Owners of electric and hybrid vehicles in North Dakota would pay an annual fee to make up for lost gas tax revenue under a bill crafted by a Grand Forks lawmaker.
Republican state Sen. Curt Kreun said his proposal would help balance the scales between owners of traditional gas guzzlers who help fund road improvements by paying fuel taxes and drivers of more environmentally friendly vehicles who use those same roads. Under his bill, electric vehicle owners would face an annual $248 “road use fee” and hybrid drivers would see a $71 annual bill.
The fee amounts were calculated using average fuel economy and annual mileage figures. If passed, the electric vehicle fee would be the largest among the 20 states that already impose one, said Kevin Pula, a senior policy specialist with the National Conference of State Legislatures.
Kreun’s bill, which will be debated during the legislative session that starts next month, comes as officials warn of heavy costs to maintain North Dakota’s transportation system. A report the Upper Great Plains Transportation Institute released earlier this year pegged the state’s total infrastructure funding needs at $21.2 billion between 2016 and 2035.
“It’s a fairness issue to keep the roads up as best we can,” Kreun said of his proposal.
The state has a 23-cent-per-gallon gas tax that raised $165.7 million for road and transit projects in fiscal year 2018, according to North Dakota Department of Transportation spokeswoman Jamie Olson. She said the agency's proposed budget "does not propose or support any fee increases."
The NCSL said states haven’t raked in much extra cash from the fees, however, because “the market share for hybrid and electric vehicles is still small.”
Only 141 electric vehicles were registered in North Dakota this year, along with 3,849 hybrids, Olson said. That’s a fraction of the 1.16 million total vehicles registered in the state last year.
Still, electric vehicle usage is on the rise alongside concerns about climate change.
The number of electric cars on U.S. roads grew to 762,060 in 2017, more than 10 times the amount in 2012, according to the International Energy Agency.
Ed Gruchalla, a former Democratic state lawmaker who’s now chairman of Citizens Local Energy Action Network, or CLEAN, said the proposed fee would discourage the use of electric vehicles, which Kreun denied was his intent.
“The reason we are proponents of electric vehicles is because we understand that we can’t keep putting CO2 in the atmosphere,” said Gruchalla, who drives an electric Nissan Leaf. “If you care about the environment, you want to encourage electric vehicles.”