California Assembly Bill 1638 – Motor Vehicle Fuel Tax Law: Suspension of Tax

Bill No.:
AB 1638
Bill Location:
CaliforniaAssembly / House
Bill Title:

Motor Vehicle Fuel Tax Law: Suspension of Tax

Full Bill Text ›
NMA Recommendation:

UPDATE April 7, 2022: Bill was Stricken from File and died.

Assembly Bill 1638 would suspend the fuel tax for six months in an effort to provide Californians with relief from high gas prices. To pay for this, the bill would transfer a specified amount from the General Fund to the Motor Vehicle Fuel Account in the Transportation Tax Fund. It is pending in the Assembly Transportation Committee. Learn more about this bill here.

Manipulating fuel tax rates arbitrarily or based on political whims does not serve motorists. Keeping the fuel tax flat over time may seem like a good thing for motorists, but the shortfall will have to be made up in some way. Increasingly, policymakers are looking to intrusive and inefficient road funding schemes such as a mileage-based users fee. Such programs, also known as Vehicle Miles Traveled (VMT) taxes, are particularly problematic for motorists on many levels. Learn more here.

The NMA advocates for a fair and adequate fuel tax rate (both at the state and federal levels) as the most efficient and equitable way to provide transportation funding. Heavier, less fuel-efficient vehicles contribute more to road wear and tear than do smaller passenger vehicles and motorcycles, but by virtue of higher fuel consumption their owners also pay more for highway upkeep and improvements. Reducing reliance on the motor fuel tax may hasten the adoption of user fees or similar detrimental funding alternatives.

Advocates for user fees point out that electric vehicle owners do not pay their fair share in fuel taxes. However, the proliferation of public electric charging stations means drivers could be charged a tax per kilowatt-hour, similar to the efficient “pay at the pump” gas tax model. Drivers with home charging stations and hybrid owners could pay an annual fee based on average travel amount, with proceeds going to state and federal highway funds. There is no reason to implement costly and intrusive VMT schemes based on tracking vehicle movements when simple and fair alternatives are available.

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