AUGUSTA — A legislative committee unanimously endorsed a bill on Thursday that would change where utility companies pay excise taxes on their vehicle fleets.

The bill, sponsored by Rep. Andrew Buckland, R-Farmington, would have a large impact on Augusta. The city says it would lose up to $250,000 per year under the proposal, which would require utility companies to pay taxes in the community where their vehicles are parked overnight, not where the companies are headquartered.

The law, which failed to pass the Maine Legislature last year, was backed again by Central Maine Power, which must register all 500 of its vehicles in Augusta while parking only 113 vehicles there overnight. According to testimony, CMP parks vehicles in 13 other places across the state, from York County to Dover-Foxcroft, including Farmington, Fairfield and Skowhegan. Those communities would see a hike in excise tax revenue from the change.

At a March hearing, a CMP lobbyist said the bill would “provide excise tax equity” throughout the state with House Majority Leader Jeff McCabe, D-Skowhegan, saying his town loses $13,000 annually under the current law. That argument won out in the Legislature’s Taxation Committee on Thursday. Members unanimously endorsed the bill, amending it to take effect on Jan. 1, 2017.

“I think this is a bill that’s been a long time in the making,” said Sen. Nathan Libby, D-Lewiston, “and modern technology allows … this special treatment to go away.”

The bill now heads to the House and Senate for consideration.

The bill has been a contentious issue between Augusta and CMP in recent years.

Sen. Roger Katz, R-Augusta, has said the bill’s past iteration was backed by CMP as a way to punish the city because CMP’s parent company didn’t like the way Augusta dealt with another subsidiary, Maine Natural Gas. CMP denied that, saying it was a matter of fairness.

If the bill is to pass, Augusta officials have hoped for a phased-in approach. City Manager William Bridgeo said he’d rather see the law take effect next year, but only apply to new vehicles, which he said may cost the city $50,000 per year for five or six years. A $250,000 funding loss would equal a 1 percent property tax hike, he said, and Rep. Matthew Pouliot, R-Augusta, said he’ll advocate for an amendment that phases the change in.

“We were hoping for more of a soft landing than that, but at least it gives the city 18 months to plan,” said Katz, a former Augusta mayor.

Bridgeo acknowledged that there’s clear legislative support for changing the law, but he hopes that it can be amended before passing the Legislature.

“It ain’t sausage until it goes on the meat counter for sale,” Bridgeo said.

Michael Shepherd — 370-7652

mshepherd@centralmaine.com

Twitter: @mikeshepherdme

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