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TITLEMulti-State VMT-Based Charge System

PROJECT CODE15-1V, 16-1V, 17-1V, 18-1V, 19-1V

COMMITTEEPolicy and Strategic Planning

YEAR FUNDEDYear 19 - FY 2011, Year 18 - FY 2010, Year 17 - FY 2009, Year 16 - FY 2008, Year 15 - FY 2007

Year 15 Budget:$100,000
Year 16 Budget:$260,000
Year 17 Budget:$100,000
Year 18 Budget:$250,000
Year 19 Budget:$300,000

STATUSActive

DESCRIPTION

Project 19-1V: Concept of Operations for VMT-Based Charges
Phase 1 of the I-95 Corridor Coalition’s multi-state VMT analysis was one of the first projects in the U.S. to review the administrative, institutional and legal issues associated with VMT-based charges. That project provided a good initial overview of desired system functionality. It addressed the required administrative functions needed to collect VMT charges and highlighted the key issues and concerns that Coalition members would need to consider in a multi-state VMT arrangement. The project considered potential institutional arrangements and used the existing, limited information to develop estimated costs for administering VMT charges. The Phase 1 Coalition VMT project established the foundation and the groundwork for a recommended more detailed and specific analysis in selected contiguous states as a Phase 2 follow on project.

The Phase 2 project will be based on actual operating environments and current conditions in the selected states and will analyze specific adaptations that would need to be made to administer VMT based charges. The Phase 2 analysis will include a detailed and targeted analysis of operational processes, legal frameworks and institutional arrangements, and how they may need to be adapted to incorporate a VMT-based charge should Coalition members consider such a direction. Also will analyze the alignment of required VMT administrative functions to those existing functions most prevalent within state DMVs, toll authorities and state Revenue Agencies.

Project 18-1V: Multi-State VMT-Based Charge System
Based on direction from the Executive Board, the Coalition will be initiating a significant project this fall to explore the institutional and legal issues associated with the potential establishment of a multi-state VMT-based fee system as a replacement for the current
gasoline tax. Based on review by the recently established Member Advisory Committeeand discussion with Coalition Leadership, the objectives of this project are to:

  • Build consensus on system functionality
  • Identify institutional and administrative requirements
  • Assess usefulness of current procedures E-ZPass, IFTA and IRP
  • Define and evaluate institutional and administrative alternatives
  • Prepare preliminary cost estimates
  • Determine relevance and seriousness of legal issues and barriers to Stateenabling legislation
  • Develop recommendations

Project 17-1V:
The institutional arrangements and legal/regulatory areas are ones for which multi-state considerations raise special challenges, and for which the I-95 Corridor Coalition is already organized to be a leader. These are both areas in which substantial progress can be made in the near term because these issues have not been addressed as thoroughly as other issues such as technologies have been addressed. These types of issues have not been addressed at all in any of the single state or single urban area VMT-based fee studies to date.

The study will assess VMT fees applied to all roads (state and local jurisdictions) and to vehicles of all types on a multi-state basis. The needs of both the State and Federal levels of government will be considered.

Background - VMT-Based Fees: Issues and Considerations from a Multi-State Perspective - In the spring of 2009, the I-95 Corridor Coalition, at the direction of its Executive Board, embarked upon a program to address the current surface transportation program funding crisis by exploring alternatives to the gas tax as the primary funding mechanism. As an active coalition that has been successfully operating for over 15 years, the I-95 Corridor Coalition is well-positioned to examine both technical and institutional/administrative issues from a multi-state perspective, reflecting a diversity of policies and opinions that will be critical to the emergence of a new revenue generation system.

In May of 2009, the Coalition convened a workshop involving a group of experts to discuss how the Coalition could best contribute to a national effort in this area. Following the recommendations of the National Surface Transportation Policy and Revenue Commission, and the work of other organizations including the FHWA, the Oregon DOT, and the TRB, the workshop produced a set of recommendations regarding the issues that a multi-state pilot program for a VMT-based fee system should address.  Based on the experts’ recommendations, an initial proposal was considered at the Coalition’s June 2 combined Steering Committee/Executive Board meeting. That proposal led to a decision to launch a project to identify the institutional and administrative requirements of a multi-state VMT-based fee system. That project commenced in November 2009 and will conclude in the summer of 2010.  The final scope of work is referenced below.

In the summer of 2009, the Coalition assembled a Member Advisory Committee, consisting of senior representatives of Coalition member state departments of transportation and toll authorities to guide the Coalition’s work activities in this area.  That group convened twice to guide the development of the scope of work for the project described above.  It will continue meeting to guide the work as it progresses.  Advisors in specialty areas, such as administrative and legal issues, will also be consulted.


CONTACTS

Procurement Agency: Maryland State Highway Administration
Project Contact: George Schoener
Executive Director
I-95 Corridor Coalition
Phone: (703) 389-9281
E-Mail: geschoener@comcast.net

TITLEMulti-State VMT-Based Charge System

PROJECT CODE15-1V, 16-1V, 17-1V, 18-1V, 19-1V

PROJECT DATES
Project Start: February, 2007 (5-1V, 16-1V and 17-1V) -  January 2011
Expected Completion: December, 2011 (5-1V, 16-1V and 17-1V), on-going

Year 15 Budget:$100,000
Year 16 Budget:$260,000

Year 17 Budget:$100,000
Year 18 Budget:$250,000
Year 19 Budget:$300,000
OBJECTIVES

Project 19-1V: Concept of Operations for VMT-Based Charges
To develop a high-level concept of operations and transition plan will  for the Coalition.

Project 18-1V: Concept of Operations for the Administrative Functions Surrounding Collection of VMT-based Charges in a Multi-State Environment

  1. To further refine the already identified administrative requirements;
  2. To identify current state and agency functions and systems that could be or would need to be changed to accommodate a VMT program and its required multi-state information exchange;
  3. To assess current interagency arrangements, especially the E-ZPass Interagency Group (IAG) and arrangements between state Transportation Departments (DOTs) and their sister revenue agencies;
  4. To develop a concept of operations for a multi-state VMT-based road user charging system that would meet the needs of the states and relevant agencies;
  5. To develop specific model legislation based on input from state representatives and relevant stakeholders;
  6. To further assess the potential use of the NMVTIS (and its model applications) as the potential interconnectivity system for exchanging vehicle ownership information among the states as a basis to share and transfer both VMT and registration information;
  7. To further refine costs based on actual cost information on similar functions from the selected states and with general input from industry;
  8. To keep Coalition members informed on VMT-related research and its potential impacts and implications; and
  9. To consider any federal role applications and integration in a multi-state environment.

Project 17-1V:
The objectives of this project are to:

  • Build consensus on a comprehensive set of functions to be included in a multi-state VMT-based fee system.
  • Identify the institutional and administrative requirements of a multi-state VMT-based fee system.
  • Identify alternative mechanisms for governing and administering multi-state VMT-based fee collection.
  • Explore existing multi-state revenue collection systems for lessons that can applied to the VMT-fee situation.
  • Prepare preliminary estimates of the costs of administration and enforcement under different options.
  • Identify legal issues that may constitute barriers or opportunities with regard to state and multi-state implementation of VMT programs.
  • Identify legal and administrative issues associated with fee structures that include variable charges and pricing for externalities such as congestion, environmental and vehicle type/class differences.
  • Explore the State and Federal legal/regulatory environment and assess the significance of legal/regulatory barriers
  • Develop an approach to address the significant barriers identified, including structure.
  • Prepare an integrated final report containing a set of recommendations regarding next steps to take to address institutional/administrative and legal/regulatory issues and findings.

Project 15-1V and 16-1V: The primary objectives of this project were to identify VMT system functionalities (to the extent needed for this analysis), assess existing and potential institutional and administrative requirements, explore the potential use of existing state agency, toll agency, and multi-state or multi-agency revenue collection systems, prepare very preliminary estimates for administration and enforcement costs, and identify legal issues.


SCOPE

bullet View Scope of Work of project 15-1V (called Feasibility of Multi-state VMT Pilot Test) and 16-1V
bullet View Scope of Work project 17-1V
bullet View Scope of Work project 18-1V


REPORTS

Bullet View Full Report Concept of Operations for the Administration of Mileage-Based User Fees in a Multistate Environment - April 2011
Bullet View Full Report and Executive Summary of Administrative and Legal Issues Associated with a Multi-State VMT-Based Charge System - November 2010
Bullet View Multi-state VMT-Based Charge Initiative Presentation
Bullet View Member Advisory Council Webcast Presentation - September 22, 2010
Bullet View VMT-Based Charge: Review of State Legal Issues - July, 2010
Bullet View Working Document Excerpt: Institutional Arrangements - July, 2010
Bullet View Working Document Excerpt: Cost Drivers and Preliminary Cost Estimates - July, 2010
Bullet View VMT-Based Charge: Review of Federal Legal Issues - June, 2010
Bullet View Member Advisory Committee Webcast Presentation - May, 2010
Bullet View Multi-State VMT-Based Road-User Fee Initiative Presentation - by Mark Muriello, PANYNJ, at the 2nd Annual Mileage-Based Fee Symposium - April, 2010
Bullet View Consolidated Task Memorandum #1 - April, 2010
Bullet View Legal Issues Questionnaire - April, 2010
Bullet View Member Advisory Council (updated April, 2010)
Bullet View Member Advisory Council Webcast Presentation - September 10, 2009
Bullet View Brainstorming Session Summary – May 5, 2009
Bullet View DMV Outreach Responses

Related Documents & Links:

Related Documents & Links:


END OF PROJECT SUMMARY

Projects 15-1V, 16-1V and 17-1V:

  1. Three broad functionality options were chosen to form a framework for the analysis of the administrative, institutional and legal requirements. These options closely correspond to those considered in other studies and cover the full range of system functionality. They range from “simple” -- deployment of a system designed to accommodate only the mandatory system function of recording and reporting miles driven, to “moderate” -- deployment of a system that achieves some of the optional functionality associated with general location variability, e.g., travel by time of day or by jurisdiction or small geographic area (cordon-based congestion charges) -- to “complex” -- deployment of a system designed to accommodate the full range of optional system functions necessary to alter driver behavior and create user financial incentives by varying the per-mile charge by time-of-day, by facility, and by other factors. The Coalition’s Member Advisory Committee directed the project team to use the most advanced option (a GPS-based system) to consider administrative and legal issues.
  2. Specific administrative functions and institutional arrangements necessary to collect VMT-based charges were identified for each of the three generic functionality options. These were:
    • Enrolling User Participants
    • Accumulating Mileages and Charges Due, by State and by Agency
    • Calculating and Billing Charges to Users
    • Maintaining User Interface and Communication
    • Auditing, Security, and Enforcement
    • Calculating and Reconciling State and Agency Mileages
    • Distributing Revenues Among the States and Other Agencies
    • Preserving Data for Planning Analysis
    • Identifying Specific State and Multi-State Administrative Units and Their Respective Responsibilities
    • Identifying Governance Procedures and State and Other Agency Membership Rules and Requirements
  3. Interviews conducted with state Department of Motor Vehicle officials, (DMVs), the American Association of Motor Vehicle Administrators (AAMVA), IAG, IRP and toll authorities’ representatives, as well as interactions with the MAC, revealed a number of issues and concerns that must be addressed for a successful transition to VMT charges. Key concerns include potential costs, institutional and systems capacity, data confidentiality and information privacy. Key findings include:
    • Data and administrative requirements will differ substantially based on whether the requirement for estimating charges is geographically coarse, such as estimating charges due to each state, or geographically fine, such as estimating the charges due to the owners of particular roads (e.g. toll facilities).
    • Interaction, involvement, and coordination among state motor vehicle agencies are essential for many of the administrative activities surrounding VMT. But most importantly, there must be coordination regarding registration files and vehicle ownership.
    • The scale of the data management challenge must be recognized. Accumulating mileages and charges by state and by agency for other vehicles under the moderate or the complex option will require the performance of new and similar administrative functions for a very large number of additional vehicles for which mileage records are not now kept.
    • Billing and collecting payments will require re-engineering, and customer contact avenues (such as call centers) will also need to be fortified.
    • Customer interface will be one of the most important and costly system components, especially if charges are determined based on a number of variables including time of day or facility.
    • New enforcement processes will be required to ensure that VMT charges are paid and collected.
    • Calculating and reconciling state and facility mileage, (as well as distributing accurate revenues to states) will be key new functions to assure that VMT-based charges are accurately collected and allocated to the states or facilities where the mileage accrues.
    • Existing toll system operators and their contractors understand most of the functions necessary for VMT system administrative and institutional arrangements.
    • The functions required at the federal level will have limited precedents, and will be “easier” to administer at the state level from a purely administrative standpoint because the states have registration files and the examples of toll agency cooperation.
  4. The all-vehicle VMT charge system proposed two years ago in the Netherlands represents the best current approximation of the costs of implementing such charges, based on the implementation costs bid for the project by private service providers. The range of preliminary estimates of administrative costs for systems assumed to have the full functionality specified in the Dutch bid process is from $40 per vehicle per year upwards. At lower functionality, such as for assessing straight VMT charges by state, without regard to time of day or facility, this report estimates that savings of $10 per vehicle per year may be possible in comparison to the Dutch bids, or a total estimated administrative cost of $30 per year per vehicle upwards.
  5. In the U.S., current annual expenditures for highways are about $120 billion to $130 billion. This level of expenditure is supported not only by fuel taxes, but also by vehicle fees, property and sales taxes, tolls and general funds. If all these sources were replaced by VMT charges spread across 240 million registered vehicles, $500 per vehicle per year in VMT charge revenues would be required. This compares to this report’s lowest preliminary administrative cost estimate of $30 to $40 per vehicle per year, resulting in a ratio of administrative costs to collections of about 6 percent to 8 percent - somewhat lower than the current costs of collecting registration fees, but considerably higher than the fuel tax collection costs of less than one percent.
  6. The most promising institutional arrangements for administering a VMT-based charge system will balance continued strong state or toll facility involvement and control with management efficiency. In such a state-centered approach, a state agency or agencies will be responsible for the administrative and legal functions necessary to monitor and administer VMT-based charges, including reconciliation and coordination with other states. This implies an institutional arrangement within which states maintain full policy, legal and administrative control, but have options to use private contractors or multi-state cooperative entities to handle some or all of the administrative functions related to monitoring and collecting VMT-based charges.
  7. Some key findings pertaining to state and Federal legal issues related to implementation of a VMT-based system are:
    • A statewide VMT-based system of charges would not be likely to face insurmountable state constitutional or other legal issues.
    • Specific authorizing legislation will need to be carefully drafted to address issues related to use of VMT-based revenues, rate setting, characterization of VMT-based charges, enforcement provisions and adjudication processes and mechanisms – and would be desirable even for a pilot program.
    • It is unlikely that constitutional restraints exist for states seeking to implement a system of VMT-based charges. Reasonable VMT-based charges are sufficiently similar to taxes and tolls collected under current law to have been tested repeatedly before the United States Supreme Court.
    • It may be efficient to collect state and federal VMT-based charges simultaneously via a single system. FHWA already relies on states to assist with efforts to implement and enforce various highway programs, and – with state assent -- could use grant conditions and other incentive programs to encourage state cooperation in collection and enforcement.

ACTIONS

Projects 15-1V, 16-1V and 17-1V:

Areas that might be further investigated in the near future should include:

  • A more refined analysis of already identified administrative requirements; * Identification of current state and toll authority functions that could or would need modification to accommodate a VMT charge program;
  • More refined cost estimates based on input from industry and analysis of similar functions performed by or for states;
  • Assessment of current interagency arrangements, including the IAG and arrangements between state DOTs and their sister state revenue agencies;
  • The development of an administrative functions concept of operations for a multi-state VMT-based charge system;
  • Assessment of the NMVTIS model as the basis of a system to exchange vehicle ownership/registration information and VMT data among the states; and
  • Interface and other issues associated with federal government use of state systems to collect potential federal VMT charges.

FINAL PROJECT EXPENDITURES

Projects 15-1V, 16-1V and 17-1V: $460,611

Project 18-1V:
This project statement is to support the inclusion of a $250K placeholder budget in the Year 18 program for future Coalition multi-state VMT-based fee activities. This budget could support the development of system requirements and testing needs and/or additional work in the institutional and/or legal areas.


I-95 Corridor Coalition Explores Alternatives to the Gas Tax

VMT-Based Charge: Issues and Considerations from a Multi-State Perspective - In the spring of 2009, the I-95 Corridor Coalition, at the direction of its Executive Board, embarked upon a program to address the current surface transportation program funding crisis by exploring alternatives to the gas tax as the primary funding mechanism. As an active coalition that has been successfully operating for over 15 years, the I-95 Corridor Coalition is well-positioned to examine both technical and institutional/administrative issues from a multi-state perspective, reflecting a diversity of policies and opinions that will be critical to the emergence of a new revenue generation system.

In May of 2009, the Coalition convened a workshop involving a group of experts to discuss how the Coalition could best contribute to a national effort in this area. Following the recommendations of the National Surface Transportation Policy and Revenue Commission, and the work of other organizations including the FHWA, the Oregon DOT, and the TRB, the workshop produced a set of recommendations regarding the issues that a multi-state pilot program for a VMT-based fee system should address. Based on the experts’ recommendations, an initial proposal was considered at the Coalition’s June 2 combined Steering Committee/Executive Board meeting. That proposal led to a decision to launch a project to identify the institutional and administrative requirements of a multi-state VMT-based fee system. In the summer of 2009, the Coalition assembled a Member Advisory Committee, consisting of senior representatives of Coalition member state departments of transportation and toll authorities to guide the Coalition’s work activities in this area. The project commenced in November 2009.

Phase I: Administrative and Legal Issues Associated with a Multistate Mileage Based User Fee System
The initial phase of the I-95 Corridor Coalition’s research assessed the implications of administering an MBUF system in a multistate environment. The study looked beyond infrastructure and vehicle technologies to examine administrative aspects (what administrative functions would need to accomplished and how they might be accomplished), institutional aspects (how agencies would be affected and how a multistate system might be managed and governed), legal and legislative issues that would need to be considered, and what the system would cost. Research was conducted through extensive interviews and review of available information. A Phase I Final Report, documenting the research process and findings, is available on the Coalition’s website at www.i95coalition.org.

Phase II: Concept of Operations for the Administrative Functions Surrounding Collection of Mileage Based User Fees in a Multistate Environment
This phase of the Coalition’s research was conducted as a case study involving the three neighboring states of Maryland, Delaware, and Pennsylvania. A concept of operations for a long range vision was developed that describes the functions that would need to be accomplished by a multistate MBUF system that encompasses all miles traveled by all vehicles by state and jurisdiction as well as tolls and congestion-based charges. The research also explored issues that would have to be considered in the transition from the current fuel tax based revenue collection to implementation of this potential future concept of operations, including staging of the transition, the functionality of early stage systems; participation in early stage systems, including vehicle types and the potential for opt-in alternatives; collection and payment enforcement methods, both within individual states and across state lines; strategies for operating under a dual fuel tax/MBUF system during transition, and procedures for properly allocating revenues based on where miles were actually driven. The research also produced a further analysis of cost, examining it from the perspective of the estimated costs associated with the collection of MBUFs compared to the current costs for collecting not only fuel taxes, but also tolls and registration fees.

Bullet View Full Report Concept of Operations for the Administration of Mileage-Based User Fees in a Multistate Environment - April 2011
Bullet View Full Report and Executive Summary of Administrative and Legal Issues Associated with a Multi-State VMT-Based Charge System - November 2010
Bullet View Multi-state VMT-Based Charge Initiative Presentation
Bullet View Project page
Bullet View Member Advisory Council Webcast Presentation - April 12, 2011
Bullet View Member Advisory Council Webcast Presentation - September 22, 2010
Bullet View Member Advisory Committee Webcast Presentation - May, 2010
Bullet View Multi-State VMT-Based Road-User Fee Initiative Presentation - by Mark Muriello, PANYNJ, at the 2nd Annual Mileage-Based Fee Symposium - April, 2010
Bullet View Member Advisory Council (updated April, 2010)
Bullet View Member Advisory Council Webcast Presentation - September 10, 2009
Bullet View Brainstorming Session Summary – May 5, 2009
Bullet View DMV Outreach Responses

Related Documents & Links:


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