Georgia’s General Assembly approved the Transportation Funding Act of 2015 (HB 170), a funding measure providing dedicated, predictable and sustainable revenue for the repair and maintenance of statewide roads and bridges.  It is projected that this new funding structure will generate more than $900 million derived from new and existing transportation sources. In addition, the fiscal year 2016 budget, which begins July 1, 2015, contains a $175 million bond package intended for transportation infrastructure improvements and transit system enhancements across Georgia. 

Much of the  of the bill was based upon findings of the Joint Study Committee on Critical Transportation Infrastructure Funding as well as extensive committee debate and public testimony throughout the legislative session.  The final version of HB 170 is the result of a bipartisan conference report approved by both chambers.  Governor Deal has indicated that he will sign the bill.

House Bill 170 meets criteria detailed in Joint Study Committee Report

• Addresses a minimum $1 billion funding shortfall for maintenance and modernization of Georgia’s roads and bridges
• Reduces the state’s maintenance backlog and 50 year repair and improvement cycle 
• Ensures all state funding intended for transportation is directed toward transportation
• Creates transparency, accountability and oversight of state transportation expenditures
• Reduces funding instability caused by fluctuating gas prices and a depleted federal Highway Trust Fund

Major Provisions within HB 170 

Sales Tax vs. Excise Tax

• Currently, Georgia’s state funding mechanism is a combination motor fuel sales tax and excise tax. This legislation converts that mechanism to an excise tax only funding model. The current 4% state sales tax paid on the total purchase of gas at the pump is eliminated. Instead, the 4% sales tax and 7.5 excise tax is replaced with a single $0.26 per gallon excise tax ($0.29 per gallon for diesel).
• This change closes a loophole that currently allows 1% of state sales tax, or the “fourth penny”, to be diverted the general fund for other purposes.
• Moving forward, all excise taxes collected from motor fuel will be used only for transportation, as stipulated by the state constitution.
• The excise tax will be indexed to the Consumer Price Index (CPI) until 2018 and fuel economy standards (CAFE) permanently in order to sustain transportation funding long-term.

Alternative Fuel Vehicles

• Currently, drivers of alternative fuel vehicles do not contribute to transportation funding though they do use Georgia roads, bridges and highways.  This legislation ensures all drivers contribute their share through a new user fee. 
• The fee is $200 annually for personal use vehicles and $300 annually for commercial vehicles.  This fee is intended to mirror what the average driver of a gasoline-powered vehicle pays in motor fuels taxes each year and is adjusted for inflation based on the CPI. 
• The $5,000 tax credit for electric vehicle purchases will be repealed on July 1, 2015.
• The $2,500 low-emission tax credit will be repealed on July 1, 2015.

Trucks

• Recognizing that heavier vehicles create more wear and tear to roadways, a new annual fee for trucks will be imposed.  The fee is $50 or $100, based on weight. This fee is NOT indexed to inflation. Revenue generated by the fee is to be dedicated to transportation purposes. 

Hotel Motel Tax (Clarified in HB 106)

• A $5 per night fee on lodging accommodations (hotels and motels tax) is created. HB 106 later clarified this definition to say that it will not apply to campgrounds, state parks, etc. 
• Expresses the intention that the fee revenues be used for transportation purposes and creates a trigger to terminate the collection of the fees if they are not appropriated to transportation purposes after a 2-year period.
• “Transportation purposes” are defined for this fee as roads, bridges, public transit, rails, airports, buses, seaports, accompanying infrastructure and services to provide access to transportation facilities, and general obligation debt and other multiyear obligations issues to finance such purposes.
• Excludes extended stay occupants (lodging provided for more than 30 consecutive days). 

Aviation Fuel

• This legislation sunsets the current 1% sales and use tax exemption for aviation fuel. It also requires local sales tax on aviation fuel to be at or below levels levied prior to January 1, 2014. 
• In accordance with federal law, this bill requires that all revenue derived from aviation fuel be spent on aviation purposes beginning July 1, 2017.

Effect on the Transportation Investment Act of 2010

• Regions that Passed a TSPLOST in 2012
• Counties in a region which approved TIA in 2012 will be eligibile to adopt a new county TSPLOST after their current 10 year tax expires.
• County TSPLOSTs may not exceed 5 years.  All revenue must be dedicated to transportation and at least 30% of estimated revenue must be spent on projects in the State Transportation Improvement Plan (STIP).
• Voters must approve this sales tax increase through a referendum.
• All sales tax exemptions in the original TIA continue to exist.

• Regions that Rejected a TSPLOST in 2012
• This bill amends the TIA to allow individual counties, not currently in a region with an approved TSPLOST, to adopt their own TSPLOST. Each county may adopt one additional TSPLOST at a fractional rate up to 1%.
• Counties that participate in a regional mass transportation system (Counties served by GRTA and MARTA) may adopt a TSPLOST beginning July 1, 2015.  All other counties may begin July 1, 2017.
• County TSPLOSTs may not exceed 5 years.  All revenue must be dedicated to transportation and at least 30% of estimated revenue must be spent on projects in the State Transportation Improvement Plan (STIP).
• Voters must approve this sales tax increase through a referendum.
• All sales tax exemptions in the original TIA continue to exist.

Local Taxes

• This new funding model has minimal impact on existing local sales taxes (HOST, LOST, MOST, SPLOST and ESPLOST).
• Existing taxes will remain unchanged until their expiration date. 
• New taxes approved by voters after July 1, 2015, may continue to be imposed at a rate of 1% of the retail sales price of motor fuels, not to exceed $3.00.

Transit Improvements

• $75 million in bonding included in FY16 budget, to be administered by State Road & Tollway Authority. Will be distributed among the various transit agencies across the state.
• Elimination of the requirement that MARTA spend 50% of tax revenue on capital improvements and 50% on maintenance and operations (included in HB 213).

Governor’s Authority

• This legislation prohibits the Governor from suspending the collection of motor fuel or aviation fuel taxes, unless a state of emergency has been declared.
• Any suspension of those taxes will only be in effect until the next legislative session and requires approval by two-thirds of the General Assembly for the suspension to remain in effect.

Georgia Transportation Infrastructure Bank

• Under this legislation, preference for loans may be given to eligible projects in Tier 1 and Tier 2 counties.
• Preference for grants and other assistance may be given to projects that have local financial support.