Existing law requires the Chair of the California Transportation Commission to create a Road Usage Charge (RUC) Technical Advisory Committee in consultation with the Secretary of the Transportation Agency. Under existing law, the purpose of the technical advisory committee is to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. Existing law requires the technical advisory committee to study RUC alternatives to the gas tax, gather public comment on issues and concerns related to the pilot program, and to make recommendations to the Secretary of the Transportation Agency on the design of a pilot program, as specified. Existing law repeals these provisions on January 1, 2019.

This bill would extend the operation of these provisions until January 1, 2023. The bill would, in addition, require the technical advisory committee to continue to assess the potential for mechanisms, including, but not limited to, a mileage-based revenue collection system, to use as alternative methods to the existing gas tax system for generating the revenue necessary to maintain and operate the states transportation system. The bill would, instead, require the committee to gather public comment related to the assessment of those mechanisms.

Existing law requires the Chair of the California Transportation Commission to create a Road Usage Charge (RUC) Technical Advisory Committee in consultation with the Secretary of the Transportation Agency. Under existing law, the purpose of the technical advisory committee is to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. Existing law requires the technical advisory committee to study RUC alternatives to the gas tax, gather public comment on issues and concerns related to the pilot program, and to make recommendations to the Secretary of the Transportation Agency on the design of a pilot program, as specified. Existing law repeals these provisions on January 1, 2019.

This bill would extend the operation of these provisions until January 1, 2023. The bill would, in addition, require the technical advisory committee to continue to assess the potential for mechanisms, including, but not limited to, a mileage-based revenue collection system, to use as alternative methods to the existing gas tax system for generating the revenue necessary to maintain and operate the states transportation system. The bill would, instead, require the committee to gather public comment related to the assessment of those mechanisms.

Existing law requires the Chair of the California Transportation Commission to create a Road Usage Charge (RUC) Technical Advisory Committee in consultation with the Secretary of the Transportation Agency. Under existing law, the purpose of the technical advisory committee is to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. Existing law requires the technical advisory committee to study RUC alternatives to the gas tax tax, gather public comment on issues and concerns related to the pilot program, and to make recommendations to the Secretary of the Transportation Agency on the design of a pilot program, as specified. Existing law repeals these provisions on January 1, 2019.

This bill would extend the operation of these provisions until January 1, 2023. The bill would, in addition, require the technical advisory committee to assess the potential for mileage-based revenue collection for Californias roads and highways as an alternative to the gas tax system. continue to assess the potential for mechanisms, including, but not limited to, a mileage-based revenue collection system, to use as alternative methods to the existing gas tax system for generating the revenue necessary to maintain and operate the states transportation system. The bill would, instead, require the committee to gather public comment related to the assessment of those mechanisms.

Existing law requires the Chair of the California Transportation Commission to create a Road Usage Charge (RUC) Technical Advisory Committee in consultation with the Secretary of the Transportation Agency. Under existing law, the purpose of the technical advisory committee is to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. Existing law requires the technical advisory committee to study RUC alternatives to the gas tax and to make recommendations to the Secretary of the Transportation Agency on the design of a pilot program, as specified. Existing law repeals these provisions on January 1, 2019.

This bill would extend the operation of these provisions until January 1, 2023. The bill would, in addition, require the technical advisory committee to assess the potential for mileage-based revenue collection for Californias roads and highways as an alternative to the gas tax system.

 UNFINISHED BUSINESS  

Bill No: SB 1328

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 10-3, 4/3/18

AYES: Beall, Cannella, Allen, Dodd, Galgiani, McGuire, Roth, Skinner, Wieckowski, Wiener

NOES: Gaines, Morrell, Vidak

SENATE APPROPRIATIONS COMMITTEE: 5-2, 4/23/18

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

SENATE FLOOR: 26-9, 4/26/18

AYES: Allen, Atkins, Beall, Bradford, Cannella, Dodd, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mitchell, Monning, Newman, Pan, Portantino, Roth, Skinner, Stern, Wieckowski, Wiener

NOES: Bates, Fuller, Gaines, Moorlach, Nguyen, Nielsen, Stone, Vidak, Wilk

NO VOTE RECORDED: Anderson, Berryhill, De León, Morrell

ASSEMBLY FLOOR: 47-28, 8/28/18 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill extends the life of the Road Usage Charge Technical Advisory Committee (TAC) for four additional years and requires it to continue assessing the potential for mechanisms such as a mileage-based revenue system to use as an alternative to the gas tax for generating the revenues necessary to maintain and operate the state’s transportation system.

Assembly Amendments (1) clarify that the work of the TAC is “continuing to assess the potential for mechanisms to use as an alternative to the gas tax for generating the revenue necessary to maintain and operate the state’s transportation system”, and (2) clarify that the TAC shall gather public comment related to this work.

ANALYSIS: Existing law establishes the TAC to study alternatives to the gas tax, sunsets the TAC on January 1, 2019, and requires the California State Transportation Agency to have implemented a road charge pilot program by January 1, 2017, and to report the results to the Legislature by June 30, 2018.

This bill extends the life of the TAC for four years and requires it to continue assessing the potential for mechanisms such as a mileage-based revenue system to use as an alternative to the gas tax for generating the revenues necessary to maintain and operate the state’s transportation system.

Comments

1. Author’s statement. In 2014, the TAC was established to guide the development and evaluation of a pilot program to assess the feasibility of a “road charge” – an amount charged to drivers for each mile they drive – as a replacement to the gas tax for transportation funding. The pilot program confirmed the viability of many aspects of a road charge system; however, additional research and work is needed in a fully transparent and stakeholder-led process before any transition is considered. This bill will extend the sunset on the TAC so that the committee can continue exploring the potential of a road charge as a future alternative method for raising revenue for maintaining California’s roads.
2. Gas tax becoming unsustainable. The excise tax on fuels was originally created in the early 20th century to serve as a substitute user fee for the construction, maintenance, and operation of the transportation system. At the time, it was technologically very difficult to track actual usage of the roadway by vehicle, but most vehicles on the road were very similar and experienced similar mileage. Therefore, a tax on fuels served as a suitable stand-in for usage.

Because of advancements in drive train technology, relying on a gas tax for funding roads has become less fair and sustainable. Vehicles which create the same demands on our streets are increasingly paying very different taxes to repair and build those streets; a Toyota Prius driver will pay less than half the gas tax of a driver of a typical car and less than one-quarter of the gas tax of the driver of a Chevy Suburban, assuming both drives the same number of miles. Electric vehicles pay no gas tax at all, though with the passage of SB 1 (Beall, Chapter 5, Statutes of 2017) last year those vehicles will soon be assessed a separate road improvement fee. Total gas tax revenue will decline as cars become more efficient. This revenue shortfall and dissimilar impact on otherwise comparable vehicles will only grow as California’s policies encouraging electric vehicles become more impactful.

1. Pilot program results. The road charge pilot program, which was completed in 2017, was the largest pilot program in the nation, involving more than 5,000 vehicles from throughout the state and testing several variations of a per-mile charge. Valuable information and experience were obtained, but the results of that test made it clear that much more work needs to be done before a substitute for the gas tax can be proposed. Using federal funding, the California Department of Transportation (Caltrans) is currently investigating a pay-at-the-pump/charging station model as a gas tax alternative.
2. TAC membership. The TAC membership is appointed by the Chair of the California Transportation Commission (CTC). It has 15 members from industry, highway user groups, privacy groups, local transportation agencies, and the Legislature.
3. CTC recommendation. CTC has recommended continuation of the TAC.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Assembly Appropriations Committee:

• Unknown costs to Caltrans, likely in the low millions of dollars, to maintain staff and consultant contracts to support the technical advisory committee.
• Costs of $55,000 annually (transportation special funds) for CTC to continue the technical advisory committee.

SUPPORT: (Verified 8/28/18)

American Council of Engineering Companies

Automobile Club of Southern California

California Alliance for Jobs

California Asphalt Pavement Association

California Association of Councils of Governments

California Transportation Commission

California Trucking Association

Public Advocates

Transportation California

OPPOSITION: (Verified 8/28/18)

None received

ASSEMBLY FLOOR: 47-28, 8/28/18

AYES: Aguiar-Curry, Berman, Bloom, Bonta, Burke, Calderon, Carrillo, Chau, Chiu, Chu, Cooley, Cooper, Daly, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Reyes, Rivas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wood, Rendon

NOES: Acosta, Travis Allen, Baker, Bigelow, Brough, Caballero, Chávez, Chen, Choi, Cunningham, Dahle, Flora, Fong, Gallagher, Harper, Kiley, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte, Patterson, Quirk-Silva, Salas, Steinorth, Voepel, Waldron

NO VOTE RECORDED: Arambula, Cervantes, Muratsuchi, Rodriguez, Rubio

Prepared by:

8/28/18 21:36:01

**** END ****

SENATE THIRD READING

STR Bill Id:

Author:(Beall)

As Amended Ver:

Majority vote

SENATE VOTE: 26-9

SUMMARY: Extends the life of the Road Usage Charge Technical Advisory Committee (TAC) for four years and requires it to continue assessing the potential for mechanisms such as a mileage-based revenue system as an alternative to the gas tax for generating the revenues necessary to maintain and operate the state’s transportation system.

EXISTING LAW:

1. Requires the Chair of the California Transportation Commission (CTC) to create a 15-member TAC to guide the development and evaluation of a pilot program to assess the potential for a mileage-based revenue system as an alternative to the gas tax.
2. Directs the California Department of Transportation (Caltrans) to provide staff to the TAC as requested.
3. Directs the California State Transportation Agency (CalSTA) to develop and implement, by January 1, 2017, a pilot program, based on guidance from the TAC, to identify and evaluate issues related to potential implementation of a road usage charge.
4. Requires CalSTA to submit a report of its findings based on the results of the pilot to the TAC, CTC, and the Legislature, by June 30, 2018.
5. Directs CTC to include its recommendations regarding the pilot program in its annual report to the Legislature.
6. Sunsets the TAC on January 1, 2019.

FISCAL EFFECT: According to the Assembly Appropriations Committee

1. Unknown costs to Caltrans, likely in the low millions of dollars, to maintain staff and consultant contracts to support the technical advisory committee.
2. Costs of $55,000 annually (transportation special funds) for CTC to continue the technical advisory committee.

COMMENTS: Since 1923, California and the rest of the nation has relied heavily on fuel taxes to support its local streets and roads and state highway system. Fuel taxes have the benefit of being fairly inexpensive to administer. Furthermore, until relatively recently, they have been a reasonably equitable means of distributing the tax burden amongst drivers in rough proportion to their use of the roadway system.

However, The gas tax is no longer a viable, sustainable revenue source. According to the Institute on Taxation and Economic Policy, two important developments have combined to greatly reduce the functionality of the gas tax:

1. The purchasing power of fuel tax revenues has declined significantly due to inflation; and,
2. Improvements in vehicle fuel efficiency have cut directly into gas tax revenues by allowing drivers to travel farther distances while buying less gasoline. From an environmental and energy policy standpoint, this is undeniably desirable. Decreased fuel consumption reduces greenhouse gas emissions and our dependence on oil. But with vehicle fuel efficiency set to nearly double in the next 20 years, fuel tax revenues will be cut nearly in half.

In the long term, an alternative to the gas tax must be found. The alternative most often cited across the nation is a mileage-based fee or road usage charge. According to the RAND Corporation, these types of fees promise more stable revenue than gas taxes and distribute the tax burden in proportion to travel with greater precision. Because the fees are tied to travel rather than gas consumption, the revenue stream is immune to changes in fuel economy or even fuel type. This is particularly important in California where state policies are pushing for more near zero or zero-emission vehicles (i.e., non gas-powered vehicles) on our roads.

Recognizing this challenge, in 2014 the Legislature passed and Governor Brown signed into law SB 1077 (DeSaulnier), Chapter 835, which established the TAC within the CTC to guide the development and evaluation of a pilot program to assess the potential for a mileage-based revenue system as an alternative to the gas tax. SB 1077 directed the administration to conduct the pilot, and submit its findings and recommendations by the end of 2018. After successfully meeting the statutory deadlines, it became clear that more study and public awareness was necessary before the Legislature could consider implementations of any viable alternatives to the fuel tax. Therefore, in its 2017 Annual Report to the Legislature, CTC recommended legislation to extend the TAC and direct its efforts to continue the study of alternative funding mechanisms.

According to the author, the TAC was established to guide the development and evaluation of a pilot program to assess the feasibility of a road charge as a replacement to the gas tax for transportation funding. The pilot program confirmed the viability of many aspects of a road charge system; however, additional research and work is needed in a fully transparent and stakeholder-led process before any transition is considered. This bill extends the sunset on the TAC so that the committee can continue exploring the potential of a road charge as a future alternative method for raising revenue for the maintenance of California’s roads.

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093 FN: 0004132

Date of Hearing: August 8, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 1328

Author:(Beall) – As Amended Ver:June 4, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill extends the sunset date for the California Transportation Commission (CTC)’s road use charge technical advisory committee. Specifically, this bill requires the CTC to continue the technical advisory committee to evaluate mileage-based revenue collection systems until January 1, 2023, rather than eliminating this committee on January 1, 2019.

FISCAL EFFECT:

1. Unknown costs to the Department of Transportation (Caltrans), likely in the low millions of dollars, to maintain staff and consultant contracts to support the technical advisory committee.
2. Costs of $55,000 annually (transportation special funds) for CTC to continue the technical advisory committee.

COMMENTS:

Background and purpose. SB 1077 (DeSaulnier), Chapter 835, established the road charge technical advisory committee within the CTC to guide the development and evaluation of a pilot program to assess the potential for a mileage-based revenue system as an alternative to fuel taxes. SB 1077 directed the administration to conduct the pilot, and submit its findings and recommendations by the end of 2018. After completing the required pilot program, it became clear that more study and public awareness are necessary before the Legislature can adequately consider implementing a viable alternative to fuel taxes. Therefore, in its 2017 annual report to the Legislature, CTC recommended the Legislature extend the sunset date for the road charge technical advisory committee to allow CTC to continue studying alternative transportation funding mechanisms. This bill implements this CTC recommendation.

Analysis Prepared by: Jessica Peters / APPR. / (916) 319-2081

Date of Hearing: June 11, 2018

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

SBPCA Bill Id:SB 1328

Author:(Beall) – As Amended Ver:June 4, 2018

SENATE VOTE: 26-9

SUBJECT: Mileage-based road usage fee

SUMMARY: Extends the life of the Road Usage Charge Technical Advisory Committee (TAC) for four years and requires it to continue assessing the potential for mechanisms such as a mileage-based revenue system as an alternative to the gas tax for generating the revenues necessary to maintain and operate the state’s transportation system.

EXISTING LAW:

1. Requires the Chair of the California Transportation Commission (CTC) to create a
   15-member TAC to guide the development and evaluation of a pilot program to assess the potential for a mileage-based revenue system as an alternative to the gas tax.
2. Directs the California Department of Transportation (Caltrans) to provide staff to the TAC as requested.
3. Directs the California State Transportation Agency (CalSTA) to develop and implement, by January 1, 2017, a pilot program, based on guidance from the TAC, to identify and evaluate issues related to potential implementation of a road usage charge.
4. Requires CalSTA to submit a report of its findings based on the results of the pilot to the TAC, CTC, and the Legislature, by June 30, 2018.

1. Directs CTC to include its recommendations regarding the pilot program in its annual report to the Legislature.
2. Sunsets the TAC on January 1, 2019.

FISCAL EFFECT: Unknown

COMMENTS: Since 1923, California and the rest of the nation has relied heavily on fuel taxes to support its local streets and roads and state highway system. Fuel taxes have the benefit of being fairly inexpensive to administer. Furthermore, until relatively recently, they have been a reasonably equitable means of distributing the tax burden amongst drivers in rough proportion to their use of the roadway system.

However, The gas tax is no longer a viable, sustainable revenue source. According to the Institute on Taxation and Economic Policy, two important developments have combined to greatly reduce the functionality of the gas tax:

1. The purchasing power of fuel tax revenues has declined significantly due to inflation; and,
2. Improvements in vehicle fuel efficiency have cut directly into gas tax revenues by allowing drivers to travel farther distances while buying less gasoline. From an environmental and energy policy standpoint, this is undeniably desirable. Decreased fuel consumption reduces greenhouse gas emissions and our dependence on oil. But with vehicle fuel efficiency set to nearly double in the next 20 years, fuel tax revenues will be cut nearly in half.

In the long term, an alternative to the gas tax must be found. The alternative most often cited across the nation is a mileage-based fee or road usage charge. According to the RAND Corporation, these types of fees promise more stable revenue than gas taxes and distribute the tax burden in proportion to travel with greater precision. Because the fees are tied to travel rather than gas consumption, the revenue stream is immune to changes in fuel economy or even fuel type. This is particularly important in California where state policies are pushing for more near zero or zero-emission vehicles (i.e., non gas-powered vehicles) on our roads.

Recognizing this challenge, in 2014 the Legislature passed and Governor Brown signed into law SB 1077 (DeSaulnier), Chapter 835, which established the TAC within the CTC to guide the development and evaluation of a pilot program to assess the potential for a mileage-based revenue system as an alternative to the gas tax. SB 1077 directed the administration to conduct the pilot, and submit its findings and recommendations by the end of 2018. After successfully meeting the statutory deadlines, it became clear that more study and public awareness was necessary before the Legislature could consider implementations of any viable alternatives to the fuel tax. Therefore, in its 2017 Annual Report to the Legislature, CTC recommended legislation to extend the TAC and direct its efforts to continue the study of alternative funding mechanisms.

According to the author, the TAC was established to guide the development and evaluation of a pilot program to assess the feasibility of a road charge as a replacement to the gas tax for transportation funding. The pilot program confirmed the viability of many aspects of a road charge system; however, additional research and work is needed in a fully transparent and stakeholder-led process before any transition is considered. This bill extends the sunset on the TAC so that the committee can continue exploring the potential of a road charge as a future alternative method for raising revenue for the maintenance of California’s roads.

Committee Comment: The Off-Road Vehicle Legislative Coalition submitted a letter to the committee highlighting the fact that certain portions of the state’s fuel tax revenues are dedicated to various funds such as for off-highway recreational vehicle parks and boating infrastructure. It is important that the TAC, when considering alternative funding mechanisms to the fuel tax, acknowledges the need for these various programs to continue to be funded through any new system.

Previous Legislation: SB 1077 (DeSaulnier), Chapter 835, Statutes of 2014, establishes the TAC and requires CalSTA to conduct a pilot program on a road usage charge.

REGISTERED SUPPORT / OPPOSITION:

Support

American Council of Engineering Companies

Automobile Club of Southern California

California Alliance for Jobs

California Asphalt Pavement Association

California Association of Councils of Governments

California Transportation Commission

California Trucking Association

Public Advocates

Transportation California

Opposition

None on file

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093

 THIRD READING  

Bill No: SB 1328

Author:

:

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 10-3, 4/3/18

AYES: Beall, Cannella, Allen, Dodd, Galgiani, McGuire, Roth, Skinner, Wieckowski, Wiener

NOES: Gaines, Morrell, Vidak

SENATE APPROPRIATIONS COMMITTEE: 5-2, 4/23/18

AYES: Lara, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

SUBJECT:

SOURCE: Author

DIGEST:

This bill extends the life of the Road Usage Charge Technical Advisory Committee (TAC) for four years and requires it to continue assessing the potential for a mileage-based revenue system as an alternative to the gas tax.

ANALYSIS: Existing law establishes the TAC to study alternatives to the gas tax, sunsets the TAC on January 1, 2019, and requires the California State Transportation Agency to have implemented a road charge pilot program by January 1, 2017 and to report the results to the Legislature by June 30, 2018.

This bill extends the life of the TAC for four years and requires it to continue assessing the potential for a mileage-based revenue system as an alternative to the gas tax.

Comments

1. Author’s Statement. In 2014, the TAC was established to guide the development and evaluation of a pilot program to assess the feasibility of a “road charge” – an amount charged to drivers for each mile they drive – as a replacement to the gas tax for transportation funding. The pilot program confirmed the viability of many aspects of a road charge system; however, additional research and work is needed in a fully transparent and stakeholder-led process before any transition is considered. This bill will extend the sunset on the TAC so that the committee can continue exploring the potential of a road charge as a future alternative method for raising revenue for maintaining California’s roads.
2. Gas Tax Becoming Unsustainable. The excise tax on fuels was originally created in the early 20^th century to serve as a substitute user fee for the construction, maintenance, and operation of the transportation system. At the time, it was technologically very difficult to track actual usage of the roadway by vehicle, but most vehicles on the road were very similar and experienced similar mileage. Therefore, a tax on fuels served as a suitable stand-in for usage.

Because of advancements in drive train technology, relying on a gas tax for funding roads has become less fair and sustainable. Vehicles which create the same demands on our streets are increasingly paying very different taxes to repair and build those streets; a Toyota Prius driver will pay less than half the gas tax of a driver of a typical car and less than one-quarter of the gas tax of the driver of a Chevy Suburban, assuming both drives the same number of miles. Electric vehicles pay no gas tax at all, though with the passage of SB 1 (Beall, Chapter 5, Statutes of 2017) last year those vehicles will soon be assessed a separate road improvement fee. Total gas tax revenue will decline as cars become more efficient. This revenue shortfall and dissimilar impact on otherwise comparable vehicles will only grow as California’s policies encouraging electric vehicles become more impactful.

1. Pilot Program Results. The road charge pilot program, which was completed in 2017, was the largest pilot program in the nation, involving more than 5,000 vehicles from throughout the state and testing several variations of a per-mile charge. Valuable information and experience were obtained, but the results of that test made it clear that much more work needs to be done before a substitute for the gas tax can be proposed. Using federal funding, Caltrans is currently investigating a pay-at-the-pump/charging station model as a gas tax alternative.
2. TAC Membership. The TAC membership is appointed by the Chair of the California Transportation Commission (CTC). It has 15 members from industry, highway user groups, privacy groups, local transportation agencies, and the legislature.
3. CTC Recommendation. The California Transportation Commission has recommended continuation of the TAC.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• Annual CTC costs of approximately $55,000 through 2023 to support TAC meetings for an additional four years. (State Highway Account)
  
• Any costs for the Caltrans staff TAC meetings would be minor and absorbable. (State Highway Account)
  
• Any costs for the California Transportation Agency to provide information and updates at TAC meetings would be minor and absorbable. (State Highway Account)

SUPPORT: (Verified 4/23/18)

American Council of Engineering Companies

Automobile Club of Southern California

California Alliance for Jobs

California Asphalt Pavement Association

California Association of Councils of Governments

California Transportation Commission

California Trucking Association

Public Advocates

Transportation California

OPPOSITION: (Verified 4/23/18)

None received

Prepared by:

4/25/18 14:42:55

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

SB 1328 (Beall) - Mileage-based road usage fee

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

SB 1328 would extend the operation of the Road Usage Charge Technical Advisory Committee (TAC) until 2023, and require the TAC to assess the potential for mileage-based revenue collection as an alternative to the gas tax system.

Fiscal Impact:

• Annual California Transportation Commission (CTC) costs of approximately $55,000 through 2023 to support TAC meetings for an additional four years. (State Highway Account)
  
• Any costs for the Department of Transportation (Caltrans) staff TAC meetings would be minor and absorbable. (State Highway Account)
  
• Any costs for the California Transportation Agency (CalSTA) to provide information and updates at TAC meetings would be minor and absorbable. (State Highway Account)

Background:

Existing law requires the CTC to establish a specified 15-member Road Usage Charge TAC to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. The TAC is tasked with studying alternatives to the gas tax and developing recommendations for CalSTA on the design of a pilot program to test alternative approaches for a road usage charge. Existing law requires CalSTA to implement a pilot program based on TAC recommendations by January 1, 2017, as specified, and requires CalSTA to submit a report on its findings based on the results of the pilot program by June 30, 2018.

The Road Charge Pilot Program, which was completed in 2017, was the largest pilot program of its type in the nation, involving more than 5,000 vehicles from throughout the state and testing several variations of a per-mile charge. The CalSTA final report on the California Road Charge Pilot Program was submitted late last year, over six months before the statutory due date. The report concludes that the pilot program successfully tested the functionality, complexity, and feasibility of the critical elements of mileage-based revenue collection, but some key questions remain unanswered , necessitating additional investigation into the mechanics and policy issues of implementing a road charge in California. Utilizing federal grant funding provided through the FAST Act, Caltrans is continuing to investigate issues regarding the feasibility of a road charge model, and the department is currently studying a pay-at-the-pump/charging station model as a gas tax alternative.

Proposed Law:

SB 1328 would extend the operation of the TAC until January 1, 2023, and require the TAC to assess the potential for mileage-based revenue collection for California’s roads and highways as an alternative to the gas tax system, beginning on January 1, 2019.

Related Legislation:

SB 1077 (DeSaulnier), Chap. 835/2014, required CTC to establish the TAC to guide the development and evaluation of a pilot program to assess the potential for mileage-based revenue collection as an alternative to the gas tax system. The bill also required CalSTA to implement a road usage charge pilot program by January 1, 2017, and report to the Legislature by June 30, 2018.

Staff Comments:

This bill would provide authority for the TAC to continue to provide a public process to study gas tax alternatives and issue recommendations on the future design of a road usage charge. As noted in the CalSTA study of the Road Charge Pilot Program, there are additional factors that need further exploration, including pay-at-the-pump revenue collection, and advancing technology options such as in-vehicle telematics for collection of mileage data. The CTC estimates an annual cost of approximately $55,000 to continue TAC meetings.

-- END --

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2017 - 2018 Regular

Bill No: SB 1328 Hearing Date: 4/3/2018

SUBJECT: Mileage-based road usage fee

DIGEST: This bill extends the life of the Road Usage Charge Technical Advisory Committee (TAC) for four years and requires it to continue assessing the potential for a mileage-based revenue system as an alternative to the gas tax.

ANALYSIS:

Existing law establishes the TAC to study alternatives to the gas tax, sunset the TAC on January 1, 2019, and requires the California State Transportation Agency to have implemented a road charge pilot program by January 1, 2017 and to report the results to the Legislature by June 30, 2018.

This bill extends the life of the TAC for four years and requires it to continue assessing the potential for a mileage-based revenue system as an alternative to the gas tax.

COMMENTS

1. Author’s Statement. In 2014, the TAC was established to guide the development and evaluation of a pilot program to assess the feasibility of a “road charge” – an amount charged to drivers for each mile they drive – as a replacement to the gas tax for transportation funding. The pilot program confirmed the viability of many aspects of a road charge system; however, additional research and work is needed in a fully transparent and stakeholder-led process before any transition is considered. This bill will extend the sunset on the TAC so that the committee can continue exploring the potential of a road charge as a future alternative method for raising revenue for maintaining California’s roads.
2. Gas Tax Becoming Unsustainable. The excise tax on fuels was originally created in the early 20^th century to serve as a substitute user fee for the construction, maintenance, and operation of the transportation system. At the time, it was technologically very difficult to track actual usage of the roadway by vehicle, but most vehicles on the road were very similar and experienced similar mileage. Therefore, a tax on fuels served as a suitable stand-in for usage.

Because of advancements in drive train technology, relying on a gas tax for funding roads has become less fair and sustainable. Vehicles which create the same demands on our streets are increasingly paying very different taxes to repair and build those streets; a Toyota Prius driver will pay less than half the gas tax of a driver of a typical car and less than one-quarter of the gas tax of the driver of a Chevy Suburban, assuming everyone drives the same number of miles. Electric vehicles pay no gas tax at all, though with the passage of SB 1 last year those vehicles will soon be assessed a separate road improvement fee. Total gas tax revenue will decline as cars become more efficient. This revenue shortfall and dissimilar impact on otherwise comparable vehicles will only grow as California’s policies encouraging electric vehicles become more impactful.

1. Pilot Program Results. The road charge pilot program, which was completed in 2017, was the largest pilot program in the nation, involving more than 5,000 vehicles from throughout the state and testing several variations of a per-mile charge. Valuable information and experience were obtained, but the results of that test made it clear that much more work needs to be done before a substitute for the gas tax can be proposed. Using federal funding, Caltrans is currently investigating a pay-at-the-pump/charging station model as a gas tax alternative.
2. TAC Membership. The TAC membership is appointed by the Chair of the California Transportation Commission (CTC). It has 15 members from industry, highway user groups, privacy groups, local transportation agencies, and the legislature.
3. CTC Recommendation. The California Transportation Commission has recommended continuation of the TAC.

Related Legislation:

SB 1 (Beall, Chapter 5 of 2017) — establishes and raises various fees for funding repairs and maintenance of California roads, bridges, culverts and transit systems, including, beginning July 1, 2020, a $100 fee on zero emission vehicles.

SB 1077 (DeSaulnier, Chapter 835 of 2014) — establishes the TAC and requires the California State Transportation Agency to conduct a pilot program on a road usage charge.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

POSITIONS: (Communicated to the committee before noon on Wednesday,

March 28, 2017.)

SUPPORT:

American Council of Engineering Companies

Automobile Club of Southern California

California Alliance for Jobs

California Association of Councils of Governments

California Transportation Commission

Transportation California

OPPOSITION:

None received.

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