HF3430

Purpose

• This bill aims to modify how charges are applied to electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs), and to establish a weight-based surcharge. It also specifies how the new revenue would be used for highway funding.

Main Provisions

• New surcharges for electric vehicles:
  • An EV surcharge is added to vehicle registration, in addition to existing taxes.
  • The surcharge can be determined in one of two ways, with the greater amount applied:
  • A fixed minimum amount, or
  • A calculated amount based on the vehicle’s price and age.
• Calculation specifics for the EV surcharge (two paths):
  • Minimum amounts:
  • For a registration period beginning January 1, 2026 through June 30, 2027: $150.
  • For a registration period beginning July 1, 2027 or later: $200.
  • Calculated amount:
  • Based on a percentage of the vehicle’s MSRP (manufacturer’s suggested retail price) and a factor tied to the vehicle’s age.
  • The percentage is 0.5%, multiplied by a year-based factor (ages 1 through 10 use a schedule defined in the bill; in the 11th year and beyond, the factor is 10%).
  • The EV surcharge is in addition to the existing registration tax.
• Revenue allocation:
  • All revenue from the EV surcharge must be deposited into the Highway User Tax Distribution Fund (the highway funding pool).
• Vehicle weight surcharge:
  • The bill also proposes a vehicle weight surcharge, intended to raise additional funds related to vehicle weight, though the specific calculation details are not shown in the excerpt.
• Applicability to vehicle types:
  • The bill addresses all-electric vehicles (EVs) and also contemplates surcharges for plug-in hybrid electric vehicles (PHEVs), with separate provisions (subdivisions) for each, though full detail for PHEVs is not completely shown in the excerpt.

How it changes existing law

• Adds new subdivisions to Minnesota Statutes:
  • A new subdivision for electric vehicles (1m) under section 168.013.
  • A new subdivision for the same section in the 2025 supplement (1n), addressing related surcharges (including PHEVs).
• Creates a framework to assess and collect an EV surcharge at the time of vehicle registration and directs the proceeds to a specific highway funding account.

Implementation Timeline (Key Dates)

• Surcharge structure for EVs takes effect with registration periods starting in 2026, with fixed minimum amounts rising through 2027:
  • 2026–2027: EV surcharge minimums start at $150.
  • After July 1, 2027: EV surcharge minimums rise to $200.
• The surcharge remains in addition to existing taxes, and revenue goes to the highway fund.

Potential Impacts

• EV and PHEV owners would face an added registration charge that grows or compounds with vehicle age and price, potentially increasing the total cost of ownership over time.
• The new revenue is earmarked for highway funding, which could affect infrastructure financing and maintenance priorities.
• The vehicle weight surcharge could affect heavier EVs differently from lighter ones, potentially influencing purchasing decisions.

Relevant Terms electric vehicle EV all-electric vehicle surcharge registration MSRP (manufacturer’s suggested retail price) year of life (vehicle age) percentages (age-based surcharge schedule) 0.5 percent highway user tax distribution fund HUTDF vehicle weight surcharge plug-in hybrid electric vehicle PHEV Minnesota Statutes 2025 Supplement section 168.013 subdivision 1m subdivision 1n registration period