Fuel tax natural gas.

14LSO-0283.L1

FISCAL NOTE

No significant fiscal or personnel impact.

It is anticipated that the gallon equivalency proposed by this legislation will have no impact on gasoline or diesel tax revenue.     

Assumptions:

1.)  It is assumed that blended gasoline will not change. Existing tax revenue from gasohol will not be impacted and will continue to be taxed at the statutory rate.  

2.)  This proposed legislation does specifically target gallon equivalency for un-blended compressed natural gas (CNG) and liquefied natural gas (LNG).  There is no impact associated with these alternative fuels either for several reasons.  First, no significant amounts of liquefied natural gas (LNG) are currently being marketed.  Second, gallon equivalency means that more LNG/CNG is required to power a vehicle and more fuel is taxed, the tax equivalency discount simply equalizes the tax for increased amount of alternative fuels necessary to power alternative use vehicles. Third, alternative fuel equivalency is currently practiced on the limited amount of alternative fuel marketed.

3.)  It has been verified that the equivalent representing CNG (5.66 pounds) is equivalent to a gallon of gasoline (see Department of Energy’s (DOE) Alternative Fuels Data Center document dated 2/27/2013 at www.afdc.energy.gov).  Or taxing CNG per pound at the same rate of a gallon of gasoline at the current tax rate is equivalent.  While the DOE document does not state the pound equivalency associated with LNG for diesel as it does for CNG for gasoline, it is assumed that 6.06 pounds of LNG is equivalent to one gallon of diesel.  The State of Texas passed legislation effective 9/1/2013 that uses 6.06 pounds of LNG as equivalent to one gallon of Diesel (Texas House Bill 2148) supporting this assumption.

Prepared by:   Dean Temte, LSO       Phone: 777-7881

(Information provided by Wayne Hassinger / Kevin Hibbard,

WYDOT; 777-3909 / 777-4026)