Senators in the Senate Appropriations Committee’s Government Operations Division reviewed a package of amendments Thursday that would change how the Department of Transportation (DOT) is funded, create a continuing appropriation for the flexible transportation fund and direct an additional 1% of legacy earnings into that fund.

The committee discussed proposed statutory language to deposit 100% of the motor vehicle excise tax into the flexible transportation fund and to raise the legacy earnings distribution from 7% to 8% of the five‑year average market value, with the additional 1% routed into the flexible transportation fund. Chairman Wansick and Senator Dwyer led the discussion while Brady, a committee staff member, walked members through the amendment sheet.

Why it matters: the changes would give DOT more automatic, ongoing access to revenue that senators said could be used to match federal discretionary grants, expand local grant buckets for counties, townships and cities, and provide DOT flexibility to move forward on more projects without returning to the Legislature for an appropriation.

Most important details

- Continuing appropriation: The amendment would make receipts deposited into the flexible transportation fund automatically appropriated on a continuing basis to DOT, meaning any increase in actual collections would be available for DOT spending without a new appropriation. Chairman Wansick said the continuing appropriation would allow DOT to spend receipts above the estimate if collections come in higher than projected.

- Motor vehicle excise tax: Under current law 50% of the excise tax had been identified for the flexible transportation fund; the amendment would direct 100% of the motor vehicle excise tax into the flexible transportation fund effective at the start of the next biennium (collections beginning then), removing the 50/50 split with the general fund.

- Legacy earnings: Senator Dwyer said raising the legacy earnings distribution from 7% to 8% would generate an additional amount (discussed in the meeting as roughly $87 million) and that the bill language would deposit that additional 1% into the flexible transportation fund. Brady confirmed the bill text would require the periodic distribution to equal 8% of the five‑year average market value.

- Money pool and buckets: Committee members discussed a combined pool made up of the motor vehicle excise tax plus the extra 1% of legacy earnings. Senator Dwyer described the example arithmetic discussed in the meeting: a $360 million excise tax estimate plus about $87 million from the extra 1% of legacy earnings produces a roughly $447 million pool, half of which (about $233 million in the example) would be used for DOT discretionary purposes while the other half would be distributed into buckets for counties, townships, cities and bridges according to percentages in the bill.

- Distribution percentages discussed (as drafted in the amendment): 50% of the identified pool for DOT matching/discretionary purposes; 12.5% for county and township road/bridge projects (replacing a prior 25% reference); 6.25% to non‑oil producing townships with priority for graveling; 12.5% for bridge repair/replacement projects; 6.25% for city road and bridge projects; and additional sub‑allocations and grant criteria intended for prioritizing projects that match federal or private funds.

- Bridge priority language: Senator Thomas proposed language requiring DOT to prioritize bridge grants using the department’s bridge condition assessment inventory and to give priority to projects that include the permanent closure and removal of a different bridge in the same county; the amendment would also generally require a 10% county match for bridge projects except where a project permanently removes another bridge.

- Highway 85 and discretionary match: Senators pressed Brady and DOT staff about funding needs for Highway 85. Committee members repeatedly referenced a previously discussed $55 million needed to match an already‑approved federal construction segment (top of the Badlands to Highway 200). Senator Dwyer also described interest in placing a $100 million placeholder from the State Investment Fund (SIF) to negotiate or secure work on additional unapproved phases (for example a six‑mile stretch DOT has not advanced). Brady and DOT staff said the $55 million construction match is in the example DOT half of the pool; the $100 million SIF placeholder would be a separate proposal that Senator Dwyer said he wanted reserved for negotiation.

- One‑time vs ongoing authority and equipment: The committee reviewed multiple line‑item adjustments moving some previously requested ongoing authority to one‑time funding (for equipment, pavement van, snow blower replacements and increased maintenance costs) and trimming operating authorities such as a $5 million reduction in state fleet authority (from a requested $17.5 million to $12.5 million in the amendment). Brady identified specific equipment amounts shifted to the undesignated equipment line (e.g., $4,000,000 for snow blower replacement, $300,000 for a Highway 85 operator item, $472,000 for engineering equipment, $1,100,000 for a pavement van in one example, totaling about $5.8 million moved into undesignated equipment in the handout).

- State rail fund and carryover: The amendment includes continuing appropriation authority for the state rail revolving loan fund so repaid loans can be re‑loaned. The bill language also clarifies carryover exemptions that let DOT use previously appropriated, unexpended funds to finish projects after the biennium cutoff.

Committee reaction and next steps

Committee members expressed differing views about whether to provide a continuing appropriation. Chairman Wansick said he generally trusts DOT to spend the money well and favored continuing appropriation in the draft, while Senator Dwyer and others cautioned the Legislature has historically been reluctant to adopt continuing appropriations and suggested the committee consider putting a dollar cap instead.

Brady told the committee staff can reconcile the amendment language with other bills (for example, changes to the legacy earnings fund or competing statutory definitions about “non oil producing” counties) and provide updated numeric examples. Several senators asked staff to produce explicit dollar allocations under the existing highway tax distribution formulas so members could see how much cities and counties would receive under the plan.

Brady and other staff said they would prepare updated charts and revised amendment text to reflect committee direction and to reconcile the bill with related proposals before the next floor and conference committee steps.

Ending

Committee members scheduled follow‑up work and agreed to consider changes after the weekend. No final floor motion on the DOT budget sections was recorded in this meeting; staff said they would produce updated amendment text and numeric allocations for committee review.