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AB-1268 • 2026

Motor Vehicle Fuel Tax Law: adjustment suspension.

Motor Vehicle Fuel Tax Law: adjustment suspension.

Taxes
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Macedo
Last action
Official status
Assembly - Died - Transportation
Effective date
Not listed

Plain English Breakdown

The effective date is listed as immediate in the source text, but no specific calendar date for enactment is provided.

Bill AB-1268: Pausing Fuel Tax Increases

This law allows the Governor to pause scheduled yearly fuel tax increases starting July 1, 2025, if raising prices would create an undue burden on low-income and middle-class families.

What This Bill Does

  • Allows the Governor to suspend a scheduled adjustment to the motor vehicle fuel tax on or after July 1, 2025.
  • Requires the Governor to determine that increasing the rate would impose an undue burden on low-income and middle-class families before suspending the adjustment.
  • Mandates that the Governor notify the Legislature of the intent to suspend the rate adjustment by January 10 of the year it is scheduled.
  • Orders the Department of Finance to submit a proposal to the Legislature by January 10 showing how transportation funding will be maintained at the level expected if the tax increase had happened.
  • Updates legal text to replace references to the 'State Board of Equalization' with the 'California Department of Tax and Fee Administration'.
  • Takes effect immediately as a change to state taxes.

Who It Names or Affects

  • The Governor, who gains authority to pause tax adjustments.
  • Low-income and middle-class families in California, whose financial burden is the reason for potential pauses.
  • The Legislature, which must receive notifications and funding proposals from state officials.
  • The Department of Finance and the California Department of Tax and Fee Administration.

Terms To Know

Motor Vehicle Fuel Tax Law
State rules that charge a tax on each gallon of motor vehicle fuel removed from a refinery or terminal rack, entered into the state, or sold in California.
California Consumer Price Index
A measure calculated by the Department of Finance used to determine the percentage amount for yearly tax adjustments.
Undue burden
An excessive financial pressure placed on low-income and middle-class families if fuel taxes are increased as scheduled.

Limits and Unknowns

  • The bill does not specify the exact amount of revenue lost by pausing a tax increase.
  • It is unknown whether the Governor will choose to suspend any future adjustments after July 1, 2025.
  • The text does not state what happens if no proposal can be found to maintain transportation funding levels.

Bill History

  1. California Legislative Information

    Assembly - Died - Transportation

Official Summary Text

Motor Vehicle Fuel Tax Law: adjustment suspension.