Senators debate higher EV registration fees and a per-kilowatt charging tax as road funding gap grows

Senators and outside witnesses debated three competing approaches to make electric vehicles and public charging contribute more to Minnesota’s road fund, with one bill recommended to pass out of committee.

Senate File 2688, authored by Senator Ann Johnson Stewart, would raise the annual registration surcharge on all-electric vehicles to $200, set a $100 surcharge for plug-in hybrids, and impose smaller, indexed surcharges on electric motorcycles and plug-in hybrid motorcycles. The committee recommended SF 2688 to pass and referred it to the Committee on Transportation.

Senator David Howe introduced Senate File 966, which would raise the all-electric passenger vehicle surcharge from $75 to $150, create new surcharges for plug-in hybrids and electric motorcycles, and tie the charges to the gas-tax indexing mechanism. That bill was laid over for future consideration. Senator Howe described the change as an effort to “bring into alignment” how EVs contribute toward the wear-and-tear costs that gasoline drivers currently pay through the fuel tax.

Senator Johnson Stewart also presented Senate File 2092, a different approach that would impose a per-kilowatt-hour (kWh) charge on public charging stations — set in the bill at 5¢ per kWh — with revenue deposited directly into the Highway User Tax Distribution Fund. That bill was laid over for further work.

Why it matters: Minnesota’s traditional road funding relies heavily on the gasoline excise tax, sales tax on vehicles and tab fees deposited to the HUTDF. As vehicle fuel efficiency improves and as EVs proliferate, legislators are seeking revenue that aligns road-use payments with who uses the roads.

Supporters and opponents: Drive Electric Minnesota, represented by Carolyn Berninger, urged caution, opposing increasing the EV fee now. Berninger said EV owners already pay more in total taxes when sales tax and current fees are counted, and she described fees up to $150–$200 as potentially “punitive,” especially for people who lack home charging and rely on public charging. Patrick Hynes of Messerli Kramer, representing Alliance for Automotive Innovation, and Margaret Donahoe of the Minnesota Transportation Alliance supported measures that approximate what drivers would pay in gas taxes; Hynes argued a simple surcharge comparable to estimated annual gas-tax liability (his group’s calculation: about $147) was easier to administer than a vehicle-miles-traveled or kWh approach.

Labor and infrastructure groups, including John Thorson of the Laborers’ International Union of North America, and the Minnesota Transportation Alliance, spoke in favor of policy changes to preserve road funding. Thorson quoted Article XIV, Section 10 of the Minnesota Constitution, and urged that electricity used to propel vehicles be treated similarly to other fuels for HUTDF purposes by either fees or a kilowatt-hour approach. Kwik Trip’s Tony Quillis testified with operational concerns about a per-kWh levy, asking for clearer rules about which operators would owe the tax, how municipal or leased chargers would be treated, and how utilities would report or bill the charge.

Committee action and next steps: The committee laid SF 966 and SF 2092 over for further work. Senators debated whether language should route revenue to the general fund with a transfer to HUTDF (Senator Howe’s bill included a general-fund transfer provision) or deposit revenues directly to the highway fund (Senator Johnson Stewart’s bill specified direct deposit). Senator Dibble said he favored an approach that approximates annual gas-tax payments and indicated transport committee coordination would continue. The committee voted to take SF 2688 from the table and then recommended it to pass and be referred to the Committee on Transportation.

Details to watch: witnesses and senators repeatedly raised equity issues for drivers without home charging, the administrative complexity of a kWh or vehicle-mile measure, whether short-term visitors from other states would be captured by a kWh charge at public plugs, and the constitutional rules that can dedicate taxes to highway purposes. Several senators pressed for clearer revenue estimates and implementation clarifications before final passage.

Ending: The committee left the bills open for amendment and further negotiation; SF 2688 is the only one of the three that the committee advanced to the transportation committee during the hearing.