Senate Transportation presses AOT on mileage-based fee for electric vehicles; seeks legislative sign-off and later start date

Senate Transportation convened April 9 to continue work on a bill that would authorize the Vermont Agency of Transportation (AOT) to develop a mileage‑based user fee for battery‑electric vehicles (BEVs). The agency presented a development timeline that assumed a January 2025 start and a July 2026 go‑live; several senators urged delaying the start to Jan. 1, 2027, and insisted the fee amount be approved by the Legislature before the state sets or collects it.

Why it matters: The proposal seeks to replace lost gas‑tax revenue from electrifying the vehicle fleet with a per‑mile charge on BEVs. Committee members said the design must address affordability and rural equity before implementation — particularly for lower‑income drivers and rural residents who drove to the committee’s attention.

AOT timeline and next steps Patrick Murphy, Agency of Transportation, described the project schedule the agency submitted with a federal grant application and said the program development includes a testing and vendor support period. Murphy said the schedule shows a July 2026 go‑live date based on a January 2025 start and roughly 18 months of development and testing. He told the committee the agency will return with statutory language for the Legislature to consider: "We will come back with a suggestion about how to calculate a fee and what that rate might be. Ultimately, it's going to be the decision of the legislature to adopt that." (Patrick Murphy, Agency of Transportation.)

Committee members asked for stronger statutory “check‑back” language. Senators repeatedly requested a provision that would bar the agency from setting or collecting any mileage fee until authorizing language is enacted by the Legislature. A committee member read draft language intended to accomplish that goal: that the agency "not commence collecting a mileage based user fee until such authorizing language is codified in statute and becomes effective." The committee asked staff and the agency to craft a clear statutory sentence to ensure the fee amount and collection cannot begin without legislative approval.

Delayed start and phased implementation Several senators urged moving the program start six months later — to Jan. 1, 2027 — to give the Legislature time to review statutory language, to allow public notice and outreach, and to prevent a compressed implementation window. AOT staff confirmed that a delayed start could be incorporated and that the program is expected to be phased in by vehicle registration dates (owners will be charged as their registrations come due, not all at once).

Rate setting and equity concerns AOT provided framing for how it would set rates and noted the agency previously proposed a starting rate in its 2024 report; committee members said they were not comfortable with the methodology in that report. Senators highlighted two equity concerns: (1) rural residents and lower‑income households could face a disproportionate burden, and (2) highly efficient drivers (including many BEV owners) could be charged at a rate that does not reflect their lower road use. One senator cited a University of Vermont rural‑equity study and warned small‑town drivers could see greater cost shifts.

AOT said the agency’s initial approach would look at what an average gasoline vehicle currently contributes in fuel taxes and propose a roughly equivalent per‑mile amount for BEVs as a starting point, with adjustments over time (for example, inflation indexing). The committee discussed alternative designs (vehicle‑class tiers, weight‑based factors, or efficiency bands) and directed staff and the agency to refine intent language that clarifies this bill is an interim step toward a broader, fairer system.

Privacy, collection mechanics and multi‑state work AOT staff said the technical work being funded is primarily for system development: data collection methods, integration with registration systems, and vendor development. The agency described participation in a multi‑state coalition to study cross‑border issues and potential apportionment of revenue. Senators also raised privacy, odometer/inspection‑based collection options, and the need for user outreach so registrants understand what they will pay.

Budget and related programs Committee members discussed existing registration and infrastructure fees and how they interrelate with a mileage fee. The committee also reviewed a separate proposal to use up to $325,000 in previously appropriated funds to continue Drive Electric Vermont’s work helping municipalities, nonprofits and businesses transition vehicle fleets; the agency said that appropriation would support technical assistance and fleet incentives.

What’s next The committee asked the agency to produce revised statutory language that (1) explicitly prohibits setting or collecting the mileage fee without legislative authorization, (2) incorporates a reasonable delayed start (the committee suggested Jan. 1, 2027), and (3) better explains rate‑setting methodology and equity mitigations. The agency said it will return with statutory language and continue stakeholder outreach.

Ending: The committee did not adopt final language during the April 9 session; members agreed to continue work and to see a revised draft that addresses the check‑back requirement, timeline adjustments and intent language about rate setting.