RD878 - Mileage-Based User Fee Program Final Report – December 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 sought proposals from contractors to administer a program for DMV to track and report a customer’s vehicle miles traveled, collect fees, and transfer revenue to the state. DMV has negotiated a contract with the selected vendor and expects all implementation steps to be completed on schedule.

Details of the program requirements, as outlined in the RFP, were included in an interim report submitted to the General Assembly in July 2021. While evaluating the submitted RFPs and working through DMV business requirements necessary to implement the program, the DMV working group considered additional issues including MBUF payment enforcement and highway use fee refunds and developed recommendations for additional legislation. Draft legislation to protect the privacy of data collected for the MBUF program was attached to the interim report. Other recommendations are detailed in this report.