House T&I Committee Advances Budget Reconciliation Proposal
On Thursday April 30, the House Transportation & Infrastructure (T&I) Committee approved its portion of the reconciliation package, meeting a required $20 billion in net savings. The committee’s proposal includes several provisions that directly affect vehicle policy. The committee:
- Establishes a $250 annual registration fee on electric vehicles (EVs)
- Maintains a $100 annual fee on hybrid vehicles
- Eliminates a proposed $20 universal vehicle registration fee that would have applied to all vehicles, including internal combustion engine vehicles
- Rescinds funding for underutilized or duplicative “Green New Deal-style” transportation programs created under the Inflation Reduction Act
The EV and hybrid fees are intended to ensure that all vehicles contribute to the Highway Trust Fund (HTF)—which is currently funded by gas taxes that EVs and hybrids largely avoid. These new user fees are projected to raise more than $38 billion over 10 years, supporting the maintenance and improvement of federal roads and bridges.
Why T&I Took Action
Congress is actively working through a major budget reconciliation process tied to extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), which are set to expire at the end of this year. To make room for those tax cuts under federal budget rules, Congress must offset their cost with at least $2 trillion in spending cuts or new revenue.
Each House committee has been tasked with identifying cost savings or revenue to help reach that goal. These changes are intended to show fiscal responsibility while preserving the TCJA’s pro-growth provisions, many of which impact the small businesses and entrepreneurs that make up much of the rental car industry.
What’s Next:
The T&I Committee’s proposal now heads to the House Budget Committee, which will combine it with other committee proposals to form the full reconciliation package. The process will continue through the summer and fall, with the Senate expected to weigh in later.
House Passes CRA Resolutions
On May 1, the U.S. House of Representatives’ completed passage of Congressional Review Act (CRA) resolutions overturning California’s electric vehicle (EV) mandate. See ACRA’s statement here.
The Senate has yet to vote on these resolutions. However, ACRA sent a letter of support this week to Senate sponsors of the resolutions on their leadership and encouraging their swift passage.