Oregon Passes Nation’s First-Ever Road Usage Charge Legislation

In early-July, the Oregon State Legislature passed Senate Bill 810, the first-ever legislation passed in the United States to establish a road usage charge system for transportation funding, drawing praise from the International Bridge, Tunnel, and Turnpike Association (IBTTA), the worldwide association representing toll facility owners and operators and the businesses that serve them. Oregon Governor John Kitzhaber, a strong supporter of the legislation, will sign the bill into law.

IBTTA’s Executive Director and CEO, Patrick D. Jones, called the bill’s passage, "a major victory for alternative forms of transportation funding across the country at both the state and federal level...This example gives momentum to the need for exploring alternative funding options, such that tolling provides, in addressing our national transportation infrastructure challenges."

SB810 authorizes the Oregon Department of Transportation (ODOT) to assess a charge of 1.5 cents per mile for up to 5,000 cars and light commercial vehicles and issue an equivalent gas tax refund to users. The bill calls for the system to be operational by July 1, 2015.

The law, while being touted as a historic step, is also highly controversial and has been a source of contention for years now. Many see it as a penalty for non-usage of gasoline while others view it as an added cost unfairly levied on drivers, especially those with efficient vehicles still using gasoline.

Mileage-based user fees (MBUF) – or road usage charges (RUC), also referred to as vehicle-miles traveled fees (VMT) - are an alternative way to fund the construction and maintenance of roads. Rather than the current gas tax method, which is based on the amount of fuel purchased at the pump, a vehicle mileage fee or road usage charge is based on how many miles are driven. Since 2000, gas tax revenues have declined significantly as a result of less driving, increased fuel efficiency, decreasing purchasing power, and possibly the adoption of alternate fuel vehicles.

As gas tax revenues dwindle, federal policymakers in the U.S. have had to divert $55 billion from the federal government’s general fund and other non-transportation funds to pay for infrastructure. This is increasing pressure on transportation policy makers across the country to search for new, viable road financing options.

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