BILL ANALYSIS Ó
SB 1077
Page 1
Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1077 (DeSaulnier) - As Amended: June 16, 2014
SENATE VOTE : 23-11
SUBJECT : Mileage-Based Fee Pilot Program
SUMMARY : Creates a Mileage-Based Fee (MBF) Task Force (task
force) to guide development and implementation of a pilot
program to study the potential for an MBF as an alternative to
the gas tax. Specifically, this bill :
1)Makes legislative findings and declarations regarding the
inadequacy of the gas tax to meet California's long-term
revenue needs for transportation and the need to explore an
MBF program as an alternative to the antiquated gas tax system
now in place.
2)Creates a 14-member task force within the California
Transportation Commission (CTC) and prescribes its membership
as follows:
a) Two members of the Assembly, appointed by the Speaker of
the Assembly;
b) Two members of the Senate, appointed by the Senate
Committee on Rules;
c) Two members of the CTC, appointed by the chairperson of
the CTC; and,
d) Eight members appointed by the Governor, representing
the telecommunications industry, highway user groups, the
data security and privacy industry, the transportation
research community, and national research and policymaking
bodies.
3)Provides that task force members are entitled to compensation
and expenses as authorized by CTC.
4)Directs the California Department of Transportation (Caltrans)
to provide staff to the task force.
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5)Directs the task force to study MBF alternatives to the gas
tax and to guide development and evaluation of a pilot program
to test MBF approaches; specifically directs the task force to
take the following into consideration:
a) The availability, adaptability, reliability, and
security of methods that might be used in recording and
reporting highway use;
b) The necessity of protecting all personally identifiable
information used in reporting highway use;
c) The ease and cost of recording and reporting highway
use;
d) 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 gas taxes; and,
e) Effective methods of maintaining compliance.
6)Requires the task force to consult with highway users and
transportation stakeholders, including representatives of
vehicle users, vehicle manufacturers, and fuel distributors.
7)Directs the California State Transportation Agency (CalSTA) to
develop and implement, by January 1, 2016, a pilot program,
based on guidance from the task force, to identify and
evaluate issues related to potential implementation of an MBF
program.
8)Requires CalSTA to submit a report to the task force, CTC, and
the Legislature, by June 30, 2017, that includes discussion on
all the following:
a) Cost;
b) Privacy;
c) Jurisdictional issues;
d) Feasibility;
e) Complexity;
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f) Acceptance;
g) Use of revenues;
h) Security and compliance;
i) Potential for additional driver services; and,
j) Implementation issues.
9)Directs CTC to include its recommendations regarding the pilot
program in its annual report.
10)Sunsets and is repealed on January 1, 2018.
EXISTING LAW:
1)Imposes an excise tax on gasoline, comprised of two parts:
a) A price-based excise tax the rate of which is calculated
to generate revenue equal to what would have been generated
had sales and use tax been collected on gasoline. The
current rate is 21.5[ per gallon until July 1,
2014, when it will drop to 18[ per gallon; and,
b) The traditional excise tax of 18[ per gallon.
2)Vests CTC with responsibility to advise and assist the
Secretary of CalSTA and the Legislature in formulating and
evaluating state policies and plans for California's
transportation programs.
FISCAL EFFECT : Unknown. The task force and pilot program set
forth in this bill are modeled after Oregon's MBF task force and
pilot program, which reportedly cost $3.5 million. California,
with its much greater size and complexity, could easily exceed
this amount, depending on how the task force is convened and the
pilot program is conducted.
COMMENTS : Since 1923, California and the rest of the nation has
relied heavily on gas taxes to support its local streets and
roads and state highway system. Gas taxes have the benefit of
being fairly inexpensive to administer. Furthermore, until
recently, they have been a reasonably equitable means of
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distributing the tax burden amongst drivers in rough proportion
to their use of the roadway system.
The gas tax is no longer a viable, sustainable revenue source,
however. According to the Institute on Taxation and Economic
Policy, two important developments have combined to reduce the
functionality of the gas tax greatly:
1)The purchasing power of gas tax revenues has declined
significantly due to inflation. If current tax rates, set in
1994, remain unchanged through 2035, real gas tax revenue will
have declined by over 40%; 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 undeniably desirable.
Decreased fuel consumption reduces greenhouse gasses and our
dependence on foreign oil. But with vehicle fuel efficiency
set to nearly double in the next 20 years, gas tax revenues
will be cut nearly in half.
In the face of rapidly declining gas tax revenues many have
implored state legislatures and Congress to raise state and
federal gas tax rates. However, raising the gas tax rate is not
a long-term viable funding solution nor does it support the
state's policies goals. As Mary Peters, United States Secretary
of Transportation from 2007 to 2009, pointed out in response to
a suggestion that the federal gas tax be increased:
"It would be virtual policy schizophrenia to increase our
reliance on gasoline tax revenue to improve and sustain our
nation's transportation systems while striving to reduce
U.S. oil consumption and promote the production and use of
alternative fuels. The success of one policy would by
definition mean the failure of the other."
An alternative to the gas tax must be found. The alternative
most often cited across the nation is MBFs. According to the
RAND Corporation, MBFs promise more stable revenue than gas
taxes and distribute the tax burden in proportion to travel,
with greater precision. And 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 driving toward
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a major overhaul of the fleet to near-zero or zero emission
vehicles (i.e., non-gas vehicles).
Recognizing that California's current gas tax system is
unsustainable, last year as part of the Governor's proposed
budget the Governor directed CalSTA to convene a workgroup
consisting of state and local transportation stakeholders to,
among other tasks, explore long-term, pay-as-you-go funding
options. As a result, CalSTA released in February of this year
its vision and interim recommendations in a report entitled
California Transportation Infrastructure Priorities: Vision and
Interim Recommendations (commonly referred to as CTIP),
including the recommendation to explore a voluntary pilot
program to study, review, and consider the viability of an MBF
in California. In response, CalSTA is working with stakeholders
to develop a strategy and recommendations for proceeding with
some sort of pilot program to explore an MBF program. The
stakeholder group is expected to complete its initial review by
the end of the summer.
Concurrent with this effort, Caltrans recently joined with other
western state departments of transportation in a consortium to
explore the technical and operational feasibility of a
multi-jurisdictional an MBF system. Oregon is at the forefront
of this charge, having just enacted the nation's first permanent
MBF program. SB 1077 is modeled after legislation that guided
Oregon's MBF pilot program.
SB 1077 provides for a rigorous, independent review of a
potential MBF system and would complement the work already begun
by Caltrans and CalSTA. Although the task force and pilot
program will likely consume substantial resources, the
significance of this effort should not be underestimated.
Billions of dollars of lost gas tax revenue are at stake. For
more than a decade CTC has raised concerns with respect to the
decline and instability of gas tax revenues. It has urged that
the Legislature and the Administration to consider
implementation of an MBF system to address California's
transportation needs. This bill will finally begin to answer
that call.
Suggested amendments:
1)Regional transportation agencies, the state's major
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transportation partners, are not represented on the task force
as they should be. Consequently, the task force should be
expanded to 15 members and the Governor should be directed to
appoint an additional member representing regional
transportation agencies.
2)Earlier versions of the bill included specific direction and
limitations related to ensuring that maximum privacy
protections are included in the pilot program. Those
requirements should be added back into the bill.
Privacy-related concerns must be addressed up front and
thoroughly or any attempt to implement an MBF system will
surely fail.
Previous legislation: SB 1299 (Lowenthal) would have required
DMV to implement a similar MBF pilot program. That bill died on
the Senate Appropriations suspense file.
AJR 5 (Lowenthal, Resolution Chapter 29, 2011) requested the
President and Congress to consider and enact legislation to
conduct a study regarding the feasibility of the collection
process for a transportation revenue source based on vehicle
miles traveled, in order to facilitate the creation of a
reliable and steady transportation funding mechanism for the
maintenance and improvement of surface transportation
infrastructure.
REGISTERED SUPPORT / OPPOSITION :
Support
AAA Northern California, Nevada & Utah
Alameda County Transportation Commission
Alliance of Automobile Manufacturers
American Council of Engineering Companies
American Planning Association
American Society of Civil Engineers, Region 9
Associated General Contractors
Auto Club of Southern California
California Asphalt Pavement Association
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California Councils of Government
League of California Cities
Metropolitan Transportation Commission
Professional Engineers in California Government
San Mateo County Transportation Authority
Santa Clara Valley Transportation Authority
Self-Help Counties Coalition
TransForm
Transportation Agency for Monterey County
Transportation California
Opposition
None on file
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093