Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Transportation Funding topic
No spam. Unsubscribe anytime.
Senate advances indexed fuel excise plan to stabilize road revenue
Summary
Senate Bill 60, amended on the floor, replaces Utah's fixed fuel excise with a base-plus-variable formula tied to a refinery/rack price to keep revenue neutral initially and allow automatic adjustments as fuel prices change; senators debated timing and technical definitions.
The Utah Senate advanced Senate Bill 60 on Feb. 20, approving an amendment requested by industry that converts the state's fixed per‑gallon excise into a base-plus-variable formula tied to a published refinery/rack price.
Sponsor Senator Valentine said the change responds to flat excise revenue amid more cars and greater fuel efficiency. He described the formula as a base (calibrated so the first fiscal year is revenue neutral) plus a percentage of the refinery poster/rack price above a $2.84 baseline. "It's a price at the refinery above $2.84 at the refinery, not at the pump," Valentine explained, adding the mechanism is modeled on approaches used in other states.
Senators asked technical and practical questions about where the tax would be collected, whether the 'rack' differs from a refinery poster price, and how price volatility affects revenue neutrality. Valentine said the tax would be collected at the distributor/rack level (distributors in Colorado, Wyoming or Nevada that supply Utah), using a published oil‑pricing service to set the price for each lot. He also described timing designed to avoid sudden pump price shocks: the bill's effective date is Jan. 1, 2015, but the first adjusted rate would take effect July 1, 2015 after a 60‑day lead and an intervening session to review the calculation.
Supporters said refiners, jobbers and station owners participated in consensus discussions; some senators expressed support for indexing to preserve road funding as vehicle fleets change. The Senate approved SB 60 on third reading by roll call (25 yeas, 1 nay, 3 absent).
Implementation: sponsors noted a published pricing service would be specified in rules or statute language and that the Legislature would review the first rate during the intervening session; distributors are the entities responsible for collection at the rack/refinery level.
Next steps: bill will be enrolled and, if enacted, administrative guidance or rulemaking will be needed to operationalize price sources and the collection point.
