What happened: California Gov. Gavin Newsom (D) signed SB 339 into law on Sept. 24, expanding a state pilot program that charges volunteer drivers a fee based on the number of miles driven, as opposed to a gasoline tax.
Why it matters: Gov. Newsom’s 2020 executive order banning the sale of gas-powered vehicles by 2035 is driving California’s development of a mileage-based financing system. The state began developing a pilot program for mileage-based alternatives to the gas tax in 2014. A committee confirmed the viability of mileage-based financing mechanisms in a 2017 report. They found a high overall level of satisfaction among the program’s volunteer participants, but the committee failed to address other aspects of a potential road charge program, including the actual testing of revenue collection. SB 339 extends the current program until 2027 and implements a fee-collection process. Participants will receive a refund for gas taxes and electric vehicles fees they would’ve otherwise paid over that period. This process will allow California to estimate revenue flows for any future road charge program.
What’s next: Recommendations to the California State Transportation Agency (CalSTA) are due by July 1, 2023. The program is voluntary for non-state-owned commercial vehicles.