AASHTO Journal

UPDATED: South Dakota Lawmakers Pass Measure to Hike Fuel, Vehicle Fees

The South Dakota Legislature voted late Friday for a transportation revenue measure that would increase roadway user fees on motor fuels and vehicles, including a 6-cent hike as of April 1 in fuel taxes.

A House-Senate conference reportedly reached agreement the morning of March 13, and both chambers approved the accord later that day.


That conference deal followed House approval March 10 of a bill that modified a Senate-passed transportation measure.

The House version aimed to raise more than $50 million in its first year mainly through a combination of phased-in motor fuel fee increases along with higher fees on vehicles.

The Legislature was acting on a January call by Gov. Dennis Daugaard to raise revenue for the road and bridge network.

The House bill would increase the maximum highway speed limit on interstate highways in South Dakota to 80 mph from 75. It would have hiked motor fuel excise taxes by 6 cents over three years – from 22 cents a gallon now to 24 cents starting July 1, plus another 2 cents in each of the next two years to reach 28 cents on July 1, 2017. Here is its legislative text.

The previous Senate version would have increased fuel fees for eight years instead of the three the House approved.

The House bill would also increase an array of vehicle purchasing, licensing and registration fees at the state level and allow local jurisdictions to increase their own “wheel taxes” as well. The vehicle fees would apply to passenger and commercial vehicles, and includes motor homes and motorcycles as well as cars and trucks.

That measure refers to both “license fees and compensation for use of the highways” as it spells out the new fee levels.

For local needs, the measure also specifies how counties and townships may levy their own road improvement taxes, and the House reportedly removed some Senate-imposed requirements on the way counties could assess those property taxes for infrastructure.

Questions regarding this article may be directed to editor@aashtojournal.org.

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