Assigned to TAT FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
FACT SHEET FOR S.B. 1245
VLT; cities and towns; counties
Purpose
Diverts vehicle license tax (VLT) distributions from county general funds to the State
Treasurer to be apportioned to counties by population and requires VLT distributions to
incorporated cities and towns to be used for any purpose related to transportation.
Background
A VLT is constitutionally required for each year of a vehicle's registration (Ariz. Const.
art. 9 § 11). The VLT decreases with the age of the vehicle and a minimum VLT for a vehicle is
$10 per year (A.R.S. Title 28, Chapter 16, Art. 3). Monthly VLT revenues are distributed by the
Director of the Arizona Department of Transportation (Director) to various sources, including the
Highway User Revenue Fund (HURF), each county's general fund, municipality funds and to
counties for transportation purposes.
The Director must distribute or deposit: 1) county general fund monies to county general
funds; and 2) county transportation monies to the State Treasurer to be apportioned among the
counties for any purposes related to transportation, as determined by the county board of
supervisors (BOS), on the basis that the population of the unincorporated area of each county bears
to the population of the unincorporated areas of all counties in Arizona (county apportionment).
The Director must also distribute or deposit the following amounts as a percentage of all VLT
monies received during the preceding month: 1) 20.45 percent to county general funds; 2) 4.91
percent to the State Treasurer for county apportionment to be used for any purposes related to
transportation, as determined by the county BOS; 3) 20.45 percent to the incorporated cities and
towns of the counties in proportion to the population of each; 4) 1.64 percent to the State Highway
Fund (SHF), as prescribed; 5) 4.09 percent to the SHF; and 6) 10.85 percent in the state General
Fund to aid school financial assistance (A.R.S. § 28-5808).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
1. Terminates the distribution of county general fund monies to the county general fund.
2. Requires the Director to distribute county general fund monies to the State Treasurer for county
apportionment.
3. Terminates the 20.45 percent distribution of VLT monies to the county general fund. FACT SHEET
S.B. 1245
Page 2
4. Adds the terminated 20.45 percent distribution in the 4.91 percent distribution, for a total of
25.36 percent, of VLT monies to the State Treasurer for county apportionment.
5. Requires, to be used for any purposes related to transportation, the distribution:
a) of incorporated cities and towns monies to incorporated cities and towns in proportion to
the population of each; and
b) of 20.45 percent of VLT revenues to incorporated cities and towns in proportion to the
population of each.
6. Makes technical and conforming changes.
7. Becomes effective on the general effective date.
Prepared by Senate Research
February 2, 2023
KJA/sr