In January of 2016, the National Conference of State Legislatures (NCSL) published a list of the top ten issues that will be before state legislatures across the nation this year. Since Pennsylvania will close out the 2015-2016 session this fall, it’s worth a look to see what our own elected officials are doing to address each of the issues. The next topic up for consideration: Electric Vehicle Fees.

Whether stuck in traffic on Interstate 76 in Philadelphia or cruising on the Pennsylvania Turnpike in Western Pennsylvania, the roads look different today than they did ten or even five years ago with the addition of electric vehicles. According to the United States Energy Information Administration, in 2016 21.5 million alternative-fuel vehicles (which include electric vehicles) were on the road throughout the country. This accounts for nine percent of the country’s vehicle stock. The number is expected to grow to 29.3 million, about 12 percent of all vehicles, in 2021.

Thirty-seven states offer incentives to drive electric vehicles. However, only ten states require electric vehicle owners to pay a fee. Pennsylvania falls into the former category.

The Pennsylvania Department of Environmental Protection administers the Alternative Fuels Incentive Grant Program, which offers rebates to consumers that purchase new plug-in hybrid, plug-in electric, natural gas, propane and hydrogen fuel cell vehicles. Rebates range from $500 to $2,000 depending on the type of vehicle. The program is able to fund up to 250 $2,000 rebates in 2016. As of August 26, 2016, 163 rebates remain.

Find out more about the Program: http://www.dep.pa.gov/Citizens/GrantsLoansRebates/Alternative-Fuels-Incentive-Grant/Pages/Alternative-Fuel-Vehicles.aspx

Act 3 of 1997 established the Commonwealth’s first provisions regarding the taxation of alternative fuels. Dan Hassel, Deputy Secretary of Tax Policy, Pennsylvania Department of Revenue, described the tax policy in a House Transportation Committee public hearing on Enforcement and Collection of Alternative Fuel Taxes held in May. Deputy Secretary Hassel said that “current law requires electric vehicle owners to file monthly reports with the Revenue Department calculating and paying fuel tax on the amount of electricity their vehicle consumers.” He went on to say that “in absence of some mechanism for tax reporting, owners of those vehicles are able to use the public highways without contributing to the cost of road maintenance.”

H.B. 1057 (Ellis, R-Butler) hopes to be the legislative fix to this issue. Currently, electricity used for vehicles is taxed as an alternative fuel, generating only $651 of revenue in fiscal year 2015-2016. Rep. Ellis’s legislation replaces the alternative fuel tax with an Electric Vehicle Road Fee. The fee would apply to owners of electric vehicles and would be collected by PennDOT when the individual registers their vehicle annually. An owner of a typical combustion-engine vehicle typically pays around $220 in annual fuel taxes. Under the new Electric Vehicle Road Fee an electric vehicle owner would pay on average $73 per year. Implementing this new fee will bring in an estimated $202,429 in annual revenue, which is over a 300 percent increase.

Read the bill in its entirety here: http://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2015&sInd=0&body=H&type=B&bn=1057

With the current legislative session winding down, it’s unlikely H.B. 1057 will move from its present home in the House Transportation Committee. Nevertheless, the emergence of electric cars will ensure the conversation continues next year as legislators look for new ways to raise revenue in Pennsylvania’s uncertain fiscal climate.