Vehicle miles traveled: local tax and state fund prohibition.

Plain English Breakdown

Checked against official source text during the last sync.

No Taxes Based on Miles Driven

This law stops local governments from charging taxes based on how many miles people drive and also prevents state agencies from using money to study or create such taxes.

What This Bill Does

• It does not allow cities, counties, or other parts of the government to charge taxes based on how far cars travel.
• It says that state agencies cannot use any money for studying, planning, testing, designing, implementing, managing, or checking a tax based on miles driven by vehicles.
• It requires the Department of Finance to find and return any unused funds meant for such studies within 60 days after January 1, 2027.
• It stops future budgets from giving money for taxes based on miles unless there is a specific law that says it's okay.

Who It Names or Affects

• Local governments like cities and counties
• State agencies

Terms To Know

Vehicle Miles Traveled (VMT)

The total number of miles driven by vehicles in a certain area.

Department of Finance

A state agency that manages the budget and financial matters for California.

Limits and Unknowns

• This law does not stop toll collection for specific facilities.
• The bill did not pass in its current form, so it is unclear if or when it will become a law.

Official Summary Text

AB 1783, as amended, DeMaio.
Additional local taxes: vehicle
Vehicle
miles
traveled tax.
traveled: local tax and state fund prohibition.
(1) Existing law sets forth various provisions on the use of state funds, including by prohibiting the use of a grant of state funds to assist, promote, or deter union organizing.
This bill would prohibit a state agency from expending funds for the study, planning, testing, design, implementation, administration, or evaluation of a tax, fee, assessment, or charge based on vehicle miles traveled (vehicle miles purposes). The bill would require the reversion of funds appropriated from the General Fund to another fund for vehicle miles purposes and would require the deobligation of encumbered but unexpended funds for those purposes. The
bill would require the Department of Finance to, within 60 days of January 1, 2027, identify all relevant appropriations and ensure their reversion or transfer. The bill would additionally prohibit any future Budget Act from appropriating funds for vehicle miles purposes unless expressly authorized by statute, as described.
Existing
(2)
Existing law authorizes the legislative body of a city or county to impose various taxes, including occupancy taxes and sales and use taxes. Existing law also prohibits a city and county form imposing certain taxes, such as a tax upon income.
This bill would prohibit a city, county, or any political subdivision thereof from imposing a tax, fee, assessment, or charge, that is calculated, in whole or in part, based on the number of miles traveled by a motor vehicle. The bill would not prohibit the collection of tolls for the use of specific facilities, as provided. The bill would provide that any existing program, pilot program, regulation, or administrative action inconsistent with this prohibition is void and unenforceable.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

Current Bill Text

Download Bill PDF