SB 1246
Initials JB Page 1 Vetoed
ARIZONA HOUSE OF REPRESENTATIVES
Fifty-sixth Legislature
First Regular Session
Senate: TAT DPA 6-0-1-0 | 3
rd
Read 29-0-1-0
House: TI DPA/SE 7-4-0-0 | 3
rd
Read 31-26-3-0
Final Pass: 16-12-2-0
SB 1246: electronic certificates of title
NOW: election; transportation tax; Maricopa County
Sponsor: Senator Farnsworth, LD 10
Vetoed
Overview
Requires Maricopa County, beginning on January 1, 2026, if approved by qualified electors voting
in a countywide election, to levy and the Arizona Department of Transportation (ADOT) to collect
a County Transportation Excise Tax and County Public Transportation Excise Tax, both to be in
effect for 20 years. Additionally, if approved by the voters, establishes a transportation excise tax
Plan.
History
In 2004, Maricopa County voters approved a countywide transportation tax levied at a rate up to
10% of the state transaction privilege tax (one-half-cent transaction tax). Revenues from the half-
cent transportation tax are deposited into the Regional Area Road Fund (RARF). Laws 2003,
Chapter 217 established the Regional Planning Agency Transportation Policy Committee (TPC)
which is tasked with the approval of a 20-year comprehensive, performance-based, multimodal
and coordinated regional transportation plan in Maricopa County. The tax will end on December
31, 2025.
The Maricopa Association of Governments (MAG) is a council of governments that serves as the
regional planning and policy agency for the metropolitan Phoenix area. Monies collected from the
voter-approved transportation taxes are deposited into MAG's RARF to be used by MAG for
maintenance and capital expenses of freeways and the state highway system (A.R.S. § 42-6106).
House Bill 2685 required Maricopa County to hold a county-wide election to continue the half-
cent transportation tax. The bill was passed by the Legislature and transmitted to the Governor
on June 24th, 2022. The Governor vetoed House Bill 2685 on July 6th, 2022.
Provisions
County Transportation Excise Tax
1. Requires, if approved by the qualified electors voting at a county-wide election, a county with
a population of 3,000,000 or more people to levy, and ADOT to collect a transportation excise
(County Transportation Excise Tax) tax beginning January 1, 2026. (Sec. 26)
2. Directs County Transportation Excise Tax to be levied and collected:
a) At a rate of up to 8.6% ($ 0.43) of the state transaction privilege tax (TPT) rate on January
1, 1990;
b) At a rate of up to 8.6% of the jet fuel excise tax rate; and
c) On the use or consumption of electricity or natural gas by customers in the county who
are subject to use tax, at a rate equal to the state TPT rate that applies to customers
engaging in the county in the utilities TPT classification. (Sec. 26) SB 1246
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3. States that the Plan adopted by the regional planning agency will specify the distribution of
the collected monies and requires the Plan to distribute the revenues as follows:
a) 53.5% to the RARF for freeways and other routes in the state highway system, including
maintenance and capital expense;
b) 18.5% to the RARF for major arterial streets, intersection improvements and regional
programs, including capital expense and implementation studies. At least 13.5% is
required to be distributed for major arterial streets and intersection improvements; and
c) 28% to the Public Transportation Fund for capital costs, maintenance and operation of
public transportation mode classifications. (Sec. 26)
4. Prohibits the RARF distribution for freeways and other routes in the state highway system and
the distribution for major arterials and intersection improvements from being decreased. (Sec.
26)
5. Prohibits County Transportation Excise Tax revenue from being used:
a) For any light rail, commuter rail, street cars or trollies;
b) To influence the outcome of an election;
c) For polling;
d) On any project that will result in a reduction in existing lane miles on a highway or a state
highway;
e) On any project that will result in a reduction in existing lane miles on a street or roadway
unless a third-party engineering study determines the reduction is necessary to reduce
congestion, and the findings are presented in a public hearing;
f) On active transportation projects; and
g) For extending light rail between 7th Avenue and 19th Avenue and Adams Street and
Jefferson Street in Phoenix. (Sec. 26)
6. Requires the County Transportation Excise Tax to be in effect for 20 years. (Sec. 26)
County Public Transportation Excise Tax
7. Requires, if approved by the qualified electors voting at a county-wide election, a county with
a population of 3,000,000 or more people to levy, and ADOT to collect a transportation excise
tax for public transportation (County Public Transportation Excise Tax) beginning January 1,
2026. (Sec. 26)
8. Directs the County Public Transportation Excise Tax to be levied and collected:
a) At a rate of up to 1.3% ($ .065) of the TPT rate on January 1, 1990;
b) At a rate of up to 1.3% of the jet fuel excise tax rate; and
c) On the use or consumption of electricity or natural gas by customers in the county who
are subject to use tax, at a rate equal to the state TPT rate that applies to customers
engaging in the county in the utilities TPT classification. (Sec. 26)
9. Requires the net revenues collected by the Public Transportation Excise Tax to be distributed
and deposited in the Public Transportation Fund for:
a) Capital costs, maintenance and operation of public transportation mode classifications;
and
b) Capital costs and utility relocation costs associated with a light rail public transit system.
(Sec. 26)
10. States that no more than 25% of County Public Transportation Excise Tax revenues may be
used for capital rehabilitation of the light rail system. (Sec. 26)
11. Defines capital rehabilitation of the light rail system as capital maintenance, repair or
improvements that ensure regional assets remain in a state of good repair to preserve the
safety and reliability of the system. (Sec. 26) SB 1246
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12. States the Public Transportation Excise Tax will be in effect for 20 years. (Sec. 26)
13. Prohibits Public Transportation Excise Tax revenues from being used:
a) For any light rail extension, commuter rail, street cars or trollies
b) To influence the outcome of an election;
c) For polling;
d) For any project that will reduce existing lane miles on a highway or state highway, unless
a third-party engineering study determines the reduction is necessary to reduce
congestion, and the findings are presented in a public hearing; and
e) To extend light rail between 7th Avenue and 19th Avenue and Adams Street and Jefferson
Street in Phoenix. (Sec. 26)
Countywide Election
14. Describes processes for the county to call a countywide election for the levy of the County
Transportation Excise Tax and the County Public Transportation Excise Tax. (Sec. 31)
15. Requires the county to conduct the election on a consolidated election date at least one year
before the date on which an existing county excise tax would otherwise be discontinued. (Sec.
31)
16. Modifies population requirements for highly populated counties from 1,200,000 to 3,000,000
or more. (Sec. 5)
17. Removes the ability for monies from any account in the RARF to be spent to determine public
opinion before the election is called. (Sec. 9)
Regional Planning Agency and Transportation Infrastructure Investment Plan
18. Requires the regional planning agency in the county to develop and adopt a Plan in
cooperation with state and local public transportation authorities and coordination with ADOT.
(Sec. 17)
19. Defines Plan as a comprehensive, performance-based, multimodal and coordinated regional
strategic transportation infrastructure investment Plan approved for a county. (Sec. 17)
20. Directs the regional planning agency to consider truck parking availability when considering
the construction, expansion or modification of freeways or other routes in the state highway
system. (Sec. 15)
21. Requires the regional planning agency to allocate at least $90,000,000 for the implementation
of commercial motor vehicle parking that is consistent with the adopted truck parking plan on
or before December 31, 2045. (Sec. 17)
22. Requires the Plan to allocate County Transportation Excise Tax revenues in the:
a) RARF for freeways and other routes in the state highway system;
b) RARF for major arterial streets, intersection improvements and regional programs; and
c) Public Transportation Fund for capital costs, maintenance and operation of public
transportation mode classifications. (Sec. 17)
23. Requires the Plan to allocate Public Transportation Excise Tax revenues in the Public
Transportation Fund for:
a) Capital costs, maintenance and operation of public transportation mode classifications;
and
b) Capital costs and utility relocation costs associated with a light rail public transit system.
(Sec. 17)
24. Directs the regional planning agency, beginning FY 2024, to adopt a budget process and
outlines requirements for the budget process. (Sec. 17) SB 1246
Initials JB Page 4 Vetoed
25. Stipulates that the regional planning agency must coordinate with implementing partners on
the budget process including ADOT for freeways and other routes in the state highway system
and the regional public transportation authority in the county for the public transportation
system. (Sec. 17)
26. Specifies the budget process does not apply to the annual operating budget of the regional
public transportation authority in the county. (Sec. 17)
27. Requires the regional planning agency to determine the use of revenues collected for capital
projects through the transportation improvement program. (Sec. 17)
28. States that any bonds issued against proceeds collected through the transportation excise
taxes require consultation with the regional planning agency. (Sec. 17)
29. Directs the regional planning agency to annually report on the status of the funded projects
and requires the report to be posted on the agency's website. (Sec. 17)
30. Stipulates requests for changes to transportation projects funded in the Plan that would
materially increase costs must be submitted to the regional planning agency for approval and
then submitted by the agency to the TPC and the State Transportation Board for consideration
and approval. (Sec. 17)
31. Requires a local authority that requests an enhancement to a transportation project funded by
the Plan to pay for all costs associated with the enhancement. (Sec. 17)
32. States that if monies are appropriated by the Legislature for a project that is identified by the
Plan, the use of the monies for construction requires:
a) That the project must be advanced as appropriate to reflect the estimated construction
start date; and
b) The monies be used in the same modal classification as transportation tax revenues. (Sec.
17)
33. Allows a municipality that pays for public transportation service in an adjacent municipality or
unincorporated area to be eligible for reimbursement from monies collected under the
transportation tax. (Sec.17)
34. Requires the regional planning agency to post a public notice on any proposed amendments
to the Plan that requires a new air quality conformity determination and to make the results of
the air quality conformity analysis publicly available. (Sec. 17)
Farebox Operating and Recovery Ratio Performance Standards
35. Directs the public transportation element of the regional transportation Plan to include the
following performance standards:
a) A farebox operating ratio standard for existing bus route extensions that are in existence
on the effective date and that are funded in whole or in part by the revenues of either
transportation excise tax; and
b) A farebox recovery ratio standard for existing bus routes that are in existence on the
effective date and that are funded in whole or in part by the revenues of either
transportation excise tax. (Sec. 30)
36. Requires the outlined performance standards to be presented each fiscal year and to achieve
the following percentages for each bus route in existence on the effective date:
a) For FY 2026 through FY 2028, 13%;
b) For FY 2029 through FY 2031, 16%; and
c) For FY 2032 and thereafter, 19%. (Sec. 30) SB 1246
Initials JB Page 5 Vetoed
37. Directs the excess costs to be allocated among affected member municipalities according to
the proportion of the bus route that is in each municipality if the regional public transportation
authority (authority) fails to meet the outlined performance standards. (Sec. 30)
38. Requires member municipalities to pay their owed amounts from their perspective general
funds to the Public Transportation Fund in the fiscal year following the fiscal year the shortfall
occurred. (Sec. 30)
39. States that if the authority fails to meet the outlined 19% performance standard for FY 2032
and onward, the authority is required to proceed with a public bid for the operation of the failing
bus route and is prohibited from submitting a proposal to bid. (Sec. 30)
40. Requires the authority to conduct a public bid to contract the operations for all new bus routes
identified in the Plan. The bid must require the perspective operators to demonstrate
compliance with the following farebox operating ratio standards;
a) 13% within the first year of operating;
b) 16% within the fourth year of operating; and
c) 19% within the seventh year of operating and every subsequent year. (Sec. 30)
41. States that if the operator fails to meet the performance standards:
a) A new public bid may be conducted;
b) The failing bus route may be eliminated; or
c) A new bus route may be redesigned followed by a new public bid. (Sec. 30)
42. Exempts transportation services required by the 'Americans with Disabilities Act of 1990'
U.S.C §§ 12101-12213 from the farebox recovery ratio performance standards. (Sec. 30)
Transportation Policy Committee
43. Adds the following members to the TPC beginning FY 2025, all appointed jointly by the
Speaker of the House of Representatives and the President of the Senate to serve six-year
terms:
a) Two members representing unincorporated areas of Maricopa County;
b) Two members representing taxpayer organizations; and
c) One member who represents residential housing development interests. (Sec. 11)
44. Modifies the membership of the TPC by increasing the number of members who represent
regionwide business interests from 6 to 12, of whom:
a) Two, instead of one, represent transit interests;
b) Two, instead of one, represent freight interests;
c) Two represent commercial real estate interests; and
d) Two, instead of one, represent construction interests. (Sec. 11)
45. Directs the TPC to develop the Plan in cooperation with the regional public transportation
authority in the county and ADOT and in consultation with the board of supervisors, Indian
communities and cities and towns in the county. (Sec. 11)
46. Requires the TPC to recommend approval, disapproval or modification of:
a) The Plan;
b) Changes to the allocation of transportation tax revenues;
c) Budget processes; and
d) Funding awarded through the regional program's process. (Sec.11)
☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal Note SB 1246
Initials JB Page 6 Vetoed
Miscellaneous
47. Requires the State Treasurer, instead of dividing and equally distributing $5,000,000 to the
Public Transportation Fund and Regional Planning Agency, to distribute every fiscal year
from the Construction Fund;
a) $2,500,000 to the Public Transportation Fund; and
b) $1,625,000 to the regional planning agency for planning and administering the Plan.
(Sec. 8)
48. Requires ADOT to separately account for the uses of the transportation excise tax revenues
deposited in the bond account and the construction account to identify how the revenues are
used for:
a) Freeways or other routes in the state highway system; and
b) Major arterial streets, intersection improvements and regional programs identified in the
Plan, including capital expense and implementation studies. (Sec. 6)
49. Restricts this state or a city, town, county or political subdivision of this state from restricting
the use of or sale of a device based on the energy source consumed by the device or used
to power the device. (Sec. 1)
50. Prohibits public monies and tax revenues from the current county transportation excise tax
from being used to extend light rail between 7th Avenue and 19th Avenue and Adams Street
and Jefferson Street in Phoenix. (Sec. 24-25)
51. Requires the speed limit for all types of motor vehicles to be at least 65 miles per hour on
interstate system highways located in a county with a population of 3,000,000 or more people.
(Sec. 3)
52. Modifies what monies in the bond account may be used for. (Sec. 7)
53. Removes the requirement that the Director of ADOT develops and annually updates, as a
component of the five-year transportation facilities construction program, a plan for the use of
monies expected to be deposited in the county's regional area road fund. (Sec. 8)
54. Requires the Auditor General to every five years internally conduct a performance audit of the
Plan and projects scheduled for funding during the next five years and modifies the reporting
requirements for the audit. (Sec. 13)
55. Establishes beginning January 1, 2026, a regional public transportation authority in a county
with a population of 3,000,000 or more people that approved a county transportation excise
tax. (Sec. 27)
56. Requires the five-year transportation facilities construction program to include a plan that is
updated annually for the use of monies expected to be deposited in a county's RARF that is
consistent with the Plan adopted by the regional planning agency and consistent with the
planning agency's budget process. (Sec. 20)
57. Specifies that this act does not invalidate any action by a regional public transportation
authority formed before the effective date. (Sec. 32)
58. States that the Legislature intends that:
a) The development of State Route 30 between State Route 85 and Loop 303 to begin in the
first phase of the Plan; and
b) The freeway allocations fund the repavement of State Route 51. (Sec. 33)
59. Contains a severability clause. (Sec. 34) SB 1246
Initials JB Page 7 Vetoed
60. Contains a conditional enactment clause. (Sec. 35)
61. Repeals statute. (Sec. 10, 12, 16, 18, 29)
62. Defines terms. (Sec. 4, 15, 17, 30)
63. Makes technical changes. (Sec. 2, 4-8, 11, 13, 15, 19, 22, 25, 28)
64. Makes conforming changes. (Sec. 2-9, 11, 13-15, 19, 21-23, 25, 28)