Georgia lawmakers passed more than $250 million in tax breaks this year. Gov. Nathan Deal on Friday signed the first one into law.
The legislation, House Bill 348, gives businesses a chance to earn tax credits for buying trucks or buses that run on alternative fuels such as electricity, petroleum, natural gas or hydrogen fuel.
It failed to gain traction last year, but swept through both chambers this year despite opposition from conservatives who viewed it as a giveaway to big businesses that don’t need the incentives. It was backed by utilities and corporate giants including UPS, whose executives attended the bill signing ceremony.
The proposal sets a tax credit of up to $20,000 for firms that purchase heavy-duty alternative fuel vehicles and $12,000 for those purchasing medium-duty alternative fuel vehicles. The credits will be awarded on a first-come, first-serve basis and are limited to $2.5 million each year.
Deal assigned a panel of executives and lobbyists to vet tax proposals last year to try to control the election-year flood of incentives that typically springs up. This measure wasn't among the two top priorities listed by the panel, though it was included in a broader package recommended for review.
“The panel’s input is always important, but sometimes they don’t have the opportunity to review everything that moves,” Deal said in an interview. “But this is one of those that we all recognize that serves a two-fold purpose. It caps credits that we’re giving and it incentives energy-efficient vehicles.”
It was one of the first pieces of legislation signed into law this year and the first tax cut. Other pending proposals include incentives for luxury jet-maker Gulfstream, breaks for back-to-school shoppers and boosts for video game developers. A tax exemption for food banks that was vetoed last year because it hadn’t been vetted by the panel also awaits.
State Rep. Don Parsons, the Marietta Republican who sponsored the alternative fuel legislation, said the new law could have a far-reaching impact.
“This will get us to less usage of foreign oil, less usage of gasoline, less usage of diesel fuel,” Parsons said. “And it will jump-start a move to alternative energy.”
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