Amended in Assembly June 16, 2014

Amended in Senate April 21, 2014

Senate Bill No. 1077

Introduced by Senator DeSaulnier

February 19, 2014

An act to add and repeal Chapter 7 (commencing with Section 3090) of Division 2 of, and to repeal Chapter 7 (commencing with former Section 3100) of Division 2 of, the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

SB 1077, as amended, DeSaulnier. Vehicles: mileage-based fee pilot program.

Existing law establishes the Transportation Agency, which consists of the Department of the California Highway Patrol, the California Transportation Commission, the Department of Motor Vehicles, the Department of Transportation, the High-Speed Rail Authority, and the Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun.

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This bill would establish a Mileage-Based Fee (MBF) Task Force within the California Transportation Commission, as specified. The bill would require the task force to study MBF alternatives to the gas tax and to make recommendations to the Department of Transportation and the commission on the design of a pilot program, as specified. The bill would also authorize the task force to make recommendations on the criteria to be used to evaluate the pilot program. The bill would require the task force to consult with specified entities and to consider certain factors in carrying out its duties. The bill would require the Transportation Agency, based on the recommendations of the task force, to develop and implement a pilot program by January 1, 2016, to identify and evaluate issues related to the potential implementation of a MBF program in California. The bill would require the agency to prepare and submit a report of its findings to the task force, the commission, and the appropriate fiscal and policy committees of the Legislature by no later than June 30, 2017, as specified. The bill would also require the commission to include its recommendations regarding the pilot program in its annual report to the Legislature, as specified. The bill would repeal these provisions on January 1, 2018.

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This bill would require the agency to develop, by January 1, 2016, a pilot program designed to assess specified issues related to implementing a mileage-based fee (MBF) in California to replace the state’s existing fuel excise tax. The bill would require the agency, at a minimum, to assess certain issues related to implementing an MBF, including, among others, different methods for calculating mileage and collecting road use information, processes for managing, storing, transmitting, and destroying data to protect the integrity of the data and ensure drivers’ privacy, and costs associated with the implementation and operation of the MBF system, as specified. The bill would also require the department to prepare and submit a specified report of its findings to the policy and fiscal committees of the Legislature no later than June 30, 2017. The bill would require the report to include, among other things, recommendations on how best to implement an MBF, as specified, and recommendations regarding public and private agency access to MBF data that ensures privacy rights as protected by the California Constitution. The bill would repeal these provisions on January 1, 2018.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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The Legislature finds and declares all of the
following:

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(a) An efficient transportation system is critical for California’s
economy and quality of life.

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(b) The revenues currently available for highways and local
roads are inadequate to preserve and maintain existing
infrastructure and to provide funds for improvements that would
reduce congestion and improve service.

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(c) The gas tax is an ineffective mechanism for meeting
California’s long-term revenue needs for all of the following
reasons because it will steadily generate less revenue as cars
become more fuel efficient and alternative sources of fuel are
identified. By 2030, as much as half of the revenue that could have
been collected will be lost to fuel efficiency. Additionally, bundling
fees for roads and highways into the gas tax makes it difficult for
users to understand the amount they are paying for roads and
highways.

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(d) Other states have begun to explore the potential for a
mileage-based fee to replace traditional gas taxes, including the
State of Oregon, which established the first permanent road user
fee program in the nation.

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(e) A mileage-based fee program has the potential to distribute
the gas tax burden across all vehicles regardless of fuel source
and to minimize the impact of the current regressive gas tax
structure.

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(f) Experience to date in other states across the nation
demonstrates that mileage-based user fees can be implemented in
a way that ensures data security and maximum privacy protection
for drivers.

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(g) It is therefore important that the state begin to explore
alternative revenue sources that may be implemented in lieu of the
antiquated gas tax structure now in place.

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begin insert SEC. 2. end insert   

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begin insert Chapter 7 (commencing with Section 3090) is added
to Division 2 of the end insert begin insert Vehicle Code end insert begin insert , to read: end insert

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Chapter   begin insert 7. end insert Mileage-Based Fee Pilot Program

 

begin insert 3090. end insert   

(a) The Mileage-Based Fee (MBF) Task Force is hereby
established within the California Transportation Commission.

(b) The purpose of the task force is to guide the development
and evaluation of a pilot program to assess the potential for
mileage-based revenue collection for California’s roads and
highways as an alternative to the gas tax system.

(c) The task force shall consist of 14 members, as follows:

(1) Two members of the Assembly, appointed by the Speaker of
Assembly.

(2) Two members of the Senate, appointed by the Senate
Committee on Rules.

(3) Two members of the commission, appointed by the
chairperson of the commission.

(4) Eight members appointed by the Governor. In making these
appointments, the Governor shall consider individuals who are
representative of the telecommunications industry, highway user
groups, the data security and privacy industry, the transportation
research community, and national research and policymaking
bodies, including, but not limited to, the Transportation Research
Board and the American Association of State Highway and
Transportation Officials.

(d) Members of the task force are entitled to compensation and
expenses as authorized by the commission.

(e) The Department of Transportation shall provide staff to the
task force.

(f) The task force shall study MBF alternatives to the gas tax.
The task force shall gather public comment on issues and concerns
related to the pilot program and shall make recommendations to
the department and the commission on the design of a pilot
program to test alternative MBF approaches. The task force may
also make recommendations to the department and the commission
on the criteria to be used to evaluate the pilot program.

(g) In studying alternatives to the current gas tax system and
developing recommendations on the design of a pilot program to
test alternative MBF approaches pursuant to subdivision (f), the
task force shall take all of the following into consideration:

(1) The availability, adaptability, reliability, and security of
methods that might be used in recording and reporting highway
use.

(2) The necessity of protecting all personally identifiable
information used in reporting highway use.

(3) The ease and cost of recording and reporting highway use.

(4) The ease and cost of administering the collection of taxes
and fees as an alternative to the current system of taxing highway
use through motor vehicle fuel taxes.

(5) Effective methods of maintaining compliance.

(h) The task force shall consult with highway users and
transportation stakeholders, including representatives of vehicle
users, vehicle manufacturers, and fuel distributors as part of its
duties pursuant to subdivision (g).

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Based on the recommendations of the MBF Task Force,
the Transportation Agency shall develop and implement, by
January 1, 2016, a pilot program to identify and evaluate issues
related to the potential implementation of an MBF program in
California.

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(a) The Transportation Agency shall prepare and submit
a report of its findings based on the results of the pilot program
to the MBF Task Force, the California Transportation Commission,
and the appropriate policy and fiscal committees of the Legislature
by no later than June 30, 2017. The report shall, include, but not
be limited to, a discussion of all of the following issues:

(1) Cost.

(2) Privacy.

(3) Jurisdictional issues.

(4) Feasibility.

(5) Complexity.

(6) Acceptance.

(7) Use of revenues.

(8) Security and compliance.

(9) Potential for additional driver services.

(10) Implementation issues.

(b) The California Transportation Commission shall include
its recommendations regarding the pilot program in its annual
report to the Legislature as specified in Sections 14535 and 14536
of the Government Code.

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This chapter shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that
date.

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SECTION 1.  

Chapter 7 (commencing with Section 3090) is
added to Division 2 of the Vehicle Code, to read:

 

Chapter  7. Mileage-Based Fee Pilot Program

 

3090.  

(a) The Transportation Agency shall develop, by January
1, 2016, a pilot program designed to explore various methods for
using a mileage-based fee (MBF) to replace the state’s existing
fuel excise tax. The agency, at a minimum, shall assess the
following issues related to implementing an MBF in California:

(1) Different methods for calculating mileage and collecting
road usage information that include alternatives to using electronic
vehicle location data. Any methods considered shall collect the
minimum amount of personal information, including location
tracking information, necessary to accomplish the goals of the
MBF.

(2)  For methods involving vehicle location data, processes for
managing, storing, transmitting, and destroying data to protect the
integrity of the data and ensure the privacy of drivers.

(3) Types of equipment that may be required of the state and of
drivers in order to implement an MBF, including a discussion of
the advantages and disadvantages of the equipment, the privacy
implications and considerations of the equipment, and
contingencies in the event of equipment failure.

(4) Estimated costs, both public and private, associated with the
initial implementation and ongoing operation of an MBF system.

(5) Processes and security measures necessary to minimize fraud
and tax evasion rates.

(6) The appropriate government entities to collect data and
handle revenue collection, and the frequency at which charges
should be billed or collected.

(b) In developing this pilot program, the agency shall consult
with the Department of Motor Vehicles, the Department of
Transportation, the Institute of Transportation Studies at the
University of California, or any other entity identified by the
agency that has expertise in automotive technology, revenue
collection, and protecting the public’s private information.

(c) The agency shall prepare and submit a report of its findings
to the appropriate policy and fiscal committees of the Legislature
no later than June 30, 2017. The report shall include, but not be
limited to, all of the following elements:

(1) Recommendations regarding how to best implement an MBF
in a manner that minimizes confusion and inconvenience to
California’s drivers while also providing safeguards that ensure
their privacy.

(2) Recommendations regarding public and private agency
access, including law enforcement access, to the data collected
and stored for purposes of the MBF that ensures individual privacy
rights as protected by Section 1 of Article 1 of the California
Constitution.

(3) Given the technological and institutional demands associated
with implementing an MBF, a discussion of different processes
that may be used to transition from the fuel tax to an MBF over
time.

(4) A discussion of issues the Legislature may wish to consider
when evaluating whether and how to implement an MBF, including
the potential impact of new, rapidly changing technology, such as
connected cars, which could provide new and possibly more
efficient options for collecting mileage data while protecting the
privacy of drivers.

(5) With the transition from a fuel tax to an MBF, a discussion
of protections and safeguards that can be put in place to ensure
that the MBF has at least the same level of protection from
diversion and the same eligible uses as the fuel taxes being
replaced, including consideration of voter approval.

(d) This chapter shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2018, deletes or extends that date.

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begin insert SEC. 3. end insert   

Chapter 7 (commencing with former Section 3100) of
Division 2 of the Vehicle Code is repealed.