Alternative Fuel, Fuel-Efficient, and Electric Vehicles - Highway Use Fees

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1374*

HOUSE BILL 1374
R4 6lr2112

By: Delegate Solomon
Introduced and read first time: February 13, 2026
Assigned to: Environment and Transportation

A BILL ENTITLED

AN ACT concerning 1

Alternative Fuel, Fuel–Efficient, and Electric Vehicles – Highway Use Fees 2

FOR the purpose of repealing the annual surcharge required to register a zero –emission 3
vehicle or plug–in electric drive vehicle in the State; requiring the owners of certain 4
alternative fuel vehicles, fuel –efficient vehicles, and plug –in electric drive vehicles 5
to pay an annual highway use fee for each vehicle registered in the State; 6
establishing a voluntary annual Mileage –Based User Fee Program wit hin the 7
Department of Transportation; allowing the owners of certain vehicles to participate 8
in the Program in lieu of paying the annual highway use fee; requiring the 9
Department, on or before a certain date, to establish a fully operational Program; 10
establishing a Highway Use Fee Account within the Transportation Trust Fund; and 11
generally relating to fees paid by the owners of alternative fuel vehicles, 12
fuel–efficient vehicles, and plug–in electric drive vehicles. 13

BY renumbering 14
Article – Transportation 15
Section 11–103.4 and 11–103.5 16
to be Section 11–103.5 and 11–103.6, respectively 17
Annotated Code of Maryland 18
(2020 Replacement Volume and 2025 Supplement) 19

BY repealing and reenacting, without amendments, 20
Article – Transportation 21
Section 3–216(a) 22
Annotated Code of Maryland 23
(2020 Replacement Volume and 2025 Supplement) 24

BY repealing and reenacting, with amendments, 25
Article – Transportation 26
Section 3–216(c)(2)(i) 27
Annotated Code of Maryland 28
2 HOUSE BILL 1374

(2020 Replacement Volume and 2025 Supplement) 1

BY adding to 2
Article – Transportation 3
Section 3–216(d)(6) 4
Annotated Code of Maryland 5
(2020 Replacement Volume and 2025 Supplement) 6

BY adding to 7
Article – Transportation 8
Section 11–103.4, 11–125.2, 13–956, and 13–957 9
Annotated Code of Maryland 10
(2020 Replacement Volume and 2025 Supplement) 11

BY repealing 12
Article – Transportation 13
Section 13–956 14
Annotated Code of Maryland 15
(2020 Replacement Volume and 2025 Supplement) 16

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That Section(s) 11–103.4 and 11–103.5 of Article – Transportation of the Annotated Code 18
of Maryland be renumbered to be Section(s) 11–103.5 and 11–103.6, respectively. 19

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 20
as follows: 21

Article – Transportation 22

3–216. 23

(a) There is a Transportation Trust Fund for the Department. 24

(c) (2) (i) The Gasoline and Motor Vehicle Revenue Account, the Driver 25
Education Account, the Motorcycle Safety Program Account, [and] the Transportation 26
Network Company Impact Fee Ac count, AND THE HIGHWAY USE FEE ACCOUNT shall 27
be maintained in the Transportation Trust Fund. 28

(d) (6) (I) THE DEPARTMENT SHALL ALLO CATE THE FUNDS IN THE 29
HIGHWAY USE FEE ACCOUNT SOLELY FOR TH E NEEDS OF THE MARYLAND AREA 30
REGIONAL COMMUTER RAIL SERVICE. 31

(II) NOTWITHSTANDING ANY O THER PROVISION OF LA W, THE 32
FUNDS IN THE HIGHWAY USE FEE ACCOUNT MAY NOT BE TR ANSFERRED OR 33
DIVERTED TO THE GENERAL FUND OF THE STATE OR USED FOR ANY OTHER 34
PURPOSE WITHIN THE DEPARTMENT. 35
HOUSE BILL 1374 3

(III) MONEY EXPENDED FROM THE HIGHWAY USE FEE 1
ACCOUNT IS SUPPLEMENTAL TO AND IS NOT INTENDED TO TAKE THE PLACE OF 2
FUNDING THAT OTHERWISE WOULD BE APPROPRIATED FOR THE MARYLAND AREA 3
REGIONAL COMMUTER RAIL SERVICE. 4

11–103.4. 5

“ALTERNATIVE FUEL VEHICLE” MEANS A MOTOR VEHICLE THAT: 6

(1) IS MANUFACTURED OR MODIFIED TO USE AN ALTERNATIVE FUEL, 7
INCLUDING ELECTRICIT Y, ETHANOL, METHANOL, GASOHOL, AND PROPANE OR 8
NATURAL GAS, REGARDLESS OF ENERGY CONSUMPTION; AND 9

(2) IS NOT A MOTOR FUEL V EHICLE, PLUG–IN ELECTRIC DRIVE 10
VEHICLE, OR PLUG–IN HYBRID VEHICLE. 11

11–125.2. 12

“FUEL–EFFICIENT VEHICLE ” MEANS A MOTOR VEHICL E THAT HAS A 13
COMBINED FUEL ECONOMY RATING OF AT LEAST 25 MILES PER GALLON. 14

[13–956. 15

(a) In addition to the registration fee otherwise required by this title, the owner 16
of a motor vehicle shall pay an annual surcharge: 17

(1) On or before July 1, 2025, of: 18

(i) $125.00 for each zero–emission vehicle, as defined in § 23–206.4 19
of this article; and 20

(ii) $100.00 for each plug –in electric drive vehicle that is not a 21
zero–emission vehicle; and 22

(2) After June 30, 2025, at a rate based on the amounts established under 23
item (1) of this subsection adjusted for inflation as determined annually by the 24
Administration. 25

(b) The Administration shall allow for payment of a surcharge assessed un der 26
this section: 27

(1) At the time the annual registration fee is paid; or 28

4 HOUSE BILL 1374

(2) In installments throughout the registration period, as determined by 1
the Administration. 2

(c) The proceeds collected from the surcharge assessed under subsection (a)(1) of 3
this section shall be deposited into the Transportation Trust Fund. 4

(d) If a person that owns a motor vehicle that is assessed the surcharge fails to 5
pay the surcharge or installments, the Administration shall refuse to register or renew or 6
transfer the registration of the motor vehicle.] 7

13–956. 8

(A) THIS SECTION DOES NOT APPLY TO: 9

(1) AN AUTOCYCLE, MOPED, OR MOTORCYCLE; 10

(2) A VEHICLE WITH A GROSS WEIGHT OVER 26,000 POUNDS; 11

(3) A VEHICLE THAT IS OWNED BY A GOVERNMENTAL ENTITY; 12

(4) A VEHICLE THAT IS REGISTERED UNDER THE INTERNATIONAL 13
REGISTRATION PLAN; OR 14

(5) A VEHICLE THAT PARTICI PATES IN THE MILEAGE–BASED USER 15
FEE PROGRAM ESTABLISHED UNDER § 13–957 OF THIS SUBTITLE. 16

(B) IN ADDITION TO THE RE GISTRATION FEE OTHER WISE REQUIRED BY 17
THIS TITLE, THE OWNER OF AN ALTE RNATIVE FUEL VEHICLE , A FUEL–EFFICIENT 18
VEHICLE, OR A PLUG–IN ELECTRIC DRIVE VEHICLE SHALL PAY AN ANNUAL HIGHWAY 19
USE FEE FOR EACH MOTOR VEHICLE REGISTERED. 20

(C) THE HIGHWAY USE FEE SHALL BE: 21

(1) CALCULATED IN ACCORDA NCE WITH SUB SECTION (D) OF THIS 22
SECTION; 23

(2) COLLECTED BY THE DEPARTMENT AT THE TIM E OF VEHICLE 24
REGISTRATION; AND 25

(3) DEPOSITED IN THE HIGHWAY USE FEE ACCOUNT IN THE 26
TRANSPORTATION TRUST FUND. 27

(D) (1) (I) THE SECRETARY SHALL CALCULATE THE HIGHWAY USE FEE 28
IN ACCORDANCE WITH THIS SUBSECTION. 29
HOUSE BILL 1374 5

(II) FOR PURPOSES OF ESTIM ATING THE AMOUNT OF MOTOR 1
FUEL TAXES PAID EACH YEAR TO OPERATE A FUEL–EFFICIENT VEHICLE UNDER THIS 2
SUBSECTION, THE SECRETARY SHALL: 3

1. ESTIMATE THE AVERAGE NUMBER OF MILES A CLASS 4
A VEHICLE TRAVELS IN THE STATE EACH YEAR; 5

2. CALCULATE THE NUMBER OF GALLONS OF FUEL A 6
FUEL–EFFICIENT VEHICLE US ES TO TRAVEL THE EST IMATED NUMBER OF MIL ES 7
UNDER ITEM 1 OF THIS SUBPARAGRAPH; AND 8

3. APPLY THE MOTOR FUEL TAX RATE ESTABLISHED 9
UNDER § 9–305(A)(2) OF THE TAX – GENERAL ARTICLE AS INCREASED BY THE 10
COMPTROLLER UNDER §§ 9–305(B) AND 9–306 OF THE TAX – GENERAL ARTICLE. 11

(2) FOR A PLUG –IN ELECTRIC DRIVE VE HICLE, THE ANNUAL 12
HIGHWAY USE FEE IS EQUAL TO 85% OF THE ESTIMATED AMOUNT OF MOTOR FUEL 13
TAXES PAID EACH YEAR TO OPERATE A FUEL–EFFICIENT VEHICLE IN THE STATE. 14

(3) (I) FOR AN ALTERNATIVE FU EL VEHICLE OR A 15
FUEL–EFFICIENT VEHICLE, THE ANNUAL HIGHWAY U SE FEE IS EQUAL TO 85% OF 16
THE DIFFERENCE BETWEEN: 17

1. THE ESTIMATED AMOUNT OF MOTOR FUEL TAXES 18
PAID EACH YEAR TO OPERATE A FUEL–EFFICIENT VEHICLE IN THE STATE; AND 19

2. THE ESTIMATED AMOUNT OF MOTOR FUEL TAXES 20
PAID EACH YEAR TO OPERATE THE VEHICLE BEING REGISTERED IN THE STATE. 21

(II) 1. FOR THE PURPOSES OF ESTIMATING THE AMOUNT OF 22
MOTOR FUEL TAXES PAID TO OPERAT E EACH VEHICLE BEING REGISTERED UNDER 23
SUBPARAGRAPH (I)2 OF THIS PARAGRAPH , THE SECRETARY SHALL USE T HE 24
COMBINED FUEL ECONOMY RATING FOR THE MOT OR VEHICLE AS DETERMINED BY 25
THE MANUFACTURER OF THE VEHICLE. 26

2. IF THE SECRETARY IS UNAB LE TO DETERMINE THE 27
MANUFACTURER’S FUEL ECONOMY FOR THE VEHICLE, THE SECRETARY SHALL USE 28
THE FINAL ESTIMATE O F AVERAGE FUEL ECONO MY AS DETERMINED BY THE U.S. 29
ENVIRONMENTAL PROTECTION AGENCY, OF: 30

A. ALL CARS MANUFACTURED DURING THE SAME 31
MODEL YEAR AS THE VEHICLE; 32
6 HOUSE BILL 1374

B. IF THE VEHICLE HAS A GROSS WEIGHT OF AT L EAST 1
6,000 POUNDS BUT LESS THAN 26,000 POUNDS, ALL TRUCKS MANUFACTU RED 2
DURING THE SAME MODEL YEAR; OR 3

C. IF DATA IS NOT AVAILABLE FOR THE MODEL YEAR OF 4
THE VEHICLE BEING REGISTERED, AVAILABLE DATA FOR THE MOST RECENT MODEL 5
YEAR CLOSEST TO THE MODEL YEAR OF THE VEHICLE BEING REGISTERED. 6

(E) ON OR BEFORE JULY 1, 2026, AND EACH JULY 1 THEREAFTER, THE 7
SECRETARY SHALL UPDAT E THE HIGHWAY USE FE E CALCULATED UNDER T HIS 8
SECTION. 9

(F) IF THE VEHICLE IS REGISTERE D FOR A PERIOD OTHER THAN 1 YEAR, 10
THE HIGHWAY USE FEE SHALL BE MULTIPLIED BY THE NUMBER OF YEA RS OR 11
FRACTION OF YEARS THAT THE VEHICLE WILL BE REGISTERED. 12

(G) IF A PERSON THAT OWNS A MOTOR VEHICLE SUBJECT TO THE HIGHWAY 13
USE FEE FAILS TO PAY THE FEE, THE ADMINISTRATION SHALL REFUSE TO REGISTER 14
OR RENEW OR TRANSFER THE REGISTRATION OF THE MOTOR VEHICLE. 15

13–957. 16

(A) (1) THERE IS A VOLUNTARY MILEAGE–BASED USER FEE PROGRAM 17
IN THE DEPARTMENT. 18

(2) THE PURPOSE OF THE MILEAGE–BASED USER FEE PROGRAM IS 19
TO ALLOW THE OWNER O F A VEHICLE SUBJECT TO THE HIGHWAY USE F EE 20
ESTABLISHED UNDER § 13–956 OF THIS SUBTITLE TO PAY A MILEAGE–BASED USER 21
FEE IN LIEU OF THE HIGHWAY USE FEE. 22

(B) (1) THE DEPARTMENT SHALL ESTA BLISH PROCEDURES FOR THE 23
COLLECTION OF THE MILEAGE–BASED USER FEE ON AN ANNUAL BASIS. 24

(2) FROM THE AMOUNT OF TH E MILEAGE –BASED USER FEE 25
COLLECTED EACH YEAR, THE DEPARTMENT SHALL RETAIN AN AMOUNT NECESSARY 26
TO ADMINISTER THE PROGRAM AND DEPOSIT T HE REMAINDER IN THE HIGHWAY 27
USE FEE ACCOUNT OF THE TRANSPORTATION TRUST FUND. 28

(C) (1) ON OR BEFORE JULY 1 OF THE YEAR FOLLOWING THE YEAR THE 29
DEPARTMENT ESTABLISHE S THE MILEAGE–BASED USER FEE PROGRAM, AND 30
EACH JULY 1 THEREAFTER, THE DEPARTMENT SHALL CALC ULATE THE 31
HOUSE BILL 1374 7

MILEAGE–BASED USER FEE FOR T HE FIS CAL YEAR AS PROVIDED IN THIS 1
SUBSECTION. 2

(2) THE DEPARTMENT SHALL CALCULATE A FEE PER MILE DRIVEN BY 3
DIVIDING THE HIGHWAY USE FEE UNDER § 13–956 OF THIS SUBTITLE BY THE 4
ESTIMATED AVERAGE NU MBER OF MILES A CLASS A VEHICLE TRAVELS IN T HE 5
STATE EACH YEAR. 6

(3) THE MILEAGE –BASED USER FEE IS EQ UAL TO THE NUMBER OF 7
MILES A PARTICIPANT’S VEHICLE TRAVELS DURING THE FISCAL YEAR MULTIPLIED 8
BY THE FEE PER MILE DRIVEN CALCULATED UN DER PARAGRAPH (2) OF THIS 9
SUBSECTION. 10

(D) THE MILEAGE–BASED USER FEE PAID BY A MOTOR VEHICLE OWNER MAY 11
NOT EXCEED THE ANNUA L HIGHWAY USE FEE TH AT THE OWNER WOULD H AVE 12
OTHERWISE PAID UNDER § 13–956 OF THIS SUBTITLE. 13

(E) THE DEPARTMENT SHALL ESTABLISH POLICIES AND P ROCEDURES TO 14
ALLOW OWNERS OF VEHICLES SUBJECT TO THE HIGHWAY USE FEE THE OPTION OF 15
PARTICIPATING IN THE MILEAGE–BASED USER FEE PROGRAM WITH VEHICLE 16
LOCATION AND DATA TRACKING LIMITATIONS, INCLUDING: 17

(1) THE REQUIREMENT THAT ANY DATA COLLECTED B E USED ONLY 18
FOR ADMINISTRATION OF THE PROGRAM; 19

(2) THE EXCLUSION OF ANY INDIVIDUAL PARTICIPANT DATA FROM 20
DISCLOSURE; 21

(3) THE REQUIREMENT THAT PROGRAM DATA HAVE A SPECIFIC AND 22
LIMITED DATA RETENTION PERIOD; AND 23

(4) THE REQUIREMENT THAT ANY RESEARCH USING A GGREGATED 24
DATA BE SUBJECT TO THE APPROVAL OF AN INSTITUTIONAL REVIEW BOARD. 25

(F) THE OWNER OF A MOTOR VEHICLE REGISTERED IN THE STATE MAY NOT 26
BE REQUIRED TO PARTICIPATE IN THE MILEAGE–BASED USER FEE PROGRAM. 27

(G) ON OR BEFORE JULY 1, 2029, THE DEPARTMENT SHALL ESTABLISH A 28
FULLY OPERATIONAL MILEAGE–BASED USER FEE PROGRAM. 29

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 30
1, 2026. 31