Why consider a Vehicle Miles Traveled (VMT) Fee?
Key reasons for developing a VMT fee include:
- Providing jurisdictions with a method of funding transportation infrastructure projects that will reduce the growth of VMT, potentially providing a VMT impact mitigation option consistent with Senate Bill 743;
- Increasing opportunities to align mitigation of development impacts with other goals, such as improved safety, mobility and equitable access to affordable multimodal transportation systems; and
- Supporting the jurisdiction’s designation as a Connected Community Priority Development Area (CC-PDA), if adopted in concert with a Parking and Transportation Demand Management (PTDM) policy.
What is a Vehicle Miles Traveled Fee?
VMT fees on land use developments provide jurisdictions a method of collecting funds for the mitigation of VMT-related transportation impacts which can be used to fund transportation infrastructure projects that will reduce the growth of VMT.
Depending on the structure of the fee that is implemented, VMT fees may also offer a VMT mitigation option consistent with SB 743. VMT fees may be applied to a designated capital improvement program (CIP) inclusive of transit, bicycle and pedestrian projects identified to mitigate development impacts on the transportation system by reducing the jurisdiction’s VMT. CIP projects may include project-adjacent spot improvements as well as corridor-wide improvements. Fees can be applied to a wider swath of CIP projects if deemed appropriate after completion of a nexus study. These programs also offer the opportunity to align mitigation of development impacts with other goals, such as improved safety, mobility and equitable access to affordable multimodal transportation systems.
A VMT fee may take the form of a traditional development impact fee pursuant to the Mitigation Fee Act (Assembly Bill 1600). These fees may apply to all development in a jurisdiction to fund identified projects, but payment of the fee would not serve as mitigation for a significant California Environmental Quality Act (CEQA) VMT impact. Alternatively, agencies may establish an in-lieu fee program that provides a mechanism for applicants to offset significant CEQA VMT impacts; however, only projects with a significant CEQA VMT impact would pay the fee. There is no state statute outlining specific requirements for in-lieu fee programs, but such programs should demonstrate that the CIP projects funded through the program have a linkage to VMT reduction.
Other VMT mitigation options that may be considered by jurisdictions include establishing a VMT mitigation exchange or VMT mitigation bank. For a full description of tradeoffs to consider related to development of various VMT mitigation options, see the report VMT Mitigation Through Fees, Banks, & Exchanges. Consultation with the City Attorney or County Counsel is essential to the development of a fee program that aligns with the jurisdiction’s goals and with legal requirements.
Jurisdictions interested in pursuing a CC-PDA designation may use a VMT fee for off-site improvements and a complementary PTDM plan to satisfy the VMT reduction planning requirements for CC-PDAs.
Key Planning Steps
The steps to develop a VMT fee are listed below. Refer to the VMT Fee Policy Development Guide for more detailed guidance
- Establish leadership and clarify plan objectives
- Identify a champion
- Convene a working group
- Identify and contact stakeholders
- Identify what kind of fee type to develop
- Solicit consultant services (optional)
- Develop and release a Request for Proposals (RFP) (VMT Fee Request for Proposals (RFP) Template)
- Review proposals and select a consultant
- Finalize the contract
- Develop the fee program
- Collect data and/or facilitate access to data sources
- Review existing plans and policies
- Determine the applicability of the fee program
- Develop the capital improvement program (VMT Fee Project Selection Worksheet)
- Conduct nexus analysis and develop the fee schedule (see scope of work in VMT Fee Request for Proposals (RFP) Template)
- Implement the fee program
- Draft staff reports to support council action (see VMT Fee Staff Reports)
- Fulfill annual reporting requirements (see VMT Fee AB 1600 Annual Impact Fee Report Template)
In addition to the guidance linked in the key planning steps above, the following sample documents are provided: