HF1140

Purpose

• Add a road usage charge for allelectric vehicles and create a system to collect it in addition to existing vehicle taxes. The bill aims to fund road maintenance and related transportation needs while establishing data governance, oversight, and annual reporting. It also defines how the charge is calculated, who manages it, and how revenue is distributed.

Main provisions and objectives

• Define allelectric vehicle: The bill adds a formal definition that aligns with existing statutory definitions for all-electric vehicles.
• Surcharge for allelectric vehicles: In addition to the existing tax, allelectric vehicles would have a separate surcharge (listed as a $75 amount in the bill) to be collected during registration. Revenue from this charge would go to the highway system.
• Creation of a road usage charge (RUC) framework: Establishes a new road usage charge program (168.0132) with detailed rules for how mileage and usage are billed and collected.
• Charge calculation methods:
  • If an account management system is active: the charge is based on miles traveled in Minnesota during the billing period, scaled by the ratio of the state’s gasoline tax rate (including any surcharge) to the analogous fuel economy for the vehicle class.
  • If account management is not active: the charge uses an estimate of average daily miles traveled, days in the billing period, and the same gasoline tax rate to determine the charge, plus an adjustment component.
  • The total charge for a registration period cannot exceed what would have been charged under the regular method.
• Analogous fuel economy: The bill requires determining a vehicle’s analogous fuel economy (MPG) using EPA data, by vehicle class (e.g., sedan, SUV, minivan, pickup) and model year, with preference to exclude allelectric vehicles where feasible.
• Account providers: The commissioner must enter into agreements with one or more account providers to manage enrollment, charge calculations, verification, billing, collections, and remittance, plus policies on prepayment, audits, and data security.
• Data and privacy protections:
  • Account providers must identify miles traveled within Minnesota using manufacturer data or geolocation devices.
  • They must share limited data with the commissioner (owner and vehicle identity, billing period, and calculated charge) electronically by specified dates.
  • They must not share geolocation data for identifiable vehicles with the commissioner or other entities, except under a court order.
  • Summary data may be shared; the program is not a government function for purposes of certain statutes.
  • Odometer data must be accessible to an account provider with owner authorization, via API or similar technology.
• Odometer data access: Vehicle manufacturers must provide mileage and odometer data to an account provider with owner/lessee authorization.
• Revenue deposits and use:
  • Revenue collected under the road usage charge is split: 11% to the Driver and Vehicle Services operating account; the remainder to the Highway User Tax Distribution Fund.
  • The Driver and Vehicle Services account receives funds to pay account providers and administrative costs.
• Reporting: An annual legislative report due by November 15, detailing implementation progress, enrollment, miles traveled, provider agreements, finances, and recommendations for potential changes. This reporting provision expires in 2031.
• Implementation window: The provision about applying to registration periods starts on or before June 30, 2026.
• Legislative review and sunset: The bill requires ongoing evaluation and would sunset the reporting provision and related framework on June 30, 2031, unless renewed or amended.

How it changes the current law

• Introduces a new road usage charge for allelectric vehicles that works alongside the existing EV tax.
• Adds a new funding mechanism and separate revenue stream for road maintenance via the Highway User Tax Distribution Fund and the Driver and Vehicle Services account.
• Creates a formal framework for third-party account providers to manage miles tracking, calculations, and billing with explicit data-sharing and privacy rules.
• Adds a new data governance structure around road usage charges, including limits on geolocation data sharing and requirements for data reporting to the state.
• Requires the state to determine an analogous fuel economy for vehicle classes to calculate charges, using EPA data.
• Sets a defined sunset for the reporting and evaluation provisions (2031) and a defined applicability window tied to vehicle registrations through mid-2026.

Key terms and concepts (from the bill text)

• Allelectric vehicle
• Road usage charge (RUC)
• Account provider
• Analogous fuel economy
• Vehicle miles traveled (average daily VMT)
• Odometer data
• Data security standards
• Geolocation data
• Billing period
• Registration period
• Exise tax rate for gasoline
• Surcharge (e.g., $75)
• Highway User Tax Distribution Fund
• Driver and Vehicle Services operating account
• Data sharing and privacy restrictions
• EPA data and vehicle classifications (sedan, wagon, car, SUV, minivan/van, pickup)
• Best value contracting (for account provider agreements)
• Sunset/expiration (2031)

Relevant Terms allelectric vehicle; road usage charge; RUC; account provider; miles traveled; vehicle miles traveled; analogous fuel economy; MPG; EPA data; odometer data; geolocation data; data sharing; data security; vehicle classification; gasoline excise tax rate; surcharge; highway user tax distribution fund; driver and vehicle services operating account; billing period; registration period; ownership authorization; API; municipal and state transportation data.