Vermont Legislature SmartTranscripts:

[Matt Walker (Chair)]: Everybody's There we go. Friday, March 13, the second month in a row of the Friday the thirteenth. Anybody feel that pressure? I don't know. It's two months in a row. We are in house transportation. We are trying to work through mileage based user fee and some changes and some pieces. I would hand it over to, I guess, to Damien to ledge counsel and by Patrick. I want you to feel comfortable to interrupt at any time rather than waiting for the hand thing to come up and whatnot. When you have something to say, we'll expect you to jump in, please. Do So want to comment and add? I know that there's been changes. We're up to what version are we on here? Like draft number four? Is that

[Damian Leonard (Office of Legislative Counsel)]: I will let you know as soon as my computer unlocks. And we won't vote on anything today, but I don't have a problem I don't about vote, but I don't have a

[Matt Walker (Chair)]: problem making adjustments and recommendations. And I don't even have a problem having more escalator talk because I think we need to, in fact, don't even mind starting here. I think there's three or four options. One them is to at one end would be to leave it the way it is and one end is to take it out entirely. Another suggestion might be to put it in contingency when other things might happen. And I don't know if there's other options. That's only three I can think of. But I think we're probably headed in, at least my read on the committees and not ready for prime time, not ready for the full inclusion of that bill, but I could be wrong.

[Rep. Candice White (Member)]: But we're talking about the insulator?

[Matt Walker (Chair)]: And this is the draft 4.1. We're going go through the draft once he pulls it up. I'm just sort of throwing conversation that my read of the room is that we would be likely to remove it as opposed to trying to come up with a contingency that says when I do agree with the agency's testimony that inflation adjustments and whatnot are probably good public policy. I do agree with that, but I am very much aware of the other parts of that of not being addressed in other So

[Unidentified Member (House Transportation Committee)]: it's taxing people in a fair way. That's good public policy.

[Matt Walker (Chair)]: Do you want That's what I'm trying to say. I don't know, we're not gonna vote on it. I wanna make sure that somebody understands it. Yes, but am I reading the room that we are much more likely to take it out than do anything else?

[Rep. Candice White (Member)]: Yeah, would agree with that. And I think it would make sense to put in some kind of intent language that there should be an inflator at a point at which we're rolling out the mBuff to all vehicles since it's already in the intent language that there's intention to roll out the mBuff to all vehicles so we could build off of that.

[Damian Leonard (Office of Legislative Counsel)]: Not a

[Matt Walker (Chair)]: leader here on that. I don't like the part about the intent of all vehicles, but I do like the part about until other inflators are there or more vehicles are in that spot. I'm going to just haven't come around to the solution that we should be a mileage based user for everybody. I didn't like the intent language last year, and it's still intent. I'm not saying I didn't used to losing. I've gotten used to that. But I agree with the other portion

[Damian Leonard (Office of Legislative Counsel)]: of that.

[Rep. Candice White (Member)]: I don't have to support the entire

[Matt Walker (Chair)]: well, I meant that the intent that it should either be on gas vehicles or on all vehicles if they've moved into mileage, basically, something like that.

[Rep. Candice White (Member)]: Right, right. But if folks aren't comfortable with that, then we can just remove the inflator altogether and not try to suggest what future legislatures do when they come back to that discussion. Good what? Yeah, just to reiterate my position, is I'd be supportive of keeping inflator language in there, provided that the gas tax gets the same inflator? We could also be supportive of taking it out. And are we having conversations about whether the construction is the right thing to tie the inflator to? Because I think we recognize that those costs have gone up extraordinarily in the past five years. So there were other inflators suggested that think I have not been quite as volatile.

[Matt Walker (Chair)]: We did hear that, and that's also another part of the reasons why we are really ready I

[Unidentified Member (House Transportation Committee)]: think his first answer to

[Matt Walker (Chair)]: the first question is gonna answer the second question. Or we just pull it.

[Unidentified Member (House Transportation Committee)]: You don't need to know what the

[Rep. Candice White (Member)]: Send those back forward.

[Matt Walker (Chair)]: Okay. Are we think unless I already know where I think we don't forget we're on

[Damian Leonard (Office of Legislative Counsel)]: this one. Thank you. The discussion allowed me to recover from my computer crash. Okay. We now have a document.

[Matt Walker (Chair)]: I'm glad that

[Damian Leonard (Office of Legislative Counsel)]: that worked. I appreciate that. So for the record, I'm Damian Leonard from the Office of Legislative Counsel. I'll pull up the latest draft for you here, which is draft 4.1 dated yesterday at 09:17AM. So to preface this, you'll see some edits in here in areas where we weren't working yesterday because I had a rare break yesterday afternoon. I was able to print out a copy of this and go through word by word, line by line, and I found some technical issues. So those are gonna be highlighted as well as correction in here as correction. So as we work through the first changes, mileage reporting period, if if you remember yesterday, I had attempted to shoehorn in mileage reporting period definition for the pay as you go program that created a lot of confusion. So I've just taken it out and changed the way we explain the pay as you go program. The next change here

[Matt Walker (Chair)]: I'm sorry. Oh, I got either totally distracted or missed. Where did

[Damian Leonard (Office of Legislative Counsel)]: Oh, sorry. That was this up. That was on page two, mileage reporting period definition. That's fine.

[Matt Walker (Chair)]: H two mileage reporting, the time between annual inspections or the time period between the most recent annual inspection and a terminated event.

[Damian Leonard (Office of Legislative Counsel)]: Yep. And I took out the right. I took out language. So there used to be an or and then an explanation of what of the smaller periods that you might make payments on for the pay as you go program. I just took that out because it was creating confusion yesterday. So for

[Matt Walker (Chair)]: Has the agency seen this? Yes. Patrick? Have you you've had a chance to review these changes, or do you wanna comment after or as we go?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Whatever is whatever you think is best.

[Matt Walker (Chair)]: I just wanna make sure that the agency has a chance to comment on any changes we made that you were involved in making them and where you if you where you stand on anything that's different or new. That's I'm just whichever the most efficient. So

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So I should say for the record, Patrick Murphy, state policy director for the Agency of Transportation. Yeah, I'm happy to weigh in as we go if that's the easiest way.

[Matt Walker (Chair)]: We Please. Yeah. You've seen this definition change and your comment is?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: It is an improvement over the last draft, so I appreciate it.

[Damian Leonard (Office of Legislative Counsel)]: Next change is on page four. So this yep. So this is into the mileage based user fee in the pay as you go option. So the what this provides is that the conclusion of each mileage reporting period, which, again, is the annual period there for a BEV enrolled in the pay as you go mileage based user fee program, the commissioner would determine if the actual miles traveled by the BEV during the reporting period were greater than or less than the miles reported by the owner during that period.

[Matt Walker (Chair)]: Thumbs up, Patrick? Not up. Yep. Okay. It's a question, not a suggestion. We're good. All

[Unidentified Member (House Transportation Committee)]: right.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. And it it occurred to me as we were as I was going through the editing that we already said that you would just report the mileage shown on the odometer at the times and in a manner required by the commissioners. We didn't need that other mileage reporting period definition. So the next change, slightly lower on the page on line 15. I noticed that I'd left out the word be, so that's added in. And then for the mileage based user fee for newly registered vehicles, one of the things that came up was that in our discussion yesterday was that I'd left out the pay as you go option for newly registered vehicles. So option one is the owner may elect to opt into the pay as you go mileage based user fee program provided the commissioner has made that program available to owners or lessees of BEV's. So, again, the commissioner can enable that program in their discretion. And then the owner or lessee of newly registered BEV who does not opt in to pay as you go shall be assessed a registration fee based on an estimated mileage based user fee equal to the rate established pursuant to subsection e multiplied by the average annual vehicle miles traveled. So this we had discussed yesterday that right now that would be about a $154, but this is how you estimate that fee is a policy choice.

[Unidentified Member (House Transportation Committee)]: Representative. How do we know the average annual vehicle miles traveled by pleasure cars?

[Damian Leonard (Office of Legislative Counsel)]: Patrick answer that.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Sure. So the UVM Transportation Research Center reviewed all the sort of, or much of the historical data on odometer readings through our vehicle safety inspection process. And they cleaned a lot of that data so that there's, you know, you're eliminating outliers or potential mistakes within the data. And then it's, they've reached that through looking at you know, all the, there's a range of ways that more and less fuel efficient vehicles are used, but this is the average that they came to. It's just under 11,000 miles. It's about 10,850 or so.

[Unidentified Member (House Transportation Committee)]: Will this number change over time? And where's the number written?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So it could change over time depending on, you know, whether people drove less, fewer miles or they drove more.

[Unidentified Member (House Transportation Committee)]: Who's gonna who's gonna come up with this number? The average vehicle miles, the average annual vehicle miles traveled by pledging cars.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That would have to be a review of the data from the prior year. It's not it's not somebody coming up with a number. It's somebody reviewing the data to see what the number is based on how people are traveling.

[Unidentified Member (House Transportation Committee)]: I I guess it it's not even written down anywhere. I don't think.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Right? So, L, it would be inputted into our our system for the mileage case user fee.

[Unidentified Member (House Transportation Committee)]: Say how how who puts that number in, how it's come up with, how often it's changed? I don't know.

[Damian Leonard (Office of Legislative Counsel)]: So if you wanted that, there are a couple different ways to do that. Probably the easiest is to say and if I pull up the document here, at the end of the sentence here that says, multiplied by the average annual vehicle miles traveled by pleasure cars registered in Vermont, You can say, comma, as determined by the commissioner or the department, and that would require them to determine that. You may then also wanna add in a requirement that they update that number periodically. You know, what as I think Patrick alluded to, what's the current average may change as the economy changes and Yeah.

[Unidentified Member (House Transportation Committee)]: And that feels we're gonna get our actual miles, but it does it should be clear how that number comes up.

[Damian Leonard (Office of Legislative Counsel)]: You can also set a default in there. That's this gets down to a policy choice with the transition, which we'll get to later in the document, instead of estimating the average annual vehicle miles traveled, there's a dollar amount in there. And there was discussion of different dollar amounts yesterday. The one that's in this draft, it just reflects the current infrastructure fee of $89 which is obviously less than the 154 at the proposed rate multiplied by 11,000.

[Matt Walker (Chair)]: Patrick, Did the agency track, or the Department of Motor Vehicles track? Is this a number that was created and tracked for this program? Or is this a data point that's part of something that's meaning average annual vehicle miles, is that something that's been tracked by the agency in other ways for other programs? Or did you have to go out and get it for this program specifically?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, we came to this number through the specific work that UVM Transportation Research Center did in order to come up with what they felt was a fair rate, but we do have, as a part of our work at the agency, we do consistently look to develop some approximation of what the average mileage is.

[Matt Walker (Chair)]: I know there's significant reports of vehicle miles driven annually. I've seen those and we've but that's not exactly the same thing, I guess.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Because You

[Matt Walker (Chair)]: guys do track this. I'm just on So

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: so there's a lot of data that's tracked in order to understand traffic volumes on all of our state highway network, but that doesn't sort of tease apart which of those vehicles and miles traveled are due to out of state traffic and which is due to in state traffic. So there is some additional work that's needed beyond all of that data to understand how vehicle miles traveled is changing, how those patterns are changing for Vermonters only.

[Matt Walker (Chair)]: I guess I would put a pin there to a certain degree saying, do we need to look at more?

[Unidentified Member (House Transportation Committee)]: I think it just needs to say how we got there or if we're gonna change it and what the number is. Doesn't say that now.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So I mean, one sorry.

[Damian Leonard (Office of Legislative Counsel)]: No. Go ahead, Patrick.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah. I mean, so I guess one option is rather than to leave it open ended and to change from year to year, you can just base it on what we know the data is now because, you know, regardless, it is an approximation, and it's a starting point for somebody to be able to figure out what they're going to pay in a monthly or quarterly basis, but there will always be the reconciliation at the point of registration. So shifts in travel patterns could make it significantly higher in terms of mileage or lower in terms of mileage for a particular year. It's not likely, but even a thousand more miles is still only going to mean a few more dollars per year. So I think the agency would be fine if you wanted to say not even, you know, 154, but if it's $150 something that more closely approximates what the average gas vehicle is paying right now, then you can just have it as a fixed number, and if it needs to be adjusted later, that's possible too, But it's it's not likely to change significantly what that starting point would be.

[Rep. Candice White (Member)]: Representative White? Yeah. Thank you, Patrick. So just to clarify, so this number will be based on the data the agency is collecting on EV vehicles or all vehicles in terms of approximating annual miles traveled per vehicle in Vermont?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Sure. I mean, at the moment, it's just been based upon the entire fleet because that is, you know, what we were asked to do by the legislature is to base a rate off of the entire fleet in relation to how much the average gas vehicle is being paid.

[Rep. Candice White (Member)]: I'm wondering if there should be a definition section for this estimated mileage based user fee with a little bit more detail on exactly what data points you're gonna use, whether it is all cars driving in Vermont or just EV cars driving in Vermont, but what the basis is for it. And then you could just refer to that in this, instead of having to spell it all out there.

[Damian Leonard (Office of Legislative Counsel)]: In in this case, I'd be a little bit concerned about creating another definition off of this since this is kind of an action we're directing them to do. You're assessing a registration based on I guess Yes.

[Rep. Candice White (Member)]: Will it be based I'm sorry to interrupt, but just like on that. It will be based initially on however the AOT looks at all cars driving in Vermont and what the average miles

[Damian Leonard (Office of Legislative Counsel)]: The average annual miles traveled by pleasure cars registered in Vermont. So it's not trucks, farm vehicles, not antiques.

[Rep. Candice White (Member)]: And then if someone is opting for that way of paying for, you know, for several years, will it all will their pay as you go mileage always be based on that? No. Just just

[Damian Leonard (Office of Legislative Counsel)]: the first year? Okay. So the the way this works is you you're assessed at the time of registration and estimated mileage based user fee. You can then pay that as a lump sum or in installments, either quarterly or monthly throughout the year. At the conclusion of the year when you actually have an actual mileage traveled, they true it up.

[Unidentified Speaker]: And that will be

[Rep. Candice White (Member)]: it's based on for you personally.

[Damian Leonard (Office of Legislative Counsel)]: Right. So at that point, you may receive a credit against what you're gonna owe in the coming year.

[Unidentified Member (House Transportation Committee)]: Yep.

[Damian Leonard (Office of Legislative Counsel)]: Or you may be assessed an additional amount because you know? So this is based on 11,000 miles right now. If you drove 16,000 miles, you'd get a bill at the end of the year for that 5,000 miles that you could then pay as a lump sum or in installments.

[Rep. Candice White (Member)]: And this is taking effect because we also talked yesterday about the registration fee would be that initial payment that would then be credited as mBuff is starting to be rolled out. So is this

[Damian Leonard (Office of Legislative Counsel)]: This is different.

[Rep. Candice White (Member)]: Specific to a year later? So it's not the initial rollout. So

[Damian Leonard (Office of Legislative Counsel)]: this applies to, let's say, your January 5 year. You go out and you buy a new EV. You register that EV. For that EV, this is how they're going to assess the mileage based user fee. You register it. You pay the estimated amount, and that's all baked into the the registration of the vehicle when you get it. If you have a current EV, as you transition into this, there we'll get to that section in a moment. But there is basically a setup in there where if you're going to have a full mileage reporting period before you renew the registration, The second half of the second half of your current infrastructure fee, because you would have had to do a a two year infrastructure fee when you register two year registration with two years of the mileage of the EV infrastructure fee. The second $89 of that infrastructure fee will be credited against the first year of your mileage based user fee there. And then they'll adjust after that. So it kind of addresses the folks who are current in the system. If you're not going to have a full mileage reporting period, then what'll happen is Yeah, that's clear.

[Matt Walker (Chair)]: Yeah. Thank you.

[Damian Leonard (Office of Legislative Counsel)]: Okay. But we'll get to that. It's several pages from now. But this is just for folks who get a new EV after 01/01/2027, and it's only for that first year. After that, you're in the standard program. And if and when pilot or pay as you go rolls out, individuals will have the option to choose that instead rather than having the upfront payment.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Okay.

[Unidentified Member (House Transportation Committee)]: I guess as we move forward, we're gonna find out if I have a EB and I'm just reregistering the EB. You know, is my upfront payment gonna be based on that number that we're talking about for a new vehicle or based on what my mileage was for the previous year? We're gonna get to that.

[Damian Leonard (Office of Legislative Counsel)]: So that we've we've already gone past that. So the annual mileage based user fee, the way it's set up in this is it's based off of inspections. So there's a chance that your inspection coincides with your registration date. There is a chance that your inspection is at a very different time. You know, to use myself as an example, I have a car that I bought in November, but it sat on the dealer lot for five months, and they had it inspected in June. So I have a June inspection and a November registration renewal. That car under this program, each June, I go in and get it inspected, gets an odometer reading, and then a mileage based user fee would be assessed off of that odometer reading. And then if I

[Unidentified Member (House Transportation Committee)]: Based on, you know, what Based on what I traveled. So you might get some back. You might get some ahead because you're prepaying, and then you're gonna start a new payment period.

[Damian Leonard (Office of Legislative Counsel)]: So the the the prepayment is for the newly registered vehicle. Yeah. And then so take that example I gave again. So assuming that's an EV, I've paid an EV infrastructure fee. I get to and I let's say it's gonna go I've got a two year registration from November 26 to November '28, but I have a June 27 to June 28 first mileage reporting period. I've paid a two year EVM infrastructure fee. That June 27 to June 28 mileage reporting period, I have an $89 credit from the second year of that EV infrastructure fee, where when I get to the end of that period, it's applied against what I now owe the state because they've got my mileage, assuming I didn't opt in to pay as you go. If I'd opted in to pay as you go, that would have been applied with each installment where I took a photo of my odometer and sent it to the DMV until that $89 was gone, and then I would start paying. So assuming regular annual mileage based user fee, I get to the end of that first mileage reporting period. Let's say I drove the average of 11,000 miles, so I've got $154 bill. Dollars 89 gets subtracted from that. Now I have a $55 bill that I have to either pay in a lump sum or in quarterly or monthly installments. So I might be paying $4 and change a month if I do monthly installments, or I might be doing four installments of, like, 13 or $14. Or I could pay just the $55 all at once. So you have three options at that point. But that's how it'll work if you're already previously registered. When you newly register, that's the instance when you have an upfront payment so that you don't have a year of driving without any money going to the system. And for that upfront payment, you can still choose to pay in installments either by the month or by the quarter. So the $154 broken out by the month is I can't remember right off the top of my head, but you know, it's you're under 20 a month at that point or by the quarter, you know, you're you're closer to $40. There you go. $12.83. And so there there are options to allow people to budget it in if they don't wanna do the upfront. $154 on top of, you know, 163 for registration, etcetera. Does that make sense?

[Unidentified Member (House Transportation Committee)]: So in this case, you've got the inspection, it's halfway through between, right? It's halfway. You've gotten the inspection, you've trued up, you know, And then based on that inspection, you'll begin to make payments going toward your registration.

[Damian Leonard (Office of Legislative Counsel)]: Well, so you pay your registration when you renew your registration. So what happens with the registration, the tie of the registration to all this is, let's say I get the bill from the state for $55 I had a bill of 154. They subtracted the 89 that I paid the last time I registered. And then the next time, five months later, I haven't paid any of the $55 bill. When I go to register

[Unidentified Member (House Transportation Committee)]: They have to pay it. They I have to pay it. So now you've trued up at registration. Yep. What will be the payments going to your next inspection?

[Damian Leonard (Office of Legislative Counsel)]: So you the with the registration, you just have to be current. You can't have past due amounts.

[Unidentified Member (House Transportation Committee)]: Right. Right.

[Damian Leonard (Office of Legislative Counsel)]: So I could be paying

[Unidentified Member (House Transportation Committee)]: zeroed out.

[Damian Leonard (Office of Legislative Counsel)]: I'm zeroed out, then I don't have payments until the end of that mileage reporting period. So the next June, let's say, or or whenever my inspection is, I get another odometer reading and then another assessment from the state for the mileage based user fee. And again, I can choose lump sum, monthly or quarterly at that point. So if your inspection and registration go hand in hand, then you'll be seeing these payments at the same time. If they're offset, the tie is really just that if you haven't kept up with the payments that you owe, you need to catch up on those payments in order to register your renew your registration.

[Matt Walker (Chair)]: Right.

[Unidentified Member (House Transportation Committee)]: I get that. Right. But otherwise renew your registration, you've zeroed out.

[Damian Leonard (Office of Legislative Counsel)]: Right. And You're coming up. Yeah. You can do that. You can do that at the end of your mileage reporting period. You can pay a 100 and whatever it is right then and then no payments until the end of your next mileage reporting period when you get a new bill. Or you can pay monthly or quarterly to budget it out. And the the I think the key thing here is the registration is a point for you to have to catch up because otherwise it won't renew at that point. But otherwise, it's tied to the mileage reporting period because otherwise you'd have potentially up to an eleven month lag where people would finish an annual reporting period and then the state is not waiting until registration to send that bill. So the way this works here is fourteen let me pull up the language for you. It might help to just look at it. So fourteen days after the conclusion of the mileage reporting period, the commissioner has to calculate your fee. As soon as practicable after calculating it, the commissioner has to send that to you, whether that's by regular mail, email, or other digital notice. Within forty five days after that, you either have to pay the full amount or opt into the quarterly or monthly installment payments. And then you start making your payments at that point. And so that's how it works. That's mileage reporting period one. You get to the next mileage reporting period. You do the same thing again. They look at your mileage traveled during that period. Within fourteen days, there's an assessment. Then forty five days after that, you either have to pay the full amount or opt into a payment plan, and then you make your payments. The only tie to the registration for that program is if you are not keeping up with your payments, and then you just have to catch up at registration the way the language is now, which

[Unidentified Member (House Transportation Committee)]: So back to my original question, the when you first register your car, nobody knows how much you drive. The estimate of how many miles the average person does gets applied. Then you get an inspection and you know your actual mileage at that point. The next time and so let's go another full year. So you get another full year. Now I know how many miles I drive every year and it's not the average, it's only half of the average. So then the payments will be half of the payments.

[Damian Leonard (Office of Legislative Counsel)]: Right, you'll be assessed on what you're actually traveling.

[Unidentified Member (House Transportation Committee)]: Talking loud because Patrick's so far away. So

[Damian Leonard (Office of Legislative Counsel)]: it's it's okay.

[Unidentified Member (House Transportation Committee)]: Of years. Okay. So it's it's a the average the number will change based on what how you report it.

[Damian Leonard (Office of Legislative Counsel)]: Right. So I think yesterday, there was an example that was used in committee of the person who buys an EV, but it's their round town car. They go to get groceries. They don't drive more than 20 miles from home in the car. And so let's say that person does only 3,000 or 4,000 miles a year, with the upfront assessment, if that's over what they actually owe, that credit just carries forward for their next mileage reporting period. So they may have a $0 bill and possibly, say you're driving less than half, you could have a couple of $0 mileage based user fee bills, but they've just prepaid essentially. The flip side of that is if you're a person does a lot of travel in their car, you're putting a ton of miles on it every day and you're doing, say, twice that. You could get to the end of that first mileage reporting period and you paid $154 But if you've done double, you'll owe another 150 at four that point. And then your next mileage reporting period, you might get a bill at the end of that for $300 And then you have to figure out, do I want to pay that as

[Unidentified Member (House Transportation Committee)]: a lump sum or budget it out? So the estimate based on the mileage we talked about how we get that number, that estimate applies to brand new cars. Yep. Then we have all these cars that are there. We got to sugar out the infrastructure fee. So that gets sugared out over the next year or two depending on how you did it. But then at some point, all the cars are all registered. They're in the program. They've been in for several years. At that point, whenever you get an inspection and you come up with a mileage, you true up what had been applied as payments, if there were payments along the But

[Damian Leonard (Office of Legislative Counsel)]: if you didn't pay as you go.

[Unidentified Member (House Transportation Committee)]: You pay at the end and you pay it and then at that point your payments will be based on, if you say, I wanna pay monthly, those payments will be based on what your actual yearly mileage has you have a record of, or does it go back to the

[Damian Leonard (Office of Legislative Counsel)]: It's the mileage in the last reporting period. So, again, take that person who just uses their EV around town. Let's say they switch jobs so they get a longer commute and suddenly they're doing more mileage. Year one, they might have a very small bill. Year two, they could have a much larger bill because they traveled a lot more. It might be helpful to think of the way you pay this and that it's similar to income taxes. So pay as you go would be like paying your estimated income taxes on a quarterly basis. The assessment at the end of the mileage reporting period is like filing your tax return in April. And, you know, at that point, if you owe a big bill, you you can the only difference here is you can choose to put that on a payment plan in a way that you may not have as much flexibility to do with your income taxes. Although, think even there, they might work with you. But in this case, the statute is setting out multiple options for people to elect to do based on what works for them. And the only time an estimated comes into play at all is the very first time. Very first time. So it's for a

[Unidentified Member (House Transportation Committee)]: person

[Damian Leonard (Office of Legislative Counsel)]: whose vehicle has no miles on it yet under their ownership.

[Unidentified Speaker]: So that very first time is the nest, and then you know a year later that you're taking a down memory. So technically, EV drive assessment for the MVA is based on what they drove year, which they're paying in the current year. It's based on how they drove the last year. So each year at the end of the year, they will true up based on what they drove during that year and pay based on last year's tribe.

[Damian Leonard (Office of Legislative Counsel)]: Right.

[Unidentified Member (House Transportation Committee)]: Okay.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yep.

[Unidentified Member (House Transportation Committee)]: So I keep working on Patrick because I'm looking at things. I'm just seeing. Can I I have to pay upfront one way or the other? I can't wait until my inspection and then pay that amount.

[Damian Leonard (Office of Legislative Counsel)]: If you're buying a new vehicle or or new to you anyway, like, if you're newly registering an electric vehicle, you do have to pay up front.

[Unidentified Member (House Transportation Committee)]: Yeah. I get that. But I've I'm back at my registration. I true up.

[Damian Leonard (Office of Legislative Counsel)]: Right? I mean, hopefully, you've been making your payments. You don't need to.

[Unidentified Member (House Transportation Committee)]: Doesn't matter. I could be over or under, but it's trued up. And I continue to make those payments or I continue to accrue that amount of fee till my next inspection. Then at that point, it's so but I don't you know, I could is there an opportunity there to pay up based on the inspection?

[Damian Leonard (Office of Legislative Counsel)]: Yeah. You're not gonna pay your inspection mechanic or inspection Yeah. Yeah. But yeah. So, again, you get to your inspection. Hopefully you've made all of your payments that were due in the prior year, whether you paid as a lump sum or monthly amounts. Your next is You

[Unidentified Member (House Transportation Committee)]: do have to pay something upfront every time. I

[Damian Leonard (Office of Legislative Counsel)]: I

[Unidentified Member (House Transportation Committee)]: so Am I maybe I'm not getting it, but I'm just trying to get the same.

[Damian Leonard (Office of Legislative Counsel)]: So the duly registered vehicles pay an amount in advance.

[Unidentified Member (House Transportation Committee)]: And that's the maybe the amount. Right.

[Damian Leonard (Office of Legislative Counsel)]: For EVs that are currently on the road, you've paid an infrastructure fee in advance. It will be credited against a mileage reporting period if you have a full reporting period before your next registration. For everyone else, when you get to that reporting period, what's gonna happen is you don't have an upfront payment at the beginning, but you get a bill at the end. So for your next reporting in your next reporting period, you'll be making payments for your last reporting period. You're not making an advanced payment on that reporting period. So if you think about this is here. This is your point here. This is the time in the prior reporting period. This is the time in the advanced reporting period. When I get to here at my inspection, there there is an assessment. I get a bill. I can choose to pay that in three different ways over this next reporting period, whether it's all at the beginning or staggered throughout. But I'm paying for what happened before that inspection. So I'm not paying in advance for what's gonna happen now. And then I get to the next one, and then I'm look they're looking back and I'm making payments. The only time I pay for what's happening now is if I opt in to pay as you go. In which case, let's say I get two months in or however often the commissioner asked me to send in photos, and I send in photo that says I drove 1,500 miles, so then I have to pay for 1,500 miles. And then, you know, the next each increment, at that point, I can make payments. However, that program ends up getting set up, that's left vague in this because we don't know the details of what the software will support, if it will support it. But generally, otherwise, what I'm doing is I'm paying for the prior year. Same as with income taxes, you're paying for the prior year's income generally unless you pay estimated taxes. And even then, you're just kind of estimating and you true up. With pay as you go is probably the closest thing to estimated taxes because you may still have a true up at the end if it turns out that there was an erroneous reading or something like that and your mileage is different.

[Unidentified Member (House Transportation Committee)]: If I register a new

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: car Yep.

[Unidentified Member (House Transportation Committee)]: I'm given an estimated assessment.

[Damian Leonard (Office of Legislative Counsel)]: Yep. You pay that.

[Unidentified Member (House Transportation Committee)]: So I have to pay it upfront.

[Damian Leonard (Office of Legislative Counsel)]: Yes. For

[Unidentified Member (House Transportation Committee)]: miles I haven't driven. But after I own my car. Yep. I don't have to pay upfront for miles not driven. I can wait until I it's reported by inspection how many miles I've driven.

[Damian Leonard (Office of Legislative Counsel)]: Right. If

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: if I could if I could

[Damian Leonard (Office of Legislative Counsel)]: just This Patrick?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yep. Okay.

[Matt Walker (Chair)]: Give it a shot or we're moving on.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yep. If if you have a new car that's being registered, you will have that estimated amount. But this language, as I understand it, would then allow you and that it's at least the intent of the agency. You would be allowed to select what payment frequency you want to, how you want to spread out those payments. So yes, it could be an option that you pay all of that upfront, but you know, someone might elect to pay on a monthly basis, and that's similar to our pay as you go system, except it's just an estimated amount of how much you might have traveled in on a monthly basis, and then the true up happens at the end of that reporting period. So there's never going to be a case with the mileage based user fee where you're having to pay a huge lump sum at the start because that's what we're trying to avoid. The only only case is if you've already paid an EV infrastructure fee, but you know, whether

[Damian Leonard (Office of Legislative Counsel)]: it's the

[Unidentified Member (House Transportation Committee)]: That's special. Yeah. That's a special case. So I register my car. I'm given an estimate. Here's what we think, you know, based on average miles. Here's what you will owe. At the end of the year after you had inspection based on that number. But I can choose not to pay it at all until inspection comes.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Right. Because you might have a pay as you go option at that point where

[Unidentified Member (House Transportation Committee)]: Oh, no. Have I have a no pay as I go. I'll pay it at the inspection. Can I do that?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: I mean, you you you would have to select one option in the language as it is now. You'd have to select one option. Either you pay the full amount, you pay it on a monthly basis, or you pay it on a quarterly basis. If we are able to provide the pay as you go option, then you could also select that.

[Unidentified Member (House Transportation Committee)]: So I'm paying it upfront on a new car. Now I have a a car that I've had for years.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, but

[Unidentified Member (House Transportation Committee)]: And I get I get to the inspection, and I've I've hit it dead nuts. It's like exact amount. Do I then have to pay the next years? Is that the next bill that will come if I'm paying once a year?

[Damian Leonard (Office of Legislative Counsel)]: You're getting billed for what you traveled in the past year.

[Unidentified Member (House Transportation Committee)]: But I hit it dead nuts. I don't owe anything. I'm I'm right there. Okay.

[Damian Leonard (Office of Legislative Counsel)]: So this is your newly registered car?

[Unidentified Member (House Transportation Committee)]: No. The the two years old now.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: He's he's a year he's a year a couple years into it now.

[Unidentified Member (House Transportation Committee)]: Yeah. Was just wondering. I mean

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So then it's going to

[Unidentified Member (House Transportation Committee)]: I pay ahead.

[Damian Leonard (Office of Legislative Counsel)]: You're doing the pay as you go, and you're dead on Or I

[Unidentified Member (House Transportation Committee)]: can construction. To pay anything

[Rep. Candice White (Member)]: and pay at the end.

[Damian Leonard (Office of Legislative Counsel)]: Yeah. So you're gonna get if you're choosing to yeah. You're gonna get a bill.

[Unidentified Member (House Transportation Committee)]: And then and then I'm gonna start a new cycle. I can choose not to pay anything until the end again Yeah. When I get my miles.

[Damian Leonard (Office of Legislative Counsel)]: Mhmm. And you can also choose when you get that bill to say, I'd like to pay this out over 12 months.

[Unidentified Member (House Transportation Committee)]: Well, we don't have that option yet. We're hoping to have that option.

[Damian Leonard (Office of Legislative Counsel)]: No. No. That's in here.

[Unidentified Member (House Transportation Committee)]: No. I know. But but the No. T and V

[Damian Leonard (Office of Legislative Counsel)]: So there's already an option to no. No. Not pay as you go. There's already an option to take the bill that you got and say, I'd like to pay this out in monthly installments, which allows instead of dealing with a, you know, significant bill on top of inspection and everything else for folks to break it down to like a $12 a month payment, something like that, so that it can address the issue of the sticker shock because it's designed to bring it closer to what you'd experience with gas tax. So you might be paying a couple bucks here, a couple bucks there in gas taxes that are built into the price you pay at the pump. That monthly allows you to do that or quarterly, etcetera. So it brings it down to a smaller amount closer to, like, a subscription to Netflix or quarterly payments or, like, $40.

[Matt Walker (Chair)]: We're going to ask Logan or the agency to come up with, here's the money I paid, here's the money I paid, a little illustration of how I would walk through the multiple examples. And that'll be helpful for, as we explain it on the floor as well. And you can put two or three illustrative examples of here's when you will actually have to pay the money out, and here's what it's based on. Because the language will be, our goal here is to provide a framework for the department to then implement, and we're not going to be able to provide us the testimony from the other day, we're not be able to fix every item. But I think what your point is, you should be able to demonstrate to the average person under a couple of scenarios when their money is gonna have to come out of their hands.

[Unidentified Member (House Transportation Committee)]: And maybe it's just me, maybe everybody else is getting it, but I'm not quite sure are you paying? I can choose either pay it upfront or not pay anything and pay it when it's due.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: No. So I wanna clarify on that point.

[Unidentified Member (House Transportation Committee)]: Okay.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: There's not gonna be, like, either you pay it or not pay it. It's gonna be either you pay it now all upfront or you pay it on a monthly or quarterly basis. That's what the language says right now. Okay. Now somebody could make the decision to to say, even though I've been enrolled in this program and I've been issued invoices on a monthly basis or a quarterly basis, I'm just not gonna pay those, and I'll wait until the end of the year to to to pay everything. There's not there there's not anything in here that says, well, if you miss, you know, February, March, and April, that you're getting hit with a late payment fee, you know. So the only part, the only time at which everything becomes, due where there's fees involved and beyond what you're actually owing is at the point of registration.

[Unidentified Member (House Transportation Committee)]: You got it. You got it. Yeah.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah. So somebody could say, alright. DMV is saying I owe a $154 for the next year because that's just the estimate because there's no historical data within the system to support anything else. They could say, I'm going to pay a 154 right now. They could say, I'm gonna pay 12, whatever it is, on a monthly basis. And, you know, when you get that first bit of data into the system, then I think as your earlier questions were getting at, that will be more finely attuned to what you've actually traveled.

[Unidentified Member (House Transportation Committee)]: Right. So the first

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: time that you begin your next Yes. Reporting

[Unidentified Member (House Transportation Committee)]: The next go around will be based on what your actual mileage is as proven to be.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That's right.

[Unidentified Member (House Transportation Committee)]: Okay. And I can pay And so can pay by the month or I cannot pay at all, but I'm not getting my car registered until I pay.

[Damian Leonard (Office of Legislative Counsel)]: And you'll owe interest?

[Unidentified Member (House Transportation Committee)]: I'll owe interest at registration or if I don't pay

[Damian Leonard (Office of Legislative Counsel)]: that at registration? If you you owe interest on past due amounts, it accrues at 1.5% per month.

[Unidentified Member (House Transportation Committee)]: So

[Damian Leonard (Office of Legislative Counsel)]: that's also in here. So your bill will go up if you don't pay. So it's not a free ride until you decide to register your car at which point.

[Unidentified Member (House Transportation Committee)]: That's getting clear, but there's no guarantee when the programs, there is a guarantee now that when the program starts, I'll have options to pay.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yes. That's always been a part of the program design because otherwise, you know, we would just be sort of recreating an unfair system of everybody has to pay a sort of flat fee.

[Unidentified Member (House Transportation Committee)]: Yeah.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: What what we want to be able to do is have somebody have the option of paying at a higher freak frequency so it's not as much upfront out of people's wallets.

[Unidentified Member (House Transportation Committee)]: So my last question, I guarantee. But there was some concern that the you're not sure that the DMV can get that part

[Matt Walker (Chair)]: rolling. No.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: That that that is yeah. That is distinct from a pay as you go option where somebody is self reporting using, you know, the photo capture and that kind of thing.

[Unidentified Member (House Transportation Committee)]: Yeah. Okay. But the monthly payments will be part of the system, monthly or quarterly, however, if you decide.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Right. And so the photo capture and being able to self report is trying to basically get at your concern, I think, which is that that initial estimate of somebody's mileage is, you know, too far out of line with what somebody might actually be traveling. So if we are able to implement that, then that then that concern goes away because you can, instead of having something based upon an average vehicle going the average number of miles, it'll be more on a pay as you go basis what somebody is actually traveling. That's why we're working to to see whether we can develop that as a yet another option on top of the spreading out of payments based on an estimated amount.

[Matt Walker (Chair)]: Okay. Thank you. I told you I wouldn't take you past 03:00. We're going have to look at you'll get an update. We may come before four on Tuesday morning. We may have to pick up here in the morning, depending on who's available. I'll coordinate that schedule, and I'll send you a text over before Tuesday. So thank you very much, Damian and Patrick. And Logan, thanks for your flexibility and keep moving us around all week. And we will see where we can pick up. We'll have a couple of long days on Tuesday and Wednesday. Thank you very much.