Committee removes records-retention clause from mileage-fee draft, debates pay-as-you-go reporting and penalties

A legislative committee working on a proposed mileage-based user fee agreed during its session to remove a records-retention provision from the draft bill and spent much of the meeting debating how self-reporting, inspections and penalties should work.

For the record, Damien Leonard of the Office of Legislative Council summarized the staff view that section 4308, which was modeled on distributor and dealer requirements for fuel sales, did not fit the mileage-fee program because odometer readings are expected to be maintained by the state. "This is language that's really more closely tied to ... wholesale dealers for gas and diesel fuel," Leonard said, and the committee agreed the section could be struck from the draft.

Patrick Murphy, who identified himself as the state policy director for the agency working on the proposal, told members a pay-as-you-go, self-reporting option could be added to the draft but is not currently included. He said the committee can either write a specific retention standard into law for self-reporting or delegate recordkeeping standards to the department to ensure compliance and data accuracy. "Conceivably, what you can include is just that there's records retention requirements for pay as you go," Leonard said; Murphy agreed to help draft language.

Members also revisited the penalty structure. The group discussed removing a stand-alone $10 administrative penalty and instead relying on a default higher flat fee that would block registration until paid, as a stronger compliance mechanism. At one point a member asked whether the flat fee tied to the 98th percentile would be "close to $375," and Murphy confirmed it was "close to 375." Committee members expressed concern that a large default charge could surprise drivers who missed an inspection window or failed to self-report; the staff and agency representatives emphasized that drivers would receive advance notice and could avoid the flat fee by completing the safety inspection and ensuring the odometer reading is recorded before registering.

Murphy described how reconciliation would work: self-reporting allows drivers to pay as they go, but the final "true up" would occur at registration using odometer readings from the annual safety inspection. If inspection data are missing, the state would lack the verification needed to calculate miles-driven and could apply the default fee; DMV notices and the myDMV system are expected to notify account holders in advance.

Committee members also asked whether odometer readings would be recorded even if a vehicle fails a safety inspection. Murphy said readings will be captured in the inspection process regardless of pass/fail and that the procurement and vendor contract language will include measures such as photographed odometer images to validate entries.

The committee did not take a formal roll-call vote but agreed in discussion to remove section 4308 and asked staff and agency representatives to draft revised language reflecting the pay-as-you-go options, recordkeeping approach and the penalty structure. The meeting adjourned with plans to reconvene the next morning and continue work around members' and staff availability.

Next steps: staff will draft alternative language on pay-as-you-go records and on how the department may set verification requirements; the committee will resume consideration at a follow-up session.