The National Conference of State Legislatures (NCSL) has urged Congress to revise proposed federal charges for electric and plug-in hybrid vehicles, warning that the collection arrangements could create costs and funding risks for state governments.

The charges form part of the proposed BUILD America 250 Act, a five-year surface transportation reauthorisation bill approved by the US House Transportation and Infrastructure Committee in May. Under the legislation, owners of eligible electric vehicles (EVs) would pay an annual federal registration fee of US$130, while plug-in hybrid vehicles (PHEVs) would be charged US$35. The fees would increase by US$5 every two years from 2029, subject to maximum rates of US$150 and US$50 respectively.

Unlike a mileage-based road usage charge, the proposed fees would not vary according to how far a vehicle travels. State motor vehicle departments would be required to incorporate the federal charges into their registration and renewal processes and remit the proceeds to the US Federal Highway Administration each month. States could retain up to 1% of the money collected for administration and apply for implementation grants worth up to $2m.

However, a state that failed to meet the requirements could lose federal highway funding equivalent to 125% of the amount it should have remitted. The NCSL said the proposed implementation timetable remained unclear, while the available administrative funding might be insufficient for states to modify their registration and payment systems. “States encourage Congress to examine innovative ways to capture all system users,” NCSL said, but asked that “the design and implementation of such fee systems be done in close consultation with states”.

The organisation said that, from 1 January 2027, 42 states will already impose additional registration fees on EVs, ranging from US$70 to US$270. Some 35 states will charge additional fees for hybrid vehicles, ranging from US$35 to US$150. The proposed federal charges would sit alongside those state-level fees but would require separate collection and remittance arrangements.

Congress is considering alternative sources of transport revenue as the effectiveness of the federal fuel-tax model continues to decline. The federal gasoline tax remains at 18.4 cents per gallon and the diesel tax at 24.4 cents, with neither rate having increased since 1993. The Congressional Budget Office estimates that the EV and PHEV charges would generate approximately US$12.4bn in net federal revenue through 2036.

It also noted that the bill expresses support for paying the proceeds into the Highway Trust Fund but does not legally require the money to be deposited there. The House Transportation and Infrastructure Committee approved the BUILD America 250 Act by 62 votes to two on 22 May, but the legislation has not received a vote in the full House and no corresponding Senate bill has been introduced.

The Senate has separately approved a stopgap funding measure that would extend existing federal surface transportation programmes until 11 December 2026. At the time of writing, that measure was awaiting consideration by the House of Representatives.