Oregon’s Road User Fee Pilot Program

Presented toInternational Fuel Tax Agreement

Managers’ Workshop September 2006

PowerPoint Presentation provided by: James Whitty, Manager

Office of Innovative Partnershipsand Alternative Funding

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.”

Effect of New Technology Vehicles on Highway Fund Revenue

LIGHT VEHICLE FUEL TAX REVENUE

350

400

450

500

550

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Fiscal Year

$ M

illio

ns

Revenue Without MPG Improvement Small Fuel Economy Increase

Medium Fuel Economy Increase Large Fuel Economy Increase

Conclusion

In the future,gas tax revenue

will not bethe primary source

for funding our roads.

• A per-mile charge based on Vehicle Miles Traveled (VMT) within a state

• Replaces fuel tax for participating motorists

A Solution: The Mileage Fee

Collection Possibilities

• Human Data Gathering

• Centralized Electronic Collection

• Collection at Fueling Stations

Structural Issues with Mileage Fee Collection

• Cost of Start Up and Operations

• Collection Enforcement

• Integration with Current Fuel Tax Collection System

• System Redundancy

• Ease of Use by Motoring Public

Oregon’s

Mileage Fee Concept

A per-mile charge based on miles driven within Oregon by zone.

Zone 1 = in state

Zone 2 = out of state

Optional

Zone 3 = rush hour

Zone 4 = local option

The Concept

On-Vehicle Device

GPS Satellite

GPSSatelliteSignals

Characteristics of Collection

VMT collected electronically by zone

Mileage Transfer

On-Vehicle Device

Wireless Gateway

Service Station Building

Wireless Reader

Service Station POS System

• VMT transmitted electronically at fueling stations

• VMT data transfer from vehicles when fueling

• Communication is short range!

• Mileage fee imposed as part of fuel purchase

• Fuel tax deducted from fuel purchase price

Gas to GoCommercial Rd., OR

May 15, 2006 – 8:00 AM

13.5gal @ 205.5 27.74State tax disc. (3.24)Net fuel 24.50

Mileage fee243.3 @ 1.22 2.96

Total Due 27.46

FLEET XXXX3024 27.46

THANK YOU

Characteristics of Collection

On-Vehicle Device

GPSAntenna

RF Antenna OBDII Port

Mileage Allocation

Rush Hour : 50.6

In Oregon : 1,200.7

Non Oregon: 100.0

No Signal : 0.9

31 zones

Vehicle Display

• Fuel tax maintained for non-equipped vehicles

• Mileage fee integrates with fuel tax collection system

• Oregon’s weight-mile tax retained for heavy trucks

• Allows rush hour pricing

Key Features

Vehicles

• No retrofitting

• Components installed during vehicle manufacture

Service Stations

• Capital costs (Oregon): $33 million

• Annual operating costs (Oregon): $1.6 million

Cost of Full Implementation

• No vehicle location data stored in vehicle

• No data transferred except mileage totals within zones

• Data transferred only at time of fueling via short range radio frequency

Privacy

1. Retrofitting cost versus

long phase-in

2. Setting mileage fee rate

3. Interstate system standardization and

revenue allocation

4. Integration with federal solution

Policy Issues Remaining

Road User Fee Pilot Program

March 2006-April 2007

Oregon’s Pilot ProgramPurpose: To test technology and system

Time Line: June 2006 – March 2007 for Full Pilot

Pre-Pilot: Preliminary control technology test √ completed

Warm Up: 20-vehicle managed start at fueling stations √ completed

Full Pilot: Point-of-sale system installed at fueling stations √ completed 280 vehicles pay mileage fee in lieu of gas tax Nov ‘06

Portion of volunteers in Rush Hour Pricing Nov ‘06

On-Board Equipment for Pilot Program

GPS Receiver

On-Board Equipment for Pilot Program

Mileage Counter

On-Board Equipment for Pilot Program

Display

Wholesale LevelWholesale Distribution

Industry

ODOT

$ Gas Tax

Retail Station

$ Cost of fuel +gas tax reimbursement

System Integration: No change in gas tax collection

Non-mileage fee vehicle Mileage Fee Vehicle

$ Mileage Fee + fuel cost

$ gas tax +fuel cost

Retail Station

Consumer Level

System Integration: Consumers pay either gas tax or mileage fee, not both

ODOT

Gallon & tax data

• If fuel taxes + mileage fees collected are less than 24 cents per gallon paid for fuel, ODOT remits the difference

• If total fuel taxes + mileage fees collected exceed 24 cents per gallon paid for fuel, ODOT sends a bill for the balance due

Retail Station

System Integration: Tax data periodically run through a “true-up” calculation by ODOT

• Bulk of revenue stream remains at distributor level (fewer taxpayers)

• Mileage fee gradually becomes predominant

System Integration

• Retain current multi-state anti-evasion processes

• Fuel tax retained as redundant system to guard against system failure and tampering

RUFTF Websitewww.oregon.gov/ODOT/HWY/OIPP/ruftf.shtml

• And Now Some non-approved

OBSERVATIONS