RD255 - Mileage-Based User Fee Program Interim Report – July 2021

Executive Summary:

Chapters 1230 and 1275 of the 2020 Acts of Assembly established a highway use fee as a new source of revenue for the Commonwealth Transportation Fund and directed the Department of Motor Vehicles (DMV) to convene a working group to develop a mileage-based user fee (MBUF) program as an alternative method of collecting the highway use fee.

The DMV working group met, conducted research on similar programs in other jurisdictions, and developed a list of requirements necessary to implement a mileage-based user fee program in Virginia. The working group considered each of the following elements as directed by the enacting legislation: the protection of all personally identifiable information that may be divulged in the reporting of highway usage, methods to record and report highway usage, the administration of the program, including the collection of fees for highway usage, and other issues identified by the working group.

The working group developed a Request for Proposal (RFP) outlining the basic requirements necessary to implement a mileage-based user fee program in the Commonwealth. The RFP was issued on March 12, 2021. The RFP remained open until April 26, 2021, and procurement activities are ongoing. DMV developed program requirements, and the RFP seeks proposals from contractors to administer the program for DMV. The program will enable customers to track and report vehicle miles traveled and pay appropriate fees.

The selected contractor will be required to protect personally identifiable information by maintaining the information collected in accordance with all applicable federal and state laws and regulations, all DMV policies, and the Commonwealth of Virginia’s information security policies. The working group also recommends strengthening the protection of information collected in the MBUF program by amending § 46.2-773 of the Code of Virginia to include specific statutory protections for this information.

As envisioned by the working group, the program will be administered with an online portal allowing eligible participants to enroll in the program, manage accounts, receive and pay invoices, and receive communications electronically.

Through its research, the DMV working group discovered there are a variety of methods available to capture and report vehicle miles traveled. An objective of the program is to offer participants mileage capture technology options to include those with the ability to capture GPS location data and those without the ability to capture GPS location data.

Other issues considered by the working group include fraud prevention and enforcement, the potential to obtain grant funding to support the program, and the possibility of achieving cost savings by working with other jurisdictions implementing similar programs.

This interim report documents the progress and recommendations of the working group to date and will be supplemented by a final report to the General Assembly in December 2021.