AZ SB1286

Establishes a local transportation assistance fund (LTAF) receiving $18-23 million annually from state lottery revenues, with distributions to cities, towns, and counties for transportation purposes.

Creates a county assistance fund receiving up to $7.65 million annually from lottery revenues, distributed to counties with separate allocation percentages for counties with populations of 500,000 or fewer persons versus more than 500,000 persons.

Establishes an Arizona state parks board heritage fund receiving $10 million annually from lottery revenues for trails, parks, historic preservation, natural areas, and environmental education programs.

Modifies state lottery fund allocations to prioritize funding for the local transportation assistance fund and county assistance fund before distributions to other programs including heritage funds, disease control research, and university capital improvements.

Requires regional public transportation authorities and metropolitan planning organizations to submit annual compliance reports on spending of local transportation assistance fund monies and establishes penalties for noncompliance.