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

Senator Niello's transit funding legislation extends California's fuel tax exemptions to county-operated local transit systems, placing counties on equal footing with cities, transit districts, and transit authorities that already qualify for relief under the Mills-Hayes Act. The measure modifies both the Use Fuel Tax Law and Diesel Fuel Tax Law to incorporate county transit operations while maintaining existing exemptions for other public transportation providers.

The bill requires exempt entities to pay one cent per gallon on fuel used for vehicles operating on state highways and freeways, with payments directed to the California Department of Tax and Fee Administration. This provision preserves a baseline contribution to transportation infrastructure while still offering substantial tax relief. Charter-party carriers remain excluded from these exemptions, maintaining current requirements for private transportation services.

These changes reflect the transfer of tax administration duties from the State Board of Equalization to the California Department of Tax and Fee Administration, updating statutory language to align with the 2017 reorganization. The provisions take effect in the first calendar quarter beginning more than 90 days after enactment, providing time for affected agencies to implement necessary administrative adjustments.