The Montana Legislature is attempting, for a third time, to tax electric vehicles to bolster the state’s roadway construction and maintenance coffers. On Jan. 6, members of the House Transportation Committee heard testimony on House Bill 60, a measure that establishes an annual registration fee on electric and hybrid vehicles.
Bill sponsor Denley Loge, R-St. Regis, described the measure as an attempt to ensure that the state has adequate funding to build and repair its roads as EV ownership increases and fuel tax collections decrease. In opening remarks, Loge said he’s concerned that the collections the state relies on to fund transportation infrastructure will dry up without the kind of registration fee he’s proposed in HB 60.
The bill includes four weight-based categories of electric vehicles and hybrid vehicles that run on a mix of gas and batteries. The lightest of the electric vehicles — those weighing 6,000 pounds or less — would be charged a registration fee of $130 per year. The heaviest electric vehicles, those clocking in at 26,000 pounds or more, would pay an annual fee of $1,100 per year. Owners of electric vehicles and hybrids would be responsible for paying both regular vehicle registration fees, which are already collected by county treasurers each year, as well as the EV registration fees outlined in Loge’s bill.
Loge said he took two calculations into account when setting up the fee structure: how much a similarly sized gas-powered vehicle would pay into the gas tax based on a 14,000-miles-driven-per-year estimate, and how much vehicles in that weight class wear down Montana’s roadways.
About a dozen proponents spoke on behalf of the bill, describing it as equitable, fair and necessary to sustain the state’s transportation funding. The lone opponent, Ian Lund with the Montana Environmental Information Center, said he supports the bill’s intention but found the fees to be too high, particularly when compared to the fees neighboring states impose on EV owners.
“North Dakota, for example, has a $120 electric vehicle fee, no change for trucks,” Lund said. “Utah has a $90 fee for all electric vehicles, no escalation for trucks. Similarly, Idaho has an $140 electric vehicle fee, but again, there’s no escalation for trucks there. South Dakota — $50 per electric vehicle per year, and they don’t have a fee for hybrids.”
Loge referenced that criticism in his closing remarks, saying that drivers in other states generally don’t drive the distances Montana motorists do.
“Think about the miles in Montana,” he said. “What are we, number four 4 in the nation for size? That relates to a lot of roads to take care of.”
A similar measure, also sponsored by Loge, passed the Montana Legislature last session but was vetoed by Gov. Greg Gianforte.
If the Electric Vehicle Infrastructure Deployment Plan co-authored by the state Department of Environmental Quality and the Montana Department of Transportation is green-lighted, the state is set to receive $43 million to expand the supply of direct-current fast-charging stations in Montana.
Loge referenced the veto in his remarks, saying that Gianforte liked the original version of the bill but disapproved of amendments introduced to the measure that bumped the registration fees considerably higher. Under the 2021 bill, registration fees ranged from $195 to $1,300.
In his veto letter, Gianforte wrote that he was particularly concerned with the $375 “heavy truck” registration fee, which would have applied to all-electric light-duty trucks manufactured by Ford, Toyota, Dodge, Chevy and GMC. A fee of that size is misaligned with his goal of making Montana a more tax-friendly environment, Gianforte wrote, calling the fees lawmakers proposed as “some of the highest fees in the nation” for electric vehicle owners.
Loge said the proposed measure is expected to bring in about $570,000 to the state’s transportation coffers its first year after adoption and indicated that some of the kinks from the 2021 bill had been worked out by an interim committee working on HB 60.
County commissioners say they believe state law requires them to collect at a lower rate than Gov. Greg Gianforte’s Department of Revenue has directed. At stake is $80 million.
Rebates of up to $675 on 2022 property taxes were authorized by this year’s Legislature, but homeowners must file with the Department of Revenue by Oct. 2.
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