veeto
Home
Bills
Feedback
hamburger
    Privacy PolicyResources
    © 2025 Veeto.
    SB-359
    Budget & Economy

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

    Enrolled
    CA
    ∙
    2025-2026 Regular Session
    0
    0
    Track
    Track

    Key Takeaways

    • Expands exemptions for exempt bus operation to counties owning local transit systems.
    • Imposes a 1-cent-per-gallon levy on exempt fuels paid to the CDTFA.
    • Shifts administration from the State Board of Equalization to the California Department of Tax and Fee Administration.
    • Operative provisions take effect the first calendar quarter after more than 90 days.

    Summary

    Senator Niello’s measure weaves policy substance with a broader scope for transit funding by extending exemptions from use-fuel and diesel-fuel taxes to counties that own and operate local transit systems, while introducing a new 1-cent-per-gallon levy on exempt fuels and transferring tax administration to the California Department of Tax and Fee Administration. The levy is described as immediate, with the exemptions and collection provisions becoming operative on the first calendar quarter that begins more than 90 days after the act’s effective date. The bill thus creates a two-stage timing framework: a contemporaneous levy and an later-on operative exemption regime.

    Key provisions establish parallel—but not identical—exemption structures across the Use Fuel Tax Law and the Diesel Fuel Tax Law. Exempt bus operation would include: (1) counties or transit entities that own and operate a local transit system directly or through a wholly owned nonprofit; (2) private operators under contract with a public agency for services entered into after the act’s effective date; (3) passenger stage corporations under Public Utilities Commission jurisdiction with specified urban/suburban routes and mileage caps; (4) common carriers operating primarily within a single city; (5) school districts, community college districts, or county offices of education operating buses for pupils and related activities; and (6) private entities under contract with a school district or related entity for the activities in (5) under contracts entered after the act’s effective date. In both laws, a charter-party carrier exemption is expressly excluded. A separate 1-cent-per-gallon levy on exempt fuels, payable to the CDTFA and treated as a tax, accompanies these exemptions. The bill also shifts administration from the State Board of Equalization to the California Department of Tax and Fee Administration.

    Implementation and administration hinge on timing and contract-date rules. The act contemplates immediate levy recognition, while substantive exemptions and levy collection become operative on the first calendar quarter commencing more than 90 days after the effective date. Notably, the use-fuel exemptions for private entities rely on contracts entered after the act’s effective date, whereas the diesel-fuel exemptions refer to specific historical contract dates for private operators (1979 for general private-contract exemptions and 1984 for certain school-related contracts). The administration shift to CDTFA is reflected throughout, replacing BOE references and aligning with current California practice. Enforcing the exemptions and the levy would require CDTFA-established regulations, forms, and reporting requirements.

    The proposal foregrounds a broader set of beneficiaries—transit districts, cities and counties that run local systems, school-based transportation operators, and contracted private providers—while preserving a charter-party carrier exclusion. It positions CDTFA as the centralized administrator for both exemptions and the 1-cent levy, with the legislative text signaling that funds from the levy “shall be used for the improvement of their transit operations and to aid in providing better transit service to and from places of employment.” As a policy framework, the measure sits alongside existing transit-funding structures and tax administration, with implementation contingent on CDTFA regulations, contract-date determinations, and the operation calendar that marks the delayed operative phase.

    Key Dates

    Vote on Senate Floor
    Senate Floor
    Vote on Senate Floor
    Unfinished Business SB359 Niello Concurrence
    Vote on Assembly Floor
    Assembly Floor
    Vote on Assembly Floor
    SB 359 Niello Senate Third Reading By Patterson
    Assembly Appropriations Hearing
    Assembly Committee
    Assembly Appropriations Hearing
    Do pass
    Assembly Revenue And Taxation Hearing
    Assembly Committee
    Assembly Revenue And Taxation Hearing
    Do pass and be re-referred to the Committee on [Appropriations]
    Vote on Senate Floor
    Senate Floor
    Vote on Senate Floor
    Special Consent SB359 Niello
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Do pass
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Placed on suspense file
    Senate Revenue and Taxation Hearing
    Senate Committee
    Senate Revenue and Taxation Hearing
    Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar
    Introduced
    Senate Floor
    Introduced
    Introduced. Read first time. To Com. on RLS. for assignment. To print.

    Contacts

    Profile
    Roger NielloR
    Senator
    Bill Author
    Not Contacted
    Not Contacted
    0 of 1 row(s) selected.
    Page 1 of 1
    Select All Legislators
    Profile
    Roger NielloR
    Senator
    Bill Author

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    Roger Niello
    Roger NielloR
    California State Senator
    70% progression
    Bill has passed both houses in identical form and is being prepared for the Governor (9/10/2025)

    Latest Voting History

    View History
    September 10, 2025
    PASS
    Senate Floor
    Vote on Senate Floor
    AyesNoesNVRTotalResult
    400040PASS

    Key Takeaways

    • Expands exemptions for exempt bus operation to counties owning local transit systems.
    • Imposes a 1-cent-per-gallon levy on exempt fuels paid to the CDTFA.
    • Shifts administration from the State Board of Equalization to the California Department of Tax and Fee Administration.
    • Operative provisions take effect the first calendar quarter after more than 90 days.

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    Roger Niello
    Roger NielloR
    California State Senator

    Summary

    Senator Niello’s measure weaves policy substance with a broader scope for transit funding by extending exemptions from use-fuel and diesel-fuel taxes to counties that own and operate local transit systems, while introducing a new 1-cent-per-gallon levy on exempt fuels and transferring tax administration to the California Department of Tax and Fee Administration. The levy is described as immediate, with the exemptions and collection provisions becoming operative on the first calendar quarter that begins more than 90 days after the act’s effective date. The bill thus creates a two-stage timing framework: a contemporaneous levy and an later-on operative exemption regime.

    Key provisions establish parallel—but not identical—exemption structures across the Use Fuel Tax Law and the Diesel Fuel Tax Law. Exempt bus operation would include: (1) counties or transit entities that own and operate a local transit system directly or through a wholly owned nonprofit; (2) private operators under contract with a public agency for services entered into after the act’s effective date; (3) passenger stage corporations under Public Utilities Commission jurisdiction with specified urban/suburban routes and mileage caps; (4) common carriers operating primarily within a single city; (5) school districts, community college districts, or county offices of education operating buses for pupils and related activities; and (6) private entities under contract with a school district or related entity for the activities in (5) under contracts entered after the act’s effective date. In both laws, a charter-party carrier exemption is expressly excluded. A separate 1-cent-per-gallon levy on exempt fuels, payable to the CDTFA and treated as a tax, accompanies these exemptions. The bill also shifts administration from the State Board of Equalization to the California Department of Tax and Fee Administration.

    Implementation and administration hinge on timing and contract-date rules. The act contemplates immediate levy recognition, while substantive exemptions and levy collection become operative on the first calendar quarter commencing more than 90 days after the effective date. Notably, the use-fuel exemptions for private entities rely on contracts entered after the act’s effective date, whereas the diesel-fuel exemptions refer to specific historical contract dates for private operators (1979 for general private-contract exemptions and 1984 for certain school-related contracts). The administration shift to CDTFA is reflected throughout, replacing BOE references and aligning with current California practice. Enforcing the exemptions and the levy would require CDTFA-established regulations, forms, and reporting requirements.

    The proposal foregrounds a broader set of beneficiaries—transit districts, cities and counties that run local systems, school-based transportation operators, and contracted private providers—while preserving a charter-party carrier exclusion. It positions CDTFA as the centralized administrator for both exemptions and the 1-cent levy, with the legislative text signaling that funds from the levy “shall be used for the improvement of their transit operations and to aid in providing better transit service to and from places of employment.” As a policy framework, the measure sits alongside existing transit-funding structures and tax administration, with implementation contingent on CDTFA regulations, contract-date determinations, and the operation calendar that marks the delayed operative phase.

    70% progression
    Bill has passed both houses in identical form and is being prepared for the Governor (9/10/2025)

    Key Dates

    Vote on Senate Floor
    Senate Floor
    Vote on Senate Floor
    Unfinished Business SB359 Niello Concurrence
    Vote on Assembly Floor
    Assembly Floor
    Vote on Assembly Floor
    SB 359 Niello Senate Third Reading By Patterson
    Assembly Appropriations Hearing
    Assembly Committee
    Assembly Appropriations Hearing
    Do pass
    Assembly Revenue And Taxation Hearing
    Assembly Committee
    Assembly Revenue And Taxation Hearing
    Do pass and be re-referred to the Committee on [Appropriations]
    Vote on Senate Floor
    Senate Floor
    Vote on Senate Floor
    Special Consent SB359 Niello
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Do pass
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Placed on suspense file
    Senate Revenue and Taxation Hearing
    Senate Committee
    Senate Revenue and Taxation Hearing
    Do pass, but first be re-referred to the Committee on [Appropriations] with the recommendation: To Consent Calendar
    Introduced
    Senate Floor
    Introduced
    Introduced. Read first time. To Com. on RLS. for assignment. To print.

    Latest Voting History

    View History
    September 10, 2025
    PASS
    Senate Floor
    Vote on Senate Floor
    AyesNoesNVRTotalResult
    400040PASS

    Contacts

    Profile
    Roger NielloR
    Senator
    Bill Author
    Not Contacted
    Not Contacted
    0 of 1 row(s) selected.
    Page 1 of 1
    Select All Legislators
    Profile
    Roger NielloR
    Senator
    Bill Author