The Utah Senate on Monday voted to give more time, and sales tax breaks, to oil refineries making the switch to cleaner-burning Tier 3 fuels.
Three of Utah’s five refineries have already achieved Tier 3 standards, aided in part by a 2017 law that incentivized the purchase of new equipment through sales tax credits. But the remaining refineries are smaller and less able to carry the upfront costs of improvements, according to Monroe Republican Sen. Ralph Okerlund, and need a “final push” to meet the state’s air quality goals.
“This is to the great benefit of all of our citizens,” said Okerlund, the sponsor of SB239. “It’s the quickest way we get to clean air.”
But other senators questioned the fairness of extending the tax incentive, which was originally intended to offset the costs of Tier 3 production and reward refiners who achieved those standards by next year.
Sen. Derek Kitchen, D-Salt Lake City, said it gives him “heartburn” to craft policy for one or two particular businesses, and he suggested the remaining refineries are planning to invest in Tier 3 production equipment with or without the tax breaks.
“It eliminates the whole point of an incentive in the first place,” Kitchen said.
Woods Cross Republican Sen. Todd Weiler, whose district includes refineries, joined the Senate Democrats in opposing the legislation, saying it rewards businesses that postponed making the kind of investments the state was pushing for.
“I do think there’s a bit of a bait-and-switch on this that I’m not comfortable with,” Weiler said.
The remaining Republican members of the Senate voted in favor of SB239 with relatively little debate or comment.
“This is a vote for clean air,” said Sen. David Hinkins, R-Orangeville. “So this is a vote that I say ‘aye’.”
The bill will now move to the House for consideration.