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Conferees narrow mileage-based user fee timing, flag federal EV fee as potential funding source
Summary
Senate and House conferees on the transportation bill agreed to advance an MBUF (mileage-based user fee) section with a later fallback implementation date while holding related coverage and rate questions for further work; federal discussion of an annual EV fee emerged as a potential supplemental funding pathway.
Senate and House conferees on the transportation bill agreed to proceed with the mileage-based user fee (MBUF) language that uses a later fallback implementation date, while leaving other coverage and rate issues for a later meeting.
The committees narrowed their differences by accepting language that lets implementation occur “on or before Jan. 1, 2027,” rather than fixing a single July 1, 2026, start date. Members said the later date is intended to avoid a scramble if administrative or federal funding pieces are not in place.
Why it matters: the MBUF discussion is a response to declining fuel-tax revenue and growing shares of electric and high-efficiency vehicles. Conferees debated whether the fee should be set to match combined state and federal gas-tax revenue or instead to approximate the state-only average fuel-tax yield. Some members also pressed for intent language stating MBUF is an interim step toward broader coverage of all motor vehicles; others cautioned that language suggesting an eventual expansion to all vehicles is premature.
Members flagged equity and policy trade-offs. Concerns raised included whether an MBUF penalizes long-distance travel, how out-of-state EV travel would be handled, and the principle of whether fees should focus on emissions and vehicle efficiency rather than miles alone. One committee member said they were “not in favor of any fees on EVs at this point” because EVs produce lower emissions; another argued the state must identify a stable replacement for falling gas-tax receipts.
A new federal development was raised by Michelle Bloomhower of the Vermont Agency of Transportation: recent federal committee work on the budget reconciliation proposal reportedly settled on an annual federal EV-related fee of $250 for battery-electric vehicles and $100 for plug-in hybrids, and one element under discussion is providing up to $2 million to each state to build collection systems. Bloomhower said those federal funds “might be able to … implement our collection process,” which could help state-level MBUF administration.
What the committee decided: conferees signaled they would mark up the MBUF sections differently—accepting the senate’s safer fallback date in one section (18) and holding the related coverage/intent section (19) for further work. Members asked staff and agency partners to explore implementation steps, the interplay with any federal EV fee, and technical choices such as whether to index fees to fuel-tax equivalents or vehicle weight/use.
Next steps: conferees left the substantive coverage and rate-setting questions unresolved and scheduled follow-up meetings to reconcile intent language, collection mechanics, and how to treat out-of-state plug-in vehicles.
