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Oregon’s pioneering Road Usage Charge Program will present significant opportunities for private businesses.

Senate Bill 810, which earlier this year created the nation’s first operational mileage fee program for transportation funding purposes, also requires state transportation leaders to build private partnerships when the program launches July 1, 2015.

As a result, consumers will be able to purchase from a variety of technologies that meet Oregon Department of Transportation standards, said James Whitty, manager of ODOT’s Office of Innovative Partnerships and Alternative Funding.

Whitty has worked since 2001 on the development of road user fees as a gas tax replacement.

“This is going to be a game changer for the nation when we show the system is operational and it works,” he said. “It will be a viable alternative to the gas tax.”

With federal gas tax revenues waning for reasons such as the increasing prevalence of more fuel-efficient vehicles, state transportation leaders are looking for other ways to both pay for future road projects and integrate users with advanced technology, Whitty said.

The legislation compensates for privacy concerns that ODOT would be able to track users on their GPS systems by providing choices for motorists. Safeguards were put in place, including removing the GPS requirement as well as limiting who would have access to the data and for how long.

“We figured out how to remove the public angst so the Legislature could pass the program,” he said.

According to SB 810, through the program users will pay a 1.5 cent per mile tax for using state roads, but receive credit on fuel taxes paid at the pump and potentially get a refund or owe additional taxes.

The mileage will be calculated by a variety of ODOT-approved technology, including GPS and other systems, Whitty said.

“People will have the opportunity to choose from technologies already available in the marketplace,” he said. “Some of those available technologies might have GPS. Others will not. It will be up to the motorists to decide.”

Oregon, which already has legislation and a successful pilot program to draw from, is about five years ahead of the rest of the nation, Whitty said. The state partnered with Washington and Nevada earlier this year on a three-month pilot program involving 88 volunteers. The program starting in 2015 will have up to 5,000 volunteers, he said.

Rep. Tobias Read, D-Beaverton, participated in the smaller program and said there was only one small payment-related kink. But that could easily be worked out by 2015 via additional testing, he said.

Otherwise, Read said, the program worked seamlessly, discounting the amount paid in fuel taxes at the pump from the amount owed on mileage. He ended up paying between $1 and $2 extra per month, he said.

Read represents a district that includes many Intel and Nike employees who are comfortable with using technology, he said.

“Oregon is the leader on this,” he said. “Keep in mind we are looked at as leaders. “If we do get this implemented well, we might enjoy some significant economic benefits.”

Read liked the model that had been established where government set the standards and the private sector determined the technology, he said.

“We could create an industry cluster around this with apps and other products,” he said. “Imagine being at your desk at work and you get a text message. You typically drive this route home, but (the app says) you should take another route.”

Representatives from businesses including Xerox, IBM, Verizon and Intel last month attended the Oregon Road Usage Charge Summit in Portland looking for opportunities to partner with the state on the program. Representatives of more than a dozen other state transportation departments also attended, according to the attendance list provided by Whitty.

John Walsh, co-owner of Portland-based Sifore Technical Sales LLC, attended the summit last month as an extended Intel sales representative.

Intel has created a division called the “Internet of Things,” which connects different systems and networks and broadens the company’s reach into new market segments and applications.

“Intel has an end-to-end strategy of more intelligent and secure devices,” Walsh said. “I was there to understand what the state needs and develop ecosystem partners. There are a lot of pieces to the puzzle and Intel has a lot of the pieces.”

While attending the summit, Walsh learned from a presentation by U.S. Rep. Earl Blumenauer, D-Ore., that tracking miles on a car would be just the tip of the iceberg of market possibilities under the new program. The system could be connected to a larger network that would include smart cities, Walsh said.

Scaled out nationally, the networks could create significant revenues for companies down the road, he said.

“The amount of miles driven is trivial,” he said. “You can do lots more with that. Envision if you had a smart enough car. Systems can tell you where parking lots are available. They could time lights to go on and off with traffic. It is a 10-to-20-year vision.”

Private firms will have the opportunity to manage accounts and create new systems that would be integral to the proposed program. ODOT in March will issue a request for qualifications for vendors to submit plans for participating in the Road Usage Charge Program.