Committee reviews mileage-based user fee plan to charge electric vehicles for road use

Patrick Murphy, state policy director at the Vermont Agency of Transportation, told the House Transportation Committee on Feb. 18 that the agency is advancing a mileage-based user fee to recover transportation revenue from electric vehicles and to address long-term declines in gas-tax receipts.

Murphy said Vermont now has about 18,000 electric vehicles in the state, “of which nearly 11,000 are fully electric,” and that recent new-vehicle sales of electrified vehicles were about 12% for the full year, rising to roughly 13.6% in the third quarter. He said the state has used modeling tied to the Climate Action Plan to estimate how vehicle adoption affects future revenues and noted the committee’s statutory direction to study options.

The agency’s preferred approach would rely on odometer readings already captured during Vermont’s annual vehicle safety inspection. Murphy said the inspection program now validates those odometer entries with a photo capture; the plan calls for linking that data to the state’s vehicle-registration system (MyDMV) so fees can be applied at registration or renewal. “It attempts to try and account for a particular vehicle’s impact upon our infrastructure network,” Murphy said, adding that “the gas tax ... has become less and less reliable” as a proxy for road use.

Committee members pressed on practical and equity questions. Representative Paul, a committee member, asked whether a Vermont MBUF would double-charge drivers who travel out of state: “So am I going to be, like, doubly charged this month?” Murphy acknowledged the issue, saying regional and national implementations remain rare and that Vermont does not yet have a cross‑border apportionment mechanism. He described possible mitigation tools, such as optional enrollment choices at registration and future regional agreements, but said no final solution exists yet.

Other technical details discussed included a proposed rate framework, administrative costs, and transition rules. Murphy cited an illustrative per-mile rate of 1.78¢ that adjusts for prior fuel‑efficiency gains and administrative costs and said an alternative starting point consistent with 2013 fuel-efficiency baselines might be closer to 3.65¢ per mile. The proposal includes default procedures for vehicles without a verified odometer reading — a higher default flat fee — to encourage inspection compliance.

Panelists and lawmakers also addressed how plug‑in hybrids would be treated. Murphy said the legislature already directed creation of an EV infrastructure fee for plug‑in hybrids and battery-electric vehicles; the statute currently directs that revenue toward charging infrastructure programs managed by the Agency of Commerce and Community Development until a mileage-based user fee is implemented. If an MBUF is enacted, the statute would repeal the battery-electric vehicle infrastructure fee while keeping and redirecting the plug‑in hybrid fee to the transportation fund.

Funding and timeline remain uncertain. Murphy said the agency applied for federal pilot grant funding but those discretionary awards are paused; the grant award the agency expected has not been received. The state set a $700,000 state match in statute split across two fiscal years. Given the paused federal funds and required statutory language, Murphy told the committee an earliest plausible rollout had slipped from mid‑2026 toward January 2027, depending on funding and legislative direction.

Committee members repeatedly raised concerns about equity and rural impacts. Murphy referenced University of Vermont modeling showing that while a miles-based fee can be more progressive than the gas tax in some respects, lower-income and rural households tend to drive farther in less-efficient vehicles and could face heavier burdens unless exemptions or adjustments are adopted. He also noted that renters and residents without home charging could be disadvantaged if public fast-charging usage were treated the same as home charging without safeguards to avoid double charging.

No statutory language was proposed or voted on at the Feb. 18 hearing. Committee chairs said the MBUF remains part of the broader revenue discussion for the committee’s upcoming T-bill work; members signaled they would consider statutory language, implementation funding and equity protections in further sessions.

The agency will return with additional detail on rate-setting, administrative costs, possible statutory language and data integrations before the committee advances any bill language or implementation plan.