House Transportation panel narrows mileage-based user-fee draft, agrees to remove proposed monthly penalty

The House Transportation Committee on March 10, 2026, reviewed a revised draft of a mileage-based user fee that would replace the current flat battery-electric vehicle infrastructure charge and add options for pay-as-you-go reporting and installment payments. Committee counsel walked members through version 3.2 of the bill, and the Agency of Transportation’s policy director described how the myDMV system could host accounts and reconcile odometer reports.

The revised draft shortens the bill’s purpose language to require that “battery electric vehicles contribute to the transportation funds in an amount that reflects the annual miles traveled by each vehicle,” counsel said, and adds a new pay-as-you-go (PAYGo) option that owners may opt into in lieu of a single annual mileage payment. Patrick Murphy, state policy director at the Agency of Transportation, told the committee the PAYGo option is intended to “more closely reflect when miles are incurred” and that the DMV would have discretion over reporting periods and technical requirements.

Why it matters: lawmakers said the measure aims to move EV owners from a flat charge toward paying by usage, closer to how the gas tax functions, while also preserving equity for low-mileage drivers. The question for the committee is how to balance fairness, administrative complexity and privacy concerns while minimizing burdens on older, rural or less tech-savvy vehicle owners.

How the PAYGo option would work: under the draft, an owner who enrolls could provide odometer readings at a frequency set by the commissioner; the commissioner would calculate a fee after each reported period and mail a statement (mail may include a myDMV notice or email). The program would reconcile at annual inspection or registration: if actual miles are lower than reported, the owner would receive a credit; if they are higher, the owner would be billed the difference. Counsel emphasized a large degree of commissioner discretion remains in the draft on periods and implementation details.

Estimating payments and new vehicles: because newly purchased vehicles lack prior data, the draft proposes assessing newly registered BEVs at a mileage-based rate multiplied by an assumed average annual mileage (the draft used roughly 11,000 miles as an example, which currently produces an illustrative figure near $154). Committee members pushed back that charging the full annual estimate at registration could be unfair to low-mileage or income-sensitive drivers and suggested alternatives such as using the existing $89 infrastructure charge as an initial payment, requiring only the first quarterly installment up front, or allowing an owner to choose monthly or quarterly installments.

Technical, privacy and cost limits: Murphy said telematics or plug-in devices have high administrative costs and privacy concerns and that pilots elsewhere have shown high overhead; the draft therefore prioritizes self-reporting (photo capture) and myDMV account management, with telematics left as a potential future option. He said the agency is working toward an implementation target of January 2027 if feasible but would preserve flexibility if the vendor or technical constraints prevent that date.

Penalties and enforcement: the draft removes a $10 late fee but initially retained statutory interest (1.5% per month) and a proposed additional penalty structure borrowed from fuels reporting (a 5% penalty for amounts unpaid after 30 days, additional 5% monthly up to 25%). Several members described that extra monthly penalty as onerous; counsel recommended deleting subsection b’s 5% monthly penalty as a policy choice. The committee chair indicated consensus to remove that subsection and asked the agency to propose options for collecting final unpaid amounts (for example, civil collection or denial/suspension of future registrations), noting the bill does not currently address some termination scenarios.

Funding and transition of EV infrastructure fee: counsel proposed deleting the current EV infrastructure fee and returning plug-in hybrid fee revenue to the general transportation fund once MBUF is implemented. Members debated effective dates (proposals ranged from July 1 to January 1, 2027) and asked for ACCD (the agency that had received EV infrastructure funds) to comment before accelerating the transfer, noting the amount is modest but may support charging port buildout programs.

Committee direction and next steps: counsel said he will add transition language for currently registered EVs, clarify the mileage-reporting definition, add an allowance for newly registered vehicles to enter PAYGo if offered, delete the 5% monthly penalty language and add effective-date/applicability text for the MBUF program. The committee planned to continue discussion later in the day. No formal roll-call votes were recorded during this session.

Representative comments captured in the session ranged from requests for simpler, customer-friendly monthly billing options to concerns about technological burdens for older Vermonters; Patrick Murphy acknowledged those concerns and said communications, account supports and vendor work would be part of implementation planning.

What’s next: the committee requested updated draft language and implementation examples from the agency and counsel and will resume deliberations in a subsequent meeting.