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    Document Summary
    - Report Published -

    Senate Document No. 4
    PUBLICATION YEAR 2008

    Document Title
    Fuel Efficient Vehicles and Transportation Funding

    Author
    Division of Legislative Services, Joint Subcommittee

    Enabling Authority
    SJR 385 (Regular Session, 2007)

    Executive Summary
    [The Executive Summary was updated by the Joint Subcommittee and released for publication on January 16, 2008.]

    Joint Subcommittee Studying Fuel Efficient Vehicles and Transportation Funding (SJR 385 - 2007)

    During the 2007 Session of the General Assembly, the General Assembly passed SJR 385 which established a joint subcommittee to study fuel-efficient vehicles and transportation funding.

    Senator Frank W. Wagner, the patron of SJR 385, served as chairman of the joint subcommittee, and Delegate G. Glenn Oder served as vice-chairman of the joint subcommittee. Other legislative members of the joint subcommittee were Senator Patricia S. Ticer, Senator John C. Watkins, Delegate Jeffrey M. Frederick, Delegate L. Scott Lingamfelter, Delegate Stephen C. Shannon, and Delegate Shannon R. Valentine. The two nonlegislative citizen members of the joint subcommittee were Mr. Hugh Montgomery and Mr. Thaddeus J. Nowak. The Secretary of Transportation, Pierce R. Homer, and the Secretary of Finance, Jody M. Wagner, also served as the ex officio members of the joint subcommittee. The joint subcommittee met twice during 2007 on September 12 and December 13.

    The joint subcommittee was instructed to review "study long-term solutions for transportation funding that are not dependent upon revenue generated from a motor vehicle fuels tax."

    In addition, the joint subcommittee was requested to "consider ways to promote the use of hybrid and fuel-efficient vehicles, which might include the development of tax incentives for the use of such vehicles."

    In furtherance of the resolutions' aims, the joint subcommittee reviewed current methods of transportation funding in the Commonwealth, which will not keep pace with new energy technologies being used for motor vehicles. To that end, the joint subcommittee heard testimony on September 12, 2007 from John R. Layman, Director/Chief Economist at the Virginia Department of Taxation, Office of Revenue Forecasting and George E. Hoffer, Ph.D., Professor of Economics at the Virginia Commonwealth University. On, December 13, 2007, Jonathan Gifford, a professor at George Mason University’s School of Public Policy, testified before the joint subcommittee. While Mr. Layman discussed motor fuels collections in Virginia, Professor Hoffer discussed fuel-efficient vehicles expected to come in the next five years and his model highway user tax system. In suggesting methods of transportation funding that would keep pace with new energy technologies, Professor Gifford noted that the General Assembly could index the fuel tax, eliminate fuel tax exemptions, reduce transfer payment to transit, and/or increase gas sales tax. He also proposed that the General Assembly could advance electronic tolling (e.g., extending HOT lanes, creating more public toll lanes, utilizing road metering) or adopt other taxes and fees like local option taxes, congestion prices, and an ad valorem gas tax. Finally, Professor Gifford suggested, in detail, more use of public-private partnerships in road projects.

    The joint subcommittee heard testimony in support of the resolution’s propositions that (1) renewable energy sources are being developed that have possible applications in motor vehicles and (2) the use and development of alternative energy and fuel sources are important for the Commonwealth's economic development and the environment. Such testimony was given by both Mr. Al Christopher, Executive Director of Virginia Clean Cities and Mr. Chad Freckmann, Director of Blue Ridge Clean Fuels. Mr. Christopher suggested that Virginia can help promote vehicle fuel efficiency and advanced technology vehicles like hybrid electrics and hydrogen, and alternative fuels like biodiesel and ethanol by (1) leading by example and buying, as a large fleet owner, efficient vehicles and using alternative fuels, and (2) dedicating a source of funds so that it is possible to buy fuel efficient vehicles and use alternative fuels, even when economic conditions are negative. According to Mr. Freckmann, the Commonwealth can promote hybrid and fuel efficient vehicles through varied means, such as (i) the Department of Motor Vehicles providing fuel efficiency reminders with all communications, (ii) the Department of Education adopting a driver’s education curriculum that incorporates alternative transportation technologies, and (iii) the Commonwealth providing incentives to all 302 Virginia high schools to purchase fuel efficient, hybrid, and alternative fuel vehicles for behind-the-wheel programs.

    Furthermore, the joint subcommittee heard testimony about the federal energy bill that was then pending in Congress. Professor Gifford and Anne Gambardella, Esq., Director of Legislative and Legal Affairs, Virginia Automobile Dealers Association, both gave relevant testimony. Ms. Gambardella also discussed the history, enforcement, implementation, and impact that California has on fuel economy standards in vehicles.

    No formal report embodying any legislative recommendations of the joint subcommittee will be submitted as a Senate Document to the 2008 Session. The joint subcommittee, however, concluded that based on current gas prices, current consumer demand, and Congress’ recently-enacted CAFE standards, the current methods of transportation funding in the Commonwealth will not keep pace with new energy technologies being used for motor vehicles (e.g., hybrid vehicles; increased use of alternative fuel) and the Commonwealth will see a decrease in motor vehicle fuels tax revenues. Such conclusions coincide with the legislative findings stated in Senate Joint Resolution 385.

    The joint subcommittee's Internet web page can be found at: http://dls.state.va.us/FEV.htm.