On April 1, 2025, the Minnesota State Legislature introduced Senate Bill 966, a legislative proposal aimed at addressing the growing presence of plug-in hybrid electric vehicles (PHEVs) and all-electric motorcycles on the state's roads. The bill seeks to impose new surcharges on these vehicles, with the revenue directed towards the highway user tax distribution fund.

The bill outlines two key provisions: a $75 surcharge for plug-in hybrid electric vehicles and a $30 surcharge for all-electric motorcycles. These fees are intended to supplement existing vehicle taxes and are designed to ensure that owners of electric vehicles contribute to the maintenance and improvement of the state's transportation infrastructure. The revenue generated from these surcharges will be transferred annually from the general fund to the highway user tax distribution fund, with specific calculations based on the number of surcharges collected in the previous fiscal year.

Notably, the bill includes a mechanism for adjusting these surcharges in response to changes in the gasoline excise tax. This provision ensures that the fees remain proportional to the overall tax structure related to vehicle use and fuel consumption.

The introduction of Senate Bill 966 has sparked discussions among lawmakers and stakeholders regarding its implications. Proponents argue that the bill is a necessary step towards equitable funding for road maintenance, as electric vehicle owners currently pay less in fuel taxes compared to traditional vehicle owners. Critics, however, express concerns that the surcharges may deter consumers from adopting electric vehicles, potentially hindering Minnesota's environmental goals.

As the bill progresses through the legislative process, it is expected to undergo further debates and possible amendments. Experts suggest that the outcome of this bill could have significant implications for Minnesota's transportation funding model and its efforts to promote sustainable vehicle use. The legislature's decision on this bill will likely reflect broader priorities regarding environmental policy and infrastructure investment in the coming years.