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.