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Senate panel OKs UTA overhaul, hikes in taxes and fees on hybrids, hotel rooms

Senate panel OKs UTA overhaul, hikes in taxes and fees on hybrids, hotel rooms

(Scott G Winterton, KSL, File)

Estimated read time: 4-5 minutes

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SALT LAKE CITY — A sweeping transportation bill that overhauls how the Utah Transit Authority is run and boosts taxes and fees, including for electric and hybrid vehicles, was approved unanimously Monday by a Senate committee.

The vote by the Senate Transportation, Public Utilities, Energy and Technology Committee advancing SB136 came after more than 1 1/2 hours of testimony. The bill now goes to the full Senate.

The sponsor of the bill, Sen. Wayne Harper, R-Taylorsville, co-chairman of the Legislature's Transportation Governance and Funding Task Force that met over the summer, said it represents a "new era" in transportation policy for a growing state.

The task force looked at dealing with lagging gas tax revenues and a transit agency that last year signed a nonprosecution agreement with federal authorities, agreeing to cooperate in an ongoing investigation and submit to oversight.

After the meeting, Harper said the tax and fee increases in the bill should raise up to $60 million annually, not including what would be a state-imposed sales tax increase in 2022 for counties that haven't approved the full 1.05 percent local option tax.

It was the tax and fee increases that sparked the most concern at the hearing, not the proposal to reduce the UTA board of trustees from 16 to three members and make them the full-time managers of the transit agency.

Besides increasing registration fees from $44 to $65 for hybrid and $194 for electric vehicles, the bill would also raise the state hotel room tax from 0.32 percent to 5 percent, and double the state rental car tax from 2.5 percent to 5 percent.

Harper said he expected there to be continued negotiations on the increases in the bill, especially the hotel and rental car tax hikes.

"My presumption is they are not final," he told the committee.

Several representatives of the tourism industry took issue with those increases.

"We feel like it's going to make Utah largely uncompetitive as we try to welcome the world," Kaitlin Eskelson, executive director of the Utah Tourism Industry Association, testified.

She said Utah households pay $1,200 less in taxes every year because of the money that comes into the state from tourists and warned that travelers should not be given a reason to "not choose Utah" because they will look at the taxes charged.

But Ed Fowler of Enterprise Rent-A-Car said more than 60 percent of his company's customers are Utahns, including many who can't afford to own a vehicle, reminding the lawmakers those customers are their constituents.

He said car rentals are already taxed higher than any other purchase, adding up to a total of more than 16 percent. An even higher tax could end up discouraging tourists from renting cars, too, Fowler said.

Adding to the cost of registering an electric or hybrid vehicle was also questioned because of their impact on air quality. Sen. Jim Dabakis, D-Salt Lake, proposed amending the bill to remove the new higher fees, but found no support.

Cleaner air, Dabakis told the committee, "is issue No. 1, No. 2 and No. 3" for his constituents. "That's what people care about."

Kevin Emerson, energy efficiency program director for Utah Clean Energy, said he'd like to see the increase for electric vehicles limited to what the owner of a fuel-efficient, gas-powered car pays in gas taxes, no more than $70.

Emerson said the bill calls for raising the fee to what would be the third-highest rate in the country and would likely impact the number of electric vehicles on Utah roads, now only about half of 1 percent.

Harper said 18 other states charge extra electric vehicle fees, ranging from $50 in Wyoming to as much as $300 in Georgia. He said he would continue to discuss the size of the fee in Utah.

For him, he said the issue is personal.

"I own a hybrid," Harper said. "I'm saying, 'Tax me.'"

Senate Minority Whip Karen Mayne, D-West Valley, said alternative fuel vehicles do need to pay more because "they don't fly above the roads." But she said the fees in the bill were "way too high" for her to support the bill beyond the committee.

Other members of the committee also said they expected to see changes made before the bill comes up for a vote in the Senate.

Sen. Jake Anderegg, R-Lehi, said there's no doubt more discussions need to happen and called for the bill to be fine-tuned.

"What we have is a good step forward," he said.

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