Bill Caption

Relating to the equalization for road use by and public charging infrastructure for alternatively fueled vehicles; authorizing a fee and a surcharge.

Fiscal Notes

Estimated Two-­year Net Impact to General Revenue Related Funds for SB 1728, Committee Report 2nd House, Substituted: a positive impact of $1,902,000 through the biennium ending August 31, 2023.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

Bill Analysis

SB 1728 would require owners of alternatively fueled vehicles to pay an equalization consumption fee of $200-250 and owners of hybrid vehicles to pay an equalization consumption fee of $30-40 at the time of registration and a $10 electric vehicle registration surcharge. Additionally, owners of natural gas vehicles would be charged a fee which would be the average annual amount of taxes that a conventionally fueled vehicle in that class would pay. All fees collected would be deposited to the state highway fund. 

Additionally, SB 1728 will be establishing the Texas Transportation Electrification Council as an administrative attachment to the TxDOT which will assist the TxDOT in administrative procedures including an electric vehicle charging infrastructure plan, such as evacuation routes; adequate vehicle charging infrastructure, and provide for electric transportation corridors in and along TxDOT right-of-ways that will go through the year 2040 that will be developed by the council. The council will also prepare an initial report to the governor and the legislature of their findings and continue to submit reports every two years until 2031.

Lastly, SB 1728 includes provisions that clearly define what an electric vehicle and a plug-in hybrid electric vehicle is and the establishment of a mileage fee alternative on lieu of paying the alternatively fueled vehicle fee and requiring DPS in consultation with the TxDMV.

Vote Recommendation Notes

As more and more people purchase alternatively fueled and hybrid vehicles, they circumvent contributing to the state highway fund through the purchase of gas and diesel fuels which fund the repairs of roads they drive on. SB 1782 would broaden the base for funding this account by charging these owners an equalization consumption fee. 

We would also like to point out that in many cases both the manufacture and purchase of alternative fuel and hybrid vehicles is subsidized by the taxpayers. So not only do buyers benefit from lower vehicle prices than they would if they had to pay full, unsubsidized market value, they also pay fewer taxes that fund the roads they drive on. 

Texas Action supports tax structures that are low rate and broad based. SB 1782 would broaden the tax base paying into the state highway fund which would also help to keep fuel tax rates low. For these reasons, Texas Action supports SB 1782. 

That being said, it should also be pointed out that this bill addresses a problem of the government's own making. If the government didn't tinker around with the economy in the first place by providing tax incentives for manufacturing and purchasing alternative fuel vehicles there would be fewer such vehicles on the road and the legislature wouldn't need to consider this bill to make up for lost revenue.