Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature

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Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
ROAD USER FEE TASK FORCE
Report to the Oregon
Legislative Assembly
2019
Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
Road User Fee Task Force
2019
Maureen Bock
Office of Innovation Manager
Director’s Office

Oregon Department of Transportation
355 Capitol St NE
Salem, OR 97301
Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
TABLE OF CONTENTS
INTRODUCTION.........................................................................................................................2

ROAD USER FEE TASK FORCE PROCEEDINGS...............................................................3

OReGO IMPLEMENTATION UPDATES.................................................................................4

PARTNERSHIPS WITH OTHER JURISDICTIONS............................................................... 7

CONCLUSION..............................................................................................................................9

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Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
INTRODUCTION
    This report is submitted to the Legislative      ODOT is also an active and leading
    Assembly in compliance with ORS 184.843          participant of RUC West. RUC West brings
    (9), requiring the Road User Fee Task Force      together leaders from state transportation
    (RUFTF) to report to each odd-numbered           organizations to share best practices and
    year regular session of the Legislative          research road usage charge.1 Currently, RUC
    Assembly on the work of the task force,          West consists of fourteen states that are
    the department and the commission in             in various stages of exploring road usage
    designing, implementing and evaluating pilot     charge programs. This includes Utah--
    programs.                                        which is establishing an operational road
                                                     usage charge system-- and California and
    The Oregon State Legislature recognized that     Washington, both of which have participated
    transportation financing would reach a crisis    in pilots and are exploring interoperability
    point, where fuels tax could not continue        with Oregon’s road usage charge program.
    to provide a sustainable funding source
    for transportation system maintenance,           The Federal Highway Administration awarded
    improvements and construction. In response,      ODOT two Surface Transportation System
    the Legislature created the Road User Fee        Funding Alternatives (STSFA) grants. The first
    Task Force in 2001. The task force has been      ODOT grant was used to conduct research
    instrumental in creating and supporting road     regarding RUC enforcement, evaluate new
    usage charge (RUC) pilots and policymaking       technologies to transfer RUC data, partner
    to explore alternative transportation            with other entities, and launch a public
    financing.                                       education campaign. The second ODOT grant
                                                     will be used to verify that RUC could be used
    Following two road usage charge pilots           as a local financing option. Additionally, RUC
    in 2006 and 2012, the 2013 Legislative           West received two STSFA grants to explore
    Assembly passed Senate Bill 810. SB 810 is       inter-state interoperability.
    the foundation for the only ongoing road
    usage charge program in the nation, OReGO.       The operational OReGO program proves
    The OReGO program launched July 1, 2015,         that RUC works: Drivers can accurately pay
    and since then, the Oregon Department of         for their use of the road on a per-mile basis,
    Transportation (ODOT) has been actively          rather than by gallons of fuel consumed.
    testing the policy and technical possibilities   ODOT continues to further research, refine,
    of RUC.                                          and execute this option of transportation
                                                     financing.

    1   https://www.rucwest.org/about/

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Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
ROAD USER FEE TASK
FORCE PROCEEDINGS
The Road User Fee Task Force has convened        and tear on the roads and less revenue. A
five times since the last report to the          mandatory RUC for automated vehicles could
Legislative Assembly in 2017.                    bridge this funding gap.

»» November 2017: The task force received        »» June 2018: The task force received an
   updates on the operational OReGO                 update on the Oregon-California and
   program and the status of the California-        Oregon-Washington interoperability
   Oregon interoperability pilot. It also           pilots as well as an overview of Utah’s
   discussed the possible path forward              road usage charge statute. It then
   for a more robust road usage charging            discussed possible legislative concepts
   program in Oregon.                               that would include enforcement options,
                                                    an efficiency minimum for enrolling in
»» February 2018: The task force received           OReGO, and expanding the enhanced
   updates on the OReGO Program, were               registration opt-out provisions for
   briefed on national momentum for road            vehicles that had an efficiency of 40
   usage programs and what ODOT is doing            miles per gallon. The task force was also
   to enhance the volunteer experience              briefed on an open architecture tolling
   here in Oregon.                                  system; a concept which would allow for
                                                    transportation payment services, like
   The task force also had a policy                 tolling and road usage charging, to be
   discussion about:                                combined on a single billing platform.
   ~~ Expanding the OReGO program to             »» September 2018: The task force received
      allow high efficiency vehicles other          a status update on the operational
      than fully electric vehicles to opt into      OReGO program and its projects, and
      OReGO in lieu of paying enhanced              learned about Minnesota’s approach to
      registration fees created in House Bill       road usage charging. ODOT staff also
      2017 (2017),                                  demonstrated the educational tools that
                                                    are being developed to inform the public
   ~~ Applying a fuel efficiency minimum for        about the need for a more sustainable
      vehicle enrollment into the program,          revenue source. It also approved of
      and                                           provisions for a legislative concept
   ~~ Adopting enforcement mechanisms               consistent with its previous discussions.
      for vehicles that were not paying the      »» April 2019: The task force received a
      enhanced registration due to their            status update on the OReGO program
      enrollment in OReGO.                          and information about the road usage
                                                    charge pilot taking place in Hawaii.
The task force also received a briefing on          Representative Lively provided an update
automated vehicles and their potential              on the task force legislation, House
impact on revenue if transportation financing       Bill 2881 (2019) that he is sponsoring
remains tied to fuels tax. Automated vehicles       in the Legislature. The task force also
are likely to be deployed in electric fleets        had a guest presentation from TriMet
and may travel significantly more miles             showcasing its app-based payment
than conventional driver-operated vehicles.         system.
This could lead to substantially more wear

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Report to the Oregon Legislative Assembly - ROAD USER FEE TASK FORCE - Oregon State Legislature
OReGO IMPLEMENTATION
    UPDATES
    The OReGO Program successfully launched
    on July 1, 2015. Since that time, it has been    OReGO 2016 STSFA Grant
    continually operating and undertaking            For the 2016 grant, the OReGO team
    projects to enhance its functionality and        established four objectives: expand the
    practicality. In 2016 and 2017, ODOT applied     market, increase public awareness, evaluate
    for, and received, grants from the Federal       compliance mechanisms, and explore
    Highway Administration. These grants             interoperability. The following projects were
    were part of the Fixing America’s Surface        defined to meet these objectives.
    Transportation Act (FAST Act) Surface
    Transportation System Funding Alternatives
    Program. RUC West also applied for and
                                                     1.   Expand the market
    received grants.
                                                      »» Expand technology options for reporting
    The FAST Act established the Surface                  mileage. If RUC is expected to mature
    Transportation System Funding Alternatives            into a mandatory program, it must move
    Program to provide grants to states, or               away from the device that plugs into the
    groups of states, to demonstrate user-based           vehicle and move toward a technology
    alternative revenue mechanisms that utilize a         that is less susceptible to tampering.
    user fee structure to maintain the long-term
    solvency of the Highway Trust Fund. The           »» Manage the open market by better
    objectives of the STSFA program are to:               managing account manager entrance
                                                          and exit into the RUC market and
    »» Test the design, acceptance, and                   certification of technology.
        implementation of two or more future
        user-based alternative mechanisms;            »» Develop requirements for a manual
                                                          mileage reporting option.
    »» Improve the functionality of the user-
        based alternative revenue mechanisms;         »» Streamline reporting and data sharing
                                                          with other government entities.
    »» Conduct outreach to increase public
        awareness regarding the need for             2.   Increase public awareness.
        alternative funding sources for surface
        transportation programs and to provide       3.   Evaluate program compliance
        information on possible approaches;               mechanisms for account managers and
                                                          RUC payers.
    »» Provide recommendations regarding
        adoption and implementation of user-         4.   Explore interoperability by hosting a
        based alternative revenue mechanisms;             multi-state RUC Forum (which was held
        and                                               in September 2017).
    »» Minimize the administrative cost of any       Of these projects, all but two are complete
        potential user-based alternative revenue
                                                     and have final reports as of April 2019. The
        mechanisms. 2
                                                     remaining project related to expanding
                                                     technology options will conclude by

    2   https://www.fhwa.dot.gov/fastact/factsheets/surftransfundaltfs.cfm

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December 2019, and the project related to         is limited by vehicle manufacturer
increasing public awareness will conclude by      constraints on its availability and usage.
December 2020.
                                                »» OReGO refined its requirements, which
The OReGO Program 2016 FAST Act grant             will make it easier for other business
was awarded at $4.2 million (fifty percent        partners to become certified for
funded through federal grants, and fifty          participation in the program.
percent funded by OReGO), though due to
a re-scoping, incorporating efficiencies into   »» A manual reporting option process was
project plans, and relying more on internal       developed but has not been deployed
resources, ODOT plans to spend only $2.7          into the operational program. In part,
million of that award. A third-party firm was     this is due to potential increase in
contracted to perform independent Quality         administrative costs. It will be deployed
Assurance for the overall project, and the        when the program is mandated or has
Office of the State Chief Information Officer     significantly more vehicles.
was engaged to provide oversight.
                                                »» One account manager became certified
OReGO learned many lessons through                with the Oregon Department of
these projects. The lessons were shared           Environmental Quality and can now
with the Road User Fee Task Force and are         provide remote emissions testing in
summarized below.                                 addition to supporting OReGO. This saves
                                                  OReGO volunteers a trip to emissions
»» On-board telematics in vehicles will be        testing sites, with the results of the
   the most reliable and accurate way to          remote emissions testing being shared
   report mileage and fuel usage, however,        directly with DMV, thereby streamlining
   using on-board telematics in OReGO             registration renewal.

                                                                                               5
»» Account managers asked OReGO                    More than ever, local jurisdictions need
        volunteers if they would share their            options to generate revenue to maintain
        anonymized travel data with ODOT’s              their roadways as infrastructure ages. Cities
        Transportation Development Division             and counties with local option fuel tax
        (TDD) to see if that data could be used         programs are facing the same pressures
        for traffic modeling. The volunteers who        on their revenues as ODOT. While OReGO
        did agree to share data received a small        demonstrates that road usage charging
        incentive from the account manager.             works to collect state fees, it remains
        TDD found the data useful although              unproven at the local level, in terms of
        there were not a significant number of          simultaneously collecting both state and
        participants.                                   local fees and accurately distributing them to
                                                        the appropriate jurisdictions. ODOT seeks to
     »» While researching how to increase public        demonstrate that RUC will work at the local
        awareness, OReGO learned that most              level to address local option issues, should
        Oregonians do not understand how                the Legislature opt to include a local option
        transportation infrastructure is currently      in a mandatory program.
        funded. Based on the feedback received
        during a longitudinal focus group of            ODOT partnered with the City of Portland
        sixty Oregonians from throughout the            and Metro on the design of the pilots, which
        state, we were able to develop new              are targeting a May 2020 launch. The pilot
        communications tools that will be               project total budget is $3.5 million and, ODOT
        deployed later in 2019.                         is in the process of securing a business
                                                        partner to collect driving data and administer
     »» Research was conducted on possible              the volunteer accounts. Once a vendor has
        enforcement mechanisms for both                 been selected, the schedule and budget can
        account managers as well as RUC                 be finalized.
        payers to help ensure compliance in
        a mandatory program. This included
        estimating the costs associated with            HOUSE BILL 2017
        implementing those mechanisms.                  IMPLEMENTATION
     »» The interoperability forum was held in          House Bill 2017 (2017) provided that fully
        2017. It included both a technical and a        electric vehicles enrolled in OReGO were
        business track. This allowed participants       not subject to the enhanced registration
        to learn, share ideas, and ask questions.       surcharge that was established in the bill.
        The reviews indicated that participants         The OReGO Program worked with DMV to
        liked the format and would appreciate           ensure that there was a seamless process
        having an opportunity to participate in         allowing people registering or renewing their
        similar events at least every other year.       fully electric vehicles to avoid paying the
                                                        surcharge based on OReGO enrollment.

    OReGO 2017 STSFA Grant –
    Local Option RUC
    This OReGO grant will support three pilots
    for adapting the state’s road usage charge
    system for localities. ODOT will conduct three
    local road usage charge area pricing pilots,
    with up to 100 volunteer participants each.
    Each pilot will explore the technical feasibility
    scenarios such as geo-fencing a city, central
    business district within a city, or county for
    additional per-mile charges during specific
    travel times and pricing limited to freeway
    corridors during certain times of day.

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PARTNERSHIPS WITH
OTHER JURISDICTIONS
The bill that created OReGO allowed ODOT        1.   Created a high-level concept of
to enter into agreements with other state            operations that all eleven participating
departments of transportation, the federal           states agreed on, which outlines the
government and Canadian provinces for the            basic principles of how a regional RUC
purposes of:                                         system will function for future pilots.

»» Conducting joint research relating to        2.   Created detailed system and business
    road usage charges and development               requirements for the Oregon-California
    programs on a multistate basis;                  pilot.

»» Furthering the development and               The total project cost was $1.9 million and
    operation of single state or multistate     was completed by July 31, 2018.
    road usage charge pilot programs; and
                                                The most valuable lesson learned from this
»» Developing a program for stakeholder         project is that a regional, inter-state RUC
    outreach and communications related to      system is possible. Each state will have its
    road usage charges.3                        own requirements—including different RUC
                                                rates, public funds laws, methods of fuels
Sharing information with other jurisdictions    tax collection and disbursements— but
is an invaluable tool. This information         this project demonstrated that a regional
sharing takes place in the form of regularly    system can be built to be agile enough
scheduled RUC West meetings, where the          to accommodate each states’ needs and
fourteen member states share lessons            function seamlessly for drivers.
learned and fund research that is of interest
to the members. Information sharing occurs
through less formal means as well, such as
when a university or another country reaches    RUC West 2017 STSFA
out with questions. OReGO has received
inquiries from places such as Israel, Paris,    Grant: Oregon and
Indiana DOT, and the Chicago Metropolitan       California Interoperability
Planning Council. The information below is
about ODOT’s more formal partnerships.          The RUC West 2017 STSFA Grant will test
                                                interoperability of the Oregon and California
                                                RUC systems, creating a platform that other
                                                states could join. The pilot is targeting an
RUC West 2016 STSFA                             April 2020 launch with a budget of $4 million.
Grant                                           This pilot will collect data from Oregon,
The Regional RUC System Definition and          California, and possibly dual-registered
Pilot Planning Project set the stage for a      vehicles, which are those registered in
regional RUC system in the Western United       both California and Nevada. A successful
States. The project accomplished two main       regional pilot will demonstrate that systems
objectives:                                     can be integrated and standardized to
                                                accommodate multiple states’ requirements,
                                                processes, systems, rates, and laws.

3   ORS 319.347

                                                                                                 7
This pilot will also test the clearinghouse
    requirements that have been developed to
                                                     Washington and Oregon
    ensure that the appropriate data is shared       Interoperability
    with each jurisdiction.
                                                     In 2016, the State of Washington was
    This needs to be proven to demonstrate           awarded a FAST Act grant that included
    that road usage charging can expand to           exploring the feasibility of an interoperable
    include more states, and eventually be           system. Oregon collaborated with
    implemented nationwide. Further, the             Washington to explore how a RUC system
    pilot will demonstrate that two funding          may operate between two states. The pilot
    mechanisms—road usage charging and fuels         launched in March 2018 and ended in January
    tax—can operate together.                        2019 with over 75 participants enrolled in
                                                     the OReGO program choosing to participate.
    As with the Local Area RUC pilot, ODOT will      This pilot used simulated payments and
    secure a business partner to collect driving     demonstrated that two states with different
    data and administer the volunteer accounts.      RUC rates and fuel use credits could use the
    Once a partner is selected, ODOT will finalize   same platform to collect data and revenue.
    the schedule and budget.                         The pilot was determined to be successful
                                                     as it provided information that refined
                                                     business requirements and identified system
                                                     modifications needed to operate in a multi-
                                                     jurisdictional RUC.

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CONCLUSION
The Oregon Department of Transportation        The local area road usage charge pilot will
continues to successfully operate the only     be the first of its kind, testing the feasibility
fully functional road usage charge program     of layering different road usage charge rates
in the country while conducting research for   in cities and counties and varying that rate
a potential mandatory program. Federal         by time of day. If proven, this will create an
grants have enabled the OReGO program to       important policy tool for localities to consider
enhance its operations and continue to learn   in the future, should the Legislature allow for
about how to best administer this type of      a local option road usage charge.
revenue model.
                                               The Road User Fee Task Force, in partnership
The regional interoperability pilot between    with ODOT, welcomes the opportunity to
Oregon and California will be the next         share lessons learned from our road usage
monumental step among the states. The          charge program and provide additional
pilot allowed states to reach consensus on     information to the Legislature at any time.
how a regional road usage charge system
could operate by creating a concept of
common operations.

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