2025’s much anticipated Road Usage Charge (RUC) bill, from Rep. Jake Fey (D–Tacoma), has been introduced, with positive news for local governments.
HB 1921 (companion to SB 5726) establishes a new transportation revenue source for the state based on “motor vehicle use of public roadways.” It imposes a 2.6 cents per mile fee, due at the time of vehicle registration renewal, for the previous 12-month period. The fee amount was chosen to “maintain the same net level of revenue as the fuel tax rate generates today,” and will automatically increase if and when the motor vehicle fuel tax increases. To avoid double taxation through the gas tax and the RUC, vehicle owners will be credited for the amount they paid in gas tax over the 12-month period they are charged for the RUC.
Revenues from the program must be used for preservation and maintenance highway purposes only. The bill maintains the same distribution formulas of the state motor vehicle fuel tax, meaning cities and towns will receive 6% of RUC revenues.
Unlike previous RUC proposals, HB 1921 includes a 10% assessment on all participating vehicles once the program becomes mandatory. The assessment is designed to generate funds to support the state’s multimodal transportation system to mitigate the demands placed on the roadway system. Proceeds may be used for rail, bicycle, pedestrian and public transportation.
The RUC is phased in over time, beginning as a voluntary program for electric and hybrid vehicles (EVs) from FY 2027-’29. The state’s EV registration fees are waived for program participants. The voluntary program kicks in beginning FY 2029-’31 for internal combustion engine vehicles (ICEVs) with a fuel economy rating of 20 miles per gallon or higher. Eligible vehicles are those that can travel faster than 35 mph and weigh 10,000 pounds or less.
The program becomes mandatory beginning in FY 2029 for EVs. For ICEVs, the mandatory program is phased in each year based on fuel economy ratings, beginning FY 2031 for ICEVs with 40 miles per gallon or higher, the economy rating diminishing at regular intervals each year through FY 2035.
The program will be administered by the Dept. of Licensing (DOL). Participants must report miles driven through periodic odometer mileage submissions. DOL may offer vehicle owners options for automated reporting methods.
Currently, the Transportation Improvement Board (TIB) receives 15% of the proceeds of the electric vehicle fee after the first $1 million is collected; however, the EV fee waivers provided in the bill would reduce these proceeds. Unfortunately, as written, the bill does not contemplate an adjustment to ensure that investments into TIB are maintained. Cities rely heavily on TIB to support and fund transportation projects like pavement preservation.
Personal privacy concerns are addressed in the bill by prohibiting DOL from collecting geographic location information, unless the vehicle owner provides express, written consent to reporting such information. DOL is also charged with implementing and maintaining “reasonable security procedures and practices to protect” vehicle owner information.
The bill includes several other provisions, including:
- Exemptions from the RUC.
- Direction to DOL and the state Transportation Commission to conduct public outreach and education regarding the RUC.
- Direction to the Joint Transportation Committee to study various aspects of the RUC, including exploring “possible local jurisdiction revenue-generating mechanisms that could be used to complement the RUC.”
- Instructions for DOL’s, county auditors’ and other agents’ management of vehicle sales and title transfers as they relate to the RUC.
AWC supports the bill and encourages cities and towns to sign in support as well.
Date to remember
HB 1921 is scheduled for public hearing in the House Transportation Committee on Thursday, February 13, at 4 pm.