1. (a) This section applies:

   1. (1) beginning after June 30, 2026; and
   2. (2) to all cities and towns except a consolidated city as described in section 5(d) of this chapter and only if the city or town uses the PASER rating system.
2. (b) As used in this section, "PASER" refers to the pavement surface evaluation and rating system used as part of a transportation asset management plan submitted to the local technical assistance program at Purdue University.

3. (c) If in the preceding calendar year:

   1. (1) a city or town's highways have an average PASER rating of at least six (6); and

   2. (2) not more than fifteen percent (15%) of the city or town's highways are in failed condition, as represented by a PASER rating of one (1) or two (2);

      the city or town shall use at least forty percent (40%) of the money distributed from the motor vehicle highway account for the construction, reconstruction, and preservation of the city or town's highways.

As added by P.L.173-2025, SEC.10.