Vermont Legislature SmartTranscripts:

[Sen. Wendy Harrison (Clerk)]: You're live.

[Sen. Richard Westman (Chair)]: This is, Senate Transportation, and we are with Logan from the joint fiscal office and Logan.

[Logan (Joint Fiscal Office analyst)]: Brady's test for the record by the American Joint Fiscal Office.

[Sen. Andrew Perchlik (Member)]: I will be playing a presentation.

[Logan (Joint Fiscal Office analyst)]: Same as yesterday, just a couple slides get you thinking

[Sen. Andrew Perchlik (Member)]: about and road usage charges and

[Logan (Joint Fiscal Office analyst)]: all that fun stuff before you hear about the details from the state of the cell. Let's see. So Utah is today's. I also if you have time afterwards, we can go to Virginia quickly. I think you'll be hearing tomorrow. But you tell us right after me. Their program on life organs is right now it's switched back to just being EVs. And then there are some older hybrids because the system has changed a little bit. There are a few older hybrids that sort of grandfathered in. For large part, most of the vehicles in this REX program are electric vehicles only. Their reporting options, have in vehicle telematics. So if you have a newer fancier vehicle, an EV vehicle, it can sort of send the data, the miles driven data to the DMV themselves. They also have the So,

[Sen. Richard Westman (Chair)]: they report how?

[Logan (Joint Fiscal Office analyst)]: So, one option is to use your vehicle telematics. Newer vehicles, they're smart and they track a lot of data already. So you can essentially get permission for your vehicle to to send mileage data to their department.

[Sen. Richard Westman (Chair)]: So if I have OnStar already?

[Logan (Joint Fiscal Office analyst)]: Theoretically, I don't know about OnStar specifically, but some vehicles like like Tesla and stuff, they they track a lot of data already.

[Sen. Andrew Perchlik (Member)]: Yeah.

[Logan (Joint Fiscal Office analyst)]: The other one is Go ahead.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you, mister. So this is a point that I really care about because did they pass a law to require the manufacturers after a certain point have applicable software that the state can capture data from? Did they put that in their bill? There were conversations about making it you have to, by a certain time, any new vehicle, able to commute. Like, there was a conversation at NCSL about states doing that. Did Utah include that?

[Logan (Joint Fiscal Office analyst)]: Or That's a great question. I I don't know the answer to that.

[Sen. Andrew Perchlik (Member)]: Manufacturer association because they usually any law that requires telematics, they do not let

[Logan (Joint Fiscal Office analyst)]: I do believe a lot of newer vehicles now at least or some of the newer vehicles are just adding this option for their own sake and not directly as a requirement from a state or federal government, but that might be a discussion that's happening. I'm not quite sure in this situation.

[Sen. Andrew Perchlik (Member)]: We could pick them up with EV tax, where we could just say, we know they're charging through the telematics. Mhmm. But basically, the department, but you said we don't want to do that.

[Sen. Richard Westman (Chair)]: Okay. Alright.

[Sen. Andrew Perchlik (Member)]: Sure. That would be helpful with this person. So,

[Sen. Richard Westman (Chair)]: but you think that in Utah, they may be getting information,

[Sen. Andrew Perchlik (Member)]: through the car dealers or through the car manufacturers? Yes.

[Logan (Joint Fiscal Office analyst)]: I think that Utah has the option to allow owners of certain vehicles that the vehicle has the ability to use the data the vehicle is collecting as their reporting option for the miles driven. They specify on their website that neither that option or the odometer photo, which is the second option, you can take a quarterly picture and send it to the DMV of miles driven. They state on the website that neither of these options share location data. It is merely just miles driven data. So I don't know specifics of how they use the telematics. They probably get into more details on the specifics. I believe so. I believe so. I think unlike Oregon, which had sort of geo fencing, it could tell there was which was a little this is more of just miles driven are than paid for.

[Sen. Richard Westman (Chair)]: And do they have a flat fee?

[Logan (Joint Fiscal Office analyst)]: That's I do. Yeah. So the next bullet there so they have this alternative fuel vehicle fee. Right now, I believe the fee is a $143. If you don't wanna do the per mile, which is currently 1.11¢, I think it'll be increasing in future. You can just pay the alternative fuel vehicle fee as a flat fee and then not worry about the mileage. I'm not sure if there is a cap. Some programs cap out at that flat fee amount. So you even if you drive more miles on the per mile scheme, you would only ever pay the flat fee. I guess I'm not sure. That's a good question for Utah when they present. And then right now there's, I think I just looked at their report that they're going present. It's a little higher than it's now, but the numbers I saw were around 10,000 enrollees, most of those fee fees.

[Sen. Andrew Perchlik (Member)]: Then Their fee equals 12,900 miles. They're just moving. Let's say the flat fee is just that around that that 13,000 miles.

[Sen. Richard Westman (Chair)]: That's around 13,000 miles. It's a definite fee.

[Logan (Joint Fiscal Office analyst)]: A lot of states try to estimate what they think the average driver drives in a year and then set some sort of fee based on that.

[Sen. Richard Westman (Chair)]: So Well, the the national the national right now is, like, 13,000 by In that area. Yeah. In in that area is what they're estimating the average driver drives.

[Logan (Joint Fiscal Office analyst)]: So If we look at Virginia, you'll see there they have a highway use speed that adds in miles per gallon, and they have a formula that sort of calculates average miles driven with the gallons.

[Sen. Andrew Perchlik (Member)]: We can look at that.

[Sen. Richard Westman (Chair)]: And they have something that's capped at 26. Yes. So Yeah. But I'll be interested to hear, but that is when you get Sure.

[Sen. Andrew Perchlik (Member)]: Is the is it do they do the EMPG or just the MPG? So if it's a following question, do they still have that?

[Logan (Joint Fiscal Office analyst)]: That's a good question. I don't I think they don't specify between the two, but I guess I don't know. So

[Sen. Richard Westman (Chair)]: finish with Utah, then we'll you can do the Virginia. Yep. So does Utah's plan, is this designed to just replace gas

[Logan (Joint Fiscal Office analyst)]: or did they? I believe it's, I should clarify with them when they present, but I believe it's supplemental. I don't believe they're getting rid of the gas tax by any means, but just trying to capture the lost revenue from EV, some of those higher efficiency

[Sen. Richard Westman (Chair)]: And is it just electric vehicles or is it hybrids? Or

[Logan (Joint Fiscal Office analyst)]: Yeah. I think right now it's just EV vehicles. I think in the past, it was more than just EV vehicles. I think they've sort of changed their program up a little bit. There are some, grandfathered in vehicles, which you'll see in the presentation coming up as they get into a little more detail on the specifics of it. Mean, vast majority of the vehicles in this are just EVs right now, though, is my understanding. And then this, found on a report that their legislative resource and general counsel I also believe the presentation you're about to see has an updated and goes under 26 data. But you can see in the early years of this program, expenses for setting up the program and running it administrative costs outweighed the amount of revenue they were seeing due to the sort of small portion of vehicles that were in it and the amounts that they were paying sort of thing and just the high upstart costs. And then in '25, as they've sort of worked with their system and made changes, they've been able to reduce costs as well as increase the amount of vehicles in the program. You'll see on the next person's presentation in twenty days, the revenue gained is significantly larger than expenses. I'm guessing they're hoping that that will continue into the future. This is just the per mile fee. They'll also show a chart that has the flat fee. Much more people are paying the flat fee portion. But I'm guessing as adoption of this RUC program increases, you'll see the revenues outweighing the expenses. But in the beginning of these programs, as it's sort of a new thing being developed, there are a lot of upfront costs.

[Sen. Andrew Perchlik (Member)]: Go ahead.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you, Jared. Do you know, Logan, if they, in their creation of their programs, really spelled out all of the details of how they were going to make it? Like, how did they spell it out in legislation, or was it more giving the option to the department to the AOT to create and design it? Are we, like, in a similar process to how they've

[Logan (Joint Fiscal Office analyst)]: That's a great question that hopefully they can answer. I'm not sure sort of all the steps and what their thoughts were when they designed this this process. So I'm sure whoever presents will be able to sort of

[Sen. Rebecca "Becca" White (Vice Chair)]: Like, were they were they planning on this? Like, did they did they assume that these were the numbers? Or

[Logan (Joint Fiscal Office analyst)]: That's a great question I can't answer.

[Sen. Richard Westman (Chair)]: It I just it is a little side on this. That National Cooperative Highway Research Project Guide that was brought up by Oregon. Yep. Megan will wanna get Logan or whoever else would be good to talk to us about. And and you and Megan

[Logan (Joint Fiscal Office analyst)]: Yep.

[Sen. Richard Westman (Chair)]: It doesn't have to be you, but I'd like to go through the guide and have somebody lead us through that so we can feel more comfortable to use it. And

[Logan (Joint Fiscal Office analyst)]: Yep. Figure something out.

[Sen. Richard Westman (Chair)]: Yeah. Or is there somebody that put that together that can talk to us and what their goals were? Just Sure. Yeah.

[Logan (Joint Fiscal Office analyst)]: Definitely.

[Sen. Richard Westman (Chair)]: Sorry. That's a little off the beaten path, but not too far.

[Logan (Joint Fiscal Office analyst)]: Do you want to go to Virginia real quick? Yeah. That would be good.

[Sen. Andrew Perchlik (Member)]: Would That be great.

[Logan (Joint Fiscal Office analyst)]: Yeah. The Virginia's RUC program is sort of based around this highway use fee that I had mentioned. It's on electric vehicles on a high efficiency vehicles achieving at least 25 miles per gallon. And they give the option of either playing this flat fee, they can participate in this M Buff, or they call it their mileage choice program, and they can pay based on the actual miles they drive. So that equation down there at the bottom is how this highway used to I

[Sen. Andrew Perchlik (Member)]: can't figure this out. Yeah.

[Logan (Joint Fiscal Office analyst)]: So they determine the average miles traveled for vehicles in the state to be 11,600.

[Sen. Richard Westman (Chair)]: Oh, okay.

[Logan (Joint Fiscal Office analyst)]: What you're essentially doing is taking the average cost that a vehicle would spend, subtracting

[Sen. Andrew Perchlik (Member)]: out the What's the fuel expense rate?

[Logan (Joint Fiscal Office analyst)]: I would have to go It's in it now.

[Sen. Andrew Perchlik (Member)]: But is that a per mile fee or That's

[Logan (Joint Fiscal Office analyst)]: the gas tax rate. The fuel tax rate? That's the gas tax rate. So it's trying to look at what the sort of average vehicle And if the fuel tax rate

[Sen. Andrew Perchlik (Member)]: per gallon or per per I'm guessing. Per gallon

[Logan (Joint Fiscal Office analyst)]: per per I think it's a per cents gallon, but could I think on their their pages the sources there go into more detail than Do they have an example, like

[Sen. Andrew Perchlik (Member)]: the average Virginian page? Yeah.

[Logan (Joint Fiscal Office analyst)]: And there's a I can pull it up if you want. There's a, like, breakout of, you have this miles a gallon. This is what you would pay. You have this MPG, this is what you pay. So it's trying to get at the loss in GAAP revenue per miles per gallon above the average. It's not effective at this point, but it takes 85%. That's the last number of that difference between the average and what you're at. It's think that's

[Sen. Andrew Perchlik (Member)]: more there. If you're going to do it for all, I don't know if I call 25 miles per gallon highly efficient, but it's It's the

[Logan (Joint Fiscal Office analyst)]: More efficient. It's what they chose. Yes.

[Sen. Andrew Perchlik (Member)]: But that depends on how much gas you're not using. Right. Instead of just putting everybody on the same boat.

[Sen. Rebecca "Becca" White (Vice Chair)]: They have to that point, do they have a fee bait or anything separate from this? Like, it seems like they're trying to get a little bit

[Logan (Joint Fiscal Office analyst)]: I don't believe so. But Oregon had this too, right? They have an APG. Yeah. Oregon had something similar to this. Oregon also gave a rebate, a tax rebate. If you did this program on gasoline, I don't believe that Virginia does the tax rebates. Again, hopefully this is something that they'll go into more detail when they present on Friday. Then couldn't find This is all their state revenue sources. If you want to compare what this program, the highway use fee at the bottom is estimated to bring in comparatively to motor fuel tax at the top there and motor vehicle sales and use tax, stuff like that. They have different ones than Vermont, obviously. Where is the motor? So it's the highway used to be third from the bottom at $65,400,000. I couldn't find just the mileage per mileage portion of that. They just sort of combined it together. So this is the flat fee as well as the per miles fee.

[Sen. Andrew Perchlik (Member)]: And you don't have an example of what the flat fee or the per miles fee is. I can show you. Pull it up here real quick.

[Sen. Rebecca "Becca" White (Vice Chair)]: Sorry, this is a little different.

[Logan (Joint Fiscal Office analyst)]: This is from their website. This is an estimation of that highway use fee charge. So right there, their their current tax is 31.7¢ per gallon. They have an annual set out for all electric vehicles. Right? So if you don't have miles per gallon, pay a 131. Okay. And then here you'll see based on your miles per gallon, you pay an additional fee. So if you're, like, pretty close to that 23¢ number, you pay, like, $6. If you're, you know, at the top, you pay a $100 extra. $300 to get to the numbers. Yeah. I know. That's great. I can find an ounce. But, anyways, it goes all the way to the list that I have in calculator. And based on that formula I showed you earlier, you can kinda see so I don't know if you have 40, you're paying an extra $53 a year, and it's time to make up that sort of difference gas.

[Sen. Andrew Perchlik (Member)]: So 131

[Logan (Joint Fiscal Office analyst)]: is the straight EV? EV, so then pay 131.

[Sen. Andrew Perchlik (Member)]: Do you know if the states are trying to incorporate motorcycles or not? In

[Logan (Joint Fiscal Office analyst)]: a road usage charge, I haven't seen anything yet of the major ones.

[Sen. Andrew Perchlik (Member)]: Probably not. I know it's very small usage of rental carages.

[Logan (Joint Fiscal Office analyst)]: Yeah. Yeah. I think So I haven't seen any states that have attacked. Well,

[Sen. Rebecca "Becca" White (Vice Chair)]: that point, I'm going to ask Hawaii there because they have a higher percentage of it is so interesting fact about Hawaii motor in motorcycles, but they also have a lot of scooters.

[Sen. Andrew Perchlik (Member)]: Yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: So but I should've thought to ask them. Other places, they probably would have the highest density of those, but we should do it on motorcycles if we're gonna do it in Vermont because there are electric motorcycles and there are, like, battery powered scooters that you have to register as well that don't use gas, but no e bikes.

[Logan (Joint Fiscal Office analyst)]: That was the extension. I'm happy to discuss the things with other questions. I will say a lot of their D and B websites are very helpful if you're just interested in how it works from a personal standpoint. They all try to explain what these programs are in ways that make it. Some of them are a little easier to understand than others.

[Sen. Andrew Perchlik (Member)]: Yes. Where are we at the state portion of the gas in Vermont? How do we compare to thirty months?

[Logan (Joint Fiscal Office analyst)]: Thirty three or four, depending on the fluctuation in the assessments. We're not too far from what this is.

[Sen. Richard Westman (Chair)]: Interesting. They're a little different, each one of them, but there's similarity between all. Yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: I've been trying to keep a list of, like, what are the main components that people all seem to have, and one of them is a a lot of them seem to have a cap or choose your own adventure option. Yeah. To choose own medicine.

[Sen. Richard Westman (Chair)]: Seem They to give an option.

[Sen. Rebecca "Becca" White (Vice Chair)]: Yeah. So that's something we should

[Sen. Richard Westman (Chair)]: And ways that people can

[Sen. Rebecca "Becca" White (Vice Chair)]: People seem to be picking the fee now over the other option given it. It's like the between Hawaii.

[Sen. Andrew Perchlik (Member)]: Because you're like they don't offer the option if you're an electric pig. Up

[Logan (Joint Fiscal Office analyst)]: to the to what?

[Sen. Andrew Perchlik (Member)]: You just have to play the fast one.

[Logan (Joint Fiscal Office analyst)]: I think you can do it

[Sen. Andrew Perchlik (Member)]: for mileage. Well, then how are they calculating the MPGs?

[Logan (Joint Fiscal Office analyst)]: I think it's so it's per mileage. So Oh, you mean just the muscle? They're not doing this calculation. Either the the Yeah. You take the

[Sen. Richard Westman (Chair)]: So if you were a lower user in pounds, hold back.

[Logan (Joint Fiscal Office analyst)]: They just said that. You take the one thirty one and divide it by the 11,600 average miles to make your per mile cost. We do the math to figure out what that is. But essentially, if you're doing the per mile program, you take what your calculated up would be the

[Sen. Andrew Perchlik (Member)]: miles that they use to calculate one thirty one. You wanna stay with the one thirty one. If you're under, you might go to the mountain. Yeah.

[Sen. Richard Westman (Chair)]: So and what's the rate? Because here you say five ounce per gallon rating of point eight five. Would so below that, would they tax it? You could pay lower based upon that?

[Sen. Andrew Perchlik (Member)]: I'm not sure.

[Logan (Joint Fiscal Office analyst)]: I'll answer your question.

[Sen. Andrew Perchlik (Member)]: That was just part of that complicated

[Sen. Richard Westman (Chair)]: Yeah. We're the formula. Algorithm. You're at the bottom, and it says, vehicle's miles rating point one eight. Yeah.

[Logan (Joint Fiscal Office analyst)]: So they take the whole equation, the difference between the state average and your vehicle average, and then they essentially use 85% of that difference. I don't know why 85 was chosen specifically. That'd be a good question for Virginia. Maybe they have some reason behind it. Maybe as a way to make it not just a straight equation. I guess I don't know the question, but yes, they apply sort of a it's not a 100% of that equation. It's 85% of that.

[Sen. Andrew Perchlik (Member)]: And do you know how they're doing that? Is it an abdominal reading or GPS? I don't know. Did you already find them?

[Logan (Joint Fiscal Office analyst)]: I might have mentioned it. Maybe I did.

[Sen. Andrew Perchlik (Member)]: Let's see if I can find it out. Yeah. Motorcycles are exempt, isn't it?

[Sen. Rebecca "Becca" White (Vice Chair)]: Oh.

[Sen. Andrew Perchlik (Member)]: In the autumn cycles. Yeah. They're the number of exempt vehicles. I want an auto cycle. Cycle. I don't know. Sounds funny.

[Logan (Joint Fiscal Office analyst)]: Two options. Oh, so you can enroll in this mileage program, I'm guessing it's the one you wanted to mention.

[Sen. Richard Westman (Chair)]: But

[Logan (Joint Fiscal Office analyst)]: they have a device. Excuse me.

[Sen. Andrew Perchlik (Member)]: A GPS.

[Logan (Joint Fiscal Office analyst)]: Yeah. Say it's a a You notice. That has a device that'll be installed to your account, and then you use it

[Sen. Richard Westman (Chair)]: So like like Oregon, they have you can elect to do the device.

[Logan (Joint Fiscal Office analyst)]: The device. Yep.

[Sen. Richard Westman (Chair)]: And that device would probably let you separate out your miles traveled out of state.

[Logan (Joint Fiscal Office analyst)]: Potentially. Yeah. I'm not sure of the extent of the one in Virginia, but it seems like at least from Oregon, that is a potential option that states could have their

[Sen. Richard Westman (Chair)]: That way you would be able to say to somebody, this is, I don't want to feed it off. Yeah.

[Sen. Andrew Perchlik (Member)]: I think it's a bigger deal than in Vermont than it is in Utah.

[Sen. Richard Westman (Chair)]: Yeah. I'd be here. Or Oregon. Well, Oregon. But I guess you're But it depends on where you live.

[Sen. Andrew Perchlik (Member)]: Yeah. That that would

[Sen. Richard Westman (Chair)]: If you're somebody who lives in, basically, a county on the border, you yeah.

[Sen. Rebecca "Becca" White (Vice Chair)]: Utah's here, can I? Yep.

[Sen. Andrew Perchlik (Member)]: Utah. Utah. You're to Utah? In Oregon? Park City. Yes.

[Sen. Rebecca "Becca" White (Vice Chair)]: It's pretty cool.

[Sen. Andrew Perchlik (Member)]: Yeah. We can just go

[Logan (Joint Fiscal Office analyst)]: to Park City.

[Sen. Richard Westman (Chair)]: We're gonna go to Park City, then we're gonna go up we can stay at Timberline, that would be my preference. I love Timberline.

[Sen. Andrew Perchlik (Member)]: And and then do Hawaii.

[Sen. Richard Westman (Chair)]: I've driven through Utah, but it's beautiful. But I have not been

[Sen. Rebecca "Becca" White (Vice Chair)]: And, no, you have. Just relax. It's

[Logan (Joint Fiscal Office analyst)]: No problem.

[Sen. Rebecca "Becca" White (Vice Chair)]: Still going. Lyle is there.

[Sen. Richard Westman (Chair)]: Lyle, are you can you hear us?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: I can. Can you hear me?

[Sen. Richard Westman (Chair)]: I we can. And I think we have a document from you. And we're traveling virtually around to the four states that have moved ahead of the rest of the country, and you're our third state. Excellent.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Who did you visit before?

[Sen. Richard Westman (Chair)]: Well, we had an invitation to Hawaii visit. So we

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: You should go physically.

[Sen. Richard Westman (Chair)]: Yes, we had that invitation. So Hawaii, Oregon, Utah, and then tomorrow will be Virginia. So if you could, for our record, let's start this way. The committee members that are here, and we have one member, Pat Brennan, who's from the Northwest Corner of the state, who is in house transportation doing other duties today, but members of my committee, I'm Richard Westman, I'm the chair of Senate Transportation. I'm from Lamoille County, which is in the North Central part of the state.

[Sen. Wendy Harrison (Clerk)]: Wendy Harrison, I'm from Windham County, and that's in the South corner of the state.

[Sen. Rebecca "Becca" White (Vice Chair)]: I'm Becca White. I'm from Windsor County. She

[Sen. Richard Westman (Chair)]: doesn't want to tell us.

[Sen. Andrew Perchlik (Member)]: I'm Andrew Perchlik from Washington County, which is central.

[Sen. Richard Westman (Chair)]: And, Lyle, if you could give us your name and your a little background, and then we'll go into your presentation, and we probably will interrupt you through going through it now and then.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Okay. Wonderful. My name is Lyle McMillan. I'm the director of strategic technologies for the Utah Department of Transportation. I previously, I spent the first twenty years as the department's right of way director, and then, we went through reorganization. I was asked to head up the department of strategic investments where I manage the state infrastructure bank, and, we started talking about doing moves into public private partnerships and transportation electrification, and that's, now my portfolio basically includes all things, transportation electrification, the the program manager for the NEVI program, and, the what we call the express lanes, which is the HOV lanes that have, tolling. We're about to start implementing a license plate reader tolling up one of our, ski canyons here in the next couple years. So we'll be heading up that project and then the road usage charge program that we're about to talk about today.

[Sen. Richard Westman (Chair)]: This will be the first winter in the last four years. I I haven't got to Park City. So

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Well, it's the one it's the one winter when you chose wisely because down here in the valley, we literally have only I mean, here it's January 15, and we've only had snow once.

[Sen. Richard Westman (Chair)]: Well well, we've had snow here pretty consistently since Thanksgiving. So

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah. We, it's about to start getting dire if we don't start getting getting some precipitation.

[Sen. Andrew Perchlik (Member)]: Well,

[Sen. Richard Westman (Chair)]: I could get up and leave and go skiing now, so but if you wanna move into

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Okay. Cool.

[Sen. Richard Westman (Chair)]: Tell us what you've done. We're trying to learn.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Alrighty. I am going to share. I need to find the right one. Alright. Can you see Yes. The presentation?

[Sen. Andrew Perchlik (Member)]: Yes. Alright. Let's move. We're not in the we're in the presenter mode. It

[Sen. Wendy Harrison (Clerk)]: is. Now

[Sen. Andrew Perchlik (Member)]: it's Alright.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: You there? Okay. There's my contact information. You can also get that from Megan. Alright. So just really quickly wanted to give you some background about what is happening in the state of Utah, but first we'll go to the national perspective. This is, we need to update it. It's only, through last August. I hope we have you correctly up there in the Northeast, but it's basically we've been trying to keep track of all the states' various, progress in terms of, has if you have a black, lightning bolt, there's legislation that's been, enacted with an EV charging tax like we have. If it's been introduced, it's a white. If there is legislation about rec, rec or miles based user fee, then, you'll see stripy, and those are the four states that you're visiting. And then, green if there's an annual fee on on an EV, and yellow if it's been introduced, and then you see there's combinations of all of the above. And then we've been trying to also kinda keep track of what those fees ranges are and that EV tax ranges so that, you have a kind of a quick sneak peek about what's happening across the nation.

[Sen. Andrew Perchlik (Member)]: And is that some states have annual fee and a tax, or is it is that where

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yes. We we do. And so the annual fee is like the annual registration fee, and we also have if if if I take my electric vehicle to a public charger that that makes me pay to Yeah. Charge my battery, then there is a 12 and a half percent Uh-huh. Charging tax on that amount.

[Sen. Andrew Perchlik (Member)]: So that was getting out of staters.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah. That's I mean, that is the intent given that, you know, that the assumption is that 80 plus percent of, a local resident's EV charging will be done from their home garage. Our history is that we have been at this for over twenty years. We started this back in 2003 with a legislative task force to analyze mileage based funding. I'm not going to go into the reasons why I think that's why you're here, that we're seeing that as we have higher efficiency, even fuel vehicles and a stronger push towards alternative fuel vehicles, our funding mechanisms are being impacted. And so we saw this. Our legislature commenced a study, the results of that study made some recommendations, and we started putting together some statutory frameworks in that. And then about six years ago, we went right past the pilot and into an actual road usage charge program that I manage. And we're gonna talk more about that. Alright. So just a quick understanding of Utah's fleet. We have over 3,000,000, total vehicles in Utah's fleet. A little bit about Utah. I mean, it sounds like you know a little bit about it, but we have about just under three and a half million people in Utah, and 85% of us are here in the Salt Lake Valley, which makes basically four or five metro areas, and that makes the rest of like 95% of Utah is rural. And so those vehicles are pretty bunched up. We have 3,000,000 of them. And then last year we had 75,000 new registrations and of those about one in five was an alternative fuel vehicle. And so we're seeing this massive increase in new vehicles being either high efficiency, you know, hybrids, plug in hybrids, and we actually had another 14 and a half thousand EVs, which don't pay fuel tax. And so we wanted to, we're working to figure out what is the best way to help, then contribute to Utah's transportation system in a fairway. So the elements of our system is we we chose a couple, like, I wanna say foundational principles. One of those is that we wanted to try we wanted to keep as much of the possibilities of technology and future technology available, and so we have two major methods. One is telematics, where we let the car tell us how many miles they drove, and then we've worked to mitigate any of the potential privacy concerns that surface with that. And then just a plain I call it dumb rock, it's just basically digital odometer capture. And I'll talk to you more about what the costs associated with those two choices are in a little bit. I mentioned the privacy piece, and basically we have got it to the point where we pay, I mean, as you know, government, But the story I like to tell is I can find out a lot about you by going to your Instagram, your Facebook, your LinkedIn, but don't don't you dare find know know anything about me, government. You know? So the we've we understand that dynamic, and so we've made a lot of work, and we pay extra. So for instance, we have a vendor who does that for us, and on the telematics side, we have a vendor who then has a vendor who goes to the SmartRoads to get that information, and then SmartRoads gets that information, gives it to the vendor, who gives it to our vendor, who gives it to us, anonymized. And every single one of those steps costs money, and so what we're trying to do is figure out how to reduce the middleman and still keep that privacy feature. And one of the things that we did that was significant is we just recently changed our contract after the first five years to a new vendor, and we eliminated the OBD2 port option, which was a device that you stick in your OBD2 port underneath the dash, and it was, it was expensive, it was kludgy, and we couldn't figure out it was very difficult to anonymize the information, so we just went away from it. Vehicle types, we initially started all of the oh, shoot. I am sorry. I'm gonna need to take a really quick break. Is that alright?

[Sen. Richard Westman (Chair)]: Yeah. Sure. Go ahead.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Do it. I'm so sorry. There's somebody at the door that I've been waiting for for about a week. I'll be right back.

[Sen. Richard Westman (Chair)]: We'll be here.

[Sen. Rebecca "Becca" White (Vice Chair)]: Do you want to go offline?

[Sen. Richard Westman (Chair)]: No. Okay,

[Sen. Rebecca "Becca" White (Vice Chair)]: another similarity.

[Sen. Andrew Perchlik (Member)]: That's like working at home. Another

[Sen. Rebecca "Becca" White (Vice Chair)]: similarity is they all seem to have major outage campaigns. Yep. All of them. All across the board. So I think we're gonna have to think about that. And they've been working on twenty years. Yes. And we've been grateful we've known about this issue. Yes.

[Sen. Andrew Perchlik (Member)]: So you're saying they got rid of this the GPS thing you plug in. Is that your digital or is that? Oh, you're very back.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: I'm back. I am so sorry. I just was, like, dreading that this was gonna happen, and she forced me to

[Sen. Richard Westman (Chair)]: You know, the life happens. We I think we'll get past this. Thank

[Sen. Andrew Perchlik (Member)]: you.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: And my wife, I told her like, hey, if they come while I'm on this presentation, will you please try to get the door? She's mortified because she was about to get in the shower, and she ran out. And she was she's concerned that

[Sen. Richard Westman (Chair)]: the FedEx guy has

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: a picture that he's never going to unsee.

[Sen. Wendy Harrison (Clerk)]: Thanks for coming.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Well, okay. I've never been more awake than I am now. Okay, so we were into the vehicle types. Initially we had all electric plug in hybrids and gas hybrids, and we realized that it didn't make a lot of sense to have the plug ins and the hybrids, especially the hybrids, because they do get gas, and some of them like I had a Lexus four fifty H hybrid and got 24 miles a gallon. It was more money to be in the program than we were deriving out of it. So, we've been phasing them out. We have less than 300 out of over 12,000 that have been grandfathered, We're just slowly moving them out of the system, and we're just taking care of them through the registration fee side of things. Another issue that's important to us is that we wanted participation to be voluntary. And so we've been trying to figure out how do we keep that dynamic and still meet our program objectives. We wanted, again, technology forward, so everything's online. And we do not I don't I don't know how it is in Vermont, but the DMV is not part of the of the Department of Transportation. Is that the way it is in Vermont?

[Sen. Andrew Perchlik (Member)]: No. No. So

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: So we've had to do quite a bit of work and develop partnerships and and connections with the DMV to make this work. And one of the other things I'll just say is that we realized early on, initially, we wanted to be able to do it. So when you buy an EV, you you know, we want you to be able to sign up for road usage charge if you want it. And the the auto dealers association did not, was not as enthusiastic about that concept as we were. And so, after a few engagements with the Auto Dealers Association, we realized that perhaps we ought to make basically, we made a tactical decision to create that opportunity at the first annual renewal opportunity. So if somebody buys an EV, they just pay the regular registration fee for an EV. And then at their first renewal registration opportunity, they get a pop up that says, hey. Would you like to, know more about road usage charge? And we are getting between four and six hundred new enrollments every month now. Now that we have, you know, like, now that EVs are coming online more and more, we like I said, we just passed, I 12,000, I just learned yesterday, and we're growing about four to 600 participants a month. So we're scaling whether we want to or not. And then on the commercial account manager or CAM side, we it used one of the things that we did be in the previous five years was we had a monthly billing. We've gone to quarterly to reduce expenses and a prepaid wallet, which means that if, as as people get to a certain amount, it automatically charges them, an amount of their choosing with a minimum of $25 that they can that it will it will charge their credit card so that they always have something available to charge to at each quarterly, statement. And one of the things that we're another thing that we're doing is, we're working to code in the ability to do ACH so that, you know, again, as we're trying to to shave, expenses out of the program, merchant fees are anywhere from two to 4% on a credit card, and that is, it's material. It's significant. So we're trying to set up so that we can, do direct withdrawals from people's checking or savings accounts and eliminate that merchant fee issue. Plus, it's really difficult. Like, we we are finding that we have as we get more and more scale, we're having to spend more and more time and resources to go after people whose credit cards have expired or they, you know, been reported lost or stolen and got new ones and then trying to get on their, on their radar to update their account information is more time than we would like to spend. Alright. So we'll we'll go back to this, odometer versus telematics conversation. Yeah.

[Sen. Richard Westman (Chair)]: Have a question.

[Sen. Andrew Perchlik (Member)]: Yeah. On that last slide you had the voluntary whether it's flat fee or the RUC, but the whole program, that's voluntary whether they want do the rough and a flat fee, but they also have to pay a registration fee. That the registration is not voluntary. Like, guess what's the part what's the voluntary part? Just whether it's a flat fee or a REC, that's the

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah. So so, that's a great question. So for my EV, and it's getting up there. When I registered a couple months ago, it was, $450, of which a $143.50, which is now $1.80 as of January 1, $143.50 is the transportation part. Okay. So there's over $300 worth of, you know, registration fees. And so that that voluntary part was the $143.50 that I could choose to pay all at once or join the RUC program and pay by the mile.

[Sen. Andrew Perchlik (Member)]: Okay. So that's that that part fee is also the registration fee.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yes. That's and that's you know, you're you're catching on to the voluntary part. That's you know, if we want it to be voluntary because our legislature asked us last year to do an analysis of two things. What would happen if we EV participation in Road Use Discharge Program mandatory? And then what would happen if we remove the cap, we call it, which is basically the same thing as the registration fee. And what we found is that, you know, some there were some interesting unintended consequences, and that is if you remove the cap, then it creates this perverse reverse penalty. Like, everybody else who who wants to would who have normally paid the registration fee, it's a cap. Right? But if you if you remove the cap, well, then you could pay more and you drive a lot, then you could pay more than what you would have otherwise. So why would you join the program? And so we knew that removing the cap and making it voluntary would would not we didn't want that situation. It didn't seem fair. So then the next question is, you know, you would you'd have to make it mandatory. And what we've what we've decided is that we we like the voluntary piece, and we would just and we you still need a cap because if you don't if you don't report your miles, you need a default. Right? And so that default would be whatever cap we chose. So the the incentive would be that we would create a cap that would be more than people would wanna pay, which would incentivize them to voluntarily join the RUC program and report their mileage. Yeah. Does that make sense?

[Sen. Richard Westman (Chair)]: Yep. Yep. Makes total sense.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Okay. And so, well, do you have any other questions before I assume we wanna move on?

[Sen. Richard Westman (Chair)]: Go ahead.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Okay. Alright. So just real quick conversation about the mileage reporting options. I'm I told you that we we're working very hard to keep the technology side of things open. We had initially when we started this new contract, we assumed it would be one third telematics, two thirds odometer, and you can see that it's basically fifty fifty. And then if you look at those that third bullet point under each column, and you can see the cost associated with odometer versus telematics, one way, and telematics is It's basically five times more expensive than odometer. Wow. We're already finding interestingly, you know, we're we're we just started, you know, this we're two weeks into year three of a five year contract, and technology is moving so quickly. Like we locked ourselves in two years ago to a five year commitment with all of these middlemen and we're getting people coming to us outside of the program saying, Hey, we've got native connectivity now with the OEMS. We can cut out the middleman. And so we're thinking that telematics will go down and we're trying to figure out, okay, so what do we do? Do we just bite the bullet for another three years? Do we try to renegotiate mid contract for this technology that's available that could help us reduce costs? And so that's the question we're going through now.

[Sen. Richard Westman (Chair)]: So the reports that we've heard is that the car manufacturers and whoever they have worked to create in the early days, OnStar's and whatever, that they've been reluctant to talk to states, but they're coming to you now?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Well, vendors. A vendor would say, we're in the business and we have figured out how to instead of going to smart car, which is basically there's one early company that had developed relationships with the manufacturers that are providing odometer and telematic information. And so you would have to go to them. It's called Smart Car. And so, we had a vendor who had a vendor who would go to Smart Car, and then each time they would mark it upright slip to make it worth their while. But we have other people saying we are now our own smart car.

[Sen. Wendy Harrison (Clerk)]: And

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: we have native telemetry that we can bypass all these middlemen, including smart car, and offer you this at a much lower cost. And so that's the I mean, that's a it's a nice problem to have, and this is where this conversation and people like us add value to you. So she we're making the mistakes so you don't have to. Okay.

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

[Sen. Richard Westman (Chair)]: Well, thank you for going.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Go ahead. One of the things that we've been talking about is that that and you you hit the nail on the head. It's not all vehicle manufacturers are are playing the game right now. Like, I have a Ford Lightning, and Ford is not being cheerful. And so I have to I have to take a picture of my odometer, and that's why we have this fiftyfifty. We wanted to, the point I want to make out of this conversation is that one of the options that's on the table besides renegotiating and getting a vendor that has native connectivity is until there's a national standard where everybody has to share and telematics is obviously the future, if we needed to save costs, we could just say, we're gonna go straight to odometer knowing that telematics is available in the future and be able to cut our costs by 80%.

[Sen. Rebecca "Becca" White (Vice Chair)]: Does that make sense? We have another question. Well, you, thank you, Mr. Chair. So I had actually had some conversations with NCSL where certain states were considering requiring that manufacturers by a certain date have their vehicles, have capability to share data. And and this isn't, you know, if you've got an old Corolla, this is if you buy a brand new car in, like, five years. Did you include in your legislative creation of this any requirements on manufacturers or this this is where the market is without any yeah.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: I I don't think we're big enough to move the needle like that. You know, like, we basically have been relying on ZEV states like California and Colorado to advance that needle.

[Sen. Rebecca "Becca" White (Vice Chair)]: Thank you, that's a really good point. Maybe that's a longer term conversation. We are a ZEV state.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Oh, okay. Yeah. So we are not, and so we are, writing the coattails of you.

[Sen. Richard Westman (Chair)]: Okay. Thanks, Chris.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: So our program, you can see over the years, we have the flat fee and that also becomes the cap as it's progressed through the years. This year in the legislation, had a legislative mandate that it was going to be one hundred and eighty and one point two five, and I'll talk about that in just a second. And then our mileage rates you see in 2021, were 1 and a half cents. And then we had a legislator who wanted to incentivize EV adoption. And so we reduced it by a third and are moving our way back, and we won't get back to our 2021 rate until 2032, according to our current legislation. And we also indexed foreign plate inflation via the CPI, our gas tax, and we have been doing that with the RUC rate as well, but because we had this hard reset on January 1, instead of the 1.25¢ per mile, we were planning on 1.43. And then in our conversations with the DMV, which is also the tax commission, they said, no, you can't add CPI, you get to reset at this statutory rate. And so we're trying to clarify that in this year's legislative session, which starts next Tuesday. But we also I was at a tolling conference last May in Oklahoma City where one of your folks was also there, and it was really interesting because we had done some analysis and came up with the, gas tax neutral RUC rate, and it was the exact amount that you guys came up with.

[Sen. Rebecca "Becca" White (Vice Chair)]: Oh, incredible.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: To see that was ratified, but my point entail in sharing that is it is significantly significantly higher than than the RUC rate that we're charging. Yours and ours was 1.86¢ per mile.

[Logan (Joint Fiscal Office analyst)]: Alright.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: But the the point was if, you know, if if you drive less, you pay less, and that that continues to be one of our selling factors for the program. And then I've I've already explained that in the previous slide, but you can see how over time we've changed things through and, we continue to move forward. But at some point, our goal is to have a gas tax neutral RUC rate so that everybody pays the same rate to contribute fairly to Utah's transportation system.

[Sen. Andrew Perchlik (Member)]: And the sure. Go ahead. The plug in hybrids and the hybrids, you're just gonna there's gonna be no registration fee, or are you also charging them, trying to capture a little bit of their efficiency?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah. It it they each have a separate higher rate than a regular internal combustion engine vehicle.

[Sen. Andrew Perchlik (Member)]: And even if it's like your old Lexus, it's just a few miles more than the other, you pay $50 more. That's correct.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: That's correct. If it's considered a hybrid, then it gets the hybrid, registration fee.

[Sen. Andrew Perchlik (Member)]: Not based on MDG?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: No. No. And that's you'll learn more about that from Virginia.

[Sen. Andrew Perchlik (Member)]: Yeah.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: They, Virginia basically took our plan for RUC two point o, and they leapfrogged us and and and did it. They did it in I'll let them talk to you about it. I mean, like, I'm jealous in that they got to do the program as we would like to get to. How they did it and the amount that it's costing them, I think you should ask questions.

[Sen. Rebecca "Becca" White (Vice Chair)]: Perfect.

[Sen. Andrew Perchlik (Member)]: Okay. That's good.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: My understanding is that we're the only program that's actually in the black.

[Sen. Rebecca "Becca" White (Vice Chair)]: Wow. In black. And

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: we're gonna talk about that. So our enrollment growth, you can see we started back in January 2020, and we steadily we were growing steadily. We did our CAM transition from our old vendor to our current vendor. It took a little bit longer than we were hoping, so there's some opacity there. And then when we came out on the other side, you can see we're just scaling. This is as of November 25, and we've already added. It's been two months, and we are already over 12,000 vehicles. So, we're adding a lot of, cars and we're learning things about that too. We're we're growing a tiny bit faster than we would have liked, but it's a nice problem to have. And you can see we've got those gas hybrids and plug in hybrids that are grandfathered and, we're actually looking to make a decision this year about whether or not that's the right thing to do, whether we should help them join their, the rest of their family outside of the program or if we should continue to leave them in.

[Sen. Andrew Perchlik (Member)]: And how many total EVs do you have? Like, is this, like, 50% of EVs or 80%?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Oh, no. We so if we I'm gonna close your eyes so you don't get we have 64,000 EVs registered as of February.

[Sen. Andrew Perchlik (Member)]: Okay.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: So of those 64,000, you know, again, as as of November, we had 11,200, but we now have 12,000. So if you do the math, it's about one in five, one in six.

[Sen. Andrew Perchlik (Member)]: 40%? Yeah. Yeah. Thank you.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Alright. And so yeah. We're we're and that's been interestingly very, very steady. That rate you know, that ratio of EVs to people who choose to join the program. And, again, I was like, why is it growing so fast? Every year, the people who, you know, who didn't choose to join RUC last year get another opportunity every single year. And in my mind, I was like, wait a second. We didn't have that many new vehicles purchased last year, but the reason is that all 64,000 are getting the opportunity every single year. Some of them are obviously coming over. Alright, so this is the part that I think may be the most valuable today, and that is our efforts to reduce administration costs. You can see in '21 through '24, the first five years of the program, we made a considerable amount of investments in learning what to do right and what not to do. Last And year we finally eked out and got in the black. And a lot of those were the things that we talked about going away from OBD2 ports and transitioning from monthly billing to quarterly billing. We also negotiated in our new contract at some point, probably won't happen during this contract period, but when we hit 50,075 enrollees, there is a significant volume discount that we will see materialized.

[Sen. Richard Westman (Chair)]: We have another question.

[Sen. Rebecca "Becca" White (Vice Chair)]: So we have joint fiscal office over here and they showed a similar slide to this one, probably this slide essentially. And the question I asked then was, were you are you did you plan for this? Did you expect to have this variation and to hit actually having some kind of revenue in this timeline? Or did you expect to have hit revenue being over expenses before this?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: No. We I mean, we being a first mover, I'd like to say, yeah, this was all according to the plan. In reality, we're just experimenting. We're just champion challenger. And one of the things that we realized we identified was that OBD2, it's technology, but it's old, it's clunky, it doesn't respect privacy and it was expensive. So going away from that was a significant savings. But then telematics has a lot of potential, but there isn't as we've identified, there isn't a lot of standardization and a lot of participation and it costs five times more, but it was still less than OBD2. And so, and then we've now been notified two years into a five year contract that we could get that even less expensive. So we didn't know that two years ago because it didn't exist two years ago, but those are some of the things that we're trying to figure out. It's like in in our next contract, how can we stay adaptable without locking ourselves into a, you know, a technology or a schema that can be optimized. So I think,

[Sen. Wendy Harrison (Clerk)]: Sorry to interrupt. I want to follow-up on that question. We heard from Oregon, I think it was yesterday, they

[Sen. Andrew Perchlik (Member)]: called

[Sen. Wendy Harrison (Clerk)]: it an evergreen system for procurement where they are just constantly receiving contract from technology companies because things do change so quickly. Are you considering that? Because that sounded really good to me.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah. That's one of those things where we are maybe content to let them work out the kinks in what we call a multicam system, where they have multiple commercial account managers. One concerns of that we have about that in Utah is that we really, really want to see what happens to our admin expenses when we get those volume discounts. But you can't get to those volume discounts if you have your customer base spread out across multiple account managers. So if we get a volume discount of 50,000, but we have three account managers and they're all doing an equal job of getting our customers, well now that 50,000 is 17,000 each and I don't get my volume discount. And so there are benefits though, and that is that there are different approaches that you can champion Challenger within the program. One of the things that we've we're just we're waiting to see what happens because we we stole shamelessly from them. You know, they were the original mover and we took their two point zero and implemented it. I think they have like 600 customers total. We have 12,000, but they're going mandatory this July or next July. And so it's going to be interesting to see what happens there and we're going to learn and skill shamelessly from their successes and studiously avoid their failures as we move forward.

[Sen. Wendy Harrison (Clerk)]: Okay, thank you.

[Sen. Andrew Perchlik (Member)]: And

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: so this

[Sen. Richard Westman (Chair)]: Oh, okay. That's

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: So this you can see where we had where we came in last year. And as we continue to scale, we expect to have 17,000 customers by the end of this year, and then we start getting those economies of scale where each incremental new participant adds money because we have those fixed costs that don't grow as much as the you know, they're fixed, and the variable costs are lower. So we are expecting to increase that that separation or that gap between our expenses and our, and our revenues a lot this year. And then I also told you about when we get that 50,000 customer piece, which we expect maybe in four or five years from now, then you can see there's gonna be a significant amount of awesomeness in play. And things are already happening in that last Friday, I got called to this semi emergency meeting where our local governments have it's got out that we are in the black, and so now they're like, where's where's ours? Where's our piece? When are going to start sharing? And so I had to negotiate a cash flow amount that stays within the program so that we can do operations before their spillover goes back into the transportation fund. And again, nice problem to have. Any questions on this guy? Alright. And then you can see we're still kind of a we're still a small player when you talk about what are what are we doing with RUC versus flat fee. And flat fee is still significant, you know, because, again, we're only one fifth of the total customer base, and we're just eating away at that slowly. And there could be some things, like we said, if we wanted to encourage more participation, we could do some things with the CAP to encourage that. Additionally, we would over time, hopefully sooner than what is in the current statute, we'd like to get to that fair and this is for somebody who owns the EV, that fair gas tax neutral RUC rate so that everybody is contributing equally to our transportation program.

[Sen. Andrew Perchlik (Member)]: Alright.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: And so I've mentioned them early, but I'm so I'll just review them really quick. The things that we have done that has to reduce costs is moving to a quarterly instead of monthly billing and statements, doing odometer capture via smartphone, adding telematics. And again, we could reduce it even further as we try to figure out how to eliminate the middleman. And then a big one was reducing those plug in devices. I wrote a check for $90,000 to our previous account manager just to pay for the OBDQ ports that our previous customers didn't send back.

[Sen. Richard Westman (Chair)]: That was

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: no fun. System improvements, again, quarterly mileage instead of monthly because we spend a ton of time. That's one of the things we're trying to figure out is what is the correct balance of communication, because I'm noticing that there's a lot of customer fatigue in terms of the amount of communications that we send out. And then being on the tolling side and on this RUC side, I don't know if you guys have been getting them, but every couple months we just get a deluge of these scam

[Sen. Rebecca "Becca" White (Vice Chair)]: And

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: so it's really hard to communicate, no, we're the real one. Just paid attention to us. Don't ignore us. Don't block us. And so those have been really interesting trying to get through, you know, trying to figure out how to how to be seen through all the clutter. And then, again, simplifying our data collection just to get just mileage and then we continue to work with our DMV partners to improve that registration and renewal experience and hopefully within the next twelve months, we're gonna start doing some we have done zero, like, advertising to the public or to EV owners or marketing to to try to increase the participation rate. And again, we're still adding 400 to 600 a month with doing nothing. And so at that point, we would expect to see some kind of a bump in uptake if we tried to do something to improve it.

[Sen. Andrew Perchlik (Member)]: Go ahead, Andy. Do you any comment about out of state driven miles? You know, it seems like Utah doesn't have a lot of metropolitan area near the border where there's another metropolitan board you know, across the border, so you might not have as much cross border traffic.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: The closest that we have that's a great question. And we are at we actually we were we have ready. We were expecting a federal grant that we have in that that was coming, so we prepared for it, and we were expecting to get it that would address you know, help us to to do some experimentation with that regard with several of our neighboring states and a non neighboring state, Washington. But that that grant has not materialized. And And that's part of the reason why we did the EV charging tax was to try to get that. Then at some point it may be forced on us. Don't know. I've heard various discussions about this and that is how do you make it as similar as possible to somebody who buys tax? The closest metropolitan area we have is Las Vegas to our St. George Washington County, which is about within an hour. And if you gas up in St. George and then go to Vegas and come back, Las Vegas gets zero gas Yeah. And so that's kind of the concept that we've been hanging our hat on to defend again. Because the other piece is we could do it, but it would require technology, geo fencing. It would require additional telematics reporting to us, hey. They left this you know, they crossed this geofence line. And, oh my goodness, we we, you know, we did experiment with that a little during COVID, and it it didn't go well. Just, you know, just the geofencing, people coming into the state or whatever, you know, telling them, you know, in Utah, you need to mask up or whatever. And, people didn't appreciate government knowing that they had crossed invisible lines. So we're you know, that that's something I don't know if it's a lesson that we learned, but it's a it is an ancillary data point that we wanna keep in mind. But we're aware of it, and at some point we may be required to do it, but we think that the downsides right now are more than the upsides. Other states also allow for somebody, if they track it somehow, they can write it off on their yearly taxes, but we don't have a provision for that currently.

[Sen. Andrew Perchlik (Member)]: But but Utahans weren't complaining like, hey. You're charging me a per mile fee, but I actually go to Las Vegas every day and spend all my time in Nevada. Why are you charging me to drive on Nevada Road? Yeah. Is that an issue? Or or Well, I

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: mean yeah. And and again, it's not there aren't enough to create an issue. Like, we the the the issue we've been working on this week is

[Sen. Andrew Perchlik (Member)]: we

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: had somebody from California move to Utah.

[Sen. Andrew Perchlik (Member)]: They actually purchased

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Bought an EV upon arrival and wanted to enroll it immediately in RUC. So we, you know, we ours is because of our issues with the Auto Dealers Association, you can't do it for until month twelve. And so we we're gonna get legislation next month that restarts that fight again. That's that's been the challenge. And we're like, you want us to pay 40 to $60 to recode that because we essentially would be need to become the DMV so that a couple dozen people don't have to wait a year to save a $100. So those are some of the that's that's the main one we're dealing with right now.

[Sen. Andrew Perchlik (Member)]: That shouldn't be an issue for us.

[Sen. Richard Westman (Chair)]: So have you so in get all the pitfalls in it. Have you had the conversation with the vendors about what the cost would be to have a system that allowed them to track in more detail across the quarters, for example?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: It exists.

[Sen. Richard Westman (Chair)]: I know it exists, but have you had the conversation with them about No. With cost?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Again, we're not we are not big enough to move that needle. You know, we we only have and we have literally, 12,000 vehicles that are in, you know, that program in a sea of hundreds of thousands, if not millions of vehicles statewide. We just like to they they don't even know we exist.

[Sen. Richard Westman (Chair)]: K. Thank you.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: The the real you guys in the ZEV community who are actually, I don't wanna say driving, but, influencing the way things go are the ones that we're relying on to to move that needle.

[Sen. Andrew Perchlik (Member)]: K.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: And, I mentioned this earlier. We've actually updated ours based on the to 2026, so I'd be interested to see yours. But we we have basically two fuel tax neutral rates that we are using for our Utah policymakers should they choose to decide that it's time to have an even playing field, and that's 184 if we are not offsetting the rate with the EV charging tax. That EV charging tax goes directly into the transportation fund. We collected almost $3,000,000 with that tax last year. If it is being used, if it is to be used, if we choose as policy to offset the gas tax or the the RUC rate with that EV tax, it would be 1.66¢ a mile. And then you can see our assumptions below. Alright. And then this is what we're working on, trying to continue to reduce admin expenses. Our goal is to get something that is as close to the RAC rate as possible, and so we continue to hammer on admin expenses and then increasing our value proposition, which is explaining to people what it is about the program. Currently, if you drive more than 13,884 miles, which is the cap, then basically a participant, would be better off, obviously, just paying the fee because then they don't have to interact with us every, four months I mean, every three months. And so the other piece is just the the way that they interact with us. So we are constantly trying to figure out how to increase our user experience and the customers' statements to make them more readable and understandable, and our customer service is outsourced to our vendor. So, we have quality audits. They're supposed to answer the phone in less than sixty seconds and have X number of calls result in a positive outcome, etcetera. And so, we continue to monitor that and try to get better, Improving our point of sale RUC enrollment, which means, again, being able to market advertise better. The piece that we just barely talked about with you is interoperability with other States and being able to share mileage and know when people are driving in our state from yours and yours from ours. Talked about the scam mitigation, which is significant. It's been nice the past month or two. We haven't had as many, but last year was really tough on that. I say support vendor community, but what that really means is holding the vendor community accountable to what they've promised in the contract.

[Sen. Wendy Harrison (Clerk)]: I like that, helping them do their job.

[Sen. Andrew Perchlik (Member)]: Yeah,

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: find ourselves doing a lot of that just to survive. Right? You know, we there's, they're saying, hey. You you said you're supposed to do this, and we're gonna look bad if you don't to. We're gonna do it because you're not so that we don't look bad. And we are constantly trying to balance that and move move it to where it's supposed to be. And then like I said earlier, we we are always trying to preserve and optimize that technology side of things even if it's not there. And, right now, we are paying, a lot to preserve that potential. And if push came to shove and we needed to reduce expenses, we could just say, you know what? We're gonna pause that for a couple of years until it gets ready for prime time and then bring it back when it is. And then the last piece is just the full indexing, continuing to educate policymakers on what it would look like if everything were fair and neutral.

[Sen. Richard Westman (Chair)]: Go ahead.

[Sen. Andrew Perchlik (Member)]: Quick question on the indexing. I did see that your projected gas tax on that of the slide was higher than it is now, at least as I understand your tax.

[Logan (Joint Fiscal Office analyst)]: Are you indexing your gas tax?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yes. Yes, we do. Absolutely.

[Sen. Wendy Harrison (Clerk)]: And it just well, I think you've been doing that for years, right?

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yes. Yeah, we have. And in fact, there's some odd reset that is happening this year where inflation has been advancing too quickly and we had some kind of provision in our statute that said you can only go, you know, like, there's a cap even on the CPI to to avoid it getting out of hand, and our our our tax rate is gonna go down a tiny bit this year, and so we're planning for that. And Leith, if he had been here today, would would know a lot more about that because it doesn't impact me, so I haven't paid a lot of attention to it.

[Sen. Andrew Perchlik (Member)]: Just wondering if you can do that.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Yeah, we do. We absolutely. And we've been taking that same CPI amount and adding it each year to the RUC rate until this year when we had that hard reset, and we were just planning on continuing to add it to this year until the Tax Commission and the DMV said no. We're taking the law literal. It says 1.25, and so that's what it's going to be. And next year, you can add CPI to that since there's no hard amount in the statute. And then I also included maybe I didn't. Did is the do you have a final page that includes this?

[Sen. Richard Westman (Chair)]: Yeah. Yeah. Yes. We do.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Alright. That's your bonus content. And that is we actually did some research to try to do a side by side of those four states, including Oregon's current and future major program attributes. I'd love to get your feedback on that. Mean, it's one of those things where we were like, man, we need something. The beauty of being in government is that we're not in competition, we're in coopetition. We want people to do better so that we can steal shamelessly from them, and we want to share so that people don't make the same mistakes that we did. This is our attempt to help people understand this is what people are doing, and this is how they're different and similar. Thank

[Sen. Andrew Perchlik (Member)]: you. It's great.

[Sen. Richard Westman (Chair)]: Pleasure. So any last question? This is for Lyle. Lyle, you've carried us right to lunchtime. Wonderful. We are in the East Coast. This is very helpful. Any further questions for Lyle? If not, we thank you so much. Thank you. This has been very helpful. Your last chart is great. If

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: you have any other questions, obviously, we love to share. We love to And

[Sen. Richard Westman (Chair)]: Megan has all your contact, and now so do we. So Yep. We, very likely will be in touch.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Well, it'd be our pleasure. We'd love to, we'd love to have more company.

[Sen. Richard Westman (Chair)]: Great. Well, thank you so much for helping us understand.

[Lyle McMillan (Director of Strategic Technologies, Utah DOT)]: Right. My pleasure. Great. Have a great day.

[Sen. Andrew Perchlik (Member)]: Bye bye.

[Sen. Wendy Harrison (Clerk)]: You too.

[Sen. Richard Westman (Chair)]: Bye. And at this point, Megan, if you