STATE LEGISLATIVE UPDATE

Things are starting to slow down a little as many state legislatures are now out of session. However, a few states continue to work. As noted above, Colorado recently passed and its Governor signed into law a new NGV incentive bill. Colorado HB 1159 was signed into law on May 17. This law provides a sales and use tax exemption for components used the production of biogas including biogas that is used as a transportation fuel. Illinois SB 3574 has been passed by both houses of the state legislature and now heads to the governor for signature. The measure provides a 2,000 pound weight exemption for natural gas powered vehicles. Missouri HB 2141 has now gone to the governor for signature. The bill includes GGE and DGE units for taxation of CNG and LNG and directs the state to use these units as the method of sale unless NCWM comes up with a different standard. New Hampshire HB 1142 imposes motor fuel taxes on CNG and LNG (currently untaxed in New Hampshire) and directs state authorities to impose tax on gasoline gallon equivalent basis. The measure was enrolled on June 4. North Carolina joins the growing list of states that have amended their state motor fuel taxation requirements to incorporate the GGE and DGE as units of taxation for CNG and LNG. SB 786 was signed into law on June 4. CNG will be taxed based on the NCWM GGE of 5.66 pounds and LNG will be taxed based on a DGE of 6.06 pounds. The change is effective January 1, 2015. CNG already is taxed based on GGE so the codification does not change the effective tax rate for CNG. LNG however previously was taxed based on gallon so the use of the DGE unit represents a significant reduction in effective tax rate.