Road Usage Charge Pilot. The Washington State Transportation Commission (WSTC) conducted a road usage charge (RUC) pilot project. The year-long RUC pilot involved approximately 2000 participating drivers who evaluated a variety of methods of reporting miles and provided feedback. In January 2020, WSTC submitted its final report to the Governor, the Legislature, and the Federal Highway Administration. The final report provided information on the legal, fiscal, operational, and policy implications of a RUC and offered recommendations on how RUCs could be implemented in Washington. One of the recommendations of WSTC was that the Legislature enact an RUC system initially on a small number of vehicles as part of a longer-term transition away from the gas tax.
In July 2020, the U.S. Department of Transportation awarded the WSTC a $5.5 million federal grant to conduct additional research and testing of a road usage charge. This work was initiated in October 2020 and has an expected completion date in 2023.
Electric Vehicle Fees. In addition to any other fees due at annual vehicle registration renewal, an electric or hybrid vehicle using at least one method of propulsion that is capable of being reenergized by an external source of electricity and is capable of traveling at least 30 miles using only battery power powered by electricity, are subject to two electric vehicle fees that total $150. The first fee is $100 and is deposited into the Motor Vehicle Fund, up to $1 million annually. If in any year the amount collected exceeds $1 million, the excess amount is distributed as follows: 70 percent to the Motor Vehicle Fund; 15 percent to the Transportation Improvement Account; and 15 percent to the Rural Arterial Trust Account.
The second fee is $50. The first $1 million raised by the fee must be deposited into the Multimodal Transportation Account. Any remaining amounts must be deposited into the Motor Vehicle Fund. The $1 million threshold was reached in November 2017, and fee revenues from the $50 fee are currently deposited into the Motor Vehicle Fund.
Transportation Electrification Fee and Hybrid Transportation Electrification Vehicle Fee. An annual $75 transportation electrification fee is imposed at the time of vehicle registration renewal on an electric or hybrid vehicle using at least one method of propulsion capable of being reenergized by an external source of electricity and is capable of traveling at least 30 miles using only battery power.
An annual $75 hybrid vehicle transportation electrification fee is imposed on hybrid and alternative fuel vehicles that do not pay the electric vehicle fee or the transportation electrification fee. This fee is collected at the time of vehicle registration renewal.
Revenues collected from the transportation electrification fee and the hybrid vehicle transportation electrification fees are deposited in the Electric Vehicle Account until July 1, 2025, after which time, revenues will be deposited in the Motor Vehicle Fund.
Per Mile Fee. Beginning July 1, 2026, at the time of initial and annual vehicle registration renewal, an electric or hybrid vehicle using at least one method of propulsion capable of being reenergized by an external source of electricity, and is capable of traveling at least 30 miles using only battery power will be subject to a per mile fee.
From July 1, 2026, through June 30, 2029, the per mile rate is two cents per mile driven. On July 1, 2029 and thereafter, the per mile rate is two and one-half cents per mile driven.
Transportation Electrification Fee and Hybrid Transportation Electrification Vehicle Fee. On July 1, 2026, the $150 in combined electric vehicles fees and the $75 transportation electrification fee are repealed.
Early Adoption Program. By July 1, 2025, the Department of Licensing (DOL), in consultation with the WSTC, must establish a voluntary early adoption program that allows the registered owner of an electric or hybrid vehicle that uses at least one method of propulsion capable of being reenergized by an external source of electricity, and is capable of traveling at least 30 miles using only battery power, to start paying a per mile fee earlier than the mandatory participation date of July 1, 2026.
Participants in the voluntary early adoption program must pay two cents per mile driven in addition to all other fees and taxes required by law. For active participants in the voluntary early adoption program, DOL must waive the $150 in combined electric vehicles fees and the $75 transportation electrification fee.
By July 1, 2024, DOL, after consultation with the WSTC, must adopt rules to implement the voluntary early adoption program, including procedures for recoupment of any waived fees if the participant is not actively participating in the voluntary early adoption program.
The voluntary early adoption program must also include participation of at least 500 electric, hybrid, and internal combustion state-owned passenger or light duty truck fleet vehicles. These vehicles are not subject to a per mile fee. DOL, in consultation with the WSTC, must establish the types of state fleet vehicles for participation to further test the viability of a per mile fee on the full range of vehicles that may be subject to a per mile fee in future years. The portion of the voluntary early adoption program involving state fleet vehicles may be initiated as early as December 1, 2024.
Proceeds from the Per Mile Fee. Revenue generated from the per mile fee must be used for preservation and maintenance and must be deposited in the Motor Vehicle Fund.
Implementation Plan. By December 1, 2023, DOL and WSTC must collaboratively develop an implementation plan for the voluntary early adoption program and for the per mile funding system on certain electric and hybrid vehicles. This plan must incorporate the ongoing work of the WSTC in evaluating a road usage charge, including coordinating with federal grant-funded research and development. The plan must include, but is not limited to:
Privacy Related Provisions. Any personally identifying information of persons related to the per mile funding system is exempt from public disclosure. The information may be disclosed in aggregate form as long as the data does not contain any personally identifying information. Personally identifying information related to the per mile funding system may be released to law enforcement agencies only if the request is accompanied by a court order.
The per mile system may not involve the collection of any personally identifying information beyond what is necessary to properly calculate, report, and collect the per mile fee, unless the vehicle owner provides their written consent for the collection of additional information. The per mile reporting methods may record or report general location data under certain circumstances. The per mile reporting methods shall not report specific location data to DOL or any subdivision of the state unless a vehicle owner specifically consents to the recording or reporting of such location data. DOL and any per mile account manager has an affirmative public duty regarding specified elements of the collection, use, and retention of the per mile information.
The committee recommended a different version of the bill than what was heard. PRO: The state gas tax is declining, and we need to find alternative ways to provide sources of transportation funding, particularly for preservation. With the work that has been done evaluating a road usage charge, Washington is ready to scale up with a test on another set of vehicles. This will provide a real-world experience to test the efficacy of a per mile funding system and build off the extensive work of the Transportation Commission.
This will provide a mechanism for addressing road maintenance needs and it is a more equitable way to fund the state transportation system. The gas tax revenue cliff is here, and it is now time to get on with finding alternative methods of funding for the needed investments. We have a lot of science to uncover as part of the rate setting. Fairness, predictability, and durability are important components of the funding system and should be addressed as the Legislature establishes the appropriate per mile rates.
The state needs to look beyond just addressing the preservation needs, including funding for multimodal investments. This might include establishing adding an additional per mile rate for these activities. There is a need to provide a discount for low income drivers. Environmental justice should be a focus of establishing the policies around the per mile funding system going forward.
CON: The per mile system outlined in the legislation is not a viable option for replacing the gas tax. This does not address the disproportionate impact of different weight of vehicles. This, along with the differences between electric vehicles, needs to be factored into the rates to make it more equitable and achieve the desired environmental goals.
The legislation will be devastating to farmers in eastern Washington who have to travel many miles on private roads. This legislation also fails to address the double taxation that applies to electric vehicles. One solution is to have a graduated per mile fee based on the weight of the vehicle. Please do not make the odometer a cash register. Without changes, this will hurt the poorest workers in the state. To mitigate this impact, there is a need to cap the amount an individual driver will have to pay under the per mile funding system. There is also a need to build in rebates to address the impacts more adequately on gig workers and others who drive a lot of miles for their employment.
OTHER: Due to the repeal of the electric vehicle fees, this legislation will result in less funding for city and county road preservation needs. This needs to get addressed to ensure revenue neutrality and to avoid this unintended consequence.
As a principle, there needs to be a more equitable and sustainable transportation funding system, but there needs to be more flexibility in the funds to achieve this goal. Equity impacts need to be considered and be part of the work going forward. This could saddle gig workers with higher costs unless this is mitigated in some way. The 18th amendment requirements are not being adequately addressed in this legislation.