Utah Clean Cities Coalition: December 2015 Federal Alt Fuel Legislation Overview

December was a busy month on Capital Hill. On Friday, December 4^th, President Obama signed the Fixing America’s Surface Transportation (FAST) Act, (Public Law 114-94). The FAST Act, like prior surface transportation legislation, authorizes funds for highway construction, as well as highway safety and public transportation programs. Two weeks later, on December 18th, the Protecting Americans from Tax Hikes (PATH) Act of 2015 was signed into law, as part of the $1.15 trillion omnibus spending package to fund the federal government through October 2016. Included with these appropriations are tax provisions that will retroactively extend several alternative fuel tax credits that expired in 2014, from Jan. 1, 2015, through Dec. 31, 2016. Both pieces of legislation contained critical provisions for the alternative fuel and advanced technology vehicle industry.

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.

PATH Act provisions with implications for Clean Cities portfolio items:

Extension of excise tax credits relating to alternative fuels.Section 192 extends of the federal $0.50/gallon alternative fuels excise tax credit on compressed natural gas (CNG), liquefied natural gas (LNG), and and propane. However, according to Section 342, the excise tax credit equivalency for LNG and propane will be measured on on an energy-equivalent basis, rather than on a volumetric one. This provision will make the excise tax credit for LNG and propane used or sold after 2015 approximately $0.29/gallon and approximately $0.36/gallon, respectively.
Extension of credit for alternative fuel vehicle refueling property. Section 182 extends the 30% alternative refueling infrastructure tax credit, which is capped at $30,000
Extension of credit for new qualified fuel cell motor vehicles. Section 193 extends through 2016 the credit for purchases of new qualified fuel cell motor vehicles. The provision allows a credit of between $4,000 and $40,000 depending on the weight of the vehicle for the purchase of such vehicles.
Extension of second generation biofuel producer credit. Section 184 extends through 2016 the credit for cellulosic biofuels producers.
Extension of biodiesel and renewable diesel incentives. Section 185 extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon. The provision also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The provision extends through 2016 the fuel excise tax credit for biodiesel mixtures.
Extension of special allowance for second generation biofuel plant property. Section 189 extends through 2016 the 50-percent bonus depreciation for cellulosic biofuel facilities.
Extension of credit for 2-wheeled plug-in electric vehicles. Section 183 extends through 2016 the 10-percent credit for plug-in electric motorcycles and 2-wheeled vehicles (capped at $2,500).