The Minnesota House of Representatives is debating a bill that could double the surcharge on all-electric vehicles and introduce new annual fees for other types of electric vehicles. The proposed legislation, known as HF189, aims to address the state’s road funding needs as it transitions to more electric vehicles.
Currently, the state’s roads are primarily funded through the motor fuels tax, which stands at 31.8 cents per gallon for both gasoline and diesel. However, as more drivers switch to electric vehicles, lawmakers are concerned that this revenue stream will decline. Rep. Natalie Zeleznikar (R-Fredenberg Township) sponsored the bill, stating, “Right now, while we’re moving to the EV model across the state and the country, our roads and bridges are funded by the gas tax. So we’re not going to have funds going into the roads and bridges like we have historically.”
The proposed bill would not only double the surcharge on all-electric vehicles from $75 to $150 but also introduce new annual fees for other electric vehicle categories as part of their registration. These include:
- $75 for plug-in hybrid electric vehicles
- $30 for all-electric motorcycles
- $15 for plug-in hybrid electric motorcycles
The legislation also suggests indexing these surcharges and transfers based on changes in the gasoline tax rate. Additionally, it proposes annual transfers from the General Fund to the Highway User Tax Distribution Fund based on vehicle registration counts.
Opponents of the bill argue that electric vehicle owners already contribute sufficiently to the state’s revenue through higher sales tax and registration fees. Nick Haeg, senior associate of electric vehicles for Fresh Energy, testified against the bill, citing a Minnesota Department of Transportation report that suggests electric vehicles already offset lost gasoline tax revenue.
The House Transportation Finance and Policy Committee has laid the bill over for possible inclusion in an omnibus bill. An amendment to alter the surcharges and direct them to a different account was rejected along party lines.
