Bill to raise gas tax 3¢ and create city/county/township road fund draws broad support and opposition

Chairman Hedlund opened a hearing on House Bill 13‑82, which would increase the state motor fuel tax by 3¢ per gallon, adjust registration fees for electric and plug‑in hybrid vehicles and create a city, county and township road fund to distribute revenue to local governments.

Representative Jared Haggart, sponsor, said the bill is designed to provide stable funding for local infrastructure and to target maintenance needs in counties, cities and townships. "The proposal in 13‑82 is to raise the gas tax by 3¢, thereby generating roughly $42,000,000 in revenue of biennium that would be distributed to cities, counties, and townships," Haggart said. The bill directs distribution for non‑oil producing counties based on the Upper Great Plains Transportation Institute needs assessment and references changes in Senate Bill 2397 that alter the definition of oil‑producing counties.

Local government and industry groups gave broad support. John Psyche, Morton County engineer and a member of the North Dakota Association of County Engineers legislative committee, said counties face rising bridge, gravel and equipment costs and that the bill would provide "additional stable funding and an equitable distribution plan." Jenny Dietzmann of the North Dakota Association of Counties cited the Upper Great Plains needs study and said local governments need predictable, long‑term funding.

Supporters cited the study’s estimate that local infrastructure needs for counties and townships total roughly $12.3 billion over 20 years (unpaved roads, paved roads, bridges and minor structures). Speakers noted that neighboring states have higher motor fuel taxes — the sponsor referenced Montana at about 34¢, South Dakota at 30¢ and Minnesota just under 29¢ — and that North Dakota’s current rate is 23¢.

Opponents, including Mike Rood of the North Dakota Petroleum Marketers Association and Chris Fitter of Fitter Oil Company, urged a "do not pass" on the gas tax portion. Rood told the committee a 3¢ tax increase would generate about $42 million in revenue but would increase credit card processing costs for retailers; Rood estimated additional processing fees and argued that the revenue would be better left in consumer pockets. Retailers and petroleum marketers also voiced concern that higher gas taxes come amid high inflation and mounting business costs.

General Motors representative Don Larson opposed only the electric‑vehicle fee adjustments in section 1 and asked that fees on EVs and plug‑in hybrids remain proportionate to fuel‑tax revenue loss. Larson cited Federal Highway Administration averages to show that current EV registration fees already exceed the per‑vehicle fuel tax revenue the state collects on a typical gasoline vehicle.

Cities and townships asked for amendments to the distribution formula. Matt Gardner of the North Dakota League of Cities urged a city‑sensitive distribution method; county and township groups asked that townships be allocated using township road miles rather than the UGPTI measure alone.

Committee members asked about alternative funding using legacy fund earnings; proponents and opponents debated fairness and whether legacy fund earnings should instead be used for roads. No formal committee vote was recorded during the hearing.