South Dakota approves fuel tax, vehicle fee, speed limit increases

By Keith Goble, Land Line state legislative editor | Tuesday, March 24, 2015

The fuel tax rate, certain vehicle fees, and speed limits in South Dakota are on the way up.

Gov. Dennis Daugaard signed a bill into law last week to raise more than $80 million each year for roads and bridges throughout the state.

Road construction and maintenance in the state are funded through multiple sources. License plate fees are primarily used for local and county roads. The state’s 22-cent-per-gallon fuel tax is the primary source of funding for state highways.

“This important legislation will significantly aid state and local governments in maintaining and improving infrastructure,” Daugaard said in prepared remarks.

The new law raises revenue for transportation work through multiple sources. Specifically, SB1 includes the first fuel tax increase since 1999. A 6-cent rate increase on gas and diesel purchases will kick in April 1.

The tax increase is expected to raise more than $40 million annually.

License plate fees for noncommercial vehicles will also increase by 20 percent. The new revenue is estimated to add more than $10 million annually for local governments.

Counties could also charge a wheel tax up to $60 per vehicle. In addition, the vehicle excise tax will increase from 3 to 4 percent. Additional revenue is expected to top $27 million per year.

State lawmakers are trying to address an estimated $280 million a year that is needed to maintain roads throughout the state.

Referring to roads as the backbone of the state, Sen. Mike Vehle, R-Mitchell, previously told lawmakers they need to act now to address current needs.

“We have a $14 billion asset. The roads are our largest single asset in the state. It’s our responsibility to keep it up.”

Also included is a 5 mph increase in the state’s speed limit on rural portions of interstate. As a result, the speed limits for all vehicles will increase from 75 to 80 mph.

Idaho, Utah, Wyoming and Texas are the only other states to permit travelers to drive 80 mph.

One more new law allows drivers on South Dakota’s two-lane highways to exceed the posted speed to pass slower moving vehicles. Specifically, HB1124 authorizes drivers on affected roads to exceed the 65 mph speed limit by 10 mph while passing.

Neighboring Minnesota and Wyoming also authorize the practice.

To view other legislative activities of interest for South Dakota, click here.

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