BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1299 (Lowenthal)
Hearing Date: 05/27/2010 Amended: As Introduced
Consultant: Mark McKenzie Policy Vote: T&H 7-1
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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.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
VMT study and report unknown, likely in the range of
$150-$200Special*
VMT implementation planminor costs to develop plan, significant
cost Special**
pressures to implement pilot program
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* State Highway Account (Caltrans), Motor Vehicle Account (DMV),
minor General Fund costs (BOE)
** Motor Vehicle Account
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
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
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SB 1299 (Lowenthal)
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 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.
Proposed amendments would:
Place the bill's provisions in the Streets and Highways Code,
rather than the Vehicle Code.
Delete provisions requiring DMV to develop and implement a
pilot program, and instead require Caltrans, in cooperation
with DMV and the Board of Equalization (BOE) to conduct a
study reviewing and discussing the literature and completed
and ongoing pilot programs that assess VMT fees.
Require Caltrans, in cooperation with DMV and BOE, to
establish a stakeholder group as a public forum to address
questions and comments.
Require DMV and BOE to develop a plan to implement a pilot
program that would allow for the testing of a VMT fee.
Require Caltrans to submit a report to the Legislature on the
study's findings and the plan to implement a VMT pilot
program.
Sunset the bill's provisions on January 1, 2016.