Internet Explorer 11 is not supported

For optimal browsing, we recommend Chrome, Firefox or Safari browsers.

Pennsylvania Considers Annual Fee for Electric Vehicle Owners

The proposed bill would charge electric vehicle owners $290 a year to supplement decreased revenue lost from the state’s gas tax. It is estimated the fee would generate as much as $20 million annually for the state.

Electric vehicle owners in Pennsylvania could be required to pay an annual fee — potentially the highest in the nation — for the privilege of driving an eco-friendly car or truck.

The House Transportation Committee approved the Senate-passed bill that would set the fee at $290 a year starting next year but the amount of the fee continues to be a subject of ongoing negotiations.

Committee Chairman Ed Neilson, D- Philadelphia, said he hopes those discussions between House and Senate leaders could result in an agreement on an electric vehicle fee program before the end of the week when the General Assembly breaks for the holidays.

Senate Transportation Committee Chairman Wayne Langerholc, R- Cambria County, also wants to see the legislation reach Gov. Josh Shapiro’s desk provided he said it is the “right product.” But he too is anxious to get a law on the books.

“I’ve been consistent that this is money that we’re leaving on the table every day that we fail to act,” Langerholc said.

At $290 a year, Pennsylvania would have the highest electric vehicle registration fee in the nation.

Sen. Greg Rothman, R- Cumberland County, who authored the bill, proposed that amount as it is roughly what the state Department of Transportation estimates owners of gas-powered passenger vehicles pay each year in the state’s gas tax at its current rate of 61 cents per gallon.

Revenue from the gas tax goes into the Motor License Fund to pay for highway infrastructure projects and support state police operations. That also is where revenue from the proposed electric vehicle fee would be deposited.

“This is not the right bill,” Neilson said, referring to the current version. “We want to make sure this legislation is done fairly. Two hundred ninety is way too high.”

But Langerholc stands behind setting the yearly fee at $290. He said the amount needs to be comparable to what gasoline-powered vehicle owners pay to make it fair and generate more than a miniscule amount of revenue. Last spring, he estimated that fee would generate upwards of $20 million.

“I support my colleague Senator Rothman’s bill,” Langerholc said. “It’s a good product. It’s a result of compromise and negotiation.”

The legislation would apply to all non-commercial passenger battery electric vehicles, but not hybrid vehicles. Neilson was going to offer amendments to the bill to have it apply to hybrids but withdrew them to see whether a forthcoming compromise with the Senate addresses that.

Neilson also would like to see the bill include an automatic inflationary adjustment to the fee as well as a provision to phase in the fee over a period of three to five years rather than all at once “so there’s no sticker shock,” he said.

Another area of disagreement is when the fee would take effect in 2024 or 2025.

“That’s the kind of stuff we’re negotiating,” Neilson said.

Langerholc said he wants to see an electric vehicle fee put in place and said the legislature could come back later to make adjustments such as some of the areas Neilson wants to address.

“Everybody has an opinion on it and it just bogs down the bill and creates more bureaucracy which we don’t want,” Langerholc said. “We want the simplest means to put them on the same footing as gasoline vehicles.”

Despite Neilson’s objection to provisions in the bill, he joined 21 other members of the 25-member House Transportation Committee in voting to move the bill out of his committee so it could advance through the legislative process.

Rep. Kerry Benninghoff of Centre County, the ranking Republican on the House committee, was among those who supported the bill.

“I do believe there’s a issue of fairness here. I think everyone who drives on the roads needs to be paying a fair share of that,” he said.

Benninghoff also said he wants to see the rate be competitive with the other states that charge an electric vehicle fee. According to the Washington, D.C.-based nonpartisan Tax Foundation, 24 states have an electric vehicle fee and they range from $50 in Hawaii and South Dakota to $200 in Ohio, West Virginia and Wyoming.

PennDOT data provided to the state’s Drive Electric Coalition indicates as of March, there were over 50,000 battery electric vehicles registered in the state, more than 27,000 plug-in hybrid vehicles and nearly 239,000 hybrid vehicles. That is up from a total of less than 48,000 in March 2020.

Langerholc said those numbers are only going to grow “so we need to act.”

Rothman’s bill would exempt electric vehicle owners from paying the state’s alternative fuels tax on electricity derived from the residence of the registered vehicle owner. That tax required electric vehicle owners to file monthly statements with the state and pay a tax on how much electricity their vehicle used.

Rothman said few people paid the tax or were even aware they were supposed to pay it. His bill would absolve individuals from having to pay any unpaid alternative fuels tax bills.

©2023 Advance Local Media LLC. Distributed by Tribune Content Agency, LLC.
TNS
TNS delivers daily news service and syndicated premium content to more than 2,000 media and digital information publishers.
Special Projects