DES MOINES — A legislative panel generally supports a supplemental registration fee on electric vehicles to offset the impact of lower gas tax revenue.
However, the five-member House Transportation Subcommittee made no decision on the amount or whether to phase it in over three to five years.
They don’t want to discourage the production or use of electric vehicles, but lawmakers see a need to protect the Road Use Tax Fund that, in large part, pays for construction and maintenance of Iowa roads.
“We’re just trying to keep the (Road Use Tax Fund) whole,” said Scott Newhard of the Associated General Contractors, which includes roadbuilders. “Electric vehicles use the road, too.”
There aren’t many of them on Iowa roads today — about 800 battery electric vehicles and about 1,900 plug-in hybrid electric vehicles, according to the Iowa Department of Transportation. That number is expected to grow rapidly for both passenger and commercial vehicles.
While the number of electric vehicles is low, Stuart Anderson of the DOT said they have an impact of about $300,000 on the Road Use Tax Fund. Based on DOT estimates, that could grow to $11 million as soon as 2025 and to more than $240 million by 2040.
For the current fiscal year, fuel taxes are expected to generate $656 million for the Road Use Tax Fund, which covers about 45 percent of all state road funding, Anderson said.
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The discussion of House Study Bill 197 centered on how quickly to proceed with implementing a supplemental registration fee. The DOT has found that, on average, Iowans pay $150 a year in fuel taxes. It is recommending an annual fee of $130 per battery electric vehicle, based on the theory that some of the charging will be done at retail locations where the state would capture 2.6 cents per kilowatt-hour. That also would capture revenue from vehicles passing through Iowa, Anderson said.
One goal of the additional revenue would be to build out electric vehicle infrastructure to increase the cars’ range, said Rep. Gary Carlson, R-Muscatine.
“Range anxiety” is a real issue for electric vehicle drivers, said Rep. John Forbes, D-Des Moines, who said he once preserved battery life by drafting behind semis when heading into a headwind between Iowa City and Des Moines.
Rep. Chuck Isenhart, D-Dubuque, encouraged lawmakers to use the discussion as an opportunity for a broader policy ideas such as a tax credit to reward Iowans for driving electric vehicles and using a portion of the $130 fee to incentivize the development of charging stations.
In addition to $130 per year fee for battery vehicles, the DOT recommended a $65 fee for plug-in hybrids and $9 for electric motorcycles.
The bill will move to the full Transportation Committee.
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