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2015 Transportation Funding Act (TFA) – Legislative Update
Presented by – Shaun Adams, Associate Legislative Director
Learning ObjectivesUpon successful completion of this session, you should be able to:• Discuss the current state of Federal funding and traditional funding of transportation in Georgia
• Recall the basic provisions and local budgetary implications of the 2015 Transportation Funding Act (TFA)
• Recite infrastructure financing options
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STATUS OF FUNDING
Status of Federal Highway Trust Fund
The Federal Highway Trust Fund is currently operating another extension that is funded through December 2015. Congress is expected to focus on a long term reauthorization during their September session and the following will be part of the discussion:
• DRIVE Act: Senate bill seeking a 6 year reauthorization with three years of funding. Passed by the Senate and is awaiting action by the House
• House: H.R. 3763 was reported out of committee on 10/22 which included a 6 year reauthorization and an effective date of 10/1/2015.
• Bipartisan Senate Proposal (Sens. Paul and Boxer): One‐time, voluntary repatriation of foreign profits at 6.5% rate with revenue sent to Highway Trust Fund (S. 981‐‐Invest in Transportation Act)
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Traditional Funding of Transportation in Georgia
• State Transportation Budget for FY 15 approximately $2.2 billion with $1.2 billion of the total coming from the federal government– Locals committed approximately $1.33 billion to transportation funding in
2014 between their general fund and SPLOST revenues
• $15 million came from the State General Fund
• Remaining $1 billion derived from state motor fuel tax collections– 3% Sales tax (add’l 1% sales tax goes into general fund); 7.5 cent per gallon
excise tax
• Locals rely on Local Maintenance & Improvement Grants (LMIG) for funding from the state – Funded at $122 million in FY 15 (12% of motor fuel collections)
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2015 TRANSPORTATION FUNDING ACT & PROVISIONS
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Current Status of Transportation Funding in GA
The passage of HB 170 and HB 106 in the 2015 legislative session seeks to add $800‐900 million in new funding for transportation purposes by doing the following:Converting the sales tax on motor fuel to an excise tax and increasing it by 6 cents per gallon
Adding a highway impact fee for heavy trucksAdding a $5 per night hotel/motel feeAdding a $200‐300 alternative fuel vehicle feeRepealing the electric car tax credit and the jet fuel exemption
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HB 170• Overview of Bill
– Convert all state motor fuel taxes to a state excise tax at a rate of 26 cents per gallon for gas and 29 cents per gallon for diesel
– Indexes the state excise tax based on Corporate Average Fuel Economy (CAFÉ) standards and Consumer Pricing Index (CPI)
– Establishes an alternative fuel vehicle fee for vehicles powered solely by electricity, natural gas, or propane of $200 per year for private use and $300 per year for commercial use
• Compressed natural gas, liquefied natural gas, and liquefied petroleum gas is exempted from the annual fee
continued on next slide
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HB 170– Establishes an annual highway impact fee of $50 for vehicles weighing 15,500‐26,000lbs and $100 for 26,001 and above
– Repeals electric vehicle tax credit and jet fuel exemption
– Establishes a $5 per day hotel/motel fee
– Authorizes a Joint Study Committee on Georgia Revenue Structure
– Requires GDOT to provide a 10yr strategic plan to General Assembly
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HB 170• Provisions of Local Impact
– Local sales and use taxes levied on motor fuel will no longer be collected on an average retail price of gas or diesel above $3 per gallon
• Effective July 1, 2015, the average retail price for gas is $2.35 and $2.549 for diesel
– Allows for a self‐start of the TIA by adoption of a resolution by a majority of the counties in the region
• May be at a fractional rate up to 1% in .05% increments• If imposed after 7/1/15, requires 30% to be spent on statewide strategic transportation plan (SSTP) projects as defined in O.C.G.A. 32‐2‐22(a)(6) continued on next slide
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HB 170– Authorizes a single county transportation SPLOST (TSPLOST 2) at
a rate up to 1% in increments of .05%• Effective 7/1/2016 for Georgia Regional Transportation Authority (GRTA) counties which include: Cherokee, Clayton, Coweta, Cobb, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding, and Rockdale
• 7/1/2017 for all other counties
– Recapitalize Georgia Transportation Infrastructure Bank (GTIB)• Places a preference on loan funds to be granted to Tier 1 and Tier 2 counties based on the Department of Community Affairs (DCA) tier system
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HB 106• Clean‐up to HB 170
– Ensures that Columbus‐Muscogee can continue to collect its OLOST on motor fuel and it is still subject to the $3 cap on average price of fuel
– Fixes language regarding TSPLOST 2 which includes:• The 90% municipalized county exception• Clarifies that an Intergovernmental Agreement (IGA) b/w county and municipalities is not required
– More clearly defines the definition of “innkeeper” to only apply to hotels and motels with regard to the $5/ day hotel/motel fee
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Potential Budget Impact• The following provisions in HB 170 did not include exemptions for
government and therefore will amount to additional local gov’t expenditures:– The highway impact fee for heavy trucks weighing between
15,000‐26,000lbs will add $50 per vehicle per year; trucks weighing over 26,000lbs will be $100 per year
– The hotel/motel fee of $5 per night – Increase in motor fuel excise tax
• Since state and local governments are only exempt from the sales tax on motor fuel, the conversion to an all excise tax has resulted in state and local governments having to pay roughly 18.5 cents per gallon more in motor fuel tax than in previous years
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Potential Revenue ImpactLMIG• Current funding at $120m (roughly
12%)• Law requires a min 10%
appropriation by the State• At 10% funding, every cent per gallon
increase in state excise is expected to generate an additional $6m in LMIG funding
• HB 170 increased state excise ~ 7 cents per gallon which is ~ $42m in add’l LMIG revenue (30% increase)
• Commitment made to double LMIG over the next couple of years
Gas Cap• Legislation provides for a cap of $3
for the average retail price of motor fuel
• Effective July 1, 2015, the average for gas is $2.35 per gallon, and $2.549 for diesel
• For example, if diesel had remained at $3.16, the projected impact would have been as follows:
– ½ of 1 cent lost for every gallon sold on diesel based on a 3% local sales tax.
– That’s $50k for every 1m gallons sold in the jurisdiction
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LOCAL FINANCINGOPTIONS
Local Financing Options
• Revenue Bonds (Forsyth County)• Georgia Transportation Infrastructure Bank (GTIB)
• General SPLOST• Regional and Single County TSPLOST
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Georgia Transportation Infrastructure Bank
• Offers low interest loans and grants for CID’s, state, regional, and local government entities– Grants were opened up to local governments beginning in 2014
• Awarded $55 million in grants in loans through 2014 supporting approximately $200 million in total project value
• Shovel ready projects with a local match that are mobility‐enhancing tend to be higher scoring
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Regional TSPLOST• What’s new?
– Authorizes counties to “self‐start” the process by adoption of a resolution from a majority of the counties in the region
– More flexibility with elections in which to place the ballot– The rate can now be a fractional rate up to 1% in increments of .05%– Requires at least 30% of the projected revenue to be spent on projects
identified on the SSTP
• What stays the same?– The make up of the roundtable and the process for selecting projects to send
to the voters– The 25% discretionary money that goes back to each individual county– The lower LMIG match, would go from 30% to 10%– The 10 year duration– Anything else not expressly addressed in either HB 170 or 106
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Single County TSPLOST• Who Can Levy and How?
– On or after July 1, 2016, counties served by GRTA can call for the referendum– If 90% of the geographical area of a county is municipalized, then 60% of the
municipal population in a county can, by resolution, call for the referendum– On or after July 1, 2017, all other counties can levy so long as they are not in
an existing TIA region– Requires a meet and confer w/ municipalities– Process for project list development similar to that of SPLOST
• Rate, Duration, Use– Can be levied at a fractional rate up to 1% in .05% increments with an IGA and
up to .75% without. Max duration of 5 years– With an IGA, 30% projected revenues are to be used on SSTP projects– Broad definition of transportation purposes, can include operations
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Single County TSPLOST• When there is an IGA between the county and all cities:
– Can levy a fractional rate up to 1%– 30% of the projected revenues must include SSTP projects– Distribution between county and cities is based on the terms of the IGA
• When there is no IGA:– Can levy a fractional rate up to .75%– There is no 30% SSTP requirement– The distribution formula between the county and its cities defaults to a formula
based on the amount of expenditures made for transportation in the most recent three fiscal years
• The proportional amount is determined by dividing the average expended in previous 3 fiscal years by the aggregate average expended on transportation by county and all qualified municipalities during the same time frame
• Amounts include maintenance and operations• Distribution amounts shall be certified by the state auditor
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Single County TSPLOST• Additional Questions:
– Can we have more than one agreement or fractional levy in place at the same time?
– What if a project is in one county but another county benefits from it, can the two counties join together to fund the project?
– Do all the counties under the agreement have to pass the tax?– What if one county votes it down?– Do the rates in each county under the agreement have to be the
same?– Can a county and a city from another county enter an agreement to
levy the tax?– Does the levy in each county under the agreement have to be
proportional to the cost of the project in that county?
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Questions?
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Thank YouShaun Adams,
Associate Legislative Director
Association County Commissioners of Georgia
191 Peachtree Street NE, Suite 700Atlanta, Georgia 30303
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