The BUILD America 250 Act’s registration charge is pitched as a fair share for the Highway Trust Fund, but the bill as written doesn’t steer the money there.
California has more electric vehicles on the road than any other state, according to the Energy Department’s Alternative Fuels Data Center. That makes it the state with the most at stake in one provision of the House’s stalled highway bill: a new federal registration fee of $130 a year for every electric car, collected by the states.
The fee is part of the BUILD America 250 Act, H.R. 8870, the five-year surface transportation bill that the House Transportation and Infrastructure Committee approved in May. Its future is now tied to a deadline. Congress has extended current highway and transit programs through Dec. 11, according to the American Association of State Highway and Transportation Officials, which leaves lawmakers about six weeks after the election to pass a full bill or extend the programs again.
What the bill would do
According to the committee’s section-by-section summary, Section 1129 directs the Federal Highway Administration to impose an annual fee of $130 on each covered battery-electric vehicle and $35 on each covered plug-in hybrid. States would collect it. Starting in 2029, the amounts would rise by $5 every two years, up to caps of $150 and $50.
The enforcement mechanism is steep. A state that does not comply would have 125 percent of the amount it owes withheld from its federal highway apportionment.
The committee’s Republican leadership presents the fee as a matter of fairness. Gasoline and diesel taxes are the main source of the Highway Trust Fund, and electric cars, which use the same roads, pay none of them. The federal gas tax, 18.4 cents a gallon, has not changed since 1993 and raises about $40 billion a year, according to the Tax Policy Center, as USA Today reported in September.
In a May 22 release, the committee said the bill “injects the Highway Trust Fund with its first new stream of revenue in over three decades.” Its chairman, Representative Sam Graves, Republican of Missouri, said: “The purpose of the BUILD America 250 Act is right there in its name.” In a statement to USA Today, Mr. Graves said the fee “ensures that electric vehicle owners begin paying their fair share for the use of our roads.” An earlier draft had set the fee at $135.
The committee’s ranking Democrat, Representative Rick Larsen of Washington, backed the bill. “You can’t have a big-league economy with little-league infrastructure,” he said in the same release.
Where the money goes
There is a gap between the pitch and the text. The Congressional Budget Office, in its July 9 cost estimate, found that Section 1129 would affect federal revenues but that the bill would not require the money to be deposited in the Highway Trust Fund. The American Public Transportation Association has made the same point in a fact sheet, noting that the committee’s report says the fees should go to the trust fund even though the legislative language does not require it.
That distinction matters to transit agencies and to states, which depend on the trust fund’s highway and mass transit accounts. Money that lands in the general Treasury can be spent on anything Congress chooses.
How the Californians voted
The committee approved the bill 62 to 2 on May 21, according to the markup record. The two no votes came from Representatives Scott Perry, Republican of Pennsylvania, and Jerrold Nadler, Democrat of New York.
Every California member of the committee who voted supported the bill: Democrats Jared Huffman, Julia Brownley, Mark DeSaulnier, Salud Carbajal, Robert Garcia and Laura Friedman, and Republicans Kevin Kiley and Vince Fong. Representative John Garamendi, the Democrat whose district spans parts of Solano and Contra Costa counties, did not vote.
Two Californians tried to change the fee before it passed. Mr. Huffman, whose district runs from Marin County to the Oregon border, offered an amendment to strike Section 1129 entirely, then withdrew it. Mr. Carbajal offered one to exempt owners with adjusted gross incomes of $75,000 or less; it failed on a voice vote. Representative Sharice Davids, Democrat of Kansas, proposed a substitute “fair share” fee paired with a sense of Congress that the revenue should go to the trust fund, and also withdrew it.
The California math
California drivers would not be starting from zero. Since 2020, the state has charged a Road Improvement Fee on zero-emission vehicles of model year 2020 or later, created by the 2017 gas-tax law, SB 1. The fee is $121 this year, adjusted annually for inflation, and is collected at renewal; it is not charged when a new car is first registered through a dealer. The money goes to state road and bridge repair.
The bill as described in the committee summary does not credit state fees against the federal one. If the federal fee is enacted as written, a Bay Area driver of a battery-electric car from model year 2020 or later could therefore owe about $251 a year in combined road fees, before vehicle license fees and other registration charges.
Plug-in hybrid owners would pay the $35 federal charge; California’s road improvement fee applies only to zero-emission vehicles.
What comes next
The bill has not reached the House floor. The Senate Environment and Public Works Committee writes the highway title of the Senate’s version, and taxes and fees fall to the tax-writing committees, which leaves the fee’s design open in any final deal.
The politics are also moving in the other direction on gasoline. President Trump and some lawmakers have proposed suspending the federal gas tax, USA Today reported, which would deepen the trust fund’s shortfall at the moment the House is counting on a new source of revenue.
For California’s representatives on the committee, the question before Dec. 11 is whether the fee survives in its current form, whether the money will be required to go to the trust fund, and whether states that already charge their own fees get any credit.
Callum Petrossian covers the House Natural Resources, Energy and Commerce, and Transportation and Infrastructure committees, from power grids and offshore leasing to water projects, highways and disaster aid, for the Inquirer’s Energy & Environment desk. More from Callum Petrossian
