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House passes bill to tax alternative fuels at gasoline-equivalent rates
Summary
The House approved HB271 on March 6, 2015, closing a tax loophole to charge alternative fuels—including hydrogen—an equivalent fuel tax based on gasoline-gallon-equivalent energy content; the bill passed 43-27 and will go to the Senate.
The Utah House of Representatives passed House Bill 271 on March 6, 2015, a measure that requires users of certain alternative fuels to pay a fuel tax equivalent to the tax charged on gasoline and diesel. Representative Blifford, the bill sponsor, said the bill recognizes hydrogen as a clean fuel and uses a gasoline-gallon-equivalent index to set the tax for different energy sources, calling the change a closing of a loophole rather than a new tax. Blifford said the fiscal note estimates about $2,000,000 in annual revenue from the change.
Opponents argued the measure could undercut incentives for cleaner fuels. Representative Fred Cox cited the Utah Constitution’s provisions governing motor-vehicle–related levies and said proceeds should be used for roads and related purposes; he also said incentives remain important to encourage adoption of cleaner technologies. Representative Draxler urged continued incentives for natural-gas and other cleaner-burning fuels and said singling out one fuel type before broader parity exists could harm air-quality goals.
Blifford responded that the bill was meant to be fair to all road users and to ensure everyone pays their share for road maintenance. The sponsor said vehicle-registration bills from the Senate would address registration-related equity in the future. After floor debate, the House opened and closed voting and approved HB271, 43 yes to 27 no. The bill will be transmitted to the Senate for its consideration.
