Hawaii launches the fourth light RUC programme in the United States, with much more to come

Phase 1

1 July saw the launch of the fourth US state (following Oregon, Utah and Virginia) to implement an operational RUC system for light vehicles (as distinguished from the five states with weight-mileage taxes for heavy vehicles).  Known as HiRUC, it follows two pilots and extensive consultation, and reflects the relatively high take-up of EVs in the state of Hawaii (3.5% of light vehicles are battery electric vehicles (BEVs) or plug-in hybrids (PHEVs).

HiRUC affects around 38,000 vehicles, being EVs with a gross vehicle weight of 10,000 pounds or less (around 4.5 tonnes).

Phase 1 of HiRUC provides a choice for owners of battery electric vehicles (BEVs) to either pay an annual fixed fee of US$50 or to pay per mile at a rate of US$0.008 (up to a cap of US$50). In effect, the RUC option means those who are likely to drive fewer than 6250 miles per annum can pay less.

The system will be implemented by odometers being checked at annual vehicle safety inspections and reported to the Department of Transportation. BEV owners will receive an invoice for RUC at the time of their annual registration renewal. The RUC invoice will be based on the vehicle safety inspection reading of the odometer. This will be the first US RUC system based on odometer readings at safety inspections.  Vehicle at the time of re-registration will choose whether to pay the US$50 or go onto RUC.

Payment for RUC is collected at the same time as the registration renewal.  

New BEVs will be placed on the flat fee at first registration, and owners can choose to remain on it, or switch to RUC after their first safety inspection.

It's important to note that this is meant to resemble the State Gas Tax, not the US Federal Gas Tax. Noting there is also County Gas Tax (and separate work underway to consider how counties could have their own RUC collected through the same means). 

Vehicle owners that select a flat fee can change onto RUC at their next renewal (those on RUC have no need to, as their payments are capped at US$50).

Pilots

Before implementation, the Hawaii Department of Transportation undertook studies and two key pilots. The first was in 2019-2020 when 359,659 residents received Driving Reports comparing what they paid in fuel tax (based on miles driven and the average vehicle efficiency of their vehicle) to what they would have paid had there been RUC at the same level.  This was an important start to engaging with the public on RUC as a replacement to the gas tax. 

This was followed up by a pilot with 2,129 participants including a range of mileage reporting options. That included smartphone odometer imaging and plug-in devices (into OBD2 ports) with and without GPS location identification. Odometer image capture was most popular.

An archive of the previous work is available here, along with a factsheet about the new system and the relevant legislation.

Phase 2

From 1 July 2028, the fixed fee will be scrapped and all light BEVs will be required to be on HiRUC. Work on designing that transition is underway, as this will be the first mandated light RUC system in the United States (all others still have the choice of an annual flat fee or RUC).  The obvious question will be whether the US$50 cap will remain in place, noting there is no such gap for the State Gas Tax.

Beyond 2028

Act 222 (the legislation introducing HiRUC) requires that HDOT to develop a Long-Term Transition Plan to transition all light-duty vehicles to RUC by 2033.  So placing all BEVs on RUC is very much a step towards a much bigger shift. This will consider when and how to include PHEVs and other hybrid vehicles, but also all gasoline powered vehicles and the future of the State Gas Tax. Noting this is only for light vehicles, so medium and heavy vehicles will have to wait.  The State Gas Tax can't be scrapped when those vehicles are paying it.

Still, no other US state has indicated a proposed deadline for transitioning ALL light vehicles to RUC.  Only Iceland and New Zealand have such policies (albeit in both cases ALL vehicles), and almost certainly Iceland will be the first to achieve it.  

Hawaii has a range of advantages. Its islands are small, there is not only no international nor inter-state traffic, there is very little inter-county traffic as there are no roll-on/roll-off ferries to enable people to take cars conveniently between the islands.  Nevertheless, while there are stereotypes about Hawaii operating more slowly than the continental United States, that is all they are.  Hawaii has shown that with some clarity of objectives, solid engagement with the public and stakeholders, and clear policy analysis around options, RUC can be implemented relatively swiftly and efficiently.

Hawaii becomes latest US state to legislate for road user charging

Following on from Oregon, Utah and Virginia, Hawaii is the latest US state to introduce road user charging (RUC) (called road usage charging in the US) as a revenue raising measure.  

Senate Bill 1534 has been signed into legislation by Governor Josh Green and is now Act 222, following two sets of pilots into distance based road charging in the State.

The Act does the following in respect of RUC:

• Eliminates the US$50 state annual registration surcharge from 1 July 2025. 
• Until 30 June 2028, requires EV owners to choose either to pay a $50 per annum fee or a per mile rate of US$0.008 (0.8c per mile) to be reported annually at vehicle safety checks. 
• From 30 June 2028, RUC will be mandatory for all EVs. 
• A plan is to be developed to implement RUC for all cars and light-duty trucks by 2033 and report to the Legislature about that plan. 

This is more advanced than RUC in any other US state, as Oregon, Utah and Virginia all provide the option of paying an annual flat fee and can then drive as many miles as the vehicle owner wishes. Hawaii will enable that option only until 2028, after that date, RUC will be mandatory. This is much closer to RUC in Victoria, Australia and in New Zealand.

More importantly, the legislation lays the path towards moving ALL light vehicles onto RUC, and therefore away from fuel tax, which is much more forward thinking than other jurisdictions (including Victoria and New Zealand).

RUC in Hawaii will effectively be reported using odometers, inspected at the state's mandatory annual vehicle safety inspections. 

Important to remember Hawaii not only has state gas tax that this is intended to progressively replace, but county based fuel taxes, and this program will aim to try to replace them as well (although not the Federal tax on fuel, which pays into the Federal Highway Trust Fund).

This followed an extensive pilot program to test RUC with the public in Hawaii, seen in the HiRUC final report here.  This website has a good description of that program. This followed the previous Hawaii Road Usage Charge Demonstration Program (PDF). 

Disclaimer: Throughout the Hawaii Road Usage Charge Demonstration and the HiRUC project, Milestone Solutions (now part of CDM Smith, and previously called D'Artagnan Consulting) was the lead contractor responsible for delivering Hawaii’s research and demonstration program including public and stakeholder outreach, policy and financial analysis, technical and system design, implementation, and evaluation of results. I worked on several elements of the HiRUC project.

Tolls floated for Hawaii

A bill has been introduced into the Hawaiian House of Representatives that would allow tolling of existing state highways if an alternative route (untolled ) is available according to TV station KHON.



Although in theory this would allow for congestion pricing, DOT Director Glenn Okimoto says he would use it to allow for new roads to be built. Chairman of the House Transportation Committee Representative Joe Souki said that he saw Hawaii as perhaps having no alternative but to allow for privately owned toll roads to be built.

Hawaii has no toll roads at present, so this bill would open up some possibilities for the state. Like others, it faces pressure from declining fuel tax revenues with political difficulties in getting tax increases to make up the difference. It will be interesting to see if this bill gets passed and whether Hawaii joins the tolling world.