By Jay Landers

Over the long term, continued reliance on taxes based on gasoline, diesel, and alternative fuel consumption to pay for U.S. highways and bridges is a losing proposition. With improving gas mileage and electric vehicles, the historical link between fuel usage and highway funding is breaking down.

Against this backdrop, multiple states have researched or pilot-tested alternatives to fuel taxes, seeking to tie user fees more closely to actual road usage. Such alternatives typically involve the use of vehicle-miles-traveled fees, which are also known as mileage-based user fees. To date, four states — Hawaii, Oregon, Utah, and Virginia — have adopted voluntary MBUF programs. Currently, no states have mandatory programs.

Such programs typically focus on passenger vehicles rather than commercial vehicles because the latter can be subject to extensive reporting requirements regarding service hours, fuel consumption, and the like. Looking to ensure that commercial vehicle operators have a say in future alternatives to fuel taxes, the Eastern Transportation Coalition has conducted a series of pilot studies involving motor carriers. Comprising the departments of transportation of 17 Eastern states and the District of Columbia, the coalition is a partnership that seeks to increase safety and efficiency by connecting public agencies representing various travel modes.

In mid-September, the coalition released a report, Mileage-Based User Fees: 2022 International Truck Pilot, that summarized the findings of its most recent pilot study, conducted last year. This study assessed options for implementing an MBUF on trucks traveling throughout the United States and Canada.

In its report, the coalition highlights the utility of such an approach while noting that certain challenges unique to the trucking industry must be addressed before implementation of an MBUF for commercial vehicles.

4 goals

Conducted between June 1, 2022, and Nov. 30, 2022, the International Truck Pilot involved 253 trucks traveling a combined total of more than 8 million mi in four Canadian provinces, the District of Columbia, and every U.S. state except Hawaii.

The pilot project had a number of goals, according to the report, which was prepared by Newroad Consulting. The first goal was to expand the diversity of the pilot fleet to assess the technical feasibility of including all commercial vehicles in the existing reporting structure. (This reporting structure includes two agreements, the International Fuel Tax Association Inc. and the International Registration Plan Inc., which are used to apportion among U.S. states and Canadian provinces the fuel taxes and registration fees from commercial vehicles that operate in multiple jurisdictions. Currently, most commercial vehicles weighing less than 26,000 lb are not subject to reporting under this structure.)

To this end, pilot participants were selected with an eye toward ensuring diversity of vehicle weight, operation, and fuel type. Of the 14 motor carriers participating in the pilot, there were two mega carriers operating 400 or more trucks, five large carriers with 51-399 trucks, four midsize carriers with 11-50 trucks, two small carriers with three to 10 trucks, and one owner-operator with two or fewer trucks. Participating vehicles ranged in weight from less than 10,000 lb to more than 26,000 lb, used diesel or gasoline as fuel, and engaged in a mix of intrastate, interstate, and international operations.

Another goal of the pilot, according to the report, included developing, testing, and analyzing a scalable, weight-based rate-setting approach that can be uniformly applied to motor carriers operating in any jurisdiction and exploring how a uniform approach might affect states’ sovereignty. The pilot also sought to examine the technical feasibility of leveraging existing reporting clearinghouses to facilitate MBUF data processing and exchange.

Assessing user fees

During the pilot, participating trucks were equipped with a mileage-recording device. Data recorded by the device were used to generate for each of the 14 participating companies a simulated statement detailing their hypothetical user fees accrued as part of the pilot.

As part of the process of setting MBUF rates, the pilot used the following four weight categories based on the registered weights of vehicles:

  • 10,001 to 26,000 lb.
  • 26,001 to 40,000 lb.
  • 40,001 to 54,999 lb.
  • 55,000 lb and above.

For each weight category, a cents-per-mile rate was developed based on a formula that incorporated existing tax rates by jurisdiction for gas and diesel.

To test the scenario in which some states have an MBUF and others retain their fuel taxes, the pilot calculated fuel taxes for Canadian provinces, rather than user fees.

Key findings

Among its key findings, the pilot determined that an MBUF offers a workable approach that can be incorporated within existing reporting systems. “With some modifications and/or modernization, the current framework used by motor carriers to report travel and reconcile fuel tax in a jurisdiction can be adapted for MBUF application, regardless of fuel type, interstate, intrastate, or international travel, and considering multiple weight categories, as long as a uniform standard is applied consistently within each jurisdiction,” according to the report.

That said, applying MBUFs to all commercial vehicles “would necessitate intrastate operators and companies with vehicles under 26,001 pounds to maintain distance records (and) file and report operations not currently required in most jurisdictions for these vehicle types,” the report states.

A weight-based MBUF could help users better understand the connection between road use and its associated costs, according to the report. “An MBUF approach, utilizing weight, can provide a more transparent and accurate cost for road use, as it directly correlates with the actual mileage traveled,” the report states.

Along with restoring the link between road use and infrastructure funding, the pilot found that an MBUF system potentially could simplify recordkeeping procedures. A uniform MBUF system can provide a “consistent framework that can significantly reduce administrative costs for both motor carriers and agencies,” according to the report. Meanwhile, the pilot also determined existing clearinghouse frameworks can be adapted to handle an MBUF, but roles and responsibilities need to be clearly defined, the report states.

Further study needed

Ultimately, the results of the pilot help highlight the needs of the commercial vehicle industry regarding the development of mileage-based approaches to user fees, says Lisa Miller, the innovation program associate for the Eastern Transportation Coalition.

“Trucks are not just big cars,” Miller says. “The complexity of the motor carrier industry has to be taken into consideration when we're talking about an MBUF or any kind of road user charge. If an MBUF is implemented, the approach for truckers has to be different than that of a passenger car.”

In its report, the coalition calls for further investigation into the use of MBUFs. Among the subjects requiring greater scrutiny are the potential effects on motor carriers that are not currently subject to reporting schemes and how to account for alternatively powered vehicles.

The coalition’s research was funded by the U.S. Department of Transportation’s Surface Transportation System Funding Alternatives Program. Created by the Fixing America's Surface Transportation Act of 2015 and administered by the Federal Highway Administration, the program provides grants to states to demonstrate user-based alternative revenue mechanisms that utilize user fees to maintain the long-term solvency of the Federal Highway Trust Fund.

The FHWA declined to comment on the findings of the coalition’s report.

This article is published by Civil Engineering Online.