This is the Spring 2015 issue of MBUFA's e-Newsletter. Please use the links below to jump directly to articles and departments of interest. We welcome any comments and suggestions as well as contributions (news, features or links to recent research) for upcoming issues.

- The Editor

OReGO LAUNCH APPROACHING	STATES EXPLORE MBUF
MBUFA 2015 CONFERENCE REPORT	MBUFA BOARD LETTER by ADRIAN MOORE
EXECUTIVE DIRECTOR'S REPORT	EVENTS
NEWS	RESEARCH LIBRARY
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IBTTA FINANCE AND ROAD USAGE CHARGING CONFERENCE

Hear the latest from Capitol Hill and the Minnesota, Florida, and California projects

April 28, 2015 7am-8am PDT

The Nines Hotel, 525 SW Morrison

Portland, OR

MBUFA QUARTERLY MEETING

May 19, 2015 10am-4pm EDT

1050 K Street NW, Suite 400

Washington, DC

OReGO LAUNCH APPROACHING

Oregon is on track to launch the world's first mileage-based user fee system for light vehicles (heavy vehicle systems have been in use for some time), with a July 1, 2015 launch date.

The most recent pilot was completed in November, 2014. In the months since then, Oregon has been running pre-launch trials with the selected vendors and volunteers to test the sign-up process and the various options motorists will have when the system is officially launched. The vendors selected as account managers - Verizon Telematics, Azuga, and sanef its have now all been certified by the Oregon Department of Transportation as being capable of implementation, as required by the enabling legislation.

Although the earliest date motorists can join the program is July 1st, the state has been busy with an outreach effort, including the launch in February of the website myOReGO.org, where motorists can sign up for the "interest list." ODOT conducted a statewide "listening tour" to learn how the road usage charge program should be communicated. One result was the selection of OReGO name and logo, which was chosen by 80 percent of participants.

Social media and stories in the media will be complemented by the marketing campaigns of the account management vendors, to build momentum so that the program launches on July 1st with many participants, including those who joined the "interest list," to sign up right away.

How will the system work?

First, volunteers will choose options for participating in the program, including who will manage their mileage reporting and payment/credit. ODOT has contracted with Azuga, Sanef and Verizon to manage accounts, calculate charges plus any credits due, and submit charges to the Oregon Treasury. ODOT will audit account managers and verify that all charges owed are paid.

The road usage charge system will automatically collect mileage data from vehicles. A mileage reporting device selected by the motorist will interface with the vehicle and be paired with software to send mileage totals to the chosen account manager. The on-board mileage reporting device may be either "basic" (does not use location-determination technology) or "advanced" (uses location-determination technology).

By Sean Slone, Director of Transportation and Infrastructure Policy, Council of State Governments

STATES EXPLORE MILEAGE-BASED USER FEES

The following article was published by the Council of State Governments Knowledge Center. It is republished here with the permission of the author. To read the brief and download a .pdf, click here

On July 1, 2015, the Oregon Department of Transportation will begin assessing a charge of 1.5 cents per mile for 5,000 drivers of cars and light commercial vehicles who have volunteered for the state's Road Usage Charge Program, known as OReGO. As warranted, the drivers will receive a refund of the state's gas tax. The program, which will test three different methods of collecting mileage-based fees, is the result of 2013 legislation and follows previous pilot projects in 2007 and 2012 to test such systems in the state.¹

While Oregon has experienced the most success in pioneering mileage-based fees, it is by no means the only state to have played a role in researching, testing and planning for a future that may include such fees around the country.

Other states have conducted pilot projects to test mileage-based user fees.

In 2011-12, the Minnesota Department of Transportation tested a road usage charging system that relied on the use of GPS-enabled smartphones for the collection and transmission of mileage data. Participants paid different fee rates based on whether travel occurred in the Twin Cities region and whether it occurred during rush hour.²

The Nevada Department of Transportation has conducted its own studies of mileage-based fees, largely with the aid of federal funding and state university support. A mini field test with 40 participants concluded in 2012 used a pay-at-the-pump system and did not rely on the collection of location data.³

A multi-state study conducted by the University of Iowa Public Policy Center and concluded in 2010 involved the deployment of a prototype mileage-based charging system incorporating on-board computers with GPS receivers in the vehicles of more than 2,500 participants in 12 locations throughout the United States during a two-year period.⁴ The geographically diverse locations used in the study included Albuquerque, New Mexico; Austin, Texas; Baltimore, Maryland; Billings, Montona; Boise, Idaho; Chicago, Illinois; eastern Iowa; Miami, Florida; Portland, Maine; North Carolina's Research Triangle; San Diego, California and Wichita, Kansas.⁵

Several states have adopted mileage-based user fee-related legislation.

California's legislature in 2014 passed legislation requiring the California Transportation Commission to establish a task force to study mileage-based fees for two years and recommend a program to test the concept. The legislature and state officials would have to decide whether to move forward with a pilot.⁶

The Indiana legislature in 2014 approved legislation authorizing the state department of transportation to contract with a third party to study transportation funding alternatives, including one based on vehicle miles traveled. Each alternative studied will be evaluated on privacy, ease of use, compliance and revenue collection costs. The study is not to exceed two years.⁷

In 2012, the Washington state legislature authorized the state transportation commission to form a stakeholder steering committee tasked with evaluating the feasibility of a road user charge and recommending potential options for a pilot test. In 2013, the legislature asked the commission to evaluate the business case for road usage charging and a policy framework was developed. The commission issued a final report to the governor and legislature in December 2014, focusing on the development of a concept of operations, the first step in putting together a systems engineering process that describes the full functionality of such a system.⁸

States are considering additional legislation this year.

In March 2015, Arkansas' House Public Transportation Committee gave its endorsement to House Bill 1716, which would use federal money to support a research project under which volunteers would be subject to a tax of 1.5 cents for every mile driven. The bill was withdrawn by its author as time ran down on the 2015 legislative session.⁹

Florida lawmakers in 2015 are considering Senate Bill 1554, which would direct the Center for Urban Transportation Research at the University of South Florida to conduct a study on the viability of implementing a mileage-based user fee system. The study would inventory previous research from pilot projects in other states. It would address the assessment of technologies, behavioral and privacy concerns, equity impacts and policy implications of such a system. The center is directed to present the findings to the legislature no later than January 30, 2016 and then work with the Florida Transportation Commission to establish the framework for a pilot project.¹⁰

In Massachusetts, Rep. Tricia Farley-Bouvier has introduced legislation (H. 2984) to create a task force to guide the development of a pilot program to assess the potential for mileage-based revenue collection.¹¹

In Oregon, members of the House Interim Committee on Transportation and Economic Development pre-filed legislation (House Bill 2271), which would convert the 5,000-volunteer road usage charge program to a mandatory program requiring people operating certain high-mileage vehicles to pay either the per-mile charge or a flat annual road usage charge. If adopted, the program would become operational July 1, 2017.¹²

States also have formed coalitions to explore mileage-based user fees.

Eleven states have joined the Western Road Usage Charge Consortium to conduct collaborative research and joint planning around implementation challenges.¹³

The Mileage-Based User Fee Alliance is a national nonprofit organization formed in 2010 that unites government, business, academic and transportation policy leaders to conduct education and outreach on the potential for mileage-based fees at the federal level.¹⁴

The I-95 Coalition-an alliance of transportation agencies, toll authorities, metropolitan planning organizations and other groups in states from Maine to Florida-has conducted research on the administration of mileage based user fees in a multi-state environment in two phases. They examined institutional and administrative requirements of a multi-state mileage-based system, as well as legal and regulatory issues that would need to be addressed. They also studied actual operating environments and current conditions in three adjoining states-Delaware, Maryland and Pennsylvania.¹⁵

RESOURCES

¹ "Road Usage Charge Program," Oregon.gov.

² Richard "Trey" Baker. "Vehicle Miles Traveled (VMT) Fees: Preliminary Report-Tasks 1 and 2." Texas A&M Transportation Institute. March 2014.

³ Ibid.

⁴ Paul F. Hanley and Jon G. Kuhl. "National Evaluation of Mileage-Based Charges for Drivers: Initial Results."Journal of the Transportation Research Board. Volume 2221. September 2011.

⁵ Federal Highway Administration. "Road Pricing: Study Reports."
⁶ Michael Cabanatuan. "Alternatives to California gas tax are on table." San Francisco Chronicle. Feb. 9, 2015.
⁷ Indiana General Assembly. "House Enrolled Act No. 1104."
⁸ Washington State Transportation Commission. "Road Usage Charge Assessment."
⁹ Noel Oman. "Vote backs mileage-tax research." Arkansas Online. March 19, 2015.
¹⁰ Florida State Senate. "Senate Bill 1554."
¹¹ Massachusetts House of Representatives. "H. 2984."
¹² Oregon Legislative Assembly. "House Bill 2271."
¹³ Matt Rosenberg. "Road Usage Charges Advance; GPS Mandate Out." PLAN Washington Catalyst. June 30, 2014.
¹⁴ Mileage-Based User Fee Alliance. "About the Alliance."
¹⁵ Mileage-Based User Fee Alliance. "Mileage-Based User Fees By Region."

MBUFA SECOND NATIONAL CONFERENCE REPORT

The Mileage-Based User Fee Alliance held its second annual national conference on February 24 at the Pew Conference Center in Washington DC to discuss the progress that has been made and the prospects and challenges ahead for the implementation of a road user fee for sustainable transportation financing. The event was sponsored by Computer Aid, Inc., CH2MHILL, and the Reason Foundation.

The day started with an address by Representative Earl Blumenauer (D-OR) who spoke of the ineffectual state of the current transportation financing system. He proposed an increase to the gas tax coupled with indexing the tax to inflation to provide a short term solution while states explore the possibility of a mileage-based user fee system.

Later in the day, Representative John Delaney (D-MD) spoke to the conference attendees about his "Partnership to Build America Act" which would create the American Infrastructure Fund to be funded by the sale of infrastructure bonds to private companies. For every dollar invested in the fund, companies would be able to repatriate five dollars of overseas earnings, tax free.

During lunch, Alex Herrgott, Deputy Staff Director of the Senate Environment and Public Works Committee addressed the conference and discussed the state of the progress in Congress of putting together a transportation bill to replace the expiring MAP-21 legislation. Herrgott expressed confidence that there will be a long-term, multi-year highway bill passed during the current Congress.

The first panel, "Why Does MBUF Produce Fireworks for Taxpayer Groups? Issues Discussed Both Pro and Con," featured tax policy professionals and focused on what the pros and cons a mileage-based user fee system offers in the context of tax policy. Panelists voiced the concerns of taxpayer groups that such a system could overcomplicate the tax code and that priority should be put towards ending the diversion of tax revenue between state and federal transportation funds and general funds. An MBUF system is worth exploring, one panelist said, if it is clear that the fee is a replacement for the gas tax. The panel discussed the merits of an MBUF system and the fairness of its "user pays" principle. Other alternative solutions to funding the Highway Trust Fund, such as pension smoothing, do more harm than good in that they raise deficits and are net revenue losses.

The second panel, "Taking to the Road with MBUF: A Vision for the I-95 Corridor," featured officials representing different transportation entities along the I-95 Corridor. Gary Euler of Parsons Brinckerhoff gave a presentation on the findings of two studies conducted by the I-95 Corridor Coalition in 2010 and 2012 on the feasibility of a VMT system. Panelists discussed the role that departments of transportation, tolling authorities and motor vehicle administrators can have in providing their technical framework for a mileage-based system.

The third panel of the day brought together MBUFA chair Jack Basso and Susan Binder of Cambridge Systematics, Inc. for a conversation called "Will There Be Pilots/Trials for MBUF in the MAP-21 Reauthorization? Key Staff Discuss the Changes for Issue Expected in the New Congress." Their discussion focused on what prospects exist for multi-year transportation bill in the new Congress and what the consequences of continuing to pass bill extensions for MAP-21 will be.

The next panel, "Will Business Have a Role: The Commercial Provider Perspective," brought together representatives from private companies who discussed what benefits they can provide to an MBUF system. The three account management vendor options Oregon residents can choose from when volunteering for the state's Road Usage Charge Program were each represented on the panel. Topics focused mainly on what value can be taken from the advancement in technology surrounding the transportation world such as the internet of things, commercial telematics, and connected vehicles. The technology is there, one panelist said, for consumers to be able to customize their driving experience to match their values.

The next panel, "Beyond the Beltway: Will States Continue to Lead the Way? A View from the West," featured Jim Whitty, Manager of the Office of Innovative Partnerships and Alternative Funding at the Oregon Department of Transportation, Jim Madaffer, Chair of the California Road Charge Pilot Program Technical Advisory Committee, and Gary Gutierrez, Project Manager of the Road Charge Pilot Program from the California Department of Transportation. They discussed the progress in Oregon and California in exploring and implementing an MBUF system.

The last panel of the day, "Is Privacy Still the Boogeyman? The Safeguards Being Considered and Debated," focused on what concerns remain about the protection of privacy in an MBUF system and what has been done so far to alleviate concerns. Panelists discussed the need to strike a proper balance with the consumer in what value can be provided in exchange for data.

The conference was well attended by members of the business community, transportation officials and academia.

By Adrian Moore, Vice President for Education, MBUFA

MBUFA BOARD LETTER

When I first began answering questions about mileage-based user fees from policymakers and their staff five years ago, they were usually about issues like privacy, fairness between rural and urban drivers and how it could work. There was a fair degree of skepticism and lack of familiarity with such a system.

But spring is in the air in Washington and just as the cherry blossoms are falling from the trees, so it appears that policymakers' skepticism is falling away as the continued reality of regular Highway Trust Fund bailouts has proven the point that the gas tax in its current condition is no longer sufficient to provide necessary funding to meet our national transportation infrastructure needs.

During my most recent conversations, something has changed. I no longer have to explain the problem with the Highway Trust Fund and the gas tax. They now understand that fuel efficiency, alternative fuel vehicles and lack of indexing eroded the value of the current gas tax and that without adjustment or alternative revenue generators, our crumbling infrastructure will only get worse.

Instead of hearing that it can't work because of privacy concerns, I am now hearing questions focused on what is happening in the states and what the federal role should be. As we have thought for some time, the state studies and pilots are going to lead the Federal government. Our colleagues at the Oregon DOT, a founding member of MBUFA, have done a remarkable job demystifying the privacy issue and, by giving participants choices and legal recourse, have changed the debate.

We all know spring is a fickle season and Congress is at best unpredictable, but the urgency is greater and the understanding of the mileage-base fee option shows that progress is being made. Our pioneer colleagues who have been designing, testing and operating mileage-based systems are moving the needle. The upcoming pilot in California will bring even higher levels of understanding and confidence. We have a lot to look forward to this summer!

By Barbara Rohde, Executive Director of MBUFA

EXECUTIVE DIRECTOR'S REPORT

In 2015, MBUFA will celebrate its fifth anniversary. Five Members that joined in the fall of 2010 are still active Members today: Oregon Department of Transportation, IBTTA, California Department of Transportation, Minnesota Department of Transportation and the Nevada Department of Transportation. Since then, we've been steadily gaining the wisdom and expertise of new members. We are greatly appreciative of the early and continued support of our inaugural members, as well as, the many that have joined since. Thank you all for your continued support and enthusiasm for this important policy issue.

Looking forward, we face yet another round of reauthorization for MAP-21! Although extensions seem to the most common word associated with the reauthorization of MAP-21, we are pleased to see the concern by many key policy leaders for "alternative transportation funding". We continue to monitor the progress of the federal legislation.

We are particularly excited by movement in several state legislatures on MBUF: Florida, Illinois, and Minnesota. This year also brings significant progress in both California, which is in the beginning processes of its pilot; and Oregon which begins implementation of its project on July 1, 2015.

On February 24, MBUFA held the 2nd Annual National Conference which was attended by almost 100 attendees at the Pew Center in Washington, D.C. Press coverage from the event gave this issue some of the most widespread publicity to date. Two members of Congress addressed the conference in addition to Alex Herrgott, Deputy Staff Director of the Senate Environment and Public Works Committee. For more details, be sure not to miss the special feature in this issue.

We also want to welcome three new members to MBUFA since our last newsletter:

Verizon Telematics

HNTB

International Telematics

These new members bring a wealth of experience on this issue and talent to continue to move the organization forward.

On May 19, we will hold a Quarterly Meeting in Washington, DC. We continue our biweekly legislative update calls. In addition, we have begun a monthly email UPDATE to interested individuals on issues regarding the subject.

2015 appears to be a very exciting year for the issue and for MBUFA-we look forward to your comments and suggestions as the year moves ahead.

EVENTS

APRIL	April 28, 7:00am - 8:30am PDT: Breakfast for MBUFA Members and Prospective Members, IBTTA Finance and Road User Charging Conference The Nines Hotel, 525 SW Morrison Portland, Oregon April 29, 7:00am PDT: Mileage-Based User Fee/VMT Research and Outreach Subcommittee Meeting, TRB Congestion Pricing Committee (ABE25) Meetings Parsons Brinckerhoff, 400 SW 6th Ave, Suite #802 Portland, Oregon
MAY	May 19, 10:00am - 4:00pm EDT: Quarterly Meeting 1050 K Street NW, Suite 400 Washington, DC
JUNE	June: Roundtable at Embassy of New Zealand - Discussion with New Zealand officials and companies about road charging in that nation