Maine – HB 700 (enacted, 2019)
A commission studied potential funding solutions for state transportation systems including a voluntary vehicles miles pilot program.
Virginia – SB 890 (enacted, 2020)
Highway Use Fees (HUF) on electric vehicles and other highly fuel-efficient vehicles achieving at least 25 mpg were created. However, in lieu of paying a HUF, vehicle owners may participate in a voluntary MBUF program beginning July 1, 2022. By enrolling in the MBUF program, a vehicle owner can pay a fee based on actual miles driven instead of a HUF. Total MBUF charges shall not exceed annual HUF amounts for a particular vehicle. According to the commonwealth’s DMV, electric vehicles currently pay a HUF of $109 to reflect the amount in fuels taxes such owners will not pay annually from not purchasing motor fuel. A mileage fee schedule will be calculated by the commonwealth’s DMV by dividing the amount of the HUF by the average number of miles driven by a passenger vehicle. The commonwealth’s DMV will also establish MBUF program guidelines by May 2022.
Connecticut – HB 6688 (enacted, 2021)
Created per-mile motor carrier fees based on truck weight, the fees will range from 2.5 cents to 17.5 cents per mile. Beginning in 2023, all vehicles weighing over 26,000 lbs. will be subject to a Highway User Fee for every mile traveled in the state. The new Connecticut program was not supported by the federally funded STSFA program.
Additional 2021 Legislation
At least four TETC member states—Massachusetts, New York, Tennessee and Vermont—considered RUC legislation in 2021 to further explore RUC systems.
Legislation in New York (AB 4094, failed) would have created a pilot RUC system. Massachusetts (SB 2350, pending) is considering a pilot RUC system to study a funding alternative to the gas tax; participants in the RUC would not be required to spend more on fees or taxes than if they had not participated in the RUC. Another Massachusetts bill (SB 2265, pending) would authorize the commonwealth Department of Transportation (DOT) to explore the feasibility of mileage-based revenue collection. The study would also consider public acceptance, costs and payment options. Finally, SB 2351 (pending) would establish per-mile rates for autonomous vehicles (AV). The base rate would be 2.5 cents per mile and would adjust annually based on changes in the consumer price index. Further, an additional amount could be charged for each mile driven by AVs without a passenger, weighing over 4,000 lbs. and operated between 8 a.m. and 8 p.m. within certain congestion zones designated by the state.
IIn Vermont, legislation (HB 123, pending) would direct drivers to report miles driven on their taxes. Finally, Tennessee’s Legislature is considering a bill (HB 1507, pending) that would establish an infrastructure bank and task it with exploring sustainable financing for state infrastructure projects including the use of road usage charging, such as vehicle miles traveled, for highway, road and bridge projects.
TETC’s activities under the STSFA grants are part of a broader effort to explore the feasibility of a potential MBUF solution, as well as develop a better understanding of how MBUF might work in a multi-state environment. TETC’s STSFA activities have also addressed other major issues associated with the MBUF concept, namely privacy, equity and administrative requirements and costs, including compliance and enforcement.
The goals of the project are:
1. Address regional issues necessary for national adoption and implementation of MBUF.
- Develop and implement state-based MBUF pilots, balancing the unique needs of each state within a multi-state framework.
- Continue the commercial vehicle pilot activities, expanded to include alternate forms of motive power (e.g., diesel, electric, hydrogen, fuel cell) and different types of fleets.
- Create a low-risk environment to address cross-state issues. This includes examining various approaches for operating a multi-state clearinghouse to distribute revenue between participating states.
- Define the regional governance structure for the multi-state and national clearinghouses using other established models such as International Fuel Taxation Agreement (IFTA), International Registration Plan (IRP) and E-ZPass Interagency Group as a reference.
- Outline common enforcement and compliance protocols and procedures to improve harmonization across states.
2. Increase public awareness of funding issues and assess the acceptance of MBUF.
- Gather public opinion through pre-and post-pilot surveys, statewide surveys and focus groups to help design effective MBUF messaging.
- Produce educational material explaining how transportation revenue works and why MBUF is a needed option.
- Decrease public concerns such as privacy and data security through demonstration pilots and related education and outreach activities.
- Use real-world data to analyze how a shift to MBUF would affect different communities, including low-income, rural and minority households.
- Identify optimal approaches for reaching and communicating with all sectors of the population and with owners of different vehicle types, and how they may be integrated into a future MBUF program.
3. Create a low-cost framework to administer MBUF.
- Pursue cost-saving opportunities through economies of scale created by a multi-state approach.
- Assess benefits of leveraging existing back-office tolling procedures for MBUF implementation to reduce administrative costs and enhance scalability.
- Include a national fleet in the commercial vehicle pilot to determine cost savings from a fleet versus an individual vehicle approach.
- Examine the costs of different data gathering approaches from low-tech (annual safety inspections) to high-tech (in-vehicle telematics).
- Identify successful compliance approaches to inform MBUF procedures.
4. Support implementation of MBUF programs in a multi-state environment.
- Document pros and cons of different payment approaches to enable all users to participate regardless of socioeconomic status.
- Support education campaigns to increase awareness of MBUF programs via social media and digital messaging campaigns.
- Continue the development and analysis of alternative per-mile rates that are linked to policy objectives such as combatting climate change.
The elements of the project include:
State Pilots and Commercial Vehicle Pilots
Pilot programs focus on having a range of participants across a representative cross-section of society including low-income and minority groups. Participants have included EVs, hybrids and internal combustion engine vehicles. The truck pilots have had diversity in the types of companies and future work will focus on diversity of truck class and weight.
Clearinghouse Demonstration & DOT Management Interface
Several eastern seaboard states have significant levels of out-of-state mileage driven on their road systems. In addition to analyzing how best to accommodate this cross-state travel in a MBUF system, TETC is demonstrating a multi-state clearinghouse that integrates data from the TETC pilot programs to identify the actual transfer of MBUF between states. The effort also explores concepts for multi-state harmonization as well as possible governance frameworks.
Education and Outreach
Education and outreach are at the core of TETC’s work on MBUF and include statewide surveys, focus groups and data analytics. These surveys and focus groups will provide qualitative and quantitative data to inform public messaging and digital communications as part of a comprehensive public awareness campaign.
Rate Setting Options
TETC’s passenger pilot have used a “revenue-neutral” approach, whereby the driver of a vehicle that gets the average mpg will pay the same amount in MBUF as they pay in-state fuel tax. Other rate-setting approaches have been analyzed, such as including the additional administrative costs associated with MBUF in the per-mile rate and a tiered rate approach based on four different mpg categories. For the truck pilots, it became clear one rate will not work for the motor carrier industry. Exploration of mpg-based rates also were not feasible. Future truck pilot rates will follow the guidance by the TETC Motor Carrier Working Group to establish a consistent and low burden approach. Additional alternative per-mile rates for passenger vehicles will also be evaluated.
Geographic & Socio-economic Analysis
MBUF program implementations to date have been voluntary, focusing primarily on EVs and other highly fuel-efficient passenger cars. Since the owners of these vehicles are typically in higher-income groups, equity concerns around the relative burden on households of differing incomes, minority groups and rural and urban users have not been a major roadblock thus far. However, if the MBUF concept is to expand and eventually be applied to all vehicles, such issues will be critical to MBUF acceptance and implementation. TETC’s work will combine data analysis, focus groups and steering committee engagement to identify ways to address equity concerns.
Mileage Reporting and Payment Options
TETC pilots have provided several mileage reporting options including a plug-in device with GPS, plug-in without GPS and smartphone apps. Additional options to be explored include a low-tech approach such as annual safety inspections and in-vehicle telematics. Future pilots will also explore the feasibility of allowing different payment options such as cash and temporary payment cards, and how to determine payment frequencies.
Synergies with Tolling
TETC works best in terms of using mileage reporting technologies (with GPS) to mimic electronic tolling. TETC work has also identified configurations in which using MBUF technology to collect tolls would be problematic (e.g., express toll lanes next to general purpose lanes). TETC is examining further tolling synergies and cost-saving measures such as leveraging back-office systems, multi-state payment processing procedures and large scale customer service management.