Vermont Legislature SmartTranscripts:

[Richard Westman (Chair)]: You're live. So we're resuming testimony. We are with Patrick Murphy, the state policy director, and Patrick, you're on.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Great. Thank you. Good to see you all. Patrick Murphy, for the record, for the Vermont Agency of Transportation. Here this morning to help with your MBUF withdrawal. We'll give just a quick update on where things stand. And then there'll, of course, be more discussion throughout the session on development of the statutory framework that's needed. So, I've got a few slides to share. Let me see here. Can you see this okay?

[Richard Westman (Chair)]: Yes. Great.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So just to quickly review how we got here, we've been working on this, the agency, for a number of years going back to a road usage charge study that involves a number of different stakeholders and the public in a process to come up with some ideas about how we might recoup the lost revenue due to electrification. And so in 2023, the legislature, through the transportation bill, authorized our agency to apply for federal grant funds and also appropriated the first half of the state match that would be required to set up a mileage based user fee. In 2021, the 2021, there was also a strategic innovation and revenue collection program that was set up by the Bipartisan Infrastructure Law, and so that created an opportunity for the state at an 80% match rate to be able to move forward with the implementation of a mileage based user fee for electric vehicles. That took quite a while to to get out through FHWA, the Federal Highway Administration. And so in 2024, the legislature enacted a flat fee for plug in electric vehicles, plug in hybrids and fully electric to go towards EV infrastructure funding. And then last year, as you'll recall, you all revised some of the language that appeared in first the Act 62 of 2023, and then renewed or created a new deadline for implementing the MyoSpace user fee for January 2027 to reflect all the delays that have happened for the federal grant. So this year is really going to be a push to be able to establish that statutory framework, although there's elements within both Act 43 of last year and then Act 62 of 2023. Those are not in statute, so the work this year will be to create that framework and then included in that is the formula to establish a rate and how that will be calculated and applied.

[Andrew Perchlik (Member)]: Good question. Patrick, in your slides about the program Act 43 to 45 that set a deadline for the mandatory fee for electric vehicles. I'm not seeing that in the act, so I remember what wording that was that he said it was I thought it was more like a goal. I thought it was kinda like that.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: In in act 43, I I can't remember the exact section. I think it might have been 18 of where it was to be implemented by 01/01/2027, but because we don't have anything in statute, it's really up to you all this year to also establish that firm date for implementation.

[Andrew Perchlik (Member)]: The section 18 is intended and talks about AMBA would be an interim step towards gradually expanding the myelopface CT.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Sure. So, yeah, so it would be section 17 then. It's in the revisions just before that. And just speak up if you're all quite small right now on my screen So just the basic points of the program to review. This was intended you'll hear from Mindy at Hawaii, and it came out of a similar approach from Hawaii that this was meant to align with our sustainable transportation goals generally. Like Hawaii, Vermont has invested a lot in EV adoption, and so we knew that there was a need to also be able to find a sustainable revenue source as we advanced EV adoption. We, like Hawaii, also use manual odometer reading for a couple of reasons. One, it's most cost effective. Some of the onboard plug in devices that are used in other states and their pilots can be quite costly upfront and costly to maintain. There's also a number of concerns that people have had around the mandatory use of some sort of GPS or onboard device with privacy concerns. So we already have a process that's set up for the annual vehicle safety inspections, and through that, we obtain odometer reading data, and that is what we intend to use for the administration of this program. We also have been fortunate to have significant investment in our DMV IT systems over the past several years. The last phase of that investment launched in November year. And so that allows us to build off of a brand new system that will be much more easy to maintain and to be able to adapt as the program evolves. A key piece of this is also to allow for flexible payment options in a similar way to how the gas tax is paid now, maybe every couple of weeks or on a monthly basis, and so we want to make sure that for Moncter's in particular, those who have taken advantage of our state programs are able to pay at a frequency that they can afford. And then this was time to be able to implement with federal funds. We did see significant delays in that in even getting the notice of funding opportunity. Last November 2024, we were awarded the grant, and then with the Trump administration, we had a pause that resulted in not obtaining those and obligating those funds until about a year later, this past fall. So a key piece to all of this is to begin with a smaller group of vehicles to be able to get things right and to start simply. There are, of course, all kinds of complexities that we won't be able to account for in this first draft of our mileage based user fee, but to be able to begin now, start to solve some of our revenue challenges, and then to allow the system to evolve over time is really important. This gives you a sense of sort of how a user will experience it. So you have the annual vehicle safety inspection where an odometer reading is collected when someone goes then to re register their vehicle. That information has been transmitted from inspection stations to the what's the FAST system, the registration system, and then through that, there is you know, a fee that's applied to the number of miles in between the most recent inspection recordings. And so then payments would happen in the similar way to how payments happen now, whether it be in person, by mail, or through myDMV. One of the discussion points that we had last spring was around setting the rate for a miles based user fee and there was, you know, some some concern about being able to have legislative discretion to to set the rate in the way that you all see fit. And so as part of this grant program, we're also working with University of Vermont to research how other states have done it, but also to figure out a methodology that makes sense for Vermont and then to be able to present that to you in about a month or just under a month. So that will be able to give you the information that you all need to design a rate and be able to set that fee. As part of that work, the UVM Transportation Research Center will also look at what are the impacts of different factors on households throughout Vermont. So you'll be able to see that kind of mapped out visually. This builds on work that research that they've already done a few years ago looking at a mileage based user fee for the entire fleet, so their focus will be on for electric vehicles, although there'll be also some information about how those impacts might change if Vermont were to move to a system for all vehicles. So we're expecting to have that work completed by the end of this month, early next month, and to be able to share that for discussion. And then lastly, you know, we we are working through a number of things, having obligated the funds for this grant over the fall. We work through contracting to be able to bring UVM Transportation Research Center on board to do some of the work around rate setting and impact analysis. We're working with contract admin on sole sourcing some pieces of the IT work, which is critical to be able to cost effectively build upon what we've already invested in, and then we'll also be working with a third party on our communications efforts. So this last slide gives you a sort of a breakdown of where our funding will be spent. There are obvious project management tasks that have to be carried out both internally to the state, but also with third party. And then the system implementation, the main bulk of the work to upgrade whatever we need with our IT systems. Then the task three is a key part to all of this, to be able to make sure that the public understands what the fee is, why it's being applied, how it's being applied. And as you'll see in some of the slides that Mindy has shared, to also be able to have people understand ahead of time what they might expect. So to be able to have resources where you can look at your past mileage and see how a mileage based user fee would impact your own household budget. And then task four is really after implementation beginning to look at how this program evolves over time, how you deal with some of the edge cases that can't be accounted for in this first effort, looking at border issues, looking at interstate travel and the capture revenue from out of state visitors, and a number of those logistical questions that would need to be tackled before the state moved from just mile space user fee for electric vehicles. So a big deliverable obviously is the implementation of the mileage based user fee in January 2027. That is still our goal. We've been meeting internally. We've gone through the agency of digital services business case process and expect to be assigned some resources to then be able to move forward with the IT project piece of it. And then that final report due to the Federal Highway Administration is expected by 2028, and that would then be shared obviously with the legislature on informing whatever future plans there might be. And then, sorry, there is another slide, and that's just to give a sense of what we expect for revenue now that the world has changed since you you've seen prior slides in prior years on estimates for what a mileage based user fee would bring in. That was, before the Trump administration and the resigning or withdrawal from EV friendly policy at the federal level with tax credits and the like. So we do expect that there still will be growth in EV adoption here in the state of Vermont. We are continuing to invest in EV infrastructure. We have incentives available through most of our local utilities as well, but we expect that that curve is going to be a lot more gradual than it was projected to be when things were a bit different. So in the first three years, expecting around $10,000,000 of revenue through the MIDAS based user fee, and then we'll see where it goes from there. Go ahead. Questions?

[Andrew Perchlik (Member)]: Yeah, so Patrick, of back to my other question, quickly reading through Act 43, is it your understanding that you have the authority to implement it, or you need authority to implement it?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: We would need authority to implement it. We would need language in statute that actually creates the fee and how the rate is set and the policies around the program on compliance and that sort of thing. We would need statutory language this year to implement.

[Andrew Perchlik (Member)]: And then on your slide of the revenue, do you have that bar chart with what the revenue would be if we just stayed with the current yearly fee, like what the difference is, the delta between the two programs?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah, I can get that for you. So the $10,000,000 over the first three years of implementation is sort of not inclusive of the EV infrastructure fee and what would be in place still, I assume,

[Andrew Perchlik (Member)]: for Do the plug in you know how much? I think the one we passed, I remember the estimate was like $750,000 a year from the infrastructure fee. Is that still what we're seeing? We would

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yes. So for this first year of the infrastructure fee being in place, we are at about almost 1,300,000.0 for the year.

[Andrew Perchlik (Member)]: So the 25 no. Is that

[Rebecca “Becca” White (Vice Chair)]: That's on top. They'll be doing it

[Andrew Perchlik (Member)]: on top. But the $20.25 is over. Is that the actual number of money received from the infrastructure fee, the $5.42 today?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yes, so these and on a different on this chart somewhere else, it states that the year is state fiscal year, so state fiscal year was only in effect the 2025, so that is an actual number, 542,000.

[Andrew Perchlik (Member)]: Okay, and all that went to the EV infrastructure development?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Right, yep. Is that

[Andrew Perchlik (Member)]: for fiscal year '26? And

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: then for fiscal year '26, you all appropriated $1,400,000 for that to go to the ACCD program for EV charging, and we're on track to bring that revenue in. Like I said, we're just under $1,300,000 for the calendar year 2025.

[Andrew Perchlik (Member)]: Okay, thank you.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Yeah, so I'll get you a different slide that shows you what the net is by moving to the mileage based user fee.

[Andrew Perchlik (Member)]: Thank you. Sure.

[Rebecca “Becca” White (Vice Chair)]: Thank you Mr. Chair, and thank you, Sandra Perchlik. I'm confused by this graph because I'm trying to understand is the expected revenue If we haven't set a fee or an amount that this would be charging them, I'm not sure how you're projecting the revenue. So I'd like to understand that a little bit more and if what you're using then to come up with the amount. And then I'm trying to understand if you could break out for me how much an EV driver because we've now paid two about $250 for every two years for registration. What is the additional amount that an EV driver is going to have to pay while this is being rolled out? So what would the total cost that we're adding the EV drivers be during this time period? And if I'm understanding correctly, we would have for a period of time both. We would both have an M Buff on EV drivers and the registration infrastructure fee or maybe on so if you could clarify that.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Sure. So it's in the legislation that you approved last year that a mileage based user fee would take the place of

[Rebecca “Becca” White (Vice Chair)]: Yeah.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: An EV infrastructure fee for battery electric vehicles. It it leaves in place the EV infrastructure fee for plug in hybrids. So the the EV infrastructure fee right now for battery electric vehicles is $89 annually. That is, as you've seen in slides, I think last week or or back in December, That is on the lower end of states, so now we have 40 states in the country have some sort of EV annual fee, and that ranges from $50 in Hawaii and maybe Montana up to $260 in New Jersey, so we are on the lower end of that. It's not equivalent to what the average gas powered vehicle is paying. That is more like somewhere in the range of $2 to $214 per year. So when a mileage based user fee is implemented, some might pay less. Those that are traveling maybe only 5,000 miles on their EV, they might pay less than what they're paying right now, but others would start to pay somewhere nearer to what the average gas vehicle is paying.

[Rebecca “Becca” White (Vice Chair)]: Well, thank you for that info. Think my perspective was we shouldn't be moving forward with fees until we reach an adoption rate, and the main feedback I got from that was we're gonna hit it, it's coming, EVs are being adopted left, right and center, the incentives are happening. And I think you very clearly started this presentation with the tides have turned, the federal incentives are gone. There is no longer a robust market supporting EV adoption at the same level. So I still even think that while we might be on the lower end for cost for EVs, we are purposefully trying to incentivize them. So it still feels a little backwards. But I really appreciate you explaining that. And then my other quest so you explained that in my second question, I've been like, so are we double dipping? Which didn't make sense to me, but it sounds like that's not the case, except for with plug in hybrids potentially. But can you explain to me how you feel we would be able to implement an mBuff program if we shifted away from an every year inspection. There's a bill on our wall now to move to a two year inspection or inspections perhaps not happening for certain types of vehicles. Do you see us being able to do the same rollout of the MBUF program if we transition to, fewer required inspections? And just a reflection on that as we discuss it in committee.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, I think there'd be definite complications that come from moving to some different system than an annual vehicle safety inspection. Others, other states have looked at a number of different ways to collect this data and run pilots, Oregon being one of those for a number of years. And those other states have found that it can be really expensive administratively and to the user to operate systems that require plug in devices or telematics or something to that effect. And there's real concern then about the privacy issues that come about there. And so I think it would pose some serious challenges to what we've proposed because we're trying to do something as cost effectively as possible. And so capturing odometer readings that we're already doing through the vehicle safety inspection process is what we've found to be the simplest way in the beginning. It's not to say that they kind of evolve over time to take into account other methods of reporting, but I think it'd be good to ask your next guess what Hawaii's own take on that is as well. The vehicle safety inspection process is where you validate the odometer reading data and what's critical to being able to apply a fee.

[Rebecca “Becca” White (Vice Chair)]: Yeah, I guess just to drill down a little bit, I hear what you're saying and I'm also not, I don't think any of us have proposed the telematics angle of moving forward with an mBuff. I think we've all heard from our constituents that that would be a please don't. We like our privacy. But do you think it's possible to collect the same information over a two year period, do a true up over a two year period rather than having it every other year? Could you do the same financial calculation if someone's getting a two year inspection rather than a one year?

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: Well, I think it's possible to do a true up. I think it creates more complications because your registration cycle is a one year cycle, and so the further apart you have those two systems, the more edge cases you'll have of mid year transfers and a number of other things that will probably result in less revenue collected overall and more administrative costs. I think we'd have to definitely look further into what those actual costs were and what the issues were that are likely to come up, but I just see that going to a two year cycle would pose some significant problems for us, especially trying to implement in the next less than a year, and any changes that were to happen wouldn't be known and effective, at least at the earliest, until June.

[Rebecca “Becca” White (Vice Chair)]: Thank you.

[Patrick Murphy (State Policy Director, Vermont Agency of Transportation)]: So that makes the runway to be able to implement a program by January 2027 more difficult, for sure.

[Rebecca “Becca” White (Vice Chair)]: Thank you. Yeah, I appreciate that.

[Richard Westman (Chair)]: So, we're going to be back on this issue again, and I think we do have the program manager from Hawaii on schedule for eleven, and and I think, Mindy, you're there.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Hi. Good morning. Yes, Sam.

[Richard Westman (Chair)]: I know it's very early in the morning in Hawaii.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes, but I am an early bird, so I have no problem.

[Richard Westman (Chair)]: That's great. Am I'm Richard Westman. I'm the chair of the Senate Transportation Committee here in Vermont, and I know you've been listening in for a little while in this, and I'm gonna have the other members of my senate committee introduce themselves. Wendy, could you?

[Wendy Harrison (Clerk)]: Hi, good morning. I'm Wendy Harrison. I represent a very rural part of Vermont in Southeast Vermont, Windham County.

[Rebecca “Becca” White (Vice Chair)]: And I'm Rebecca White and I'm the Vice Chair and I'm from Windsor County.

[Richard Westman (Chair)]: That is. I'm from Lamoille, which is the North central part of the state. We have ski areas, and we're getting snow, which I suspect you aren't today.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: No snow here.

[Andrew Perchlik (Member)]: Go ahead. I'm Andrew Perchlik, state senator from the Washington District. And I'm Pat Brennan. I represent Grand Isle County, the islands, which is not nearly as nice as Pure Isle. Mhmm.

[Patrick “Pat” Brennan (Member)]: This time of year.

[Richard Westman (Chair)]: We understand that Hawaii is the fourth state to do a road usage charge program. And if you could give us some background of your program, and we do have your handout both electronically and in paper for some of us. And if you could lead us to what Hawaii has done and help us better understand. We're trying to understand what the states that are in front of us have done.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes, for sure. Go ahead and share my screen with the slide deck. Are you all able to see the screen?

[Richard Westman (Chair)]: Yes. Yes. Okay.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Perfect. Okay. So before we wanna begin, just wanna say good morning, chair Westman, vice chair Hawaii, and members of the committee. Really appreciate the opportunity this morning to testify today. My name is Mindy Kimura, and I'm the program manager of the Hawaii Road Uses Charge Program with the Hawaii Department of Transportation. And my briefing today will address the implementation of Hawaii's RUC program and its role in accomplishing sustainable transportation funding. So a little bit of background on the Hawaii road usage charge program. Eight years ago, Hawaii began looking at a road usage discharge, beginning with a feasibility study and then HDOT applying for the STSFA grant in 2017. In 2018, Hawaii was awarded the federal grant and the HIROC demonstration project began as a pilot with an emphasis on public engagement and understanding. Shortly after that, in 2022, we completed the pilot and phase one final report. Following the 2022 final report, 2023, our legislature adopted the recommendations from our final report, and Act two twenty two was signed by our governor, making Hawaii the fourth state to adopt the road usage charge program. In act twenty twenty two, it set 07/01/2025 as the beginning of high RUC with the start of a small scale RUC program for electric vehicles. And it also set 07/01/2028 as a mandate for all EV drivers statewide to be in the RUC program. And then finally, it also set the beginning of Hawaii twenty twenty six legislative session as the due date for H. To develop a transition plan to include all light duty vehicles in this road usage charge program no later than 2033. A fast forward to today, our program is now up and running and on 07/01/2025, HYRUC officially launched for electric vehicles. So first, before we go into the implementation details, I do want to note that earlier grant funding from STSFA was a huge factor in our successful demonstration project. The STSFA grant was the predecessor to the CERT grant program, of which Vermont also received a CERT grant late last year to assist with the implementation of an MBA for Vermont. The SCSFA grant program allowed for robust community engagement on all of our islands in the state and our counties. The Hawaii Department of Transportation conducted 10 focus groups, 1,500 phone surveys and 14 community meetings. We've also developed a driving report as an effective communication tool that reached over 350,000 Hawaii households, really introducing the public to what a road usage charge is, how it impacts them, and why we are transitioning to this sort of program. We also conducted a technology test drive, which helped volunteer participants understand road usage charging better through hands on experience with different mileage reporting options. And throughout the entire process, we ensured that we had strong engagement with our stakeholder advisory group, critically including our key legislators and community leaders. At the end of this demonstration, our recommendations to the legislature were one to take a first, a modest step in implementing this program, leveraging our existing motor vehicle inspection program, continuing to work with stakeholders and partners, and then also to continue to seek federal grants to support the program implementation. So taking a pilot or research project and turning it into legislation is entirely different tasks. There were several factors that led to our access. One, we formed a foundation of good research. Our pilot was very well done and provided real time actionable information to our stakeholders and legislatures. People saw experienced the program through our demonstration project. And that really made the difference. We studied different issues and engaged a well rounded team of policy experts, technical experts, as well as communication experts to ensure that the implementation went smoothly. We also had support from a broad spectrum of policymakers to ensure that this was viewed as a needed remedy for the transportation funding shortfall. We also held regular briefings with our legislative leadership, community leadership, and rank and file members, making ourselves available and providing transparency on this process. And this really built trust and let our legislators know that this was a priority for the Department of Transportation. And finally, the legislation was well crafted. It was very modest, starting with only EVs, providing a low barrier of entry. Really because of that safe fall that legislators said that if there were any issues with the rock after implementation, it starts small so that the issues can be managed and resolved before expansion. So once the legislation was passed in 2023, in order to get the program off the ground in less than two years, we began building out our implementation team and engaging key agencies that would assist us with implementation. With HDOT serving as the program administrator, we relied on key partnerships with the county DMV's and key agencies within the state of Hawaii, such as our city and county of Honolulu's Department of IT to smoothly implement this program. In addition, we also kept our key partners, our EV owners in mind, as they would be the first group to have an opportunity to choose RUC in Hawaii. So that there were and still are multiple government agencies involved in the implementation of the program. I do want to note that not all agencies are aligned to each other or at the same level of government. We have our State Department of Transportation, our four county DMVs, as well as the four county departments of finance. As I mentioned before, the City and County of Honolulu Department of IT, which supports all of the outer counties as well for their motor vehicle registration system. And as you can imagine, with the amount of counties and players involved, each county has slightly different vendors, processes and requirements, which then brings us to the various different types of support that is needed to be evaluated for the RUC transition. So some vendors are common across counties. Some vendors share one contract across all four counties, or they can be separate contracts within each county. Some vendors were also in the middle of being renewed with their contracts or some other contracts were in the middle of expiring or needing to be renewed during the actual implementation period. So to facilitate all of these moving parts within the implementation, we developed an implementation working group, formed as our steering committee for implementation. The implementation working group, also known as the IWG, the purpose of the group was to support, collaborate and advise on the State RUC implementation. During the period of eighteen months, we met on 13 times, and this group was vital for providing problem solving potential issues that led up to during and after the launch, for implementation to move along as planned. The IWG was also actively engaged throughout the process, really enabled that DMV led RUC launch and transition. So in collaboration with our IWG, the key takeaways from the group were one adapting over time. The DMVs again were very involved in shaping the program. Our collaboration with them allowed us to adapt as needed and as quickly as we needed to go. This also included working through an interim solution to ensure that our program launched on time, while the Department of IT also had a modernization effort going on at the same time. This was also a really good opportunity to connect agencies. We noticed that over time, the IWG was an avenue for many county DMV's, DIT and the program team to come together unlike they've had before. They ultimately started working together to share best practices and lessons learned on things within the rec program, but also beyond just the rec program. And then also served as an effective communication tool, opening the door for more fluid communication, meeting one on one as needed, and not just when our entire group meetings were scheduled. So as mentioned, the Hirec program went live on July 1 and it's going well. There have been some hiccups along the way, but fortunately they have been relatively minor and addressed by our team quickly. So you may be wondering how does this actually work in Hawaii on the back end perspective? So Hawaii, like Vermont, has an existing vehicle inspection system where nearly all vehicles are inspected on an annual basis. This includes the odometer reading being recorded, as well as an odometer photo being captured. So this requirement allows us to leverage the existing process to reduce costs, enhance the customer experience, and then also to make it a more seamless process for agency administrators. So from the perspective of an EV owner, this is what the High Rook program looks like. So only registration renewals printed on or after July 1, which was the official launch date showed a road usage charge on their registration fees. The per mile road usage charge was used as the default to communicate the road usage charge owed to the customer on the registration renewal notice. So for our program, for the first three years, EV drivers have the option to either choose a per mile road usage charge at $8 per 1,000 miles or a $50 flat annual fee. The reason why we default them into the per mile road usage charge is because right now the per mile road usage charge program is capped at $50 So automatically this will give them the least costly option since it caps out at the flat annual rate. Then the road usage charge is calculated at the time of registration renewal notice generation using the two most recent valid odometer readings. So the this also contains we had to revise our MVP for the project, ensuring that the road charge shows up on the registration renewal notice to preserve that all existing renewal methods for the road users charge choice exists. And then it also reduces the burden on customer service reps. And I do want to note that at any time during the first three years of the program, if the per mile ruck is chosen, this choice of the flat annual option will be removed and mainly because we are moving to per mile road usage charge as a mandatory in 2028.

[Andrew Perchlik (Member)]: Go

[Rebecca “Becca” White (Vice Chair)]: ahead. Are you if I could just ask a question. So I really appreciate you just breaking out that you have an option for EV drivers to start either the flat fee or you could have a capped amount at that, which I really appreciate. Are you going to continue that for the entire program or is that just an interim before you roll it out to all drivers?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yeah. That's a good question. So right now, the legislation does have the program capped at $50 until 2028. What we are looking at is having the cap removed really to preserve that user pays principle and equity point. So we are looking at having that cap removed.

[Rebecca “Becca” White (Vice Chair)]: Okay. Thank you. That's good to know.

[Richard Westman (Chair)]: And the dollar amount you said was $8 per thousand miles?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Correct. Yeah. So it's 0.008¢ per mile, but that math can get a little iffy, but it's less than a penny per mile.

[Andrew Perchlik (Member)]: Do you know the average miles driven in Hawaii?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes. So our latest latest numbers show that the average miles driven for a typical resident is about 9,000 miles a year.

[Andrew Perchlik (Member)]: Yeah. I I assumed it would be lower because there's not too far you can go. Very

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: true. What I do notice in Hawaii is that, we like to take a lot of back and forth commutes, so that might account for our high mileage.

[Andrew Perchlik (Member)]: Because we're about 15,012.

[Richard Westman (Chair)]: 12 we base this on nationally, it's like 13,500. So we're below the national average. Okay.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Any questions? Shown on the screen is an example of what that registration renewal notice looks like. So as I mentioned before, we tied the road usage charge program into the existing safety inspection and registration processes, mainly to keep them virtually unchanged and to ease the ease the customer experience with the interaction of the program. So now on the notification, EV drivers will see their road usage charge transparently shown on their notice with the road usage charge fee amount due, as well as the number of miles that were recorded. So since launch, over 15,000 HIROC eligible vehicles have received the registration renewal notice informing them about the HIROC program and what their associated per mile RUC amount due is. We're also anticipating approximately over 40,000 within the first year of operation. So now that we've overviewed the technical implementation aspects, I want to move into our communication aspects. So one critical component of implementation was communicating with those who would be impacted by this. We wanted EV owners and the public at large to understand why this change was happening and what the impact would be. Our overall communications objective was to support the smooth and seamless implementation of road users charging beginning with EV drivers. So to support this overall objective, our goals were to ensure that current and future EV drivers understand Hawaii's RUC program when registering. To also encourage current and future EV drivers to choose the road usage charge when they renew their vehicles or register their vehicles. We also wanted to support a positive EV driver experience both before and during the registration process, and then also continue to inform, educate, and engage all audiences about road uses charging, specifically why Hawaii is implementing it and how it supports Hawaii's goals. So key themes were and still are important. One being our partnership with the county DMV is critical. Our communications report, our communications approach has been county focused to keep it really local and at the county levels. We also wanted to integrate to any extent that we can into the existing systems and processes and how they do their communications outreach. So one way that we are already providing a way for EV drivers to better understand High Rock is through an online estimator at our website. You can feel free to try it yourself via highruc.org or we have a QR code on screen. And this estimator really helps folks understand which road usage charge choices better for them, either the per mile road usage charge or just the flat annual. So on the website, you can go ahead and enter in your annual mileage driven per year. And also shows a breakdown of kind of what the annual averages per each county is. Click your estimate right now. And then it shows you that breakdown of per mile reduces charge or flat annual reduces charge. I do want to note that because we are working through the removal of the cap, we also show a strike through of what the we show a strike through of what the road usage charge rate would be without the CAP, mainly because we are ideally trying to get this removed by 2028 and just so there isn't such a huge sticker shock once 2028 comes in the cap is removed. In addition to help notify drivers about the Hawaii Roadie's Discharge program, we're also sending out monthly postcards prior to an EV owner's registration. So this helps them understand what they need to know, how they might be able to get the road use discharge choice and where to go to learn more information. We have also been continuously adapting the information on the back of the postcard based on the inquiries that we are receiving on our higherup.org website, which we'll discuss next. Today, over 24,000 postcards have been sent to EV owners so far, and this will continue through the first year of operations. So in discussions with their Canadian views, the top most concern has been the impact, the impact that this program would cause their customer service reps. So we really worked hand in hand with them to ensure that the road users charge program was designed to be as seamless as possible and integrated into the existing processes, and also to ensure that it's as easy as possible to communicate to customers that were coming in. Through this collaboration, the DMV is really on the role that they're playing in the support in supporting the customer. The customer front facing service, especially with the road usage charge choice options and just kind of communicating what the program is about. So in support of this, the Hawaii Department of Transportation has provided communication support for the dmbs This has included customer facing materials such as posters, rack cards, fact sheets, and monitor slides to display in their DMV lobbies. And then we've also provided internal documents such as common FAQs for customer facing DMV reps, and then also in person trainings that we've conducted with them. So six to nine months before launch, we put out a huge outreach asking to connect briefings with county mayors, county councils, legislative officials, and key stakeholders, as well as potential long term advisory group members. And the purpose of this was to really keep them informed of what the program is going to be like once launch officially hit, to share what we were learning as we were going through the implementation process and seeking ways to collaborate in any further communication and outreach efforts. So for example, AAA offered to publish a short article on High Rock in their AAA Hawaii Magazine. And then we've also partnered up with Hawaii EV Association through a Zoom webinar for their membership to help them understand what the process looks like and kind of walk them through the registration renewal process. But that wasn't all. We also went to social media communications and then we had a social media communications and engagement plan to further inform, educate and engage audience who were not engaged through traditional media. So this included Facebook, Instagram and Twitter. It contained action based content prompting EV drivers to be aware and ready for the transition, informing them of what they'll see when the program launch. We also have partners such as our county DMV's that then reach to their social media audiences by reposting reposting our publishing things. So how are we monitoring the effectiveness of our communication efforts? Here are the web stats and traffic from the highrock.org website. As you can see, there are two major peaks shown. One, shortly after the first set of postcards about the High Rock program were received, and then another right after H. Sent our press release and posted social media. So these peaks were astounding. We've peaked out at about four fifty to just under five thirty sessions in a single day. So that kind of gave us an indication that people were aware of the program and were paying attention. So today, we've only received about 87 questions since the launch of the program. So about, we're about six months in. So 87 questions is not too bad. Normally these questions roll in on a monthly basis, right after EV drivers receive their monthly postcards. And what's more, what's even more astounding is that 92% of these inquiries have been neutral. The types of questions that we've been receiving is mainly surrounding the timing of safety inspection, for these newly purchased EVs or other EVs that did not receive a choice because they didn't have sufficient mileage readings because either they didn't conduct their safety inspection or some other reason.

[Andrew Perchlik (Member)]: Many registered

[Richard Westman (Chair)]: how many registered vehicles are there in Hawaii?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Our last database showed that there's about right just over 40,000 EVs registered statewide.

[Andrew Perchlik (Member)]: Okay.

[Richard Westman (Chair)]: And that 40,000 EVs, how many total registrations?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: All 40,000.

[Andrew Perchlik (Member)]: 40,000 is the EV registration or the total registration?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Oh, 40,000 is the EV registration. The total amount of vehicles in Hawaii is about one point just under 1,400,000.

[Richard Westman (Chair)]: 3,400,000. Thank you.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: And then our last inquiry has been about asking about the future program plans, specifically on how non EVs will be transitioned to the program, especially for those low mileage drivers. They see that this program is live for electric vehicles and they're like, when can we be in this program? When is it our turn? So that's enlightening to hear.

[Andrew Perchlik (Member)]: So

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: some key ingredients for our successful implementation being that one, just because it is run directly via our DMVs, it doesn't mean that it's easy. Really needing to take the time to delve into those best practices and lessons learned from other pilots and transitions really helps to hone in on those program focused concepts. We've also engaged, continue to engage with all involved parties a lot, really getting the buy in at every stage so that we're not blindsided right before launch. Not just with our implementation working group, although those were very, very helpful and important. We also ensure that it was key to engage with other involved parties offline, one on one when things come up and not just when a meeting is scheduled. Another key aspect is testing. Testing is a huge, huge portion of the implementation. At every phase we've done testing, creating use cases to go along with the requirements and test cases, really painting the picture for what a real world scenario would be to help once the program goes live. This also helps the implementers, vendors and system providers to get a full understanding of what the intent of the program is supposed to do. Especially if you think about these use cases, you think, oh, yeah, maybe it won't happen until you get it in real life. And you're like, oh, thank goodness, we tested it before we went live. Also being willing to accept and be prepared for when the program does evolve quickly. Really thinking about planning implementation and what needs to be implemented and the types of adaptions that you're going to need to make early on in the process to meet your implementation deadline. Being flexible with that.

[Richard Westman (Chair)]: We have one more question.

[Rebecca “Becca” White (Vice Chair)]: Oh, thank you, Chair Westman. And thank you, Wendy. Sorry to interrupt you, Mitch. Hello. One of the pieces that we've separated out in our MBUFT program is the difference between plug in hybrid vehicles and battery electric vehicles. And I haven't heard you mention that. So I was wondering if you have broken that out or if that's come up for you.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes. Yeah. So right now the program is only for purely battery electric vehicles, not plug ins. I do have some slides after this that ties into when those PHEVs start to come into the play. But really because some PHEVs do already pay a fuel tax, we need to think about how that plays in to make sure that we're not double charging them.

[Rebecca “Becca” White (Vice Chair)]: You.

[Andrew Perchlik (Member)]: Mindy, Yeah. Do you have the ability to register vehicles for two years there at a time instead of one year?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: No. So registration is done only on an annual basis.

[Richard Westman (Chair)]: Okay. I think that for right now, keep going, please. Okay.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: And that's perfect, a perfect segue, question about the PHEVs into our long term transition plan. As part of the enabling legislation for the for the program, the legislature also required the HDOT to develop a long term transition plan to include all light duty vehicles in the program no later than 2033. So this is a huge effort and a lot of different aspects and different stakeholders that we need to keep in mind of through the process. So as such, HDOT developed a long term transition advisory group, also known as our LTACH, to help with this plan development. So this included a broad group of stakeholders and elected officials, such as county departments of finance, legislative officials and key stakeholders through either like EV initiative groups or low income advocate groups. This robust membership really helped HDOT throughout 2025 to advise us on the recommendation to transition all of these vehicles by 2033. A key anecdote that I do want to mention from our LTAC discussions were that throughout the entire process, never once did we hear any doubt about the road usage charge program from any of our legislators or stakeholders. The House and Senate Transportation Chairs were also closely engaged and really thinking about these topics throughout the entire process and the development of the plan. So at the LTACHs recommendation, HDAU articulated a clear North Star really intended to guide all transition type decisions. So this North Star was defined as by 2033, Hawaii's road usage charge program should be financially sustainable, meaning that it generates sufficient reliable revenues to maintain Hawaii's roadways as fuel tax revenues continue to decline. It also must be operationally feasible, practical to implement, and administer using our existing systems whenever possible. And then thirdly, publicly acceptable. It must be understandable, transparent, and applied fairly in the eyes of Hawaii's residents. So this North Star really anchored the long term transition plan and provided the benchmark for measuring success along the journey towards this fully implemented system. So some high level LTTP or long term transition plan recommendations included PH PHEVs and hybrids to be next in the program, then to continue to expand it to all other light duty vehicles by 2033. It also continues with the recommendation of the $8 per 1,000 miles road usage charge rate, really to maintain that revenue neutrality with the gas tax set first, and then have it be indexed to inflation once everyone is in the program. It also seeks to remove the existing $50 cap for the program. And then especially for those PHEVs, hybrids and gas vehicles, as we do transition year by year to credit fuel tax payments made against the road usage charge owed so that our residents aren't being double taxed. It also seeks to integrate consistent rate setting methodologies across the state and counties, especially since our counties are looking at having a county reduces charge as a replacement for the county fuel tax. It also recommends having no new exemptions, discounts or refunds outside of what is already existing for fuel taxes, and then to continuously monitor and revisit future possible changes related to compliance, the fuel tax removal and installment payments. And then. So, this is a draft of what the recommended implementation timeline is based on our long term transition plan. So we have the first milestone being 2028 is when the per mile reduces charge becomes mandatory for all EVs statewide, meaning that $50 flat annual option gets removed. Next phase is in 2029 for when PHEVs and hybrids then become enrolled in the program. And then throughout 2030 to 2033 is when we're going to be expanding the program to all light duty gas vehicles, really gradually phasing them into the program based by model year, because that is the information that we already have within our motor vehicle registrations database. And then what's next for our high risk research aside from trying to expand this program at 2,033, each that is the recipient of a 5,760,000.00 CERT grant that will assist in expanding the Roadie's Discharge program in Hawaii. So this funding will support the technical implementation of key program features, to support policy research and analysis, and then continued stakeholder outreach and education. So as a closing statement, over the past eight years, our research and pilot has really culminated in a real road usage in a real road usage charge program that was ultimately enacted by our legislature. Over the next few years, we're going to be working with policymakers and stakeholders to transition all of our vehicles to our road usage charge program in support of the sustainable transportation funding and our zero emission goals, our process has been complex and multifaceted, and we've been supported by strong multi agency and disciplinary partnership with our policymakers, stakeholders, all four counties, key agencies and our technical teams. And thank you for listening to my presentation today, and I'm happy to answer any questions.

[Wendy Harrison (Clerk)]: Wendy. Thank you so much. This is really, really helpful and I'm very impressed with how deliberate you were and all of the testing that you did. Can you talk a little bit about how if you've changed or how trucking trucks and tourist traffic is if if they'll pay some other fee or perhaps already pay that sort of fee?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes. So on the topic of trucks, right now the program only looks at having a road usage charge program for light duty vehicles. So that's vehicles under gross vehicle weight rating of 10,000 pounds or less than 10,000 pounds. The reason for that is because the state of Hawaii already does have a weight tax in addition to a fuel tax. So what we take into consideration, look at looking at these heavier vehicles, there's really a lot of discussion that needs to be made before we can just go ahead and impose a road usage charge on them because they are already paying a higher weight fee.

[Wendy Harrison (Clerk)]: Okay, that makes sense. Can I just follow-up? And so then, the, rental cars, is there a fee on rental cars also?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Correct. Yes. So in our demonstration project, one of huge points that we heard from our Hawaii residents is that they want to make sure that our visitors to our islands are also equally contributing as much as our residents are. So in addition to all of the other funding mechanisms that we have, there's also that rental car surcharge that we have statewide. But the road usage charge program is also applicable to rental car vehicles. And they're at the same exact rate as white residents. And really because we don't want to give the perception of, oh, we're taxing them more or taxing them less. So just flat rate across all groups.

[Wendy Harrison (Clerk)]: Oh, that's terrific. Thank you.

[Richard Westman (Chair)]: Okay.

[Rebecca “Becca” White (Vice Chair)]: Thank you, Mr. Chair. And you're- first of all, Mindy, thank you so much for for your presentation. This was really high quality. And if you ever wanna come to Vermont, we are always We've

[Richard Westman (Chair)]: been thinking about a field trip.

[Rebecca “Becca” White (Vice Chair)]: Exactly. We're definitely always changing.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Come out here for the sun, and I'll come up there for skiing.

[Richard Westman (Chair)]: There we go.

[Rebecca “Becca” White (Vice Chair)]: I did, to the point that Senator Harrison was raising, you are in a unique situation in Hawaii where you're not having drivers across state lines in the same way that we experience that as a state. Do you have I mean, besides rental cars, I mean, people really aren't driving in Hawaii unless they are registering their vehicle. Right? I mean, that's is there any lessons you would suggest that you've seen to how to get out of state drivers or is that just not an issue at all?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yeah. So we don't have the the cross border issues, but we what we do have is vehicles being transferred in and out of state. That's where we're kinda seeing that leakage. When vehicles come into state, typically, they're supposed to go straight to the DMV, get their Hawaii Hawaii registration done, and that's when they're gonna be on record and how we can start charging the road user charge. In addition to all of the other registration fees, we're seeing that some of those out of state transfer vehicles aren't registering in time or even couple years after they moved here. You're thinking you're talking about couple of meters of already fees being been delinquent. In addition, with vehicles moving out of state, because registration is done on an annual basis, they could go ahead and ship their vehicle out of state right before registration is due and not have to pay for the mileage or the registration fees. So that's something that in our long term transition plan, we're looking at addressing, is there some way that we can either do some sort of prorating or how can we address these out of state vehicles so that we're not seeing that leakage. It's very minimal compared to the whole piece of the pie, but it's still leakage that we're seeing.

[Rebecca “Becca” White (Vice Chair)]: Well, thank you very much.

[Richard Westman (Chair)]: My view, as I look at this and the money that you've raised, when I sit in the chair in this Appropriations Committee, what I would immediately go to is the fiscal analysis for the underlying in that. And the picture of what you're replacing and what the estimates for that money and what you raised. Do you have out of the fiscal office for your legislature or the fiscal office, the fiscal analysis for your agency, could you provide us any of that background material?

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yes, for sure. I do have one that I can pull up real quick. Okay. So this is our our fiscal predictions based on our recommended vehicle phase and strategy. Again, that's the mandatory by 2028, PHEVs and EVs by 2029, and the model year fees in from 02/3033. I do want to note that the road usage charge rate was set at that $8 per 1,000 miles and it was really to be revenue neutral. So we're not expecting any huge fiscal increases based on this project or based on this program alone.

[Wendy Harrison (Clerk)]: Yeah,

[Richard Westman (Chair)]: that's absolutely helpful. This is a great start. Any of the background information that you could could ship us on that would be interesting to see.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: For sure. Candidate. Yeah.

[Wendy Harrison (Clerk)]: So you do see that there.

[Richard Westman (Chair)]: I think in every case, all of us are just trying to figure out a way to replace the losses that we're seeing and level out the funding.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Yeah. Yeah. Completely understand. That's the whole reason why we're really pushing for this. And essentially due to other factors like our zero emission goals too, that's really kind of why we set that revenue neutral is we don't wanna dis incentivize these the owners. We just want to make it an evil and even playing field across all vehicle owners and something that specifically our low income households can also afford to make sure they're not punitive being under punitive measures.

[Richard Westman (Chair)]: Very good. Any other questions? We thank you so much. And if we have any further questions, we'll be back in touch with you.

[Mindy Kimura (Program Manager, Hawaii DOT RUC Program)]: Sounds good. Thank you guys

[Andrew Perchlik (Member)]: Thank for having you.

[Richard Westman (Chair)]: Bye.