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A proposal to raise motor-fuel tax on natural gas-powered vehicles was throttled way back on Tuesday — cut from a proposed 16 cents per gallon equivalent of gasoline down to just 2 cents a gallon initially.
The Senate Revenue and Taxation Committee amended HB271, and then voted 6-0 to send it to the full Senate.
When the bill was passed earlier by the House, it proposed to raise the natural gas tax by an equivalent of 16 cents per gallon of gasoline, from the current 8.5 cents to 24.5 cents — tripling it to match the current state gasoline tax.
The House-backed plan would have automatically raised the natural-gas tax to match any future increases in gasoline tax. Lawmakers are negotiating such a gasoline tax hike this year, which could add another 5 cents a gallon initially.
After amendment, the bill now would raise natural gas tax by 2 cents per gallon equivalent this year, with 2-cent increases coming annually for the next three years — a total of 8 cents over four years.
The bill's sponsor, Rep. David Lifferth, R-Eagle Mountain, said he cut the tax hike because the compressed natural gas (CNG) and liquefied natural gas (LNG) industries worried it otherwise could ruin their business.
Kim Hugie, owner of the CNG America chain of filling stations, said the initial proposal to make CNG match gasoline taxes "would just kill the CNG market, especially at this time when gasoline prices are almost at parity with CNG."
Natural gas-powered cars cost more to buy, but have a market because they use lower-cost fuel that also produces less pollution.
Such cars also have largely escaped motor-fuel taxes. Lifferth, who drives an electric-hybrid vehicle, said he pushed his tax increase on them because "We want to make sure that everyone who is using the roads pays their fare share."
He said that is needed to help cover an $11.3 billion projected shortfall for priority transportation projects through 2040. He also said other tax credits help make such clean-fuel cars affordable, and he does not see the tax has hurting much.