A BILL for an Act to create and enact a new section to chapter 54-27 of the North Dakota Century Code, relating to the creation of the city, county, and township road fund; to amend and reenact subsection 1 of section 39-04-19.2, section 54-27-19, subsection 1 of section 57-43.1-02, and subsection 1 of section 57-43.2-02 of the North Dakota Century Code, relating to the electric and plug-in hybrid vehicle road use fee, the tax imposed on motor vehicle and special fuels, and the highway tax distribution fund; and to provide an effective date.
HB 1382 would revise North Dakota’s road-funding structure by increasing several transportation-related user taxes and fees and redirecting some of the revenue into a new city, county, and township road fund. The bill raises the electric vehicle road use fee, the plug-in hybrid vehicle road use fee, and the electric motorcycle road use fee, while also increasing the state motor vehicle fuel tax and special fuel tax from 23 cents to 26 cents per gallon, effective for taxable events after June 30, 2025. It also creates a new fund in the state treasury that would receive three cents per gallon from those fuel taxes and distribute the money to counties, cities, and townships for road infrastructure.
The bill would also amend the highway tax distribution fund formula, which governs how motor vehicle registration fees and fuel tax revenues are shared among the state highway fund, township highway fund, public transportation fund, counties, and incorporated cities. Under the proposal, the first $5.5 million per biennium would still go to the state highway fund for administrative assistance, and the remaining revenues would continue to be allocated monthly under the existing percentage-based formula, with counties and cities receiving distributions for highway purposes. The new city, county, and township road fund would add another dedicated revenue stream for local road infrastructure, with two-thirds going to counties and cities using the existing city/county formula and one-third going to the township highway aid fund.
In practical terms, the bill would increase costs for fuel users and owners of electric and plug-in hybrid vehicles while increasing the amount of transportation revenue available to state and local governments. It would affect the statutes governing vehicle registration fees, fuel taxes, and the highway tax distribution system, and it would expand the funding base for local road maintenance and construction. The bill also preserves the constitutional restrictions that these local distributions be used only for highway purposes.
The overall sentiment appears mixed to favorable in the House, where the bill advanced on second reading with multiple recorded vote totals showing support, but it ultimately failed in the Senate on second reading by a 0-45 vote. That final outcome suggests the proposal faced significant opposition in the Senate despite earlier House approval. Because there are no committee transcripts provided, the record does not show detailed debate, but the vote history indicates the main support likely centered on road funding needs, while opposition was strong enough to block final passage.
The main points of contention are likely the tax increases themselves and the treatment of electric and plug-in hybrid vehicles, which are charged road use fees in addition to the fuel-tax changes. Supporters would likely view the bill as a way to align transportation funding with road use and provide more money for local infrastructure, while opponents may have objected to raising fuel taxes, increasing vehicle-related fees, or altering the distribution of existing transportation revenues. The bill’s failure in the Senate suggests those concerns outweighed support for the funding changes.
HB 1382 would amend North Dakota’s motor fuel tax, special fuel tax, electric vehicle road use fee, and highway tax distribution statutes, and it would create a new city, county, and township road fund in the state treasury. It would increase the per-gallon fuel tax by 3 cents, raise EV and plug-in hybrid road use fees, and dedicate a portion of fuel-tax revenue to local road infrastructure and township aid. The bill would also adjust how highway-related revenues are allocated among the state, counties, cities, townships, and public transportation fund, while keeping local distributions restricted to highway purposes under the state constitution.
The bill appears to have had some support in the House, as reflected by its passage through multiple second-reading votes there, but it encountered decisive opposition in the Senate, where it failed 0-45 on second reading. Overall, the sentiment suggests that transportation funding improvements and local road support were appealing to some lawmakers, but the proposed tax and fee increases were not broadly acceptable across both chambers. The final Senate vote indicates strong negative sentiment at the point of final consideration.
The central contention was over raising taxes and fees to fund roads. Opponents likely objected to increasing the motor vehicle fuel tax and special fuel tax, as well as the higher road use fees on electric vehicles, plug-in hybrids, and electric motorcycles. Another likely point of debate was the reallocation of transportation revenues through the new city, county, and township road fund and the revised highway tax distribution formula, which could shift money among state and local recipients. Supporters likely emphasized road maintenance, local infrastructure needs, and a user-pays approach, while opponents focused on the burden of higher transportation costs and the fairness of taxing EVs and fuel users.