Chairman Nichols stresses that the state is losing out on federal funds because Texas doesn’t impose a fee now.

Alternatively-fueled and hybrid vehicles are taking up more and more space on Texas roads and their drivers pay nothing into the State Highway Fund when not burning fossil fuels.

Senate Bill 1728 by Sen. Charles Schwertner, R-Georgetown, heard in Senate Transportation this week, would impose an additional fee at the time of registration or renewal of registration of an alternatively fueled vehicle (AFV). 

The argument is straightforward: Those vehicles use the same roads as those burning gasoline and should be subject to an equalization of road use consumption amount. The bill would establish fees of $200 for AFVs and $40 for hybrid electric vehicles with a gross weight less than 6,000 pounds and fees of $250 for AFVs and $50 for hybrid electric vehicles with a gross weight of 6,001 to 10,000 pounds. If approved, an estimated $37.8 million will flow into the State Highway Fund in fiscal year 2022. Proponents noted that the drivers of those vehicles pay nothing or little in gas taxes.

Nationwide, 14 states impose a fee for hybrid vehicles and 28 states on electric vehicles. Additionally, proponents noted, the state’s motor vehicle fuel tax has not increased in 30 years. “This is good policy,” said David Jankowsky, founder and president of Tulsa, Oklahoma-based Francis Energy, which works on electric vehicle infrastructure. “In your wisdom the state enacts $200 but the state cannot monetize that $200 without public-charging infrastructure in the state of Texas.” He suggested a “next generation transportation fund” to draw down from federal stimulus funds to create charging stations.

Not everyone was on board. Susan Shifflett, president of the Texas Natural Gas Vehicle Alliance, asked that vehicles powered by natural gas be removed. “We already pay into the state motor fuel tax and are the only alternative fuel who do. An additional fee on natural gas vehicles is another layer of red tape because we already report to the Comptroller.” Natural gas fleet operators also must spend more money on engines and refueling, she said.

Texas Advanced Energy Business Alliance President Suzanne Bertin said her organization supports paying a “fair share” for road use but criticized the bill for imposing a “flat tax” on electric vehicle owners who already pay more than petroleum-fueled vehicle drivers. “This creates an unreasonable burden on EV owners and picks technology winners and losers” Bertin said. Her organization proposes the state adopt an annual fee formula to charge EVs an equivalent amount as they would be charged if they paid into the current gas tax. Formulas are more fair, she said, and would align with how other vehicles are charged. 

“The most commonsense way for people who don’t pay a fuel tax is through a fee. The fee is consistent with what the average consumer pays on fuel,” said Adam Blanchard with the San Antonio Mobility Coalition.
“When you pay a gasoline tax, it’s not a one-time shot. Maybe you don’t fuel the bite you do after paying the fee. I agree they need to pay a fair share, but I want to figure out what is a fair share,” said Sen. Juan Hinojosa, D-McAllen.
But Chair Robert Nichols, R-Jacksonville, stressed to witnesses that the state is also losing federal matching funds without a fee.

The bill was left pending in committee.