HB 4169

House Engrossed
transportation;
  2026-2027
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
CHAPTER 141
HOUSE BILL 4169
AN
ACT
Amending section 28-339, Arizona
Revised Statutes; repealing section 28-6534, Arizona Revised Statutes;
amending title 28, chapter 18, article 2, Arizona Revised Statutes, by adding a
new section 28-6534; repealing section 28-7282, Arizona Revised
Statutes; relating to transportation.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 28-339, Arizona Revised
Statutes, is amended to read:
START_STATUTE28-339. State match advantage for rural transportation fund; allocation
of monies; definitions
A. The state match advantage for rural
transportation fund is established. The department shall administer
the fund. Monies in the fund are continuously appropriated.� The
fund consists of the following:
1. Monies appropriated by the legislature.
2. Any nonfederal gifts, grants, donations or other
amounts received from any public or private source for transportation projects.
3. Monies allocated pursuant to
section 28-6534.
B. On notice from the department, the state
treasurer shall invest and divest monies in the fund as provided by section 35-313,
and monies earned from investment shall be credited to the fund.
C. The department may establish any subaccount in
the fund that the department determines is necessary to carry out the purposes
of this section.
D. The department may not approve any expenditures
from the fund unless the expenditure is made in accordance with this section.
E. Monies in the fund shall be used only for the
following:
1. To reimburse up to fifty percent of the costs
associated with developing and submitting an application for a federal grant.
2. To provide a match or
reimbursement of a match for a federal grant.
3. To fund or reimburse design and other engineering
services expenditures that meet federal standards for projects eligible for a
federal grant. Applicants awarded funding for design and other
engineering services shall submit an application for a federal grant within two
years after the award or the award lapses and the applicant must repay any
expended monies to the fund. The applicant shall submit repayment
within thirty days after receiving an invoice from the department.
F. Except as provided in subsection G of this
section, the department shall suballocate monies in the fund to the following
five categories:
1. Twenty percent to projects located in counties
with a population of one hundred thousand persons or more for uses described in
subsection E, paragraphs 2 and 3 of this section.
2. Twenty percent to projects located in counties
with a population of less than one hundred thousand persons for uses described
in subsection E of this section.
3. Twenty percent to
projects located in municipalities with a population of ten thousand persons or
more for uses described in subsection E, paragraphs 2 and 3 of this section.
4. Twenty percent to
projects located in municipalities with a population of less than ten thousand
persons for uses described in subsection E of this section.
5. Except as provided in subsection L of this
section, twenty percent to the department for uses described in subsection E,
paragraphs 2 and 3 of this section.
G. A project located in a county with a population
of more than one million persons is not eligible for funding pursuant to
subsection F, paragraph 1 of this section. A project located in a
municipality that is partially or entirely located in an urbanized area of a
county with a population of more than one million persons is not eligible for
funding pursuant to subsection F, paragraph 3 or 4 of this
section. The department may not use monies pursuant to subsection F,
paragraph 5 of this section for projects that are located in an urbanized area
of a county with a population of more than one million persons.
H. An entity that is eligible to receive a federal
grant shall submit an application to the department to be eligible for an award
from the fund.� The entity must first obtain the approval of the applicable
metropolitan planning organization or council of governments before submitting
an application to the department. The department may establish an
application deadline and require additional documentation to ensure that an applicant is eligible for the federal
grant. The board may also determine the extent to which an applicant
has the technical and financial capacity to successfully complete the project.
I. On receipt of an application, the department
shall determine if the requirements of the notice of funding opportunity or the
federal statutes establishing the federal grant are met and if the approval
required under subsection H of this section is granted.� If the department
determines that the application meets the requirements and is complete, the
department shall forward the application to the departmental committee
established pursuant to section 28-6951 for a
recommendation. If a recommendation is made, the department shall
notify the chairperson of the board that the application is ready for
consideration and action by the board.
J. Once notified pursuant to subsection I of this
section, the chairperson of the board shall place the application on an agenda
for action within forty-five days after original receipt of the
notification.� The board may give preference to applicants that can demonstrate
any of the following:
1. The percentage of
matching monies provided by the applicant.
2. The extent that
the applicant will partner with other entities to deliver the project.
3. Other factors as
deemed appropriate by the board for the applicable federal grant.
K. The board may
approve, deny, modify or request more information on the application.� If the
board approves an award, the department shall execute an agreement with the
applicant regarding reimbursement and expenditures pursuant to subsection E of
this section.
L. On the department's
request, the board shall approve the use of monies as described in subsection
F, paragraph 5 of this section. The department may annually use up
to five percent of the monies earned in the previous fiscal year under
subsection B of this section to administer the fund.
M. If an applicant
receives an award pursuant to subsection E, paragraph 2 of this section but is
not able to secure the federal grant, the department shall make the award
monies available for other applications.
N. Beginning January 1 and July 1 of each year, the
board may redistribute the unawarded monies in the fund to ensure each category
under subsection F of this section receives a share of the monies based on the
percentages prescribed in subsection F of this section. The
department shall post the amount available for each category on the
department's website within thirty days after the approval of the
redistribution by the board.
O. Notwithstanding subsection J of this section and
based on available funding, the board may direct the department to close
applications for any category and return any unawarded applications to the
applicants.
P. The board shall rescind an award if an applicant
receives funding from another source for the same project and purpose in an
amount equal to or greater than the award made under this section.� The
applicant shall repay any monies expended from the fund within one year after
the date of the rescission resolution approved by the board.
Q. For the purposes of this section:
1. "Federal grant" means a federal
discretionary grant program administered by any federal agency for surface
transportation purposes.
2. "Urbanized area" means an urbanized
area as defined in the most recent decennial census certified by the United
States census bureau.END_STATUTE
Sec. 2. Repeal
Section 28-6534, Arizona Revised
Statutes, is repealed.
Sec. 3. Title
28, chapter 18, article 2, Arizona Revised Statutes, is amended by adding a new section 28-6534, to read:
START_STATUTE28-6534. Arizona highway user revenue fund distribution; state match
advantage for rural transportation fund
Not later than June 15 of each fiscal year, the
department shall ALLOCATE and transfer $2,500,000 of revenues from the Arizona
highway user revenue fund to the STATE match advantage for rural TRANSPORTATION
fund established by section 28-339. END_STATUTE
Sec. 4. Delayed repeal
Section 28-7282, Arizona Revised
Statutes, is repealed from and after June 30, 2035.
APPROVED BY THE GOVERNOR JUNE 13, 2026.
FILED IN THE OFFICE OF THE SECRETARY OF STATE JUNE 13, 2026.