Legislators in nine states pursue changes to electric, hybrid vehicle fees

February 10, 2021

Keith Goble

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Work continues at statehouses around the country to supplement transportation funding via electric and hybrid vehicles.

In an effort to encourage people to pursue more fuel-efficient options, 45 states offer financial incentives for hybrid and electric vehicle owners. According to the National Conference of State Legislatures, less than 2% of all light-duty car sales across the nation are for electric vehicles.

However, as popularity for such vehicles is anticipated to grow, state officials are increasingly concerned about the lost transportation revenue that could result from fuel-efficient vehicles.

The NCSL reports that 28 states impose a special registration fee for plug-in electric and/or plug-in hybrid vehicles. Fees range from about $50 annually for plug-in hybrid vehicles in Iowa to $225 yearly for plug-in electric vehicles in Washington.

Arizona

Alternative-fuel vehicles are one source of revenue being eyed in Arizona to help address transportation funding needs.

A House bill would impose an annual tax rate on electric vehicles and vehicles that use a combination of fuel and electric power, or hybrids.

The tax rate for electric vehicles would be set at $111 the first year. In year two, the rate would increase to $139. The year after, the rate would rise to $166.

Hybrid vehicles would be taxed at $45 the first year. The rate would increase to $56 the second year and to $67 the following year.

Once fully implemented, both tax rates would be adjusted annually.

The bill, HB2437, awaits consideration in the House Transportation Committee.

Arkansas

Two Arkansas Senate bills would reverse course on the state’s pursuit of additional revenue via alternative fuel vehicles.

In 2019, the state authorized an additional registration and annual renewal fee of $100 to be collected from hybrid vehicle owners. An additional $200 fee was applied to electric vehicle registrations.

The registration and renewal fees for hybrid and electric vehicles are estimated to raise $1.9 million annually.

The first bill, SB225, would reduce the additional registration fee and annual renewal fee for hybrid vehicles to $50.

The second bill, SB117, calls for completely removing the additional $100 fee.

Elimination of the annual fee is estimated by the state’s Department of Finance and Administration to reduce revenue by $2.2 million. Cutting the annual fee in half would trim revenue by $1.1 million.

Both bills are in the Senate Transportation, Technology and Legislative Affairs Committee.

Florida

Two Florida bills call for collecting more money from owners of electric and hybrid vehicles.

A $135 flat fee would be applied to license an electric vehicle up to 10,000 pounds. The rate would increase to $150 in 2025.

Affected vehicles weighing at least 10,000 pounds would include a $235 license fee. The fee would be raised to $250 in 2025.

Hybrid vehicle owners would be responsible for paying a $35 licensing fee. The amount would increase to $50 in 2025.

Revenue raised via the licensing fees would be deposited into the state’s Transportation Trust Fund.

The bills, SB140 and HB819, await consideration in committees.

Montana

One idea getting attention at the Montana statehouse to boost transportation funding would tap electric vehicles to help cover costs for road upkeep and construction. The fee would not apply to hybrid vehicles.

The bill would implement a new annual fee on all electric vehicles registered in the state. Specifically, affected vehicles under 6,000 pounds would be charged $100. Affected vehicles over 6,000 pounds would be charged $150.

The House Transportation Committee recently held a hearing on the bill.

House Transportation Chairman Denley Loge, R-St. Regis, told the committee the annual cost would be cheaper than what fuel-powered vehicle owners pay for pump taxes.

A fiscal note attached to the bill reports there are 996 electric vehicles in the state. The number of such vehicles is expected to grow annually.

The proposed fee is estimated to raise $161,000 by fiscal year 2025.

The committee did not vote on HB188.

Oklahoma

Electric and hybrid vehicles are the focus for collecting additional road revenue at the Oklahoma statehouse.

Bill sponsors say the effort is intended to ensure all vehicles using Oklahoma highways are contributing to the cost of maintaining the systems in a “fair and equitable manner.”

HB2234 would enact a 7-cent per kilowatt hour tax at public for-profit charging stations. Specifically, a vehicle with a 50kw battery could fully charge for a tax of $3.50 or less.

In-state electric vehicle owners would be eligible for a tax credit up to the amount of their annual registration for fees paid at public charging stations.

Advocates say the tax would permit the state to collect revenue from out-of-state vehicles.

Additionally, an annual vehicle registration fee would be applied for electric vehicles. The fee would vary based on vehicle model.

“While some states have passed laws that are punitive to the electric vehicle industry, the intent of this legislation is simply equity,” bill sponsors said in a joint statement.

The bill is in the House Appropriations and Budget Committee.

South Dakota

In South Dakota, the House voted 51-18 to enact an annual flat-rate registration fee on many electric vehicle owners. The rule would not apply to hybrid vehicles.

The bill, HB1053, would charge affected noncommercial vehicle owners $50 annually for registration.

An estimated $8,000 annually would be directed to the state’s road maintenance fund.

“It’s time to put this plan in place so we have the system to be able to tax alternative-fuel vehicles,” Rep. Mark Willadsen, R-Sioux Falls, said while speaking on the House floor.

The bill has moved to the Senate Transportation Committee.

Texas

One Lone Star State legislator is trying again to impose an additional fee for the registration and renewed registration of electric and hybrid vehicles.

Rep. Ken King, R-Hemphill, has introduced a bill, HB427, to collect an additional fee of $200 for electric vehicles and $100 for vehicles that use a combination of fuel and electric power, or hybrid vehicles.

In 2019, King introduced an identical bill.  The effort received a public hearing but the House Transportation Committee failed to advance the bill.

Collecting the additional fees is estimated to raise $55 million over the next two years for the state’s highway fund, according to a fiscal note.

The bill awaits assignment to committee.

Utah

The Utah House is considering a bill to increase registration fees on electric, hybrid, and plug-in hybrid vehicles.

The state now charges annual fees of $120 for electric vehicles. Annual fees are $52 for plug-in hybrids and $20 for hybrid vehicles.

There is also an option to pay a six-month registration fee as opposed to an annual fee. The six-month fee totals $93 for electric vehicles, $40 for plug-in hybrids, and $15 for hybrids.

HB209 would raise annual and six-month vehicle registration fees.

Specifically, the annual fee for electric vehicles would be increased to $300. The fee for plug-in hybrids would be raised to $260. Hybrid vehicle owners would pay $50.

Six-month registrations for electric vehicles would increase to $232.50. Plug-in hybrid vehicle owners would pay $201.50, and hybrid vehicle owners would pay $38.75.

All revenue would be deposited in the state’s Transportation Fund.

Washington

A Washington state bill would go the other way on fees for hybrid vehicle owners.

The state now charges a $75 annual fee on hybrids to fund electric vehicle charging stations. A $150 annual fee is collected on electric vehicle owners to benefit the state’s motor vehicle fund.

The bill, SB5308, would eliminate the fee on hybrid vehicles.

It is in the Senate Transportation Committee. LL

State trends

Keith Goble, state legislative editor for Land Line Media, keeps track of many trends among statehouses across the U.S. Here are some other articles by him.

TBS

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.