Committee backs fee increase to seed $50M "Better Bridge" fund; industry warns of volatility

Senator Josh Kasmier opened the hearing on Senate Bill 324 proposing a $50 million seed transfer into a new state special account to fund local bridge grants, pay and retention for the Montana Highway Patrol, motor vehicle division operations, and victim-services grants.

Ryan Evans, assistant budget director in the Governor’s Budget Office, described the bill as originally introduced in the governor’s budget request and said the measure would seed a $50 million Better Bridge Fund that could support a roughly $10 million-per-year local-bridge grant program. Evans said the bill also funds the Montana Highway Patrol salary survey, supports the Motor Vehicle Division and continues funding for crime-victim services (VOCA) currently routed through other sources. He said the bill would also eliminate the Motor Vehicle Division’s 3% administrative fee paid by registrants unless amended.

Chris Dorrington, director at the Montana Department of Transportation, urged passage to create a reliable revenue stream for local off-system bridges. "Local bridges are expensive — these are million-dollar structures — and the revenue stream in this bill helps meet that need," he told the committee.

Sponsor and proponents described two alternative bill forms in committee. The version amended in Transportation increased a luxury-vehicle registration fee from $825 to $1,000 for the first year rather than imposing a 1% sales-tax-style levy on high-MSRP vehicles. The original draft would have imposed a 1% tax on certain new luxury vehicles; the sponsor and the Governor’s Budget Office said that original approach generated larger, more-stable revenue estimates than the amended $1,000 flat-fee option.

Proponents from counties and industry associations said Montana still faces a large bridge backlog and that seed money coupled with a stable revenue stream could buy down local hazards. "This fund is designed to solve a pretty real problem," Chris Dorrington said, citing many bridges built in the 1930s that now need replacement.

Opponents representing commercial registered-agent businesses and private-sector service firms warned the bill relies too heavily on growth in an industry that is sensitive to market and tariff shocks. Kali Wicks, representing a commercial registered-agent business, told the committee the industry is volatile and said higher fees risk driving business to other states such as Alaska. Other opponents raised concerns that eliminating the 3% MVD administrative fee would create an ongoing shortfall for motor-vehicle operations unless other offsets are found.

The committee heard detailed fiscal questions from members about the effects of a new 25% tariff on imported vehicles and whether revenue estimates remain reliable under that change. Law firms, registration services, and others said the current amendment to $1,000 will be workable while they oppose returning the bill to the original 1% model.

In executive action the committee voted to recommend do-pass for Senate Bill 324; a roll-call showed 13 yeas and 9 nays. Several members urged additional amendment work as the bill moves to the floor.