California Senate Bill SB94

California 2025-2026 Regular Session

• Introduced: 1/23/25
• Refer: 2/5/25
• Refer: 3/26/25
• Refer: 4/2/25
• Refer: 4/3/25
• Failed: 2/2/26

Caption

An act to amend Section 39000 of the Vehicle Code, relating to transportation. 39719 of the Health and Safety Code, and to amend Sections 7360, 7362, 7363, and 7364 of, and to add and repeal Section 7374 of, the Revenue and Taxation Code, relating to transportation, and making an appropriation therefor.

Summary

SB 94 would reallocate a portion of California’s cap-and-trade revenues and adjust the state motor vehicle fuel tax to offset that transfer. Specifically, it would end the existing continuous appropriation of 25% of Greenhouse Gas Reduction Fund proceeds to the High-Speed Rail Authority on June 30, 2026, and instead direct 25% of annual fund proceeds to the Motor Vehicle Fuel Account from the 2026-27 fiscal year through December 31, 2030. The bill also adds a mechanism requiring the Department of Tax and Fee Administration to reduce the fuel tax rate by a percentage calculated each year so that the amount of fuel-tax revenue collected is reduced by roughly the amount transferred from the Greenhouse Gas Reduction Fund. In addition to the funding shift, the bill makes conforming changes to the Revenue and Taxation Code so the fuel tax provisions exclude the new reduction formula in Section 7374. It also includes a technical, nonsubstantive amendment to the Vehicle Code definition of “bicycle.” The practical effect is to redirect transportation-related funding away from high-speed rail and into the Motor Vehicle Fuel Account, while lowering the per-gallon fuel tax during the same period to maintain a revenue offset tied to the new transfer. The bill’s impact on state law would be significant because it changes the statutory allocation of cap-and-trade proceeds under the Global Warming Solutions Act and alters the operation of the state’s motor vehicle fuel tax law. It would temporarily override the existing 25% continuous appropriation for high-speed rail, create a new annual transfer to the Motor Vehicle Fuel Account, and require annual administrative calculations by the tax agency and Air Resources Board. Because the bill transfers money into a continuously appropriated account, it is treated as an appropriation and has fiscal implications for the state budget and transportation funding structure. The available voting history suggests the bill faced resistance in committee. On April 23, 2025, it failed passage in committee on a 5-0 vote, though reconsideration was granted, and a later vote on a motion to do pass but re-refer to Environmental Quality failed 1-4. That pattern indicates limited committee support at that stage, with the bill not advancing cleanly through the Revenue and Taxation Committee process. Overall sentiment appears mixed to negative in committee, with the main point of contention likely being the redirection of greenhouse gas reduction funds away from high-speed rail and the broader policy choice to use cap-and-trade proceeds to offset fuel taxes. Supporters would likely frame the bill as providing transportation tax relief and redirecting funds to the Motor Vehicle Fuel Account, while opponents would likely object to weakening a major funding stream for high-speed rail and altering the intended use of climate-related revenues.

Impact

SB 94 would amend Health and Safety Code Section 39719 to terminate the existing 25% continuous appropriation of Greenhouse Gas Reduction Fund proceeds to the High-Speed Rail Authority after June 30, 2026, and replace it with a 25% annual transfer to the Motor Vehicle Fuel Account from the 2026-27 fiscal year through December 31, 2030. It would also add Revenue and Taxation Code Section 7374 to require annual calculations that reduce the fuel tax rate by an amount intended to offset the transferred cap-and-trade revenue, while making conforming changes to the fuel tax provisions in Sections 7360, 7362, 7363, and 7364. The bill would therefore affect state transportation finance, cap-and-trade revenue allocation, and the administration of motor vehicle fuel taxes, while making a technical change to the Vehicle Code’s bicycle definition.

Sentiment

The bill appears to have generated limited support in committee and encountered procedural difficulty. The recorded votes show a failed passage vote and a failed motion to do pass and re-refer, suggesting skepticism among committee members. Because there are no transcripts, the available record does not show detailed debate, but the vote pattern indicates the proposal was not broadly embraced at that stage.

Contention

The central point of contention is the bill’s shift of 25% of Greenhouse Gas Reduction Fund proceeds away from the High-Speed Rail Authority and into the Motor Vehicle Fuel Account, paired with a corresponding fuel-tax reduction. Opponents are likely to view this as diverting climate and transportation funding from high-speed rail and other greenhouse-gas-reduction purposes, while supporters are likely to emphasize tax relief and a rebalancing of transportation funding. The committee votes suggest disagreement over both the policy direction and the fiscal consequences of changing the use of cap-and-trade revenues.