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Committee hears Senate changes to mileage'based user fee: flat-fee option, 2029 cap removal and phased EV transition
Summary
Legislative counsel summarized Senate amendments to the mileage'based user fee: a $178 flat-fee cap (for 2027'28) was added along with a $178 maximum for initial options, the flat fee disappears in 2029 and the default noncompliance rate rises to $375; the Senate limited automatic statutory expansion in 2029 to hybrids and required outreach, transition reports and a fuel-tax credit to offset MBUF amounts.
The committee devoted substantial time to changes the Senate made to the mileage'based user fee (MBUF) provisions.
Danny Leonard, legislative counsel, said the Senate added a flat fee and a cap on the MBUF options for the program's early years. "The fourth option that the senate added is a flat fee of a $178 per year," Leonard said, and he noted the cap equates roughly to 12,700 miles of driving. The Senate also capped all payment options at $178 for the first two years (2027 and 2028) before removing the cap in 2029 and raising the default rate for noncompliance to $375.
Counsel described transition mechanics for electric vehicles: owners registering or renewing before 2027 will get the EV infrastructure fee credited to the first MBUF reporting period; for new EV registrations owners may choose a one'year or two'year interim payment (e.g., $89 for one year, $178 for two years) that will be applied as a credit against the first mileage'based charge. Leonard said the Senate limited automatic statutory expansion in 2029 to plug'in and mild hybrids; the broader plan instruction that AOT draft a proposal for other fuel'efficient vehicles remains, but statutory coverage beyond hybrids would require additional legislative action.
Leonard gave an illustrative example to show potential bills: a vehicle traveling 22,000 miles a year at 35 mpg would face a base MBUF of about $308; estimated gas tax paid would be about $198, leaving a net MBUF near $110 under that example. "So that in that case there, if you had a Prius or Prius Prime or something like that that gets above 50 miles per gallon, you would have a higher MBUF at that distance," he said.
Committee members raised fairness questions for high'mileage drivers and for vehicles whose registration patterns make credits and default rules complex. Members also asked about outreach and user'experience feedback; counsel noted section 19 requires outreach, education and feedback gathering as part of the federal grant conditions.
What happens next: the committee flagged inconsistencies in the Senate draft (for example, the flat fee language as drafted could remain after 2029) and asked counsel to reconcile drafting oversights, provide clarified language and follow up on implementation details with DMV and AOT.
