Revenue from alternative-fuel vehicles catches attention in 10 states

State officials concerned about lost funds.

May 2019

Keith Goble

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As states continue to wait on the federal government to reach a transportation funding deal, work continues at statehouses to come up with their own solutions to help boost transportation funding. Among the options getting attention in legislatures from the Pacific Northwest to the Appalachians is tapping alternative-fuel vehicles for additional revenue.

In an effort to encourage people to pursue more fuel-efficient options, many states now offer financial incentives for hybrid and electric vehicle owners. As popularity for such vehicles is expected to grow, however, more state officials are concerned about the lost transportation revenue that results from fuel-efficient vehicles.

According to the National Conference of State Legislatures, 20 states impose additional fees for registering and licensing certain vehicles. Below are some notable efforts at statehouses to raise revenue from hybrid and electric vehicles.

Alabama

New annual flat-rate registration fees on electric vehicles are on the books in Alabama.

Included in a new law to raise the state’s fuel tax rate by 10 cents is an annual tax on electric vehicles of $200. Additionally, HB2 will collect an annual tax of $100 on plug-in hybrid vehicles.

Arkansas

Gov. Asa Hutchinson has signed into law a bill to raise road revenue via a new wholesale fuel tax, increased license fees on hybrid and electric vehicles, and through other means.

Previously SB336, the new law is estimated to raise nearly

$100 million annually for the state Department of Transportation. Increasing registration fees for hybrid and electric vehicles will raise $1.9 million.

Kansas

The House has voted to advance a bill to impose a new annual vehicle registration fee of $75 for certain plug-in hybrid electric vehicles. A $150 fee would be charged for all-electric plug-in vehicles.

Estimated to raise $610,000 initially, the fees would kick in on Jan. 1.

HB2372 has moved to the Senate where a similar version, SB189, is in committee.

Minnesota

Legislation introduced in both statehouse chambers would more than triple the annual fee for owners of electric vehicles.

SF1409 would raise the surcharge for electric vehicles from $75 to $250. Hybrid vehicle owners would also be charged a new fee of $125.

Gov. Tim Walz included in his budget proposal a plan to raise the fee on electric vehicles to $100. The revenue would be used to help cover costs for charging stations.

The House version is HF2026.

Nebraska

The state of Nebraska collects a $75 annual fee for alternative-fuel passenger vehicles.

LB366 would raise the rate to $85 in 2020. Additional increases to $95, $105 and $115 would be imposed through 2023. The rate would settle at $125 by 2024 and each year thereafter.

North Dakota

One bill nearing passage at the statehouse would boost transportation funding via electric and hybrid vehicles. Additional revenue would be used to help cover costs for road upkeep and construction.

House lawmakers voted to approve collection of a $120 annual “road use fee” on electric vehicles. Hybrids would see a $50 yearly fee.

SB2061 has moved back to the Senate for approval of changes to the fee on electric vehicles. The Senate voted to collect a $110 annual fee on affected vehicles.

The bill would also set up a legislative study on the infrastructure needs for electric cars.

Revenue estimated in excess of $200,000 annually would be used for state and local roads, and transit.

If agreed upon by both chambers, the bill would head to the governor’s desk.

Ohio

Gov. Mike DeWine has signed into law the two-year transportation budget.

The budget includes a 6-cent fuel tax increase. Additionally, electric vehicle owners would pay a $175 yearly fee. Hybrid vehicle owners would pay $75 annually.

Texas

A bill in the House Transportation Committee would impose an additional fee for the registration of electric and hybrid vehicles.

HB1971 would collect an additional fee of $200 for electric vehicles and $100 for hybrid vehicles.

The bill is estimated to raise

$55 million over the next two years for the state’s highway fund.

Washington

The House Transportation Committee voted to advance a bill to collect additional revenue from electric vehicle owners.

SB5971 would double the fee for electric vehicles from $150 to $300. Additionally, a new $50 fee would be charged for hybrid electric vehicles.

The bill has moved to the House Ways and Means Committee.

Wyoming

Gov. Mark Gordon has signed into law a bill to collect more revenue from alternative-fuel vehicles.

State law requires plug-in electric cars to have a decal costing $50 each year.

HB166 increases the annual fee for plug-in electric vehicles to $200.

A provision was removed for hybrid vehicle owners to need a sticker costing $100 annually. LL

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.