Gov. John Hoeven has approved a state DOT budget that includes a fuel tax increase and provisions to pay for roadwork in North Dakota. It takes effect July 1.

The new law, previously SB2012, raises the state’s tax on diesel and gasoline from 21 cents to 23 cents a gallon. It also includes a provision to increase all motor vehicle registration rates by $10.

Registration fee amounts depend on a vehicle’s age and weight.

The plan is part of the North Dakota Transportation Department’s budget bill. It includes $953.6 million in total spending.

The tax and fee increases are expected to raise $28.6 million for construction and repairs of state highways during the next two years, and almost $9 million for cities and counties, the Grand Forks Herald reported.

It also limits use of grant-anticipated revenue vehicle bonds – commonly known as GARVEE bonds – to pay for roadwork.

The special class of bonds may be used only to finance the replacement of a bridge across the Missouri River at Bismarck, and for continued four-lane construction on U.S. 2.

The funding program allows the state to borrow money against the federal transportation dollars that come each year to pay for construction. The bond issues are based on the assumption that federal funding in future years would pay them off. This allows the state to get money needed for the project up front.

Lawmakers sought bonds to raise enough state money to get the maximum share of federal highway aid, the newspaper reported.