Capitol Letters: Are electric vehicles paying into the Road Use Tax Fund to support Iowa roads?

State Rep. Megan Jones

A way for electric vehicles to contribute to the cost of Iowa’s roads has now been in full effect for two years, and tax and fee collections are picking up.

Back in 2019, the Legislature passed House File 767. This bill created a series of new registration fees and fuel taxes for alternatively fueled vehicles. The bill increased vehicle registration fees starting in 2020, and provided for a tax on hydrogen used as fuel and electricity purchased at a non-residential charging station. The latter changes began in Fiscal Year 2024.

This law considered groundbreaking and viewed by transportation policy experts around the country as a template for other states to follow.

These fees and taxes are deposited into the Road Use Tax Fund. So how much is being collected? Between Fiscal Year 2020 and 2023, the state deposited $2 million into the Road Use Tax Fund from the increased registration fees. By the end of 2025, that cumulative amount has risen to $7.4 million. As for the tax on hydrogen fuel or electricity purchased at a non-residential charging station, the DOT collected $402,989 from this tax in Fiscal Year 2025.

These figures are a small amount when considering what the state takes in for gas taxes and regular vehicle registration fees. But the amount is growing as is the number of electric vehicles on Iowa roads.

Iowa Legislature leads on reducing prior authorizations

This general assembly, the legislature has passed two major bills changing prior authorization requirements that delay health care for patients and place health care providers out of patient care and doing office work.

House File 2635 has passed both chambers this year and is awaiting the Governor’s signature. The bill does the following related to prior authorizations:

• Allows insurers to use AI for an initial prior auth review request, except for prior auth for medical necessity denials.
• Provides timelines for audits in private insurance and requires insurers to negotiate with providers.
• Prohibits private insurance from imposing a financial penalty, reimbursement reduction, administrative fee, or terminating participation in network based on the health care provider’s referral to an out-of-network health care provider.
• Prohibits private insurance from denying or downgrading a request for prior auth unless a qualified reviewer or clinical peer within the same specialty makes the decision and a written statement is provided with specific reasons and coverage criteria.
• Prohibits private insurance and Medicaid from requiring prior authorization on cancer-related screenings and life-threatening conditions.

Additionally, last year, the legislature passed and the Governor signed House File 303, to set up timelines for determination from health insurers on prior authorizations, require insurers to review health care services that require prior authorization, require reporting to the state regarding prior authorizations and allows the state to investigate complaints.

Now insurers are required to provide a determination to a request for prior authorization from a health care provider:

• Within 48 hours of an urgent request
• Within 10 days of a nonurgent request
• Within 15 days of a nonurgent, complex/ unique situation, or when experiencing a high volume of requests
• Respond that the PA request was received within 24 hours

The bill requires an annual report to the Insurance Division by all health insurers with information on prior auth approvals and denials and the average/median time between the request and the decision. This report will be made public within 60 days. These first reports are due Aug. 31, 2026.

Contact Rep. Megan Jones by email: megan.jones@legis.iowa.gov