Summary of Alternative Fuel Tax Credit Extensions in the Consolidated Appropriations Act of 2016, H.R. 2029

On Friday, December 18th, President Obama signed the Consolidated Appropriations Act of 2016 (H.R. 2029). Division Q, the Protecting Americans from Tax Hikes Act (PATH Act), retroactively extends many tax credits.

There are several PATH Act provisions with implications for Clean Cities portfolio items:

• Alternative Fuel Infrastructure Tax Credit. Section 182 extends the tax credit for alternative fuel infrastructure through December 31, 2016. Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, and biodiesel are eligible for a tax credit of 30%, up to $30,000. Residential fueling equipment may receive a tax credit up to $1,000.
  
  
• Alternative Fuel Excise Tax Credit. Section 192 extends the $0.50 per gallon tax credit for alternative fuels, including liquefied hydrogen, through December 31, 2016.
  
  
• Alternative Fuel Mixture Excise Tax Credit. Section 192 also extends the $0.50 per gallon tax credit for alternative fuel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2016. Alternative fuel blenders must be registered with the Internal Revenue Service (IRS).
  
  
• Qualified Two-wheeled Plug-In Electric Drive Motor Vehicle Tax Credit. Section 183 extends the two-wheeled plug-in electric drive motor vehicle tax credit through December 31, 2017. Qualified vehicles are eligible of a tax credit for 10% of the cost of the vehicle, up to $2,500.
  
  
• Fuel Cell Motor Vehicle Tax Credit. Section 193 extends the $4,000 tax credit for the purchase of qualified light-duty fuel cell vehicles through December 31, 2016.
  
  
• Biodiesel Income Tax Credit. Section 185 extends the biodiesel income tax credit through December 31, 2016. A taxpayer that delivers unblended biodiesel (B100) into the tank of a vehicle may be eligible for a $1.00 per gallon of biodiesel, agri-biodiesel, or renewable diesel tax credit.
  
  
• Biodiesel Mixture Excise Tax Credit. Section 185 also extends the $0.50 per gallon tax credit for biodiesel, agri-biodiesel, or renewable diesel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2016. Alternative fuel blenders must be registered with the IRS.
  
  
• Second Generation Biofuel Production Property Depreciation Allowance. Section 189 extends the 50% special depreciation allowance for second generation biofuel production plants through January 1, 2017.
  
  
• Second Generation Producer Tax Credit. Section 184 extends the tax credit for second generation biofuel producers through December 31, 2016. Second generation biofuel producers registered with the IRS may be eligible for a $1.01 per gallon of biodiesel tax credit.

The changes outlined above are effective immediately. To view the full text of the PATH Act, visit https://www.gpo.gov/fdsys/pkg/BILLS-114hr2029enr/pdf/BILLS-114hr2029enr.pdf. See the Alternative Fuels Data Center Federal Laws and Incentives page for descriptions of each incentive.

As always, if you have questions about the PATH Act or other topics, please contact the Technical Response Service.


Happy Holidays!


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

Fixing America’s Surface Transportation Act

On Friday, December 4th, President Obama signed the Fixing America’s Surface Transportation Act, or FAST Act (Public Law 114-94). Like prior surface transportation legislation, the FAST Act authorizes funds for highway construction, as well as highway safety and public transportation programs.

There are several FAST Act provisions with implications for Clean Cities portfolio items:

• National Electric Vehicle Charging and Alternative Fuel Station Corridors. Section 1413 of the bill charges the U.S. Department of Transportation (DOT) with designating national plug-in electric vehicle (PEV) charging and hydrogen, propane, and natural gas fueling corridors in strategic locations along major highways by December 2016. DOT will update and re-designate the corridors every five years.
• PEV Charging on Federal Property. Section 1413 also explicitly authorizes the U.S. General Services Administration or other federal agencies to install electric vehicle supply equipment (EVSE) that may be used by federal employees and certain others to charge their privately-owned vehicles. Those who use the EVSE to charge vehicles must pay to reimburse the agencies for the EVSE procurement, installation, and maintenance.
• State High Occupancy Lane (HOV) Exemptions. Section 1411 extends the provisions related to HOV lane exemptions for U.S. Environmental Protection Agency (EPA)-certified low-emission and energy-efficient vehicles. Only alternative fuel vehicles (AFVs) and PEVs, however, may access HOV lanes toll-free through September 30, 2025. States are allowed to implement toll-access HOV programs for other low-emission and energy-efficient vehicles through September 30, 2019.
• Tire Fuel Efficiency Standards. Section 24331 states that DOT, EPA, and the U.S. Department of Energy will develop regulations for passenger car tire fuel efficiency standards by December 2017. Some exemptions apply, including light truck, snow, and spare tires.
• Natural Gas Vehicle Fuel Economy Calculation. Section 24341 moves up to 2017, from 2020, when natural gas vehicle fuel economy calculation methodology (see 40 Code of Federal Regulations 600.510) will change. Model year 2017 and later vehicles will use the new calculation methodology to better align with the conventional vehicle fuel economy methodology update schedule.

The changes outlined above are effective immediately. To view the full text of the FAST Act, visit https://www.congress.gov/114/bills/hr22/BILLS-114hr22enr.pdf.

As an additional federal legislation update, Congress is expected to vote on the Protecting Americans from Tax Hikes (PATH) Act very soon. The PATH Act, now House Amendment #2 to H.R. 2029, could extend AFV refueling property tax credits, cellulosic biofuels production tax credits, and biodiesel and renewable diesel incentives. Stay tuned for more information!

As always, if you have questions about the FAST Act or other topics, please contact the Technical Response Service.


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

Six Tips for a Successful Transition to Natural Gas

From Ryder Exchange:

It's a persistent challenge for food and beverage transportation managers: How to squeeze the last drop of fuel efficiency from each mile traveled, while also avoiding fuel price volatility and complying with changing government regulations. Through its partnership with Ryder, Eagle Distributing found the answer in a well-planned transition to natural gas vehicles.

During a recent Food Logistics webinar entitled, "Natural Gas Fleets: the secret ingredient for stable fuel costs and compliant emissions," Eagle and Ryder executives discussed the steps taken and lessons learned from their fleet conversion from diesel to natural gas.

Natural gas has become a "best of all worlds" business strategy for organizations seeking fuel price stability, increased efficiency, and sustainable stewardship – especially amid increasing governmental regulations. But how can a company long tied to diesel best transition to natural gas?

For Eagle Distributing, which delivers alcoholic and non-alcoholic beverages to 1,100 accounts weekly along 6,500 miles of local and over-the-road routes throughout Louisiana, the move to a sustainable resource was no surprise. The company began recycling decades ago and continues to see itself as a leader in sustainability.

"We are constantly looking for green initiatives for conserving energy, reusing items, or recycling," says Robert A. "Bobby" Nichols, Chairman of Eagle Distributing of Shreveport. "So compressed natural gas (CNG) was an obvious advantage for us to leverage as a green initiative."

What did Eagle learn from its move to CNG vehicles?

1. Start small. Eagle began by bringing on four CNG-powered sales vehicles to better understand what the transition would entail. Once employees embraced the move, the company took delivery of more vehicles. Over the next several months, Eagle transitioned out older diesel vehicles and took delivery of 24 natural gas vehicles. Eagle still uses several diesel units for remote markets where natural gas fueling stations are not yet available.
   
   
2. Be part of a bigger effort. It helped that the cities of Shreveport and Bossier, which were involved in natural gas conversions of their own, built four natural gas stations for community use. Eagle eventually partnered with another local company to build their own fueling stations.
   
   
3. Educate those who'll be affected. Eagle's drivers were skeptical at first. They feared loss of power or limited refueling capacity. So Eagle educated its drivers to boost acceptance. Drivers eventually appreciated being at the wheel of state-of-the-art technology that was quieter and cleaner, and whose fuel was domestically sourced. In fact, a large natural gas reserve exists in North Louisiana's Haynesville shale region. Drivers soon saw themselves as environmental stewards using a locally-sourced product.
   
   
4. Look for incentives. Louisiana offers various grants and incentives for converting fleets to natural gas. So do California, Colorado, Texas, Georgia, Florida, North Carolina, Illinois, Ohio, Pennsylvania, Maryland, Delaware, and New York. These can help offset the costs of acquiring and operating such vehicles. Eagle also tapped Ryder's Flex-to-Green program, which allows the company to swap out diesel for natural gas units without penalty when the situation or timing is right.
   
   
5. Calculate the costs. Eagle executives realized upfront costs are offset by environmental benefits in the near term, and any eventual rise in diesel costs in the long term. Moreover, as natural gas fuel tank technology increases the diesel gallon equivalent (DGE) – one configuration can deliver 1,100 miles on a single fill up – more OEMs and truck manufacturers will collaborate to deliver units with even greater range.
   
   
6. Study the factors that make natural gas work. Whether converting all or part of a fleet, make an informed decision. Spec the right vehicle type and application, including expected hours of service, cost of fuel, duty cycle (whether local or over the road), and frequency or availability of refueling stations on the projected route.

Eagle today enjoys decreased exposure to fuel price volatility, a reduced carbon footprint, and a positive halo in the community, especially as its efforts have been profiled by local newspapers and TV stations. Eagle credits a well-planned transition and its various allies who helped ease the move.

"Our partnerships were the most important part of converting to CNG," Trey Rives, Eagle's Operations Manager, told attendees. Added Nichols, "More people in our area are aware of CNG advantages and appreciate Eagle moving that way."

To listen to the recorded webinar, hosted by Food Logistics magazine and sponsored by Ryder, in its entirety, click here.