SENATE, No. 2352

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED JUNE 9, 2016

 


 

Sponsored by:

Senator  SAMUEL D. THOMPSON

District 12 (Burlington, Middlesex, Monmouth and Ocean)

 

 

 

 

SYNOPSIS

     Revises “New Jersey Transportation Trust Fund Authority Act” and increases the motor fuels tax.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the New Jersey Transportation Trust Fund Authority increasing the motor fuels tax, and amending various parts of the statutory law.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

1.  Section 3 of P.L.1984, c.73 (C.27:1B-3) is amended to read as follows:

     3.  The following words or terms as used in this act shall have the following meaning unless a different meaning clearly appears from the context:

     [a.] "Act" means this New Jersey Transportation Trust Fund Authority Act of 1984 as amended and supplemented.

     [b.] "Authority" means the New Jersey Transportation Trust Fund Authority created by section 4 of this act.

     [c.] "Bonds" means bonds issued by the authority pursuant to the act and includes prior bonds and transportation program bonds.

     "Circle of Mobility" means an essential group of related transit projects that include (1) the New Jersey Urban Core Project, as defined in section 3031 of the "Intermodal Surface Transportation Efficiency Act of 1991," Pub.L.102-240, and consisting of the following elements: Secaucus Transfer, Kearny Connection, Waterfront Connection, Northeast Corridor Signal System, Hudson River Waterfront Transportation System, Newark-Newark International Airport-Elizabeth Transit Link, a rail connection between Penn Station Newark and Broad Street Station, Newark, New York Penn Station Concourse, and the equipment needed to operate revenue service associated with improvements made by the project, and (2) the modification and reconstruction of the West Shore Line in Bergen County connected to Allied Junction/Secaucus Transfer Meadowlands Rail Center; the construction of a rail station and associated components at the Meadowlands Sports Complex; the modification and reconstruction of the Susquehanna and Western Railway, as defined and provided in section 3035 (a) of the "Intermodal Surface Transportation Efficiency Act of 1991"; the modification and reconstruction of the Lackawanna Cutoff Commuter Rail Line connecting Morris, Sussex and Warren Counties to the North Jersey Transportation Rail Centers; and commuter rail service in the central New Jersey region terminating at the proposed Lakewood Transportation Center in Ocean County or other location, as determined by the Board of the New Jersey Transit Corporation, pursuant to a resolution of the board providing for the achievement of a consensus among the interested parties as to the direction of the proposed rail line; provided, however, that this 2000 amendatory act shall not be construed as affecting any priorities which may have been assigned to any other project in the Circle of Mobility.

     [d.]   "Commissioner" means the Commissioner of Transportation.

     [e.] "Department" means the Department of Transportation.

     [f.] "Federal aid highway" means any highway within the State in connection with which the State receives payment or reimbursement from the federal government under the terms of Title 23, United States Code or any amendment, successor, or replacement thereof, for the purposes contained in the act.

     [g.]   "Federal government" means the United States of America, and any [officer]office, department, board, commission, bureau, division, corporation, agency or instrumentality thereof.

     [h.  "South Jersey Transportation Authority" means the public corporation created by section 4 of P.L.1991, c.252 (C.27:25A-4) or its successor.

     i.]   "New Jersey Highway Authority" means the public corporation created by section 4 of P.L.1952, c.16 (C.27:12B-4) or its successor.

     [j.] "New Jersey Turnpike Authority" means the public corporation created by section 3 of P.L.1948, c.454 (C.27:23-3) or its successor.

     [k.] "Notes" means the notes issued by the authority pursuant to the act.

     "Permitted maintenance" means, in relation to public transportation projects and transportation projects, direct costs of work necessary for preserving or maintaining the useful life of public transportation projects and transportation projects respectively, provided the work performed is associated with the acquisition, installation and rehabilitation of components which are not included in the normal operating maintenance of equipment and facilities or replaced on a scheduled basis.  The work shall ensure the useful life of the public transportation project or transportation project for not less than five years and shall not include routine maintenance or inspection of equipment and facilities that is conducted on a scheduled basis.  This definition shall not apply to the term “maintenance” as used in the definition of "public highways."  In relation to public highways, “permitted maintenance” means the direct costs of work necessary for preserving or maintaining the useful life of public highways, provided the work is not associated with the regular and routine maintenance of public highways and their components.  The work shall ensure the useful life of the transportation project for not less than five years.

     "Prior bonds" means bonds issued pursuant to the authorization contained in P.L.1995, c.108 and P.L.2006, c.3 and any bonds issued to refund such prior bonds.

     [l.] "Public highways" means public roads, streets, expressways, freeways, parkways, motorways and boulevards, including bridges, tunnels, overpasses, underpasses, interchanges, rest areas, express bus roadways, bus pullouts and turnarounds, park-ride facilities, traffic circles, grade separations, traffic control devices, the elimination or improvement of crossings of railroads and highways, whether at grade or not at grade, bicycle and pedestrian pathways and pedestrian and bicycle bridges traversing public highways and any facilities, equipment, property, rights of way, easements and interests therein needed for the construction, improvement and maintenance of highways.

     [m."Public transportation project" means, in connection with public transportation service, passenger stations, shelters and terminals, automobile parking facilities, ferries and ferry facilities, including capital projects for ferry terminals, approach roadways, pedestrian accommodations, parking, docks, and other necessary land-side improvements, ramps, track connections, signal systems, power systems, information and communication systems, roadbeds, transit lanes or rights of way, equipment storage, pedestrian walkways and bridges connecting to passenger stations and servicing facilities, bridges, grade crossings, rail cars, locomotives, motorbuses and other motor vehicles, maintenance and garage facilities, revenue handling equipment and any other equipment, facility or property useful for or related to the provision of public transportation service.

     "South Jersey Transportation Authority" means the public corporation created by section 4 of P.L.1991, c.252 (C.27:25A-4) or its successor.

     [n.] "State agency" means any [officer]office, department, board, commission, bureau, division, agency or instrumentality of the State.

     [o.] "Toll road authorities" means and includes the New Jersey Turnpike Authority, the New Jersey Highway Authority, or its successor, and the South Jersey Transportation Authority.

     "Transportation program bonds" means bonds issued by the authority pursuant to the authorization contained in P.L.2012, c.13, and P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and any bonds issued to refund such transportation program bonds.

     [p.] "Transportation project" means, in addition to public highways and public transportation projects, any equipment, facility or property useful or related to the provision of any ground, waterborne or air transportation for the movement of people and goods including rail freight infrastructure, which equipment, facility, or property may be acquired by purchase or lease.

     [q.] "Transportation system" means public highways, public transportation projects, other transportation projects, and all other surface, airborne and waterborne methods of transportation for the movement of people and goods.

     [r.   "Permitted maintenance" means, in relation to public transportation projects, direct costs of work necessary for preserving or maintaining the useful life of public transportation projects, provided the work performed is associated with the acquisition, installation and rehabilitation of components which are not included in the normal operating maintenance of equipment and facilities or replaced on a scheduled basis.  The work shall ensure the useful life of the project for not less than five years and shall not include routine maintenance or inspection of equipment and facilities that is conducted on a scheduled basis.  This definition shall not apply to the term "maintenance" as used in subsection l. of this section.  For purposes of this subsection, "permitted maintenance" means, in relation to public highways, the direct costs of work necessary for preserving or maintaining the useful life of public highways, provided the work is not associated with the regular and routine maintenance of public highways and their components.  The work shall ensure the useful life of the project for not less than five years.

     s.     "Circle of Mobility" means an essential group of related transit projects that include (1) the New Jersey Urban Core Project, as defined in section 3031 of the "Intermodal Surface Transportation Efficiency Act of 1991," Pub.L.102-240, and consisting of the following elements: Secaucus Transfer, Kearny Connection, Waterfront Connection, Northeast Corridor Signal System, Hudson River Waterfront Transportation System, Newark-Newark International Airport-Elizabeth Transit Link, a rail connection between Penn Station Newark and Broad Street Station, Newark, New York Penn Station Concourse, and the equipment needed to operate revenue service associated with improvements made by the project, and (2) the modification and reconstruction of the West Shore Line in Bergen County connected to Allied Junction/Secaucus Transfer Meadowlands Rail Center; the construction of a rail station and associated components at the Meadowlands Sports Complex; the modification and reconstruction of the Susquehanna and Western Railway, as defined and provided in section 3035 (a) of the "Intermodal Surface Transportation Efficiency Act of 1991"; the modification and reconstruction of the Lackawanna Cutoff Commuter Rail Line connecting Morris, Sussex and Warren Counties to the North Jersey Transportation Rail Centers; and commuter rail service in the central New Jersey region terminating at the proposed Lakewood Transportation Center in Ocean County or other location, as determined by the Board of the New Jersey Transit Corporation, pursuant to a resolution of the board providing for the achievement of a consensus among the interested parties as to the direction of the proposed rail line; provided, however, that this 2000 amendatory act shall not be construed as affecting any priorities which may have been assigned to any other project in the Circle of Mobility.

     t.     "Prior bonds" means bonds issued pursuant to the authorization contained in P.L.1995, c.108 and P.L.2006, c.3 and any bonds issued to refund such prior bonds.

     u.    "Transportation program bonds" means bonds issued pursuant to the authorization contained in P.L.2012, c.13, and any bonds issued to refund such transportation program bonds.]

(cf:  P.L.2012, c.13, s.1)

 

     2.  Section 9 of P.L.1984, c.73 (C.27:1B-9) is amended to read as follows:

     9.  a.  The authority shall have the power and is hereby authorized after November 15, 1984 and from time to time thereafter to issue its bonds, notes or other obligations in principal amounts as in the opinion of the authority shall be necessary to provide for any of its corporate purposes, including the payment, funding or refunding of the principal of, or interest or redemption premiums on, any bonds, notes or other obligations issued by it, whether the bonds, notes, obligations or interest to be funded or refunded have or have not become due; and to provide for the security thereof and for the establishment or increase of reserves to secure or to pay the bonds, notes or other obligations or interest thereon and all other reserves and all costs or expenses of the authority incident to and necessary or convenient to carry out its corporate purposes and powers; and in addition to its bonds, notes and other obligations, the authority shall have the power to issue subordinated indebtedness, which shall be subordinate in lien to the lien of any or all of its bonds or notes.  No resolution or other action of the authority providing for the issuance of bonds, refunding bonds, notes, or other obligations shall be adopted or otherwise made effective by the authority without the prior approval in writing of the Governor and the State Treasurer.

     b.    Except as may be otherwise expressly provided in the act or by the authority:

     (1)   Every issue of bonds or notes shall be general obligations payable out of any revenues or funds of the authority, subject only to any agreements with the holders of particular bonds or notes pledging any particular revenues or funds.  The authority may provide the security and payment provisions for its bonds or notes as it may determine, including (without limiting the generality of the foregoing) bonds or notes as to which the principal and interest are payable from and secured by all or any portion of the revenues of and payments to the authority, and other moneys or funds as the authority shall determine, provided that for transportation program bonds or notes issued in anticipation of such transportation program bonds, only revenues dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds," may be used for such payment;

     (2)   In addition, the authority may issue notes, in anticipation of the issuance of the bonds, provided that the issuance of such notes shall be subject to the bonding limitations as provided in subsection i. of this section, and the payment of such notes if issued in anticipation of the issuance of transportation program bonds shall be paid solely from revenues dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds."  The authority may also issue notes in anticipation of the receipt of appropriations, grants, reimbursements or other funds, including without limitation grants from the federal government for federal aid highways or public transportation systems, the principal of or interest on which, or both, shall be payable out of the proceeds of appropriations, grants, reimbursements or other funds, including without limitation grants from the federal government for federal aid highways or public transportation systems.  Such notes shall not be subject to the bonding limitations as provided in subsection i. of this section; and

     (3)   The authority may also enter into bank loan agreements, lines of credit and other security agreements as authorized pursuant to subsection h. of section 6 of P.L.1984, c.73 (C.27:1B-6) and obtain for or on its behalf letters of credit in each case for the purpose of securing its bonds, notes or other obligations or to provide direct payment of any costs which the authority is authorized to pay by this act and to secure repayment of any borrowings under the loan agreement, line of credit, letter of credit or other security agreement by its bonds, notes or other obligations or the proceeds thereof or by any or all of the revenues of and payments to the authority or by any appropriation, grant or reimbursement to be received by the authority and other moneys or funds as the authority shall determine, provided that for any such agreements entered into in connection with transportation program bonds issued pursuant to the authorization contained in subsection i. of this section, or notes issued in anticipation of such transportation program bonds, only revenues dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds," may be used for such payment.

     c.     Whether or not the bonds and notes are of the form and character as to be negotiable instruments under the terms of Title 12A, Commercial Transactions, New Jersey Statutes, the bonds and notes are hereby made negotiable instruments within the meaning of and for all the purposes of Title 12A of the New Jersey Statutes.

     d.    Bonds or notes of the authority shall be authorized by a resolution or resolutions of the authority and may be issued in one or more series and shall bear the date, or dates, mature at the time or times, bear interest at the rate or rates of interest per annum, be in the denomination or denominations, be in the form, carry the conversion or registration privileges, have the rank or priority, be executed in the manner, be payable from the sources, in the medium of payment, at the place or places within or without the State, and be subject to the terms of redemption (with or without premium) as the resolution or resolutions may provide.  Bonds or notes may be further secured by a trust indenture between the authority and a corporate trustee within or without the State.  All other obligations of the authority shall be authorized by resolution containing terms and conditions as the authority shall determine.

     e.     Bonds, notes or other obligations of the authority may be sold at public or private sale at a price or prices and in a manner as the authority shall determine, either on a negotiated or on a competitive basis.  Every bond, or refunding bond, issued on or after the effective date of P.L.2006, c.3 (C.27:1B-22.2 et al.) shall mature and be paid no later than 31 years from the date of the issuance of that bond or refunding bond.

     f.     Bonds or notes may be issued and other obligations incurred under the provisions of the act without obtaining the consent of any department, division, commission, board, bureau or agency of the State, other than the approval as required by subsection a. of this section, and without any other proceedings or the happening of any other conditions or other things than those proceedings, conditions or things which are specifically required by the act.

     g.    Bonds, notes and other obligations of the authority issued or incurred under the provisions of the act shall not be in any way a debt or liability of the State or of any political subdivision thereof other than the authority and shall not create or constitute any indebtedness, liability or obligation of the State or of any political subdivision or be or constitute a pledge of the faith and credit of the State or of any political subdivision, but all bonds, notes and obligations, unless funded or refunded by bonds, notes or other obligations of the authority, shall be payable solely from revenues or funds pledged or available for their payment as authorized in the act.  Each bond, note or other obligation shall contain on its face a statement to the effect that the authority is obligated to pay the principal thereof or the interest thereon only from revenues or funds of the authority, and for transportation program bonds and agreements securing such transportation program bonds only from revenues dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds," and that neither the State nor any political subdivision thereof is obligated to pay the principal or interest and that neither the faith and credit nor the taxing power of the State or any political subdivision thereof is pledged to the payment of the principal of or the interest on the bonds, notes or other obligations.  For the purposes of this subsection, political subdivision does not include the authority.

     h.    All expenses incurred in carrying out the provisions of the act shall be payable solely from the revenues or funds provided or to be provided under or pursuant to the provisions of the act and nothing in the act shall be construed to authorize the authority to incur any indebtedness or liability on behalf of or payable by the State or any political subdivision thereof.

     i.     The authority shall minimize debt incurrence by first relying on appropriations and other revenues available to the authority before incurring debt secured by State revenues to meet its statutory purposes.  Commencing with the fiscal year beginning July 1, 1995 and ending within the fiscal year beginning July 1, 2005, the authority shall not incur debt in any fiscal year in excess of $650,000,000, except that if that permitted amount of debt, or any portion thereof, is not incurred in a fiscal year it may be incurred in a subsequent fiscal year.  Commencing with the fiscal year beginning July 1, 2006 and ending with the fiscal year beginning on July 1, 2010, the authority shall not incur debt for any fiscal year in excess of $1,600,000,000, reduced in each of those fiscal years by the amount by which the appropriation of State funds to the Transportation Trust Fund Account for that fiscal year shall exceed $895,000,000; provided, however, that if a portion of that permitted amount of debt, less any reduction as provided above, is not incurred in a fiscal year, an amount not greater than the unused portion may be incurred in a subsequent fiscal year in addition to the amount otherwise permitted.  Debt permitted for the fiscal year beginning July 1, 2006 may be incurred prior to July 1, 2006.  The authority shall not issue transportation program bonds in excess of $1,247,000,000 for the fiscal year beginning July 1, 2012, in excess of $849,200,000 for the fiscal year beginning July 1, 2013, in excess of $735,300,000 for the fiscal year beginning July 1, 2014, and in excess of $626,800,000 for the fiscal year beginning July 1, 2015, except that (1) if that permitted amount of transportation program bonds, or any portion thereof, is not incurred in a fiscal year, it may be issued in a subsequent fiscal year and (2) 30 percent of the permitted amount of transportation program bonds for a fiscal year may be issued in the fiscal year preceding such fiscal year provided that (a) any transportation program bonds issued pursuant to this paragraph shall be deducted from the authorization for the fiscal year from which it was taken, and (b) the proceeds of any such transportation program bonds shall not be encumbered until the fiscal year from which the deduction of the authorization was taken pursuant to this paragraph.  Transportation program bonds authorized to be issued for the fiscal year beginning July 1, 2012 may be issued prior to July 1, 2012.  Commencing with the fiscal year beginning July 1, 2016, and in each subsequent fiscal year thereafter, the authority shall not issue transportation program bonds in excess of $1,400,000,000 per year.  Any increase in this limitation shall only occur if so provided for by law.  In computing the foregoing limitation as to the amount of bonds the authority may issue, the authority may exclude any bonds, notes or other obligations, including subordinated obligations of the authority, issued for refunding purposes.  The payment of debt service on transportation program bonds and any agreements issued in connection with such transportation program bonds shall be paid solely from revenues dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds."

     j.     Upon the decision by the authority to issue refunding bonds pursuant to this section, and prior to the sale of those bonds, the authority shall transmit to the Joint Budget Oversight Committee, or its successor, a report that a decision has been made, reciting the basis on which the decision was made, including an estimate of the debt service savings to be achieved and the calculations upon which the authority relied when making the decision to issue refunding bonds.  The report shall also disclose the intent of the authority to issue and sell the refunding bonds at public or private sale and the reasons therefor.

     k.    The Joint Budget Oversight Committee, or its successor, shall have authority to approve or disapprove the sale of refunding bonds as included in each report submitted in accordance with subsection j. of this section.  The committee shall approve or disapprove the sale of refunding bonds within 10 business days after physical receipt of the report.  The committee shall notify the authority in writing of the approval or disapproval as expeditiously as possible.

     l.     No refunding bonds shall be issued unless the report has been submitted to and approved by the Joint Budget Oversight Committee, or its successor, as set forth in subsection k. of this section.

     m.   Within 30 days after the sale of the refunding bonds, the authority shall notify the Joint Budget Oversight Committee, or its successor, of the result of that sale, including the prices and terms, conditions and regulations concerning the refunding bonds, and the actual amount of debt service savings to be realized as a result of the sale of refunding bonds.

     n.    The Joint Budget Oversight Committee, or its successor, shall, however, review all information and reports submitted in accordance with this section and may, on its own initiative, make observations and recommendations to the authority or to the Legislature, or both, as it deems appropriate.

     o.    No refunding bonds shall be issued unless the authority shall first determine that the present value of the aggregate principal of and interest on the refunding bonds is less than the present value of the aggregate principal of and interest on the outstanding bonds to be refinanced, except that, for the purposes of this limitation, present value shall be computed using a discount rate equal to the yield of those refunding bonds, and yield shall be computed using an actuarial method based upon a 360-day year with semiannual compounding and upon the prices paid to the authority by the initial purchasers of those refunding bonds.

(cf:  P.L.2012, c.13, s.3)

 

     3.  Section 20 of P.L.1984, c.73 (27:1B-20) is amended to read as follows

     20.  There is hereby established in the General Fund an account entitled "Transportation Trust Fund Account," which shall consist of two subaccounts entitled: "Transportation Trust Fund Account - Subaccount for Debt Service for Prior Bonds" and "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds."  During the fiscal year beginning July 1, 1984 and during each succeeding fiscal year in which the authority has bonds, notes or other obligations outstanding, the treasurer shall credit to the "Transportation Trust Fund Account - Subaccount for Debt Service for Prior Bonds" a portion of the revenues derived from the following, as determined by the treasurer, and to the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds" only revenues derived under subsection a. of this section and from the petroleum products gross receipts and sales tax as set forth in subsection d. of this section:

     a.     An amount equivalent to [the] all revenue derived from [$0.105 per gallon from] the collection of the tax imposed on the sale of motor fuels pursuant to chapter 39 of Title 54 of the Revised Statutes, as provided in Article VIII, Section II, paragraph 4 of the State Constitution[, provided, however, such amount during any fiscal year shall not be less than $483,000,000];

     b.    (Deleted by amendment, P.L.2000, c.73).

     c.     An amount equivalent to moneys received by the State in accordance with contracts entered into with toll road authorities or other State agencies, provided that effective with the fiscal year beginning July 1, 1988 the amount so credited shall not be less than $24,500,000.00 in any fiscal year.

     The treasurer shall also credit to the "Transportation Trust Fund Account - Subaccount for Debt Service for Prior Bonds," in accordance with a contract between the treasurer and the authority, an amount equivalent to the sum of the revenues due from the increase of fees for motor vehicle registrations collected pursuant to the amendment to R.S.39:3-20 made by section 32 of P.L.1984, c.73 [and from the increase in the tax on diesel fuels imposed pursuant to the amendment to R.S.54:39-27 made by section 35 of P.L.1984, c.73 and by P.L.1987, c.460, and as amended by section 18 of P.L.1992, c.23, and repealed by section 56 of P.L.2010, c.22 and now imposed pursuant to section 3 of P.L.2010, c.22 (C.54:39-103)], provided that the total amount credited during the fiscal year beginning July 1, 1984 shall not be less than $20,000,000.00 and that the total amount credited during the fiscal year beginning July 1, 1985 and during every fiscal year thereafter shall not be less than $30,000,000.00.

     In addition to the amounts credited to the account by this section[,] : commencing with the fiscal year beginning July 1, 1995 and every fiscal year thereafter, there shall be appropriated from the General Fund such additional amounts as are necessary to carry out the provisions of this act and beginning July 1, 2000 the fees collected pursuant to subsection a. of section 68 of P.L.1990, c.8 (C.17:33B-63) shall be credited to the account for the purposes of this act, provided, however, the amount credited from such fees during any fiscal year shall not be less than $60,000,000.

     d.    In addition to the amount credited in subsection a. of this section, beginning January 1 following approval by the voters an amount equivalent to the revenue derived from the tax imposed on the sale of petroleum products pursuant to P.L.1990, c.42 (C.54:15B-1 et seq.), provided, however, such amount shall not be less than $100,000,000 in the period January 1 through June 30 following approval by the voters and shall not be less than $200,000,000 in any fiscal year through the fiscal year commencing July 1, 2015; and in the fiscal year commencing July 1, 2016, an amount equivalent to all revenue derived from the sale of petroleum products pursuant to P.L.1990, c.42 (C.54:15B-1 et seq.) and in each year thereafter; the fiscal year commencing July 1, 2001 and for each fiscal year thereafter an amount equivalent to the revenue derived from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) on the sale of new motor vehicles, provided, however, that such amount shall not be less than $200,000,000 for the fiscal year commencing July 1, 2003 and for each fiscal year thereafter, as provided in Article VIII, Section II, paragraph 4 of the State Constitution.

     No later than the fifth business day of the month following the month in which a credit has been made, the treasurer shall pay to the authority, for its purposes as provided herein, the amounts then credited to the "Transportation Trust Fund Account - Subaccount for Debt Service for Prior Bonds" and "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds," provided that the payments to the authority shall be subject to and dependent upon appropriations being made from time to time by the Legislature of the amounts thereof for the purposes of the act, and further provided that the revenues deposited into the "Transportation Trust Fund Account - Subaccount for Debt Service for Transportation Program Bonds" shall consist solely of revenues which are dedicated pursuant to the New Jersey Constitution, including Article VIII, Section II, paragraph 4, and subsections a. and d. of this section.

(cf:  P.L.2012, c.13, s.5)

 

     4.  Section 8 of P.L.1987, c.460 (C.27:1B-21.1) is amended to read as follows:

     8. a. Commencing with the report of the commissioner, as may be amended, required to be submitted pursuant to section 22 of P.L.1984, c.73 (C.27:1B-22) on or before March 1, 2006 and on each succeeding March 1 thereafter through March 1, 2015, the annual amount so reported by the commissioner for proposed projects shall not exceed $1,600,000,000 exclusive of federal funds, and beginning with the report due March 1, 2016 the amount so reported by the commissioner for proposed projects shall not exceed $1,800,000,000, and each succeeding year thereafter the amount so reported by the commissioner for proposed projects shall not exceed $1,800,000,000 plus an additional $50,000,000 increase each year thereafter.

     b.    For the fiscal year beginning on July 1, 2006 and for each fiscal year thereafter through the fiscal year beginning on July 1, 2011, the total annual amount authorized to be appropriated from the revenues and other nonfederal funds of the New Jersey Transportation Trust Fund Authority for the projects listed in the appropriations act pursuant to section 21 of P.L.1984, c.73 (C.27:1B-21) shall not exceed $1,600,000,000, all amounts exclusive of federal funds.  The total amount authorized to be appropriated from the revenues and other nonfederal funds of the New Jersey Transportation Trust Fund Authority for the projects listed in the appropriations act pursuant to section 21 of P.L.1984, c.73 (C.27:1B-21) shall not exceed: $1,247,000,000 for the fiscal year beginning on July 1, 2012; $1,224,000,000 for the fiscal year beginning on July 1, 2013; $1,225,000,000 for the fiscal year beginning on July 1, 2014; and $1,247,000,000 for the fiscal year beginning on July 1, 2015.  The total amount authorized to be appropriated from the revenues and other nonfederal funds of the New Jersey Transportation Trust Fund Authority for the projects listed in the appropriations act pursuant to section 21 of P.L.1984, c.73 (C.27:1B-21) shall not exceed $1,800,000,000 in the fiscal year beginning on July 1, 2016 and in each subsequent fiscal year the amount shall not exceed $1,800,000,000 plus an additional $50,000,000 increase each year thereafter.

     c.     (Deleted by amendment, P.L.1991, c.40.)

     d.    (Deleted by amendment, P.L.1992, c.10).

     e.     The State Auditor shall provide for a unified annual audit of expenditures from the "Special Transportation Fund," established by section 21 of P.L.1984, c.73 (C.27:1B-21), in order to determine that these funds are expended for costs eligible for funding from the authority and in a manner consistent with appropriations made by the Legislature.  The findings of such audits shall be transmitted to the presiding officer of each House of the Legislature, and to the Chair of the Senate Budget and Appropriations Committee, the Senate Transportation Committee, the Assembly Appropriations Committee, and the Assembly Transportation and Communications Committee or their successors.

     f.     The State Auditor shall review bond issuances of the authority and report to the Joint Budget Oversight Committee and to the members of the Senate Budget and Appropriations Committee and the Assembly Appropriations Committee, or their successors, on the status of the bonds of the authority and projects financed from the proceeds of the bonds.  The report shall include the investment status of all unexpended bond proceeds and provide a description of any bond issues expected during a fiscal year, including type of issue, estimated amount of bonds to be issued and the expected month of sale.

(cf:  P.L.2012, c.13, s.7)

 

     5.  Section 22 of P.L.1984, c.73 (27:1B-22) is amended to read as follows: 

     22.  The commissioner shall prepare and submit the following reports to the Governor, the Legislature, and the Financial Policy Review Board, established pursuant to section 6 of P.L.2006, c.3 (C.27:1B-22.2) under the terms set forth below: a Transportation Master Plan, a Statewide Capital Investment Strategy, an Annual Transportation Capital Program, a Transportation Trust Fund Authority Financial Plan, and a Five-Year Capital Plan.

     a.     To the end that the transportation system of the State shall be planned in an orderly and efficient manner and that the Legislature shall be advised of the nature and extent of public highways, public transportation projects and other transportation projects contemplated to be financed under this act, the department shall submit a master plan, as provided in subsection (a) of section 5 of P.L.1966, c.301 (C.27:1A-5).  Notwithstanding the provisions of that act, the plan shall be for a period of five years and shall be submitted to the Commission on Capital Budgeting and Planning, the Chairman of the Senate Transportation Committee and the Chairman of the Assembly Transportation and Communications Committee, or their successors, and the Legislative Budget and Finance Officer, and the metropolitan planning organizations, on or before March 1, 2001, and at five-year intervals thereafter.  The master plan shall set the direction for the department's overall Capital Investment Strategy and subsequent annual Transportation Capital Programs submitted to the Legislature for approval pursuant to this section.  This master plan shall, to the extent practicable, conform to all federal requirements for Statewide transportation planning.

     b.    The Department of Transportation, in conjunction with the New Jersey Transit Corporation, the New Jersey Turnpike Authority, and the South Jersey Transportation Authority, shall prepare a "Statewide Capital Investment Strategy" for at least a five-year period which shall contain, at a minimum, a statement of the goals of the department, the corporation, and the toll road authorities in major selected policy areas and the means by which the goals are to be attained during that period, using quantitative measures where appropriate.  The Statewide Capital Investment Strategy may be updated and submitted no later than March 1 of each year.  The Statewide Capital Investment Strategy shall provide for a multi-modal, intermodal, seamless, technologically advanced, and secure transportation system.  It shall recommend investment for major program categories, set overall goals for investment in the State's infrastructure, and develop program targets and performance measures.  It may rely on infrastructure management systems as developed by the department to assess bridge conditions, pavement conditions, bridge, traffic and pedestrian safety, traffic congestion and public transit facilities. With respect to pavement conditions, the department shall set as a priority the utilization of efficient cost-effective materials and treatments as  stated in section 9 of P.L.2000, c.73 (C.27:1B-21.22). In the event that there exist appropriate circumstances for the use of micro-surfacing and cold-in-place recycling, the department shall establish as a special priority the use of these materials and surface treatments.  The goals of the Capital Investment Strategy shall include, but not be limited to, reduction of vehicular and pedestrian accidents, reduction in the backlog of projects, including one-half of the structurally deficient bridge repair projects and pavement deficiencies, and an increase in lane miles of bicycle paths, with a goal of constructing an additional 1,000 lane miles of bicycle paths in five years to reduce traffic congestion and for recreational uses. The construction of bicycle and pedestrian lanes, paths and facilities shall be subject to no stricter environmental requirements than are provided pursuant to federal law and regulations for such lanes, paths and facilities, notwithstanding the provisions to the contrary of State law and regulations, including State Executive Order No. 215 of 1989.  With respect to the New Jersey Transit Corporation, the Statewide Capital Investment Strategy shall deal with the corporation's overall goal to keep the public transportation system in a state of good repair and, more specifically, in the area of bus transportation, present a strategy and a preliminary timetable for the replacement of the current diesel bus fleet with a fleet of buses which have reduced emission of air pollutants.  The corporation shall consider the feasibility of buses with improved pollution controls and that reduce particulate emissions and buses powered by fuel other than conventional diesel fuel, such as compressed natural gas vehicles, hybrid vehicles, fuel cell vehicles, biodiesel vehicles, vehicles operated on ultra low sulfur fuel, and vehicles operated on any other bus fuel approved by the United States Environmental Protection Agency[, and the like].  The corporation may consider as part of its strategy, cooperative efforts with bus manufacturers, and the solicitation of federal support, in developing a "clean bus" with air pollution controls superior to currently available technology.  For the fiscal year beginning July 1, 2007 and each fiscal year thereafter, all buses purchased by the New Jersey Transit Corporation shall be buses with improved pollution controls and that reduce particulate emissions, or buses powered by fuel other than conventional diesel fuel, such as compressed natural gas vehicles, hybrid vehicles, fuel cell vehicles, biodiesel vehicles, vehicles operated on ultra low sulfur fuel, or vehicles operated on any other bus fuel approved by the United States Environmental Protection Agency[, and the like].  In the event that the corporation is not able to meet the bus purchase requirements set forth in this section with respect to any fiscal year, prior to the commencement of the fiscal year, the board of the corporation shall by resolution submit a report to the Legislature detailing its inability to meet the requirements and the reasons therefor and shall submit the report to the Senate and General Assembly when both houses are in session, including therein a request to be exempted from the bus purchase requirements of this section with regard to the fiscal year in question.  The President of the Senate and the Speaker of the General Assembly shall cause the date of submission to be entered upon the Senate Journal and the Minutes of the General Assembly.  If a joint resolution approving the exemption is passed by the Legislature and signed by the Governor prior to the commencement of the fiscal year in question, the corporation shall be exempt from the requirements for that fiscal year.

     In the fiscal year beginning on July 1, 2007 and in each fiscal year thereafter, in the year prior to the year in which final engineering is anticipated to start on any project which extends the reach of the New Jersey Transit rail or light rail system, the New Jersey Transit Corporation shall be required to identify and include in the annual Statewide Capital Investment Strategy the required State financial assistance to support operation of the incremental service for the first three years and the projected fare box recovery ratio at the commencement of the fourth year of operation of each project.

     The Statewide Capital Investment Strategy shall also detail the planned investment of capital funds for public transportation projects of companies other than the New Jersey Transit Corporation engaged in the business of providing motor bus transportation.  The Statewide Capital Investment Strategy shall demonstrate that such investment adequately addresses the finding in section 2 of P.L.1979, c.150 (C.27:25-2) that in the provision of public transportation services it is desirable to encourage to the maximum extent feasible the participation of private enterprise.

     c.     On or before March 1 of each year, the commissioner shall submit a report of general project categories and proposed projects thereunder to be financed in the ensuing fiscal year, including therewith a description of the projects, the county or counties within which they are to be located, a distinction between State and local projects, and the amount estimated to be expended on each project. This report shall be known as the "Annual Transportation Capital Program" for the upcoming fiscal year.  It shall include proposed projects of both the Department of Transportation and the New Jersey Transit Corporation.  The program shall be consistent with, and reflective of, the goals and priorities of the Capital Investment Strategy and the program shall include an explanation which demonstrates how it is consistent with, and reflective of, the goals and priorities.

     d.    On or before March 1 of each year, the commissioner shall also submit a "Transportation Trust Fund Authority Financial Plan" designed to implement the financing of the proposed projects.  The financial plan shall contain an enumeration of the bonds, notes or other obligations of the authority which the authority intends to issue, including the amounts thereof and the conditions therefor. The financial plan shall set forth a complete operating and financial statement covering the authority's proposed operations during the ensuing fiscal year, including amounts of income from all sources, including but not limited to the proceeds of bonds, notes or other obligations to be issued, as well as interest earned.  In addition, the plan shall contain proposed amounts to be appropriated and expended, as well as amounts for which the department anticipates to obligate during the ensuing fiscal year for any future expenditures.

     e.     The Statewide Capital Investment Strategy, the Annual Transportation Capital Program, and the Transportation Trust Fund Authority Financial Plan shall be submitted to the Senate and General Assembly.  Within 45 days of the receipt thereof, the Senate or the General Assembly may object in writing to the commissioner in regard to any project or projects in the Annual Transportation Capital Program it disapproves or which it is of the opinion should be modified or added to or any additional or alternative projects considered or in regard to any element of the financial plan.  The commissioner shall consider the objections and recommendations and resubmit the report within 10 days, containing therein any modifications based upon the commissioner's consideration of the objections or recommendations.

     f.     In order that the Legislature shall be advised of the nature and extent of public highways, public transportation projects, and other transportation projects contemplated to be financed under this act, the commissioner shall submit annually, together with the Annual Transportation Capital Program, a Five-Year Capital Plan, which shall set forth projects and programs anticipated to be funded over the five-year period. The Five-Year Capital Plan shall, to the extent practicable, conform to all federal requirements for Statewide transportation capital programming.

(cf:  P.L.2006, c.3, s.5)

 

     6.  Section 6 of P.L.2006, c.3 (27:1B-22.2) is amended to read as follows: 

     6.    There is hereby created in the Executive Branch of the State Government, a body corporate and politic, with corporate succession, to be known as the Financial Policy Review Board.  For the purpose of complying with the provisions of Article V, Section IV, paragraph 1 of the New Jersey Constitution, the board is hereby allocated within the Department of Transportation, but, notwithstanding that allocation, the board shall be independent of any supervision or control by the department or by any body or officer thereof.  The board is hereby constituted as an instrumentality of the State exercising public and essential governmental functions, and the exercise by the board of the powers conferred by this act shall be deemed and held to be an essential governmental function of the State.

     The board shall be comprised of five public members with experience in transportation finance and policy.  The Governor shall appoint three of the members with the advice and consent of the Senate.  The remaining members shall be appointed by the Governor as follows:  one upon the joint recommendation of the President of the Senate and the Minority Leader of the Senate, and one upon the joint recommendation of the Speaker of the General Assembly and the Minority leader of the General Assembly.  Each member shall serve for a four-year term and shall serve until the member's successor is appointed and qualified; provided, however, that in order to achieve non-concurrent terms, of the members first appointed pursuant to this section, two members appointed by the Governor shall serve for four years; while the two members appointed upon the joint recommendation of the President of the Senate and the Minority Leader of the Senate and upon the joint recommendation of the Speaker of the General Assembly and the Minority Leader of the General Assembly shall serve for three years each, and the remaining member appointed by the Governor shall serve for two years.  The Financial Policy Review Board shall be deemed to be constituted immediately upon appointment and qualification in the manner provided in this section of at least three members.

     The purpose of the board is to assure fiscal discipline through evaluating the financing of transportation and preparing an annual State of Condition of Transportation Financing certification.  The certification shall ensure that the financing and expenditures of the New Jersey Transportation Trust Fund Authority (the "authority") adhere to certain standards.  The standards are:  a. The bonding limitation as provided in subsection i. of section 9 of P.L.1984, c.73 (C.27:1B-9).  b. For the fiscal year commencing July 1, 2007, the amount expended from the revenues and other funds of the authority for permitted maintenance shall not exceed the amount expended for permitted maintenance in the fiscal year commencing July 1, 2006.  c.  The total amount authorized to be appropriated from the revenues and other funds of the authority for project costs commencing with the fiscal year beginning July 1, 2007 through the fiscal year beginning July 1, 2015 shall not exceed $1,600,000,000 annually, and for the fiscal year beginning July 1, 2016 shall not exceed $1,800,000,000, and for each subsequent fiscal year the amount shall not exceed $1,800,000,000 plus an additional $50,000,000 increase each year thereafter.

     Commencing with the fiscal year beginning July 1, 2007, the board shall submit to the Governor, the Legislature, and the commissioner on an annual basis the State of Condition of Transportation Financing certification as to the requirements of subsection a. of this section referencing therein a certification with regard to subsections b. and c. of this section to the extent feasible, given the other provisions of this section.  The certifications shall be based on the board's review of the State's fiscal year final expenditures from the preceding fiscal year, including bonding and expenditures from the annual independent audit of the authority, and the amount of authority funds programmed for permitted maintenance.  If the capital program and its financing are found to be in compliance, the first annual certification required by this paragraph shall be submitted by February 1, 2008, after the certification is concurred with by the members of the authority, and by February 1 of each year thereafter.  The board shall advise the commissioner and the authority on February 1, 2008 and on each succeeding February 1, if the board finds that the authority is not in compliance with the bonding requirements as provided in subsection a. of the section, and that a corrective action plan is needed.  The authority shall submit a corrective action plan that would reduce its future bond sales to offset the amount of excess bonding or to reduce future debt service payments, or both, as the case may be.  Upon approval of the corrective action plan by the board, the certification shall be issued with certain conditions.  The Annual Transportation Capital Program submitted to the Legislature for the forthcoming year shall be in compliance with the provisions of the corrective action plan.  If the board does not approve the corrective action plan, the authority shall submit a financial plan showing bonding only for existing projects, noting that no bonds shall be issued for new projects shown in the department's Annual Transportation Capital Program.  The board shall advise the commissioner on February 1, 2008 and on each succeeding February 1, if the board finds that the Department of Transportation has exceeded the limitation for the amount of authority funds spent on permitted maintenance pursuant to subsection b. of this section, or for the amount authorized to be appropriated for project costs pursuant to subsection c. of this section and that a corrective action plan is needed.  The department shall submit a corrective action plan that would offset the excess amount spent, or the excess amount appropriated, in the prior year with less funding for permitted maintenance or for projects, as the case may be, in the proposed capital budget request.  Upon approval of the corrective action plan by the board, a certification as to these matters shall be issued with certain conditions.  The Annual Transportation Capital Program submitted to the Legislature for the forthcoming year shall be in compliance with the provisions of the corrective action plan.  If the board does not approve the corrective action plan, the authority shall submit a financial plan showing bonding only for existing projects, noting that no bonds shall be issued for new projects shown in the department's Annual Transportation Capital Program.

(cf:  P.L.2006, c.3, s.6)

 

     7.  Section 25 of P.L.1984, c.73 (27:1B-25) is amended to read as follows: 

     25. a. Notwithstanding the provisions of subtitle 4 of Title 27 of the Revised Statutes and P.L.1946, c.301 (C.27:15A-1 et seq.), the commissioner may, pursuant to appropriations or authorizations being made from time to time by the Legislature according to law, allocate to counties and municipalities funds for the planning, acquisition, engineering, construction, reconstruction, repair, resurfacing and rehabilitation of public highways and the planning, acquisition, engineering, construction, reconstruction, repair, maintenance and rehabilitation of public transportation projects and of other transportation projects which a county or municipality may be authorized by law to undertake.

     b.    The commissioner shall, pursuant to appropriations or authorizations being made from time to time by the Legislature according to law, allocate at his discretion State aid to counties and municipalities for transportation projects, except that the amount to be appropriated for this program shall be 10[%]percent of the total amount appropriated for the total county and municipal aid programs.  This State aid shall be set aside prior to any formula allocations provided for in subsections c., d., and e. of this section.

     c.     The commissioner shall, pursuant to appropriations or authorizations being made from time to time by the Legislature according to law and pursuant to the provisions of subsections b. and d. of this section, allocate State aid to municipalities for public highways under their jurisdiction.  The amount to be appropriated shall be allocated on the basis of the following distribution factor:

                                                Pc                    Cm

            DF =                            ____       +     ____       

                                               Ps                 Sm

     where, DF equals the distribution factor

     Pc equals county population

     Ps equals State population

     Cm equals municipal road mileage within the county

     Sm equals municipal road mileage within the State.

     After the amount of aid has been allocated based on the above formula, the commissioner shall determine priority for the funding of municipal projects within each county, based upon criteria relating to volume of traffic, safety considerations, growth potential, readiness to obligate funds, and local taxing capacity. In addition to the above criteria used in determining priority of funding of municipal projects in each county, the commissioner shall consider whether a project is intended to remedy hazardous conditions as identified for the purposes of providing transportation pursuant to N.J.S.18A:39-1.2 for school pupils or to improve pedestrian safety.

     For the purposes of this subsection, (1) "population" means the official population count as reported by the New Jersey Department of Labor and Workforce Development; and (2) "municipal road mileage" means that road mileage under the jurisdiction of municipalities, as determined by the department.

     d.    There shall be appropriated at least $175,000,000 for the fiscal year commencing July 1, 2006 through the fiscal year commencing July 1, 2015, and in the fiscal year commencing July 1, 2016, the amount appropriated shall be 11 percent of the amount authorized to be appropriated from the revenues and other nonfederal funds of the New Jersey Transportation Trust Fund Authority for the projects listed in the appropriations act pursuant to section 21 of P.L.1984, c.73 (C.27:1B-21) and for each fiscal year thereafter, for the purposes provided herein and in subsections b., c., and e. of this section.  (1) Of that appropriation, the commissioner shall allocate $5,000,000.00 as State aid to any municipality qualifying for aid pursuant to the provisions of P.L.1978, c.14 (C.52:27D-178 et seq.).  The commissioner shall allocate the aid to each municipality in the same proportion that the municipality receives aid under P.L.1978, c.14. (2) The remaining amount of the appropriation shall be allocated pursuant to the provisions of subsection c. of this section

     e.     The commissioner may, pursuant to appropriations or authorizations being made from time to time by the Legislature according to law, allocate additional funding to the Local County Aid Program for public highway projects, in accordance with a formula similar to that provided for in subsection c. of this section, except that Cm equals road mileage under county jurisdiction and Sm equals total county road mileage within the State.

 (cf:  P.L.2012, c.13, s.9)

 

     8.  Section 3 of P.L.2010, c.22 (54:39-103) is amended to read as follows: 

     3.  a.  A tax is imposed on fuel used or consumed in this State as follows:

     (1)   Motor fuel:

     (a)   at the rate of 10.5 cents per gallon in each State fiscal year through the State fiscal year beginning on July 1, 2015; at the rate of 21.5 cents per gallon for the State fiscal year beginning on July 1, 2016, which rate shall increase by an additional 2 cents per gallon in each subsequent State fiscal year for:

            gasoline and

            blended fuel that contains gasoline or that is intended for use as gasoline;

            (b)        at the rate of 13.5 cents per gallon in each State fiscal year through the State fiscal year beginning on July 1, 2015; at the rate of 24.5 cents per gallon for the State fiscal year beginning on July 1, 2016, which rate shall increase by an additional 2 cents per gallon in each subsequent State fiscal year for:

                        diesel fuel,

                        blended fuel that contains diesel fuel or that is intended for use as diesel fuel, and

            kerosene;

     (2)   Liquefied Petroleum Gas:

                        at the rate of one-half of the tax imposed under subsection a. of this section on gasoline[, or 5.25 cents per gallon];

            (3)        Aviation gasoline:

                        at the rate of [10.5 cents per gallon] the tax imposed under subsection a. of this section on gasoline.

     b.    In addition to the tax, if any, imposed pursuant to subsection a. of this section a tax is imposed on aviation fuel for distribution to a general aviation airport at the rate of 2 cents per gallon.

     c.     The taxes imposed by this section are imposed on the consumer, but shall be precollected pursuant to the terms of the "Motor Fuel Tax Act," P.L.2010, c.22 (C.54:39-101 et seq.), for the facility and convenience of the consumer.

(cf:  P.L.2010, c.79, s.2)

 

     9.  This act shall take effect on July 1, 2016.

 

 

STATEMENT

 

     This bill amends the “New Jersey Transportation Trust Fund Authority Act of 1984” to make changes necessary to permanently support the State’s Capital Transportation Program beginning with Fiscal Year 2017.

     This bill provides the Transportation Trust Fund Authority (authority) with $1.4 billion per year in bonding authorization beginning with FY 2017 and continuing in perpetuity.  The bill allows for an annual transportation capital program size of $1.8 billion in FY 2017 and then increases the authorized program size by $50 million per year in perpetuity; this represents an increase from the $1.6 billion program authorization level that has been appropriated each year since FY 2007.  The bill also anticipates the resources necessary to support $400 million of “pay-as-you-go” funding, which is funding available for projects that does not rely on debt or non-State resources in FY 2017, with the ability for that amount to increase by at least $50 million per year in each subsequent fiscal year.  In the previous four years, the amount of “pay-as-you-go” support averaged less than $10 million per year.

     The bill incorporates statutory language which dedicates all revenues from the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax to the Transportation Trust Fund.  This language mirrors language amending the State Constitution proposed in ACR 1 of 2015 that is scheduled to appear as a ballot questions in the November 2016 general election, and would constitutionally dedicate these revenues in addition to the statutory dedication that is provided for in this bill.

     This bill increases the tax on motor fuels. The amount of the increase in the motor fuels tax is eleven cents per gallon in State fiscal year 2017 and then by an additional two cents per gallon in every subsequent State fiscal year. The tax on gasoline, aviation fuel, and blended fuel containing gasoline increases from 10.5 cents per gallon to 21.5 cents per gallon in FY 2017 and then increases by an additional two cents per gallon every year thereafter. The tax on diesel fuel and blended fuel containing diesel increases from 13.5 cents per gallon to 24.5 cents per gallon in FY 2017 and then increases by an additional two cents per gallon every year thereafter.  The rate on liquefied petroleum gas is half of the rate on gasoline and would increase from 5.25 cents per gallon to 10.75 cents per gallon in FY 2017 and then increases by an additional one cent per gallon every year thereafter.  This increase provides approximately $550 million in additional funding in FY 2017 and will provide for approximately $100 million per year in additional funding each year thereafter.  This additional revenue will provide the State with the ability to increase the size of the State transportation capital program without relying on borrowing.  It will also provide additional revenues that the State can use to reduce borrowing below the statutorily authorized $1.4 billion per year, because the $100 million of additional annual revenue projected from a two cents per gallon annual increase in the motor fuels tax is greater than the $50 million per year annual growth in authorized annual appropriations for the State transportation capital program.

     The bill also sets the size of the local aid program at 11 percent of the total State transportation capital program size.  Under current law, the local aid program is set at $175 million which is approximately 11 percent of the current $1.6 billion State transportation capital program.  This will allow the local aid program to grow proportionately with the increase in size of the State transportation capital program.