House passes SB276 to tweak indexed gas-tax formula; sponsors say it won’t add a new tax

The Utah House on the floor approved first substitute Senate Bill 276, a bill that adjusts the price floors and ceilings used in the state’s indexed gasoline tax formula created in 2015.

Representative Schultz, the bill sponsor, told colleagues the measure “does not add an additional tax,” but modifies where the floor and ceiling sit so the indexing mechanism will function as intended. He said the bill “drops the floor to a dollar 78, per gallon versus the $2.45” and sets a new ceiling at $2.43 while keeping the 40¢-per-gallon cap enacted in the earlier law.

Schultz described the change as a technical fix driven by a sharp drop in wholesale gasoline prices after 2015 that pushed the index’s effective start date far into the future. He said SB276 is expected to be revenue neutral in the near term and "is not expected to increase until 2019," when projections show roughly a 1¢ per gallon increase. He gave an example of the estimated impact on a typical driver: about $3.60 per year assuming 12,000 miles annually and 20 miles per gallon.

During questions, lawmakers pressed staff and the sponsor on revenue distribution and enforcement. Schultz noted the bill keeps the existing distribution formula, under which 30% of gas-tax revenue goes to local governments and a portion flows through the Transportation Investment Fund of 2005 back to the general fund.

The House voted to pass the first substitute of SB276 by a recorded vote of 58 yes to 15 no. The bill will be returned to the Senate for further action.

Next steps: SB276 will be returned to the Senate for signature or further consideration.