U.S. House Passes Highway Bill with Alt-Fuel Tax Parity Provision

    On July 15th, the U.S. House of Representatives passed a bill that levels the taxes of alternative fuels compared to traditional fuels.

    H.R.3038, which is legislation to fund and extend the authorization for the country’s highway and transit programs through the end of 2015, passed the House in a 312-119 vote.

    Rather than tax on volume, the tax parity provision included in the bill will ensure the federal highway excise taxes on liquefied natural gas (LNG) and propane autogas are levied based on the fuels’ energy output.

    U.S. Rep. Todd Young explains, “LNG produces 58? Of the energy output of diesel, but the two fuels are currently taxed at the same 24.3 center per gallon rate.  Similarly, propane produces 72% of the energy output of gasoline, but those two fuels are taxed at the same 18.3 cents per gallon rate.  The tax parity provision recognizes these disparities and sets the energy equivalent rates for LCF (14.1 cents per gallon) and propane (13.2 cents per gallon).

    UPS and NGVAmerica have already issued statements of approval for the new bill.  UPS, specifically stated, “LNG and propane are both clean, readily available fuels, produced in the United States.  Removing this economic disincentive in the tax code will speed the penetration of LNG and propane vehicles into the marketplace, and expand the use of LNG and propane on America’s roadways. 

    The authorization for federal transportation funding expires at the end of July, which means a passage of an extension by Congress is needed.  The Senate must also consider H.R.3038 or its own transportation funding legislation. However, the Senate has previously voted to the LNG tax inequality in 2014.  

    View the original post by NGT News here.  

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