Montana committee hears wide support and opposition for bill raising luxury vehicle fees to fund bridges, victims services and Highway Patrol

Senators on the Senate Transportation Committee heard competing testimony on Senate Bill 324, a package that would convert Montana’s luxury vehicle fee to a 1% charge on a vehicle’s manufacturer’s suggested retail price, transfer $50 million of one‑time general fund money to seed a new Better Local Bridge Fund, create a $10 million Montana Department of Transportation (MDT) grant program requiring local match, direct $2 of an existing $10 registration fee to a victims of crime account, and provide ongoing revenue to the Montana Highway Patrol (MHP).

The bill’s sponsor, Senator Josh Kasmier, said the measure “creates a better local bridge fund and provide[s] a funding stream for that purpose,” and that it would fund multiple priorities without relying on ongoing general fund appropriations. Ryan Evans, assistant budget director in the governor’s office, told the committee the measure was included in the governor’s budget and described “a nexus between the funding and the expenditures,” noting the proposal would also “eliminate the 3% administrative fee imposed … as they register their vehicle.”

Why it matters: proponents from counties, transportation and public‑safety agencies said Montana faces a large backlog of deficient off‑system bridges and that local governments lack reliable capital to repair or replace them. County commissioners and MDT officials described hundreds of off‑system bridges in need of work and urged a new dedicated funding stream. Victim services advocates and county attorneys also urged the committee to secure stable funding for victim‑witness and community‑based victim services after federal funding sources proved unstable.

Proponents included Yellowstone County Commissioner John Ostlund and Chris Dorrington, director of the Montana Department of Transportation. Dorrington said there are “2,196 off‑system bridges” statewide and that “22% of those bridges are load posted.” Montana Association of Counties and local commissioners described multimillion‑dollar needs: the association estimated about $440 million to address bridges that are closed or load posted.

Victim service providers and county attorneys said the bill’s allocation of $2 of the $10 registration surcharge to a new victims of crime state special revenue account would stabilize advocates’ funding. Natalia Bowser, director of Montana Border Crime Control, said that allocation “goes out as grant funding to subrecipients, distributed to programs across the state that serve victims of crime.” County attorneys and the Montana Coalition Against Domestic Violence described services funded by those dollars — crisis hotlines, emergency shelters, court advocacy and victim‑witness specialists — and said those programs have faced federal funding shortfalls.

Public safety testimony emphasized the MHP funding need. Colonel Kurt Sager, colonel of the Montana Highway Patrol, and Jesse Luther of the Association of Montana Troopers said the patrol’s state special revenue sources have not kept pace with expenses and pay adjustments; Luther noted the patrol receives about $5 million annually now from the existing luxury vehicle revenue and said salary increases this session make additional revenue “critical.”

Opponents representing Montana’s commercial registered agent and registration services said the change to a percentage on MSRP — effectively a targeted sales tax — would dramatically raise costs to their clients and risk moving the business to other states. Kalli Wicks of LLC TLC and other registration‑industry witnesses said their companies could face a roughly fourfold increase for typical transactions under the fiscal note scenario and urged a flat fee or different structure to avoid driving away nonresident registrants. Bennett Law Office and other opponents suggested smaller increases or a sliding scale tied to vehicle price instead of a flat percentage.

Committee questions focused on market effects and alternatives. Senators asked whether a sliding fee schedule or tiered flat fees (for example, higher fees only for the first few registration years or for higher MSRP brackets) might reduce industry disruption while producing revenue targets. Sponsor Kasmier said he was open to amendments as long as a revised approach could still fund the priorities in the bill. Ryan Evans and MDT staff said a $10 million annual Better Local Bridge Fund target was an administration objective but the fiscal note indicated somewhat lower revenue in early years; MDT staff described the program as a competitive grant program requiring 20% local match rather than an even per‑county distribution.

Clarifying details and mechanics: the bill seeds the new bridge fund with a $50,000,000 one‑time general fund transfer, authorizes a new $10,000,000 MDT grant program requiring local match, directs $2 of a $10 registration fee to the victims of crime account (estimated at about $2.3 million annually at full implementation in the fiscal note), proposes to eliminate an existing 3% DMV administrative surcharge after a transition period, and converts the luxury vehicle levy from a fixed fee to 1% of MSRP. The fiscal note and witnesses emphasize the legislation primarily taxes out‑of‑state purchasers who currently register luxury vehicles in Montana.

No committee vote was recorded in the transcript on SB 324. Committee members and staff agreed to continue work on potential amendments and to obtain additional data — including MSDR distributions, renewal patterns, and more granular MSRP data — before further action.

Next steps: committee members asked for more detailed fiscal and market data from the Department of Justice, MDT and the governor’s budget office, and several senators urged continued negotiation with industry stakeholders on fee structure amendments before the bill advances.

Ending note: proponents framed the bill as a package designed to stabilize multiple, distinct state funding priorities — local bridge repairs, victim services and MHP retention — while opponents warned of unintended market consequences if the fee is converted to a 1% MSRP tax without a different fee schedule or other mitigations.