Oregon to Become First State to Implement Road Usage Charge

Oregon is the first to implement a road use charging program, but many states are evaluating how such a system could work for them.

State governments and policy makers contemplating per-mile charging as a way to sustain transportation funding can now learn how Oregon established the nation’s first ever Road Usage Charge Program for light vehicles. ODOT’s new publication, “Road Usage Charge Pilot Program 2013 & Per-Mile Charge Policy in Oregon,” Photo: Salem-News.com

(SALEM, Ore. ) - State governments and policy makers contemplating per-mile charging as a way to sustain transportation funding can now learn how Oregon established the nation’s first ever Road Usage Charge Program for light vehicles.

ODOT's new publication, “Road Usage Charge Pilot Program 2013 & Per-Mile Charge Policy in Oregon,” details how Oregon successfully designed and completed its second per-mile charge pilot program and ultimately passed legislation to establish a fully operational road usage charging program, to launch July 1, 2015. “Oregon is the first to implement a road use charging program, but many states are evaluating how such a system could work for them,” said James Whitty, Manager of ODOT’s Office of Innovative Partnerships and Alternative Funding. “This report gives them a viable example, a step-by-step guide for how Oregon designed the system and developed the policy. We hope other states will run with our example and build upon it to maintain our collective highway investment nationwide.”

Why did Oregon conduct the pilot program?

Funding for transportation system maintenance, improvements and construction has been declining in Oregon and around the country since the 1990s. This is due in part to more fuel efficient vehicles purchasing less gas, thus paying less in gas taxes – which go toward maintaining and building roads and highways. That’s good news for the environment and for reducing dependence on fossil fuels, but it reduces funds available to maintain Oregon roads. More information about declining revenues is available at the ODOT website on transportation funding. The Oregon Legislature identified this trend in 2001 and established Oregon’s Road User Fee Task Force to investigate options to the traditional gas tax. With its direction, ODOT designed and conducted pilot programs in 2007 and 2013 to test a per-mile charging system. After twelve years, two pilots and extensive research and study, Oregon’s Road Usage Charge Program is now becoming operational. What is the Road Usage Charge program?

Oregon’s Senate Bill 810 (2013) was the first legislation in the U.S. to establish a per-mile charge. It authorized ODOT to set up a mileage collection system for volunteer motorists beginning July 1, 2015. ODOT may assess a charge of 1.5 cents per mile for up to 5,000 cars and light commercial vehicles and issue a gas tax refund to those participants. The volunteer program will not be another pilot but rather the start of an alternate method of generating sustainable revenue to pay for Oregon highways. As directed by the legislation, the Road Usage Charge Program must give motorists choices for the technologies they use to report miles driven, as well as how they manage and pay their road use charges. They will have the opportunity to obtain services through nongovernmental entities with market-driven options that are efficient and cost-effective. How will the system work?

The road usage charge system will automatically collect mileage data from vehicles. A mileage reporting device chosen by the motorist will interface with the vehicle and be paired with software to send mileage totals to an account manager. The on-board mileage reporting device may be either “basic” (does not use location-determination technology) or “advanced” (uses location-determination technology). ODOT will contract with companies to serve as road usage charge account managers. They will maintain customer 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 Office of Innovative Partnerships is currently seeking vendors to provide these account services for the program. Procurement documents and instructions can be downloaded online at the Oregon Procurement Information Network. The Oregon Road Usage Charge Pilot Program was the first ever Local Government Awardee named to the Intelligent Transportation Society World Congress’ Hall of Fame (2013). Oregon’s program was recognized for its equitable approach of charging drivers based on their actual usage of the roadways (i.e., the number of miles driven) rather than on the amount of fuel they purchase. ODOT’s Office of Innovative Partnerships and Alternative Funding works to create public-private partnerships that benefit the state’s transportation system and its citizens. Created in 2003 by the Oregon Legislature, the office deploys private sector creativity, flexibility and entrepreneurship to innovate new transportation solutions and funding models.

The report can be downloaded from ODOT’s website; print copies can be ordered by contacting ODOT”s Office of Innovative Partnerships and Alternative Funding at (503) 986-3903.

Source: ODOT