If your thinking about buying an electric vehicle (EV) in Texas after August 31, 2023, you will want to know about being slapped with an extra $400 registration fee and if you already own an EV, when it’s time to register your vehicle annually, you will be required to pay an additional $200 registration fee on top of the current annual registration fees. This comes on the hill of the 88th Texas Legislature passing Senate Bill 505. The original author of the bill Texas Senator Robert Nichols (SD 3) filed the bill on January 19, 2023, and climbed the ladder quickly with it being pushed into the Senate Transportation Committee by February 17, 2023.
According to the “Authors/Sponsors Statement of Intent,” the purpose of the bill is to ensure those who buy EVs will have to help pay for roads that are used by those EVs. As more EVs drive on Texas roads, there are concerns about how they contribute to the funding of the roads they use. In the State of Texas, the gasoline/diesel fuel tax is used to fund transportation projects; however, with the growing use of EVs, the revenue from the fuel tax is decreasing, which diminishes the ability to fund road improvements for all drivers.
A report from the Midland Reporter-Telegram a year ago showed there are 122,967 EVs registered in the state of Texas. Obviously, with this being a year old, there are more than that. If you take the number of EVs from a year ago and charge the new fee of $200, that means EV owners will pay out about $24.6 million annually. There are around 21 million gasoline & diesel-powered vehicles in Texas that use about 13 billion gallons of gasoline and 4.5 billion gallons of diesel fuel each year. Both gasoline & diesel are charged $0.20 a gallon of state tax.
EVs use the same roads as gasoline & diesel-powered vehicles, so they should be subject to an equalization of road use consumption amount. S.B. 505 addresses these concerns by creating an equalization consumption amount for EVs, based upon the vehicle class. Both the upper and lower chambers are hoping this bill will solve the growing problem where only petroleum-powered vehicles are paying into the transportation fund while all vehicles benefit from this funding.
Probably the most unique issue with SB 505 is that it was bi-partisan. From the very beginning when the bill was first moved to the Senate Transportation Committee and all nine committee members pushed it out to a full upper chamber vote. The Senate voted 31-0 to move the bill onto the lower chamber. Once read, SB 505 was sent to the House Transportation Committee and it was a 12-0 and one absent to move the bill to a full vote of the House. After the 3rd reading of SB 505 in the lower chamber, they voted 145-0, with 1 present, but voting and four absent.
Now the bill heads to Governor Abbott’s office to be signed into law.
