BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1077 (DeSaulnier) - Vehicles: mileage-based fee pilot
program.
Amended: April 21, 2014 Policy Vote: T&H 9-0
Urgency: No Mandate: No
Hearing Date: May 12, 2014 Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1077 would require the Transportation Agency
(STA) to develop a pilot program by January 1, 2016 to explore
methods for using a mileage-based fee (MBF) that would replace
the state's excise tax on gasoline, and assess specified issues
related to statewide implementation of a mileage-based fee.
The bill would also require STA to submit a report to the
Legislature by June 30, 2017 that includes specified findings
and recommendations related to implementation of an MBF.
Fiscal Impact:
Unknown, likely minor costs to assess specified issues and
develop a plan for conducting a pilot in 2014-15. Staff
notes that the Department of Transportation (Caltrans),
through administrative action, has initiated efforts to
gather information and make recommendations for developing a
mileage-based fee pilot program. (State Highway Account)
Unknown costs, likely over $1 million annually through
2016-17, to conduct lab and field testing of equipment and
implement the pilot program. (State Highway Account)
Estimated costs of $50,000 to $100,000 in 2016-17 to
prepare and submit the report to the Legislature. (State
Highway Account)
Background: Mileage-based fees, also referred to as
vehicle-miles travelled (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 to date,
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
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technological and institutional challenges to implementing a
comprehensive VMT program. A measure was recently enacted in
Oregon (Senate Bill 810, 2013 Regular Session) to implement a
voluntary program that would allow 5,000 vehicle owners to pay a
per-mile road charge of 1.5 cents per mile in lieu of a fuel
tax, beginning in 2015.
Proposed Law: SB 1077 would require STA to develop an MBF pilot
program by January 1, 2016 to assess the following issues
related to implementing an MBF in California to replace the fuel
excise tax as a source of transportation funding:
Methods for calculating mileage and collecting road
usage information that minimizes the collection of personal
information and includes alternatives to using electronic
vehicle location data.
Processes for managing, storing, transmitting, and
destroying data to ensure privacy and protect the integrity
of the data.
Types of equipment that may be required by individuals
and state agencies in order to implement an MBF, including
an assessment of the advantages and disadvantages, privacy
considerations, and contingencies for failure related to
any necessary equipment.
Estimated costs, both public and private, associated
with the initial implementation and ongoing operation of an
MBF system.
Processes and security measures necessary to minimize
fraud and tax evasion.
The appropriate government entities to collect data and
administer revenue collection, and the frequency of billing
and collecting MBF charges.
The bill requires the STA to consult with the following entities
to develop the pilot program: the Department of Motor Vehicles
(DMV), Caltrans, the Institute of Transportation Studies at the
University of California, or any other entity that has expertise
in automotive technology, revenue collection, and protecting the
public's private information.
SB 1077 would also require STA to submit a report of its
findings to the Legislature by June 30, 2017 that includes the
following elements:
Recommendations for implementing an MBF in a manner that
minimizes driver confusion and inconvenience while
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safeguarding privacy.
Recommendations regarding access to collected and stored
MBF data by public and private agencies, including law
enforcement, that ensures the protection of individual
privacy rights, as specified in the California
Constitution.
A discussion of various processes for transitioning from
a fuel excise tax to an MBF over time, given the
technological and institutional demands associated with
implementation.
A discussion of issues the Legislature may wish to
consider when evaluating whether and how to implement an
MBF, including emerging vehicle technologies that may
provide efficient options for collecting mileage data while
protecting the privacy of drivers.
A discussion of protections and safeguards that may be
enacted to ensure that an MBF has protections from
diversion and use of the revenues for non-transportation
purposes, and the same eligible uses as existing fuel tax
revenues, including consideration of voter approval.
This bill would sunset on January 1, 2018.
Related Legislation: SB 1299 (Lowenthal), which was held on this
committee's Suspense File in 2010, would have required DMV to
develop and implement a pilot program to assess specified issues
related to implementing a VMT fee in California that would
replace the excise tax on gasoline.
Staff Comments: Costs related to this bill are unknown, but
would depend upon the rigor of STA's assessment of issues
related to implementing an MBF, and the size and scope of the
pilot. STA was unable to provide an estimate of pilot costs at
the time of this analysis. Staff assumes that STA or Caltrans
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 an MBF 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. Implementation of a pilot program
would require recruiting participants, testing of
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mileage-recording equipment, methods for fee collection, and the
collection, transmission, and maintenance of data. Staff
estimates costs to conduct the pilot would likely exceed $1
million, and potentially several million, annually over two
fiscal years.
For comparative purposes, Oregon's 2007 pilot program was rather
extensive, involving nearly 300 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 Oregon's program were approximately $3
million. Oregon's costs for the more recent 2012-13 pilot
program that involves approximately 100 participants in three
states are unknown. Costs for administering Oregon's
forthcoming voluntary per-mile road charge, as noted above, are
anticipated to be approximately $1.4 million per year.