ARIZONA STATE SENATE

RESEARCH STAFF

LIAM MAHER

LEGISLATIVE RESEARCH ANALYST

APPROPRIATIONS, TRANSPORTATION & TECHNOLOGY COMMITTEE

Telephone: (602) 926-3171

TO:                  MEMBERS OF THE SENATE

APPROPRIATIONS, TRANSPORTATION & TECHNOLOGY COMMITTEE

DATE:            February 20, 2026

SUBJECT:      Strike everything amendment to S.B. 1138, relating to clean elections; transportation funding

Purpose

            Redirects the 10 percent surcharge that is collected on all traffic-related civil and criminal fines and penalties that would otherwise be deposited in the Citizens Clean Elections Fund (Fund) to the Highway User Revenue Fund (HURF). Contains requirements for enactment for initiatives and referendums (Proposition 105).

Background

In 1998, voters approved Proposition 200 which created the Fund. The Fund receives revenues from a 10 percent surcharge on all civil and criminal fines, qualifying contributions from participating candidates and penalties paid by candidates (JLBC Baseline).

            The Citizens Clean Election Commission (CCEC) must return excess monies to the state General Fund (state GF) if it is determined that the anticipated collections exceed the CCEC's statutory expenditure limit. The CCEC determines the excess monies on an annual calendar year basis by projecting revenues over the next four years and designating monies above the expenditure limit as excess monies that must be transferred the state GF. The most recent transfer from the Fund to the state GF was $10 million in FY 2012 (A.R.S. § 16-954; JLBC Appropriations Report).

            HURF consists of monies collected from taxes and fees associated with transportation that include the motor fuel tax, vehicle license tax, vehicle registration fee and driver's license fee. HURF monies may only be spent for the purposes prescribed in the Arizona Constitution (A.R.S. § 28-6533).

            Each fiscal year, the Arizona Department of Transportation and the State Treasurer must distribute HURF monies as follows: 1) 51.5 percent to the State Highway Fund; 2) 19 percent to the counties; 3) 27.5 percent to incorporated cities and towns; and 4) 3 percent to incorporated cities with a population of more than 300,000 persons (A.R.S. § 28-6538).

            If redirecting surcharges from the Fund to HURF modifies the excess monies that would have otherwise been directed to the state GF by the CCEC each year, there may be a fiscal impact to the state GF.

Provisions

1. Redirects the 10 percent surcharge collected on all traffic-related civil and criminal fines and penalties that would be deposited in the Fund to HURF.

2. Replaces the requirement for excess Fund monies to be transferred to the state GF when the CCEC determines that anticipated collections exceed the CCEC's statutory expenditure limit with a requirement for excess Fund monies to be transferred to the state GF when the amount of monies in the Fund exceeds the Fund balance as of the general effective date.

3. Specifies that all surcharges collected for traffic-related civil and criminal fines and penalties that are redirected to HURF must be distributed proportionally to counties with fewer than 1,000,000 persons.

4. Makes technical and conforming changes.

5. Requires for enactment the affirmative vote of at least three-fourths of the members of each house of the Legislature (Proposition 105).

6. Becomes effective on the general effective date.