Minnesota trims EV fees, drops Clean Cars

Gov. Tim Walz and Minnesota legislative leaders said on May 13 they had reached an end-of-session budget deal that includes lower vehicle registration fees, one-time property tax relief and new money for Hennepin County Medical Center. CBS Minnesota reported the agreement was announced Wednesday night, days before the Legislature’s May 18 adjournment deadline. Walz said on Thursday the package also preserves budget reserves while funding what he called programs that matter. The vehicle-fee piece matters because Minnesota had approved new electric-vehicle surcharges that were due to rise in 2026. A bill introduced in February, SF 3853, set a minimum surcharge of $150 for all-electric vehicles for registration periods beginning on or after January 1, 2026, compared with a prior $75 surcharge. The same bill set a $50 surcharge for plug-in hybrids. CBS Minnesota said Republicans had pushed to lower car registration fees and claimed that as one of their priorities in the final deal. (cbsnews.com) ### Which EV fees were headed up before this deal? SF 3853, posted by the Minnesota Revisor of Statutes on February 27, amended the state’s vehicle-registration law to raise the all-electric vehicle surcharge. The bill said the minimum fee would be $150 for registration periods starting between January 1, 2026 and June 30, 2027, then $100 after July 1, 2027. An earlier proposal from 2025, SF 2688, had gone further. (revisor.mn.gov) That bill would have raised the all-electric surcharge from $75 to $200 and imposed a $100 surcharge on plug-in hybrids, with future annual adjustments tied to the gasoline excise tax. The final budget deal described by Walz and legislative leaders points to a retreat from those higher charges, though the top-line agreement released publicly did not spell out the exact replacement figures. ### Why were Minnesota lawmakers revisiting the tab-renewal charges? CBS Minnesota reported that lower car registration fees were part of the bipartisan bargain struck in a divided Capitol. Walz announced the agreement with legislative leaders as they worked to close out the session and resolve a supplemental budget package. The broader deal also included $205 million in one-time funding for Hennepin County Medical Center and a new $500 million hospital reserve account, according to CBS Minnesota. (revisor.mn.gov) Those items were negotiated alongside the fee rollback and one-time property tax relief, making the vehicle-tab change part of a larger end-of-session compromise. ### What happened to Minnesota’s Clean Cars rule? (cbsnews.com) The Minnesota Pollution Control Agency said in January that the state’s Clean Cars rule ended with the close of the 2025 model year. The agency said the rule, adopted in 2020 and effective in 2024 for model year 2025 vehicles, had aimed to push electric vehicles above 6% of new light-duty sales in Minnesota; it said about 7% of such sales in 2024 were electric. (cbsnews.com) A House research summary for HF 376 described the rule as Minnesota’s version of California’s Advanced Clean Cars I standards. That summary said the rule applied beginning with model year 2025 and did not adopt California’s later Advanced Clean Cars II program. A House Session Daily report in February 2025 said the standards would expire when the first 2026 models reached showrooms later that year. (pca.state.mn.us) ### Why is NACS saying the state will dismiss the rule? NACS, the trade group for convenience retailers, said on May 14 that Minnesota would dismiss the Clean Cars rule in litigation after the attorney general’s office told the court that the Pollution Control Agency had finalized proposed rulemaking language to rescind it and started internal review. That account matches the agency’s earlier position that the rule had already become obsolete after model year 2025. (house.mn.gov) Frank Kohlasch, assistant commissioner for air and climate policy at the Minnesota Pollution Control Agency, had told House lawmakers in February 2025 that repealing the rule midyear was unnecessary because model year 2025 was the only model year to which it applied. He said manufacturers, not dealers or consumers, were the entities regulated by the rule. ### What still has to happen before Minnesotans see the changes? (convenience.org) May 18 is the constitutional deadline for the regular 2026 session to adjourn, and lawmakers still must turn the leaders’ agreement into enacted budget bills. CBS Minnesota reported the deal first as a one-page framework with top-line numbers rather than final statutory text. (house.mn.gov) The next concrete steps are legislative passage of the budget measures and completion of the Pollution Control Agency’s internal review on the Clean Cars rescission. Those actions will determine the final EV fee schedule and the formal end point of the state rule. (cbsnews.com)