Budget provision would make EV, hybrid drivers pay fee for road maintenance
This story was updated on May 24 at 10:37 a.m. to clarify that the legislation affects plug-in hybrids only.
In New Hampshire, as in many states, highways are maintained with revenue from the state gas tax. But a 2020 Department of Transportation report projected that as more drivers trade in their gas-powered cars for electric vehicles, that revenue stream will start drying up.
On Monday, the Senate Finance Committee voted to approve a budget amendment requiring electric and plug-in hybrid vehicle owners to pay an additional fee when they register their cars. Revenue from this fee would help replace lost gas tax revenue in the highway fund, lawmakers said.
This isn’t the first time the Legislature has tried to collect funds from EV and hybrid owners to pay for highway improvements. In 2018, the House passed a bill, championed by Plaistow Republican Rep. Norman Major, that would charge owners graduated fees based on their vehicle’s fuel efficiency. Owners of more efficient vehicles, including those that don’t use gasoline at all, would pay higher fees. Fee revenues would go into the state highway fund.
The Senate killed that bill.
In 2019 and 2020, Major brought similar bills that both died in the House. In 2020, Rep. Peter Somssich, a Portsmouth Democrat, introduced a bill that would charge vehicle owners by their vehicle’s weight and miles traveled, instead of efficiency. He argued that charging based on efficiency would disincentivize Granite Staters from driving more efficient vehicles.
Somssich’s proposal didn’t make it out of the House either.
This year, a budget amendment based on a bill sponsored by Dover Democrat Sen. David Watters might actually cross the finish line. Watters’ bill takes a slightly different tack than those brought by Major and Somssich. It would institute a flat fee of $100 for EV and hybrid owners at registration time each year.
Sen. Dan Innis, a Bradford Republican, made two main tweaks to the bill’s language when he introduced it as a budget amendment Monday.
The first change would give hybrid owners a break, addressing what Innis called an “oversight” in the initial bill. “The purpose behind that (bill) was to try to bring a little bit of equality to the fees that an electric car owner pays, versus the driver of a gas car that’s paying the gasoline tax,” Innis said. “And we recognized, Sen. Watters and I, that hybrids kind of fall in between.”
In Innis’ amendment, plug-in hybrid owners would pay a $50 fee instead of the $100 paid by EV owners.
His amendment also strays from Watters’ bill by omitting language that would allow the DOT to use up to 20 percent of the funds raised to build EV charging stations.
The amendment does, however, include language from the bill extolling the value of electric vehicles. It reads, “Electric vehicles contribute to the reduction of air pollution in New Hampshire and serve an important role in transitioning the transportation sector to clean energy.”
At the hearing for Watters’ bill in February, 31 people registered support, including a representative from the DOT.
Rebecca Ohler, administrator for the Technical Services division at the Department of Environmental Services, expressed that while DES used to worry that additional fees for EV owners would discourage EV adoption, they no longer have that concern. DES registered as neutral on the bill but Ohler said they feel the EV market is now at a point where fees of this size wouldn’t serve as too much of a disincentive to purchasing an EV.
Three people registered opposition to the bill but none spoke at the hearing.
The Senate Finance Committee is continuing to craft changes to the budget passed by the House. Their budget proposal will go next to the Senate for a vote. If the vehicle registration fee measure makes it into a final budget signed by Gov. Chris Sununu later this summer, New Hampshire will join the over 30 other states that currently have additional registration fees for EVs and/or hybrids.