Arizona 2024 2024 Regular Session

Arizona Senate Bill SB1168 Introduced / Fiscal Note

Filed 02/26/2024

                    Fiscal Note 
 
 
BILL # SB 1168 	TITLE:  HOV lanes; degradation; technical correction S/E: 
ADOT; abandoned vehicle fees; reimbursement 
SPONSOR: Farnsworth 	STATUS: As Amended by Senate TTMC 
PREPARED BY: Jordan Johnston  
 
Description 
 
The bill would repeal the Abandoned Vehicle Administration Fund and transfer all unexpended and unencumbered 
monies from the fund into the State Highway Fund. The bill further eliminates all reimbursements to eligible towing 
companies that tow abandoned vehicles. 
 
Estimated Impact 
 
We estimate that the bill would eliminate $(1.3) million in annual towing company reimbursements beginning in FY 2025.  
These monies would then be distributed to state funds.  Under an existing statutory formula, the General Fund would 
receive $1.2 million and the State Highway Fund would receive $0.1 million.  In addition, we estimate that the bill would 
transfer a balance of about $500,000 from the Abandoned Vehicle Administration Fund to the State Highway Fund. 
 
We have requested the Arizona Department of Transportation's (ADOT) estimated impact of this legislation and are 
awaiting a response.   
 
Analysis 
 
Owners of abandoned vehicles must pay ADOT an additional fee for the abandoned vehicle when registering another car 
or paying a driver's license fee. The additional fee, which is set by the ADOT director, depends on where the vehicle was 
abandoned.  
 
Except for vehicles towed prior to August 9, 2017, towing companies receive reimbursement totaling 20% of all 
abandoned vehicle towing fees.  The analysis assumes all future abandoned vehicle fees are for towed vehicles after 
August 9, 2017.  If the vehicle was abandoned on private property, street or state highway, or public land located within 
an incorporated city or town, then the owner pays a fee of $500.  The fee is deposited into the Abandoned Vehicle 
Administration Fund.  After the initial 20% ($100) reimbursement to towing companies, the remaining fee is effectively 
distributed 72% ($360) to the General Fund and 8% ($40) to the State Highway Fund.  Virtually all abandoned vehicle fees 
currently collected by ADOT are for vehicles abandoned on private property, streets or state highways, or public land 
located within an incorporated city or town. 
 
If the vehicle was abandoned on state or federal land, which includes national forest, state park, Bureau of Land 
Management land, or state trust land outside of a city or town, then the owner pays a fee of $600.  The Administration 
Fund first reimburses the towing company 20% ($120) for fees from vehicles abandoned on state and federal land.  After 
that disbursement, the remaining fee is effectively distributed 48% ($288) to the General Fund and 32% ($192) to the 
State Highway Fund.  Less than 1% of abandoned vehicles are towed on state or federal land. 
 
The bill would eliminate the Abandoned Vehicle Administration Fund and instead deposit the fees directly into the State 
Highway Fund.  The bill further eliminates all reimbursements to towing companies that tow abandoned vehicles.   
 
 
(Continued)  - 2 - 
 
 
By eliminating these reimbursements, the abandoned vehicle fees are effectively redistributed to the State Highway Fund 
and General Fund.  Table 1 below delineates the impact of this redistribution on the following sources where the 
abandoned vehicle fee is currently deposited: General Fund, State Highway Fund, and towing company reimbursements.  
The FY 2025 impact is based upon FY 2022 actual revenues from the abandoned vehicle fee as reported by ADOT, which is 
the most recent actual revenue data available to us. 
 
The total revenue generated in FY 2022 from the abandoned vehicle fee was $6.7 million, which was disbursed to 3 
different sources as follows: $4.8 million to the General Fund, $0.6 million to the State Highway Fund, and $1.3 million to 
the towing company reimbursements.  The bill would keep revenues at an equivalent level, however the monies would be 
redistributed as follows: $6.0 million to the General Fund and $0.7 million to the State Highway Fund.  The new 
distribution of revenues equates to an effective increase of $1.2 million to the General Fund and $0.1 million to the State 
Highway Fund. 
 
 
 
 
 
 
 
 
 
 
 
 
To further detail the changes made under the bill, Table 2 shows the abandoned vehicle fee distributions under both 
current law and this bill.  This table shows how much of the fee dollars are distributed to each fund source. 
 
 
Local Government Impact 
 
None 
 
2/26/24 
Table 1  
SB 1168 Revenue Impact ($ in millions) 
 	FY 2025 
   
General Fund 	$1.2 
State Highway Fund 	0.1 
    Subtotal 	1.3 
   
Towing Company Reimbursements (1.3) 
 
 
     Total 	0.0 
Table 2 
Fee Distribution From Abandoned Vehicle Fees 
 	Towing Reimbursements General Fund State Highway Fund Total 
Tow - Private/Local Land    
Current Law 	$ 100 $ 360 $ 40 $ 500 
Bill Proposal        0   450   50   500 
Tow - State/Federal Land    
Current Law    120   288 192   600 
Bill Proposal        0   360 240   600