Use Fuel Tax Law: Diesel Fuel Tax Law: exempt bus operation.

Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Niello
Last action: 2025-10-01
Official status: Chaptered by Secretary of State. Chapter 217, Statutes of 2025.
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Diesel Fuel Tax Exemption for County Bus Operations

This law changes the rules to allow counties that run local bus systems to be exempt from certain diesel fuel taxes.

What This Bill Does

Adds an exemption in the Use Fuel Tax Law so counties can avoid paying a tax on diesel fuel when they operate local buses.
Updates references in the Use Fuel Tax Law from the State Board of Equalization to the California Department of Tax and Fee Administration, reflecting recent changes in how taxes are managed.
Expands the Diesel Fuel Tax Law exemption for bus operations to include counties that own and run local transit systems.

Who It Names or Affects

Counties that operate local bus services
The California Department of Tax and Fee Administration

Terms To Know

Use Fuel Tax Law: A law in California that puts a tax on the use of fuel.
Diesel Fuel Tax Law: A law in California that taxes diesel fuel when it is distributed or delivered.

Limits and Unknowns

The exact date this law will start working depends on its effective date.
This bill does not specify how much money counties might save from the tax exemption.

Bill History

2025-10-01 California Legislative Information
Chaptered by Secretary of State. Chapter 217, Statutes of 2025.
2025-10-01 California Legislative Information
Approved by the Governor.
2025-09-17 California Legislative Information
Enrolled and presented to the Governor at 2 p.m.
2025-09-10 California Legislative Information
Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2818.) Ordered to engrossing and enrolling.
2025-09-08 California Legislative Information
In Senate. Concurrence in Assembly amendments pending.
2025-09-08 California Legislative Information
Read third time. Passed. (Ayes 78. Noes 0. Page 2991.) Ordered to the Senate.
2025-09-02 California Legislative Information
Read second time. Ordered to third reading.
2025-08-29 California Legislative Information
From committee: Do pass. (Ayes 15. Noes 0.) (August 29).
2025-08-20 California Legislative Information
August 20 set for first hearing. Placed on APPR. suspense file.
2025-07-15 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (July 14). Re-referred to Com. on APPR.
2025-06-26 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
2025-06-24 California Legislative Information
June 23 set for first hearing. Placed on REV. & TAX. suspense file.
2025-06-05 California Legislative Information
Referred to Com. on REV. & TAX.
2025-05-29 California Legislative Information
In Assembly. Read first time. Held at Desk.
2025-05-29 California Legislative Information
Read third time. Passed. (Ayes 38. Noes 0. Page 1325.) Ordered to the Assembly.
2025-05-27 California Legislative Information
Ordered to special consent calendar.
2025-05-23 California Legislative Information
Read second time. Ordered to third reading.
2025-05-23 California Legislative Information
From committee: Do pass. (Ayes 6. Noes 0. Page 1197.) (May 23).
2025-05-20 California Legislative Information
Set for hearing May 23.
2025-05-19 California Legislative Information
May 19 hearing: Placed on APPR. suspense file.
2025-05-15 California Legislative Information
Set for hearing May 19.
2025-05-14 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 5. Noes 0. Page 1082.) (May 14). Re-referred to Com. on APPR.
2025-04-08 California Legislative Information
From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
2025-03-18 California Legislative Information
Set for hearing May 14.
2025-02-26 California Legislative Information
Referred to Com. on REV. & TAX.
2025-02-14 California Legislative Information
From printer. May be acted upon on or after March 16.
2025-02-13 California Legislative Information
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 359, Niello.
Use Fuel Tax Law: Diesel Fuel Tax Law: exempt bus operation.
The Use Fuel Tax Law imposes a state excise tax at specified rates, generally $0.18 per gallon, on the use of fuel, as defined, and establishes various exemptions from those taxes, including an exemption for any transit district, transit authority, or city owning and operating a local transit system, as provided.
This bill would additionally apply this exemption to a county that owns and operates a local transit system, as provided.
The California Constitution provides for the establishment of the State Board of Equalization, which, before July 1, 2017, had primary responsibility for most of the state’s duties, powers, and responsibilities regarding the administration of taxes and fees.
Existing law, on July 1, 2017, transferred to the California Department of Tax and Fee Administration various duties, powers, and responsibilities of the State Board of Equalization, including administration of the Use Fuel Tax Law, as specified.
This bill would change references in the Use Fuel Tax Law provisions described above from the “State Board of Equalization” to the “California Department of Tax and Fee Administration” to reflect the transfer of the board’s duties, powers, and responsibilities to the department.
The Diesel Fuel Tax Law imposes taxes at a specified rate with respect to the distribution or delivery of each gallon of diesel fuel, and establishes various exemptions from those taxes, including an exemption for an exempt bus operation that consists of, among other things, a transit district, transit authority, or city owning and
operating a local transit system, as provided.
This bill would additionally apply this exemption to a county that owns and operates a local transit system, as provided.
This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.

Current Bill Text

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