Authorizes Governor to suspend an adjustment to the motor vehicle fuel tax based on CPI scheduled on or after July 1, 2025.

The Motor Vehicle Fuel Tax Law, administered by the California
Department of Tax and Fee Administration, imposes a tax upon each gallon of motor vehicle fuel removed from a refinery or terminal rack in the state, entered into the state, or sold in the state, at a specified rate per gallon. Existing law requires the department to adjust the tax on July 1 each year by a percentage amount equal to the increase in the
California Consumer Price Index, as calculated by the Department of Finance. Article XIX of the California Constitution restricts the expenditure of revenues from the Motor Vehicle Fuel Tax Law, Diesel Fuel Tax Law, and other taxes imposed by the state on fuels used in motor
vehicles upon public streets and highways to street and highway and certain mass transit purposes.

This bill authorize the Governor to suspend an adjustment to
the motor vehicle fuel tax, as described above, scheduled on or after July 1, 2025, upon making a determination that increasing the rate would impose an undue burden on low-income and middle-class families. The bill would require the Governor to notify the Legislature of an intent
to suspend the rate adjustment on or before January 10 of that year, and would require the Department of Finance to submit to the Legislature a proposal by January 10 that would maintain the same level of funding for transportation purposes as would have been generated had the
scheduled adjustment not been suspended.

Pending committee assignment. May be heard in committee March 18.

02/16/20 24 Read first time in Assembly.