Senate Panel Backs Electric Vehicle Fees

Article reposted with permission from The News Service of Florida.

Florida lawmakers have restarted a move to impose annual registration fees on electric vehicles amid pushback over the proposed amount.

The Senate Transportation Committee on Wednesday backed a proposal (SB 28) that would require electric-vehicle owners to pay $200 registration fees to try to offset anticipated losses in gas-tax dollars as more people convert to electric and hybrid vehicles.

Annual fees of $50 a year would be imposed on plug-in hybrids that use a combination of electricity and gas and $25 fees would be imposed on electric motorcycles.

Bill sponsor Ed Hooper, R-Clearwater, called the proposal an issue of “fairness" for everyone who uses the state’s road system. He said the fee structure is based on figures from the Electric Drive Transportation Association.

The association projects motorists who drive 10,000 miles a year pay about $190 a year in federal, state and local gas taxes, Hooper said. For people who drive 12,000 miles a year, the combined taxes come to about $228 a year, he said.

Gas-tax money is used to pay for transportation projects.

“So, to remain silent on this issue for very long is eventually going to put the state in a crisis where we can't have adequate transportation capacity,” said Hooper, who chairs the Senate Transportation, Tourism and Economic Development Appropriations Committee.

But a Tesla lobbyist, Sen. Tracie Davis, D-Jacksonville, and Sen. Joe Gruters, R-Sarasota, said the proposal could result in electric-vehicle owners being “double taxed.”

“Electric-vehicle owners pay tax when they purchase electricity, either at a charging station or at their house,” Gruters said.

Lobbyist Jeff Sharkey, who represents Tesla, said the automaker projected the appropriate fee at about $135 based on the Electric Drive Transportation Association calculations.

“What we would like to see in really going forward is really looking at what that baseline fee would be,” Sharkey said.

The proposal has the backing of the Florida Chamber of Commerce and the Florida League of Cities.

Ananth Prasad, president of the Florida Transportation Builders' Association, said electric vehicles are “highly subsidized” under a federal law known as the 2021 Infrastructure Investment and Jobs Act, which earmarked $7.5 billion toward electric-vehicle infrastructure.

“There’s a heavy amount of subsidy already given to encourage people to drive electric vehicles,” Prasad said.

But Leighanne Boone of the Rethink Energy Action Fund called the proposal “punitive,” as families are choosing electric vehicles because they are less expensive to drive.

Darryl Alfred, who uses an electric vehicle as a rideshare driver in Tallahassee, said the fees could create a disincentive for electric-vehicle ownership in disadvantaged communities.

“After doing some research I found that I could afford the high payments (of an electric vehicle), but only if I stayed steady at work,” said Alfred, who also works as a real estate agent. “Part of what made this possible was the lack of fuel, oil changes and other fees and maintenance typical of vehicle ownership.”

The Senate approved a similar proposal during the 2023 legislative session, but the measure did not advance in the House. Hooper’s bill is filed for the 2024 session, which will start Jan. 9.

The House Transportation & Modals Subcommittee will take up similar legislation (HB 107) on Thursday.

State economists have projected the proposed registration fees would generate $65 million a year, with nearly two-thirds going into the State Transportation Trust Fund and the rest picked up by local governments.

The Florida Department of Transportation’s 2021 EV Infrastructure Master Plan found the use of electric vehicles could result in a drop of 5.6 percent to 20 percent in “motor-fuel based revenue streams” by 2040. The percentage varied depending on the rate of EV sales.

According to the U.S. Department of Energy, Florida is second to California in the number of registered electric vehicles. The federal agency based its numbers on data from the National Renewable Energy Laboratory and Experian Information Solutions.

As of the end of 2022, Florida had 167,990 registered electric vehicles, up from 95,640 a year earlier. At the end of 2020, Florida had 58,160 registered EVs.

A Senate staff analysis said 32 states impose some form of registration fee on electric vehicles. Of those, 19 states include a fee on plug-in vehicles that operate on a combination of electricity and gasoline.

Under Hooper’s proposal, the annual Florida electric-vehicle fee would go up to $250 starting in 2029. The hybrid fee would increase to $100 in 2029, with the electric motorcycle fee going to $35.