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State Subsidies For Natural Gas Vehicles In The U.S.

|Includes:Clean Energy Fuels Corp. (CLNE), WPRT

There was a "State's Memoradum of Understanding" circled among 16 states to convince automakers to make alternative fuel vehicles. On August 4, 2012, this "Memorandum of Understanding" turned into a "Request for Proposal". Take the time to look at this link. Contracts and providers have all been put into place.

All these 16 states and others (California in particular) have given subsidies to this industry. A link to all the state subsidies is here, a summary of the subsidies with qualifications and other forms of alternative fueled vehicles for these original 16 states is below. Enjoy.

1. STATE OF OKLAHOMA, signed November 9, 2011. Link to data here.

Incentive Summary:

- Alternative Fuel Vehicle ("AFV") tax credit. One time credit of 50% of the incremental cost of a purchase or conversion, or 10% of the cost of the up to $1500.

- Alternative Fueling Infrastructure ("AFI") tax credit. Tax credit for 75% of the cost of building a fueling station, or, 50% of the cost, up to $2500 for home fueling stations. Credit can be extended out 5 years.

- AFV and AFI subsidized loans for government fleets. Zero interest seven year loans up to $10,000 for vehicle conversions and $100,000 for filling stations, to be paid back by a surcharge on fuel savings from conventional fuel. *If alternative prices do not stay below conventional fuel, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities.

- State offers AFV private fleets or AFI private party loans at 3% for 6 years.

Legal Summary:

- AFIs built for state use may be used by the general public if no other AFI is readily available and must discontinue providing to the general public if a private station is built within 5 miles.

- Oklahoma legislature intends to have one public fueling station located every 100 miles along its interstate highway system by 2015, and one public station every 50 miles by 2025. State agencies may collaborate with private agencies to make this happen.

- Each Oklahoma state agency must develop and implement an energy efficiency and conservation plan that includes purchasing preferences for alternative fuel sources ("AFS").

- All Oklahoma school and government fleets may and should consider purchasing vehicles that only are able to operate on alternative fuels, and must use alternative fuel if a fueling station is within 5 miles and the price is cost competitive.

- In Oklahoma, the fuel excise tax on CNG is $0.05 per gasoline gallon equivalent ("GGE") until January 1, 2015 and $0.13 GGE thereafter.

Oklahoma passed a Alternative Fuel Technician Training Act for regulating training, testing and certification of technicians.

2. STATE OF COLORADO, signed November 9, 2011. Link to data here.

Incentive Summary:

- AFV light passenger vehicles, light and medium duty trucks (purchased or converted) get a sliding scale tax credit starting at 55% and working its way down to 25% between 2012-2015 up to $6000.

- Fuel conversions for AFVs over 10,000 pounds are exempt from Colorado taxes.

- Changed gross weight restrictions for AFV to 1000 pounds heavier. *Smart: this means the extra tanks do not cut into gross vehicle weight.

- Exempt AFI from filing state air pollution notices.

Legal Summary:

- Colorado has implemented fuel tax exemptions by using a flat fee annual tax for AFVs.

- Colorado has exempted corporations and individuals who resell alternative fuel or use it to create electricity from regulations applicable to public utilities.

- AFV must report the type of alternative fuel used to operate a vehicle. Forms have been generated to do this.

- With exceptions, DPA must purchase vehicles that use CNG subject to availability and infrastructure as long as the cost is within 10% of other options.

- Alternative Fuel is defined to include compressed natural gas subject to modification by the Colorado Air Quality Control Commission.

- GGEs must be displayed at all places that sell alternative fuels.

3. STATE OF WYOMING, signed November 9, 2011. Link to data here.

Incentive Summary:

-none at this time.

Legal Summary

- A feasibility study must be completed to convert school district vehicles to NGVs and submit that study by November 1, 2012.

- by July 1, 2012, certain Wyoming agencies must convert existing or acquire new vehicles to operate on natural gas. $200,000 is allocated for this process.

4. STATE OF PENNSYLVANIA, signed November 9, 2011. Link to datahere.

Incentive Summary:

- Grants are provided through a program to provide funding for eligible municipal and commercial fleet purchase on conversions to NGVs on vehicles more than 14,000 pounds, up to 50% of the incremental or conversion cost, capped at $25,000. Funds have been allocated.

- Grants up to $1,000,000 are available for alternative energy projects, research for deployment or manufacturing. Grants can be used for equipment, construction, contractor expense and engineering. Pure research is excluded. Grants closed November 2012, but sign up for future programs is available.

- Grants to address alternative energy projects and transportation as well as concerns for energy and the environment are available, with exceptions. Grants were closed on October 2011, but sign up for future programs is available.

Legal Summary:

- a tax system for GGE is in place.

5. STATE OF UTAH, signed November 16, 2011. Link to data here.

Incentive Summary:

- Utah gives a tax credit up to 35% of AFV price with a $2500 cap, or a tax credit of 50% of AFV conversion price up to $2500.

- Grants and loans, excluding bio-diesel are given to businesses and government agencies for cost of buying AFV, converting to AFV, and cost of fueling equipment (as long as matching funds are provided from federal or non-federal sources).

- CNG and LNG are exempt from state fuel taxes.

- CNG and LNG can use HOV lanes with a permit.

Legal Summary:

- Certification, inspection, testing and other laws have been put in place.

- private individuals and entities can purchase CNG from a state operated fueling station if there is no commercial fueling station to meet the geographical needs.

- Utah government agencies can allow natural gas to be sold at less then the full cost and spread the cost to other customers of the gas corporation. In addition, gas corporations can recover costs of building, operating and maintaining natural gas stations by creating an incremental surcharge on all others in the rate class. There are qualifications and limits to how this can be done.

- A state commission must produce reports by September 20, 2013 on what options and opportunities there are for promoting measures, such as AFV conversions, to result in cleaner air.

- a inter-local entity of state government entities and private parties may be created to promote conversion of AFV and encourage operation, maintenance and infrastructure and help fund it, with qualifications.

- AFVs can be subject to rules for inspection and vehicles over 26,000 pounds are required to get a special permit.

- Fleets over 10 vehicles capable of being fueled at a centralized location can be required to use clean fuel if it is necessary to meet national air quality standards.

6. STATE OF MAINE, signed December 2, 2011. Link to data here.

Incentive Summary:

- none at this time.

Legal Summary:

- By December 1, 2012, a plan must be in place for reducing petroleum consumption 30% by 2030 and 50% by 2050. The plan must prioritize transportation.

- CNG and LNG are exempt from state fuel tax.

- a non-lapsing fund is available to increase energy efficiency and reduce reliance on fossil fuels within the state's transportation system as well as other purposes.

- vehicle insurance companies can change premiums to encourage AFV.

7. STATE OF NEW MEXICO, signed December 22, 2011. Link to datahere.

Incentive Summary:

- an unfunded grant program is in place to fund AFV, AFI, education, technical assistance and training for many government agencies and tribal nations.

- alternative fuel distributed or used by U.S. government, state government or Indian nation, tribe or pueblo is exempt from the state excise tax.

Legal Summary:

- 75% of state government and educational institutional fleet must be AFVs, with some exceptions. Up to $5 million is authorized to be loaned at no more than $3000 per vehicle.

- Alternative fuel now includes natural gas.

- the state excise tax for alternative fuel is set at $0.12 when purchased for vehicles. Vehicle owners (under 54,000 GVWR) may opt for flat fees.

8. STATE OF WEST VIRGINIA, signed January 16, 2012. Link to datahere.

- State gives an income tax credit for conversions or new purchases of AFV vehicles valued at 35% of the purchase price or 50% of the conversion up to $7,500 for vehicles under 26,000 pounds and up to $25,000 for vehicles 26,000 pounds or greater. Expiration is December 31, 2021.

- State gives an income tax credit for AFI of 50% of the cost of construction, installation and purchase up to $250,000. If AFI is built so the general public can use it, the credit will be multiplied by 1.25 up to $312,500 so long as it does not exceed the cost of construction. On January 1, 2014 the credit is decreased to $200,000 and $150,000 on January 1, 2016. Home fueling gets a 50% credit up to $10,000.

- State reimburses any county up to 10% for the cost of using alternative fuel buses.

Legal Summary:

- Local incentives and subsidies for coal-based liquids is prohibited by law.

- A task force has been put together to analyze the potential for the state to operate pilot public natural gas stations and communicate with public agencies to convert their fleets to natural gas and develop infrastructure. In addition it will explore partnerships towards this goal, how to handle a natural gas excise tax and develop communication strategies to educate the public.

- State agencies may be required to have up to 75% of their fleet consist of AFVs, with waivers based on geography and/or inability to create centralized fueling stations. This does not apply to a number of agencies.

- State requires education boards to use alternative fuels to the maximum extent possible.

9. STATE OF KENTUCKY, signed January 27, 2012. Link to data here.

Incentive Summary:

- State provides grants and investments for research, development and commercialization of alternative fuels and renewable energy to build economic growth, stimulate private investment, expand knowledge base, develop a resource network and build awareness of the economic opportunity this represents. This includes natural gas and all other forms alternative fuel.

- State encourages adoption of alternative fuels through department research, public education, collaborative partnerships involving alternative fuels and AFVs.

Legal Summary:

- State to develop plan to replace 50% of the commonwealth's motor fleet of light-duty vehicles with AFVs.

- Governor's Office to oversee support and development of implementation of a comprehensive energy strategy.

- State may not regulate rate, terms or conditions of the sale of natural gas for an alternative fuel station, retailer or end user of CNG.

10. STATE OF TEXAS, signed February 6, 2012. Link to data here.

Incentive Summary:

- State will give grants for 50% of the cost up to $500,000 for storage, compression, or dispersal of alternative fuels where air quality is not meeting State standards. Funds end in 2017.

- State gives grants to replace or re-power medium and heavy-duty vehicles with a gross weight over 8,500 pounds for incremental costs. Funds end in 2017.

- State helping to ensure NGVs have fueling infrastructure by supporting development of NGI on interstate highways connecting 3 major cities with no more than three grants per entity of $100,000 for CNG, $250,000 for LNG, and $400,000 for stations providing both. Funds end in 2017.

- State to provide grants for clean air projects in areas with clean air problems for heavy-duty vehicles, fueling infrastructure, fuel use, electrification infrastructure.

- State to encourage fleet owners of diesel to replace them with AFV. Grants are available to cover the incremental costs of doing so. Fleets of at least 75 vehicles, including 20 diesel-powered vehicles, who commit to changing 20 vehicles qualify. Program ends in 2017 and latest grant period is over.

- State to make competitively-priced natural gas available to school districts and local public entities to aggressively promote alternative energy sources, especially those in Texas.

- State offers grants for buyers who wish to convert medium and heavy-duty diesel school buses, delivery vehicles and old forklifts to propane or natural gas.

- State to offer vouchers for $3,500 for AFVs towards purchase price.

- Owners and operators of equipment who store or dispense motor fuels including alternative fuels that meet emission limits set by the state are exempt from registering or paying for an air pollution permit.

- State is offering a rebate of $2,000 for purchase of a NGV or $3000 for conversion of a gasoline vehicle up to 5 vehicles per customer. $1000 is offered for NG forklifts. Additionally qualified residential and commercial NGV fueling may be eligible for $2000 rebate. Limited to certain cites and gas rate codes.

Legal Summary:

- State agencies with more than 15 vehicles with some exceptions, may not purchase a vehicle unless it is a AFV. Some waivers apply as well as other rules.

- State gives various agencies the task of providing vision to unify all sorts of alternative fuels to help develop, research, create funding and help university research programs.

- State to regulate safety of the natural gas industry.

11. STATE OF OHIO, signed March 6, 2012. Link to data here.

Incentive Summary:

- State has a fund program to retrofit school buses operating on diesel fuel.

- State provides grants and loans up to 80% of the cost of purchasing and installing fueling facilities, including pretty much anything not petroleum based according to Department of Energy standards. Also program funds 80% of the incremental cost of purchasing or using alternative fuels for businesses, nonprofits, public school systems or local government.

Legal Summary:

- State allows logos and symbols for alternative fuels on turnpikes.

- Except for law enforcement, all newly acquired vehicles must be capable of using an alternative fuel if reasonably priced and available and credits can be given for acquisition.

12. STATE OF MISSISSIPPI, signed March 21, 2012. Link to data here.

Incentive Summary:

Only private incentives are available.

Legal Summary:

- State requires by July 1, 2014, at least 75% of all state vehicles have a fuel economy rating of 40 miles per gallon and encourages the purchase of alternative fuel vehicles.

- Installers of CNG must hold a license and report installations or vehicle must be inspected. Additional regulations apply.

- Vehicles using natural gas, depending on the weight, are charged a flat tax or tax based on usage of NG.

- Vehicles using NG must have a decal.

- Transmission, sale or distribution of CNG or propane is deregulated when used for motor vehicle fuel.

- State agencies must try to limit consumption of petroleum by carpooling and using alternative fuels were possible.

13. STATE OF LOUISIANA, signed April 16, 2012. Link to data here.

Summary of Incentives:

- State offers a tax credit of 50% for conversions, incremental costs of purchasing a AFV or fueling equipment.

Legal Summary:

- The legislature encourages the governor to take action to leverage natural gas as the primary transportation fuel for Louisiana residents and businesses as it is cheaper than gas and will result in significant cost savings for customers.

- Legislature states it supports U.S. Congress acting on expanding domestic gas reserves and encourages Federal government to use natural gas.

- Loan assistance will be given to assist local government and municipalities to help cover the cost of conversions. Funds have not been appropriated as of September 2012.

- CNG or LNG vehicles pay a flat fuel tax or a variable of the current special fuels tax depending on weight.

- Louisiana Division of Administration must purchase NG or propane vehicles if fueling stations are within 25 miles. In addition state agencies may acquire infrastructure to fuel AFVs.

- regulation of stations and installations has been put in place.

- CNG production, pipelines, distribution is not regulated when used for transportation.

14. STATE OF ARKANSAS, signed July 24, 2012. Link to data here.

Summary of Incentives:

- State to provide grants to alternative fuel producers, processors and distributors. Producers may be eligible for $0.20 per gallon of alternative fuel produced, feedstock $3 million or 50% of the project cost, whichever is less, distributors get $300,000 or 50% of the cost, what ever is less for distribution or storage. This program also offers rebates for school bus conversions to natural gas up to 75% of the conversion cost. School districts may receive up to $50,000 per fiscal year for conversions. As of March 2012 no funds available.

Legal Summary:

- State modified alternative fuel to include natural gas and propane among other things.

- State requires all conversions to an alternative fuel be reported within 10 days of conversion.

- Fuel excise taxes are based on gasoline gallon equivalent ("GGE").

- Individuals are not allowed to use natural gas as fuel without using a separate meter.

- LNG or propane used as a motor fuel is taxed on a flat fee basis by permit based on weight.

15. STATE OF VIRGINIA, signed October 2, 2012. Link to data here.

Incentive Summary:

- a fund has been created to distribute loans and grants to various state agencies for support AFVs and the infrastructure.

- AFV can automatically use HOV lanes.

- Businesses involved in AFV parts manufacturing, conversion, get a tax credit of $700 per full-time employee for up to three years.

- Employers get a $500 tax credit for green jobs over $50,000 for 5 years.

- Education board can use the Library Fund to provide loans to convert school buses and construct AFI.

- AFV are exempt from the Virginia emission inspection program.

Legal Summary:

- a AFV Conversion Fund is created to assist agencies with the cost of AFVs and aftermarket conversions. Funds can be used in conjunction with other federal funds if any. Funds come from a number of sources.

- A state agency has outlined a public-private partnership solicitation for AFV, AFI, manufacturers for support of the state's fleet.

- The state has put policies and procedures in place for purchase of AFV to the greatest extent possible based on a number of factors.

- The state will provide funding for universities to use towards technology, research, development and commercialization via grants, loans and other methods.

- State fuel tax for "liquid" alternative fuels is $0.175 and providers, bulk users, retailers or others who do not pay this tax must get a alternative fuel license from the state.

- Local government can reduce personal property taxes on AFVs.

- State may refrain from regulating CNG other than the public sector.

- State has a plan to be the capitol of the East Coast for alternative energy plans, production, jobs investment, and energy conservation and consumption.

- Education Board can put signs on school buses displaying AFV designation.

- AFV get HOV exemption for certain corridors.

16. STATE OF TENNESSEE, signed March 22, 2013. Link to data here.

Incentive Summary:

- The State provides funding for alternative fuel infrastructure improvements and the private sector can use funds for infrastructure or jobs with limitations.

Legal Summary:

- Utility districts can own natural gas fueling stations provided the operation is not franchised by another entity. This doesn't prevent private ownership within a utility district either.

- State fleets must make every effort to ensure that 100% of new vehicles are energy efficient vehicles using alternative fuels.

- Governor's Task Force on Energy Policy is to develop a plan to facilitate a transition to alternative and renewable fuels and explore all ways to do this.

- CNG is to be taxed according to GGE and obtain a permit.

- CNG dealers must obtain a permit and collect taxes on CNG used by vehicles.

Disclosure: I am long WPRT, CLNE.

Stocks: CLNE, WPRT