Committee delays mileage-based user fee, weighs interim EV infrastructure funding and special fund

Members of the House Transportation Committee on Wednesday reviewed draft updates that move the effective dates for a mileage-based user fee and clarified related electric vehicle (EV) registration and infrastructure fees after federal grant and implementation delays.

Damian Leonard of the Office of Legislative Council told the committee the changes in the draft are minimal: "the bare minimum" to move implementation dates out by a year because the federal grant and program readiness have not arrived. He said the draft retains references to the Strategic Innovation for Revenue Collection (SIRC) grant the state is pursuing but postpones statutory dates tied to July 1, 2025, to a later date.

What the committee discussed - Implementation delay and grants: Agency staff and committee members said the federal grant the state expected to use for nonfederal match has not been executed as anticipated. The draft keeps the option to accept federal grants and uses the existing language for a $350,000 nonfederal match in prior budget language, but members discussed whether the committee should plan to proceed using state funds if the federal grant does not arrive. - Interim EV infrastructure fee: The committee confirmed that the annual EV infrastructure registration fee established in prior legislation is in place for both battery-electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). AOT staff explained the rationale for treating PHEVs differently for some programs: because plug-in hybrids can operate on gasoline and electric power, charging-use can vary and is harder to measure in advance. - EV supply equipment special fund: The draft creates an "EV supply equipment special fund" and directs annual and biannual EV infrastructure fees into that fund to be administered by the Agency of Commerce and Community Development (ACCD) for grants to install Level 1 and Level 2 charging at workplaces and multiunit dwellings and to cover necessary administrative costs. Leonard noted administrative handling of special funds carries accounting costs and interest on the fund would be retained by the general fund under the draft language. - Funding the mileage-based user fee (MBUF): Committee members repeatedly asked whether the state should identify roughly $3 million of state funds so the agency could start implementation sooner rather than waiting another 12–18 months for a federal grant. Staff estimated that an initial outlay in that range would enable the program to be implemented sooner and return revenue (AOT testimony suggested implementation could recover several million dollars annually once running). Agency staff said they are also pursuing partnerships (for example with the Eastern Transportation Coalition) and other grant avenues.

Clarifying program mechanics - Which vehicles initially: Committee members and agency staff said earlier policy discussions favored starting the mileage-based user fee with fully battery-electric vehicles because they pay no motor-fuel taxes; plug-in hybrids were addressed in prior legislation by a reduced infrastructure fee (the draft retains separate treatment for PHEVs for the interim infrastructure fee). - Administrative and operational uncertainty: Committee members and Legislative Council staff said more operational work remains: how to collect fees equitably for out-of-state chargers, whether fees could be assessed on kilowatt-hours at charging stations, and how interim funding and partnerships affect the schedule.

Next steps - The committee invited continued work between the agency, Legislative Council, and partners to firm up operational details and identify funding options for an accelerated start if the federal grant does not materialize. AOC staff (Michelle) and agency partners said additional program edits will likely be needed and could reappear in a later draft.

Ending - No formal action was taken; the committee deferred substantive decisions on implementation timing and funding until staff can report back on alternative funding options and operational details.