BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1299 (Lowenthal)
Hearing Date: 05/03/2010 Amended: As Introduced
Consultant: Mark McKenzie Policy Vote: T&H 7-1
_________________________________________________________________
____
BILL SUMMARY: SB 1299 would require the Department of Motor
Vehicles (DMV) to develop and implement a pilot program by
January 1, 2012 to assess specified issues related to
implementing a vehicle miles traveled (VMT) fee in California.
DMV would report its findings and recommendations to the
Legislature June 30, 2012.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
VMT assessment over $200, but potentially significant
costs Special*
Report likely minor costs in 2011-12 Special*
____________
* Motor Vehicle Account
_________________________________________________________________
____
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
VMT fees have received increased attention in recent years as a
potential alternative to the fuel tax as source of
transportation funding. Several comprehensive studies and pilot
programs have been completed or are underway, including an
academic research study in Iowa and pilot programs in Oregon and
Washington State. These studies indicate that VMT could be a
viable revenue source, but also identify technological and
institutional challenges to implementing a comprehensive VMT
program.
SB 1299 would require DMV to assess the following issues related
to implementing a VMT fee in California: (1) different methods
for calculating mileage; (2) processes for transmitting data
that ensure privacy and integrity of the information; and (3)
equipment that may be required by the state and drivers,
including contingencies in cases of equipment failure. The bill
would require DMV to submit a report to the Legislature by June
30, 2012 that would include: (1) recommendations for
implementing a VMT; (2) a discussion of options for
transitioning from a fuel tax to a VMT fee; and (3) issues for
consideration by the Legislature in evaluating whether to
implement a VMT.
Staff notes that costs related to this bill are unknown, but
would depend upon the rigor of DMV's assessment of issues
related to implementing a VMT. It is assumed that DMV staff
would aggregate the results of pilot programs and studies
conducted in other jurisdictions and evaluate their
applicability to California, survey technology providers to
determine available equipment options and infrastructure costs,
evaluate various methods for collecting data and ensuring its
integrity, assess issues related to phasing in a VMT fee
collection system (including when, where, and how often the fees
would be collected), and survey the acceptability of such a
system among fee payers. Staff estimates that DMV costs related
to an assessment that simply gathered information and proposed
recommendations for further inquiry could exceed $200,000.
However, if
Page 2
SB 1299 (Lowenthal)
DMV determined that extensive equipment testing were required to
record mileage, transmit and maintain data, assess the fees, and
administer the program, costs related to this assessment could
be significant and would likely include contracting out for lab-
or field-based testing. For example, Oregon's pilot program was
rather extensive, involving 260 volunteers to evaluate the
technological and administrative feasibility of a mileage-based
fee using GPS equipment installed in vehicles and data
collection via short-range radio frequency to receivers at gas
stations. Costs for the Oregon program were approximately $3
million. SB 1299 does not require a pilot program of this
magnitude.
Staff notes that the actual implementation of a VMT fee in
California would impose a substantial workload on DMV or other
administering agency, resulting in multi-million dollar costs.
This bill is intended to assess whether a VMT fee is a feasible
alternative source of transportation funding.