Senate advances tax exemption to encourage local production of cleaner 'Tier 3' fuel

The Utah Senate on Monday passed a third substitute to Senate Bill 197, a measure that would grant sales-tax exemptions for manufacturing equipment used in local refineries if companies convert production to EPA-defined Tier 3 fuels by July 2021.

The bill's sponsor (identified in the transcript only as the sponsor speaking on the floor) told colleagues the measure has two aims: to reduce the cost of goods sold for in-state refiners so they remain competitive, and to accelerate production of Tier 3 gasoline. “By doing that, they actually hire more people and expand,” the sponsor said, and described the change as “a win for the manufacturing companies, and also a win for our air quality.” The sponsor quoted an EPA/Division of Air Quality estimate, saying the change could be “the equivalent of taking 4 out of every 5 cars off the road.”

Several senators pressed the sponsor for fiscal details and implementation dates. Senator Hilliard asked whether an updated fiscal note was available; the sponsor said staff were looking for an updated fiscal note and would follow up. A question from another senator sought clarification on the bill’s effective dates and the period allowed for refineries to seek eligibility; the sponsor said the bill allows a ramp-up period and requires evidence of Tier 3 production by July 2021 or loss of the exemption.

Supporters argued the measure would produce local environmental benefits because Tier 3 fuels lower sulfur and other vehicle emissions, and that incentivizing local conversion is preferable to losing the production to larger refineries out of state. Dissenters and questioners raised process and fiscal concerns; one senator said earlier versions prompted scrutiny over exemptions but called the reduced fiscal exposure more acceptable.

The transcript records the Senate moving to a roll-call and then passing the third substitute. The transcript shows the motion to pass and subsequent floor action; it does not consistently record a final, single roll-call tally in the same contiguous span that contains the sponsor’s full explanation.

What happens next: the bill was advanced on the Senate floor and, per routine, will be transmitted as the Senate’s action requires for any additional concurrence, enrolling, or interchamber steps noted in the legislative process.

Source: Floor debate and roll-call proceedings as recorded in the session transcript.