Patrick Murphy, policy director with the Vermont Agency of Transportation, told the Senate Transportation Committee that the agency has federal grant funding and an IT foundation to run a mileage-based user fee (MBUF) for electric vehicles, but that statutory language is needed this legislative session to create the fee, define rate-setting authority and set implementation rules. “The implementation of the miles based user fee in January 2027 — that is still our goal,” Murphy said.

The agency has sought an 80 percent federal match through programs set up by the 2021 bipartisan infrastructure law and applied for a federal grant administered by the Federal Highway Administration; delays in obligating those funds have pushed the timeline, Murphy said. He told senators the legislature previously authorized state match funding and directed program work (citing Act 62 of 2023 and subsequent revisions), but that the earlier acts did not create the final statutory language required to make the program mandatory.

Why it matters: Vermont has promoted electric-vehicle adoption while facing declines in gas-tax revenue that traditionally pays for road maintenance. The MBUF is intended to produce a stable revenue source tied to miles driven, to be collected initially for battery-electric vehicles and later scaled if the state moves to include all vehicles.

Key details presented to the committee included: the state plans to use odometer readings collected during the existing annual vehicle safety inspection process to calculate miles traveled and bill drivers, leveraging recent investments in DMV IT. Murphy said the agency is contracting with the University of Vermont Transportation Research Center to develop a Vermont-specific rate-setting methodology and an analysis of household impacts; that work is expected to be delivered in about a month.

Murphy estimated roughly $10,000,000 in MBUF revenue over the first three years for the initial EV cohort, noting this projection excludes revenue from the existing EV infrastructure fee. Committee members asked for a net comparison between continuing the current EV infrastructure fee and moving to MBUF; Murphy offered to provide follow-up slides showing the delta.

Senators also raised operational and equity questions. Several members asked whether a shift to biennial vehicle inspections would undermine the MBUF design; Murphy said moving away from annual inspections would complicate data collection, increase administrative edge cases and make a January 2027 rollout more difficult. He cautioned that methods relying on onboard telematics or GPS are costlier for users and raise privacy concerns, which is why Vermont plans to rely on odometer readings initially.

Next steps: the agency requested statutory language this year that would create the fee, establish how rates are set and define compliance rules. Murphy said the UVM report on rate methodology will be available soon, and the agency expects to refine draft statutory language and follow up with the committee on net revenue comparisons and implementation details.