Legislative Mandate

1. VMT Fees: The Oregon Experience and the FutureNASTO 2010 ConferenceWilmington, DelawareJune 14, 2010James Whitty, ManagerOffice of Innovative Partnershipsand Alternative Funding 1

2. Road User Fee Task Force Legislative Mandate “To develop a design for revenue collection for Oregon’s roads and highways that will replace the current system for revenue collection.” 2

3. Fundamentals of Mileage Charging • Six Things A Mileage • Charging System Must Do • Calculate miles driven • Access mileage data • Apply mileage charging rates • Provide a billing • Collect payment • Enforce payment [300 miles x 1.2 cents = $3.60] 3

4. Policy Issues for Mileage Based Fees • Purpose of the system • Nature of payer and charge • Cover all motorists • Cover all roads • Cover all mileage • Protect motorist privacy • Local option • Congestion pricing • Rate structure • Public vs. private operations 4

5. Structural Issues for Mileage Based Fees • Ease of motorist use • Crediting gas tax • Administration • Integration with existing systems • Reliability and back up system • Managing nonpayment and fraud • Transition management • Relative operating costs • Capital costs • Overall system risk 5

6. GPSSatellite Pay-at-the-Pump Model GPS Satellite Signals WirelessReader On-Vehicle Device (OVD) VIN, VMT data, Fuel purchase amount VMT Data Modem Modem WirelessGateway Central Database VMT Charge Service Station POS System Service Station Building Central Computer 6

7. The Receipt Fuel tax deducted from fuel purchase price Mileage fee imposed as part of fuel purchase csr R# 1 S# 1 T# 882316 10:55 AM 06/09/06 Leathers Fuels 11421 SE Powell Blvd Portland, OR 97266 Pump# 1 Unleaded 19.50 @ 2.549 49 .71 ST Fuel Tax @ .24 (4.68) VMT Fee : 5.12 Rush Hour : 40 In-Oregon : 28.6 Non-Oregon : 0 No Signal : 0 Subtotal 50.15 Total 50.15 Cash 50.15 Thank You ! 7

8. Privacy Protection for VMT Fees • On Board Unit (OBU) Variations: Oregon’s Pilot Thick Thin • Travel coordinates transferred • Mileage calculations occur at • central computer • No GIS map • No travel coordinates transferred • Mileage calculations occur on-device • Only summary data transferred • May or may not have GIS map 8

9. Pay-at-the-Pump Model Pluses Minuses • Meets most policy objectives • Provides gas tax credit • Covers all roads • Charges only in-state travel • Easy for all motorists to use • Protects motorist privacy • Cost effective operations • Reliable • Enforceable • Seamless transition • Minimal private sector burden • Allows congestion pricing • Reduces overall system risk • Long period for development • and implementation • Slow technological evolution • Does not cover vehicles not visiting commercial fueling stations • Public concerns about privacy and how system would work 9

10. Public Concerns Confidence in system Efficiency Fairness Perceptions of large and costly bureaucracy Privacy & fear of technology A government mandated device Motorist class wars Rate structure Rate equity Rural driving Flexibility of Road Pricing 10

11. “… the unfamiliar, the vaguely perceived, the mysterious, the hidden, the unexpected are all apt to be threatening. One way of rendering them familiar, predictable, manageable, controllable, i.e., unfrightening, and harmless, is to know them and to understand them.” Abraham Maslow 11

12. Solutions to Public Concerns • Develop a flexible VMT fee collection system that can evolve with technology and public preferences • Allow market development of the technology and system • Provide motorist choices of certified technology and payment methods • Structure mileage fee rates to meet public policy goals 12

13. Central Transition Issues for VMT Fees • Establishment of public policies • Data collection: 200 million OBU installations • Determination of payment method(s) • Management of 200 million motorist accounts • Integration with existing systems • Determination of public and private sector roles • Establishment of enforcement regime • Designing system to address public concerns 13

14. An Implementation Plan for VMT Fees • Plank 1: An Open Technology Platform • Plank 2: A Simple Mandate to Report Mileage • Plank 3: Motorist Choice for Data Collection • Plank 4: Options for Invoicing and Payment 14

15. An Implementation Plan for VMT Fees • Plank 1: An Open Technology Platform • Government requires open network and available operating system • Government sets common standards for mileage data generation and transfer • Data accuracy and form • Data transmission frequency • Vehicle identification • Anti-tampering and enforcement protocols • Portability • Government creates certification processes for data reporting, invoicing and payment methods 15

16. An Implementation Pathway for VMT Fees • Plank 2: A Simple Mandate • Legislative body imposes obligation upon motorists to provide mileage data to billing agency • Motorists choose compliance method • No mandate for specific on board technology • Motorists bear the burden of their choice of data generation and transfer methods • Undifferentiated mileage charged highest rate • Motorists have option to choose on-board units (OBUs) able to differentiate mileage 16

17. An Implementation Plan for VMT Fees • Plank 3: Market Based Approach for Data • Generation and Transfer • Basic Installed On Board Unit (OBU) • Simple diagnostic port connection with wireless data transmission • No mandate for OBU with locator capability • No GPS • No cellular triangulation • Government role • Sets technology and systems standards • Establishes certification processes • Data provision options • OBU Installations • Auditing and enforcement 17

18. An Implementation Plan for VMT Fees • Plank 3: Market Based Approach to Data • Generation and Transfer • Private sector role • Trusted third party status • Provides options for mileage data generation and collection • Market provided OBU options • Meets standards and has certification • Motorist chooses an OBU meeting personal requirements • Privacy • Differentiation of mileage data • Computing capacity • Precision • Cost • Optional applications and services 18

19. An Implementation Plan for VMT Fees • Plank 4: Options for Invoicing and payment • Government role • Provides basic invoicing and payment system (Provider of last resort) • Approves alternative invoicing and payment protocols for • private sector options under an open system • Invoicing and payment options under open system • Point of sale • Mail • Electronic • Prepayment • Automatic debit • Cell Phone • Motorist bears burden of invoicing and payment choice • Convenience • Administrative cost 19

20. The Transition to VMT Fees • Federal government sets technology standards under an open platform • Assures interoperability • Assures technological and system evolution • Development of enforcement regime for U.S. • Federal government funds state implementations • Phased fleet implementation Phase 1: Small scale start • Mandate for electric vehicles • Conditional voluntary adoption Phase 2: New vehicles Phase 3: Retrofitting the tail 20

21. Development of U.S. enforcement regime • Determining acceptability of electronic surveillance • approach for U.S. system • Monitoring of motorists • Partial implementations • Provider notification of OBU service interruptions • Exceeding threshold amount while at commercial • fueling/charging station 21

22. Re-animation of Road User Fee Task Force • Legislature repealed sunset clause in 2009 • Appointed by Governor, Senate President and House Speaker • Authority to propose legislation • Principal task for 2010: Propose partial implementation of VMT fees in Oregon 22

23. Coordinated VMT Fee Activities in the United States • State Peer Conference Call on VMT Fees • Hosted by TXDOT, assisted by Texas Transportation Institute • Currently participating: Oregon, Nevada, Idaho, California, Colorado, Minnesota, Texas, Ohio, Pennsylvania, I-95 Corridor Coalition • Contact Ginger Goodin of Texas Transportation Institute • Mileage Based User Fee Alliance • To support congressional adoption of mileage based user fee legislation • Formation announcement July 1, 2010 • Jack Basso, chairman 23