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Panel advances bill doubling Minnesota EV surcharge to $150 to shore up highway funds
Summary
Senate File 966, to raise the annual surcharge on electric vehicle registrations from $75 to $150 and to add fees for hybrid and electric motorcycles, was moved by the Transportation Committee to the Taxes Committee without recommendation after supporters said it was a fast way to capture revenue while lawmakers study more complex options.
St. Paul — The Senate Transportation Committee advanced Senate File 966, a bill to raise the annual electric vehicle surcharge from $75 to $150 and to add surcharges for hybrid vehicles and electric/hybrid motorcycles. The measure was moved to the Taxes Committee without recommendation.
Sponsor Sen. Paul Howe described the bill as a step toward matching the revenue that would otherwise come from gasoline taxes. Howe said the average per-driver contribution from fuel taxes is about $2.29 per trip measure and that the surcharge proposal is still a “bargain” compared with typical fuel tax contributions.
Nut graf: Supporters and industry representatives told the committee that a surcharge is the simplest and quickest way to replace declining gas-tax revenue as EV adoption grows. Opponents and some senators raised fairness questions and urged careful calibration to avoid penalizing lower-income or modest-weight hybrid owners.
Testimony and support
Margaret Donahoe, executive director of the Minnesota Transportation Alliance, told the committee the alliance strongly supports increasing EV fees to maintain highway funding and highlighted that other states charge annual EV fees ranging from about $50 to several hundred dollars. Patrick Heinz of Messerli Kramer for the Alliance for Automotive Innovation testified that a surcharge is “by far the easiest” approach and suggested a formula to approximate the gasoline tax equivalent.
Committee discussion and outcome
Sen. Zach Jasinski and others supported a simple surcharge approach for speed of implementation. Committee members flagged concerns about where the revenue is spent on other items — for example, whether trunk highway funds are used for non-highway projects — and suggested the legislature also address spending priorities to increase effective funding for roads.
Howe moved Senate File 966; the committee approved the motion by voice vote and referred the bill to the Taxes Committee. No roll-call vote was recorded in committee.
Ending: Senators said they plan additional work on whether a surcharge alone is sufficient and how to capture revenue from nonresident EV users; the bill will be considered next by the Taxes Committee.
