out the purposes of this section. D. If a governmental entity or a private person deposits monies in the statewide transportation acceleration needs account for acceleration of a specific project and the appropriate regional planning agency or council of governments, in cooperation with the transportation board, approves the project, the board shall designate the monies deposited by the governmental entity or private person solely for the project for which the monies are deposited. E. Notwithstanding section 28-6993, and any other agreements entered into by the department of transportation for the distribution and expenditure of monies from the state highway fund, the transportation board shall not approve any expenditures from the statewide transportation acceleration needs account unless the expenditure is made in accordance with this section and is for the construction or reconstruction of freeways, state highways, bridges and interchanges that are contained in the regional transportation plan of a county or the department's long-range statewide transportation plan pursuant to section 28-506. For the purposes of this subsection, a regional transportation plan is a twenty-year comprehensive, performance-based, multimodal and coordinated regional transportation plan that is approved for the county as provided by law and as amended or otherwise modified. F. Monies in the statewide transportation acceleration needs account shall be used only to pay for the following costs of a transportation project approved pursuant to this section: 1. Except as provided in section 28-7010: (a) Materials and labor. (b) Acquisition of rights-of-way for highway needs. (c) Design and other engineering services that are within the scope of engineering practice as provided in title 32, chapter 1. (d) Other directly related costs approved by the transportation board. 2. Beginning in fiscal year 2006-2007, interest costs resulting from bonds, loans, notes or other obligations issued or incurred or advances made by or on behalf of a city, town or county. G. Monies in the statewide transportation acceleration needs account that are appropriated by the legislature and any interest earnings shall be allocated as follows: 1. For a county with a population of at least one million two hundred thousand persons for the area included in the regional planning agency's transportation improvement plan, sixty percent. 2. For a county with a population of more than five hundred thousand persons but less than one million two hundred thousand persons for the area included in the regional planning agency's transportation improvement plan, sixteen percent. 3. For all other counties, twenty-four percent. H. The regional planning agency in a county designated as a transportation management area shall establish a process for the review and approval of transportation projects eligible to receive monies from the statewide transportation acceleration needs account. As part of its request to the transportation board for monies, the regional planning agency shall ensure and submit evidence satisfactory to the board that any project costs not eligible for monies from the statewide transportation acceleration needs account are available and dedicated to the project. In all other counties, the department, in cooperation with the metropolitan planning organization or the council of governments that has the authority to approve transportation projects for the county, shall develop requests for expenditure of monies from the statewide transportation acceleration needs account. As part of the request to the transportation board for monies, the metropolitan planning organization or the council of governments for the department shall submit evidence satisfactory to the board that any project costs not eligible for monies from the statewide transportation acceleration needs account are available and dedicated to the project. I. On receipt of a request for monies from the statewide transportation acceleration needs account, the transportation board shall pl