Cal. Rev. & Tax. Code § 60043

(a) “Government entity” means this state and its political subdivisions except for a political subdivision that is only an exempt bus operator.
(b) Sections 60146 and 60205.5 do not apply to a government entity if both of the following apply:
1. (1) The diesel fuel is purchased tax-paid from a supplier or retail vendor.
2. (2) The tax-paid diesel fuel is used solely for the operation of a diesel-powered highway vehicle within this state.