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    Legislative Update: Moving Forward Act

    The Clean Fuels Community’s Guide to the Moving Forward Act 

    H.R. 2, the Moving Forward Act, is a $1.5 trillion plan to overhaul American infrastructure, with provisions including improvements for roads and bridges, transit systems, housing, schools, the U.S. Postal Service, drinking water systems, broadband, and clean energy. As of July 1, 2020, the Act has passed the House of Representatives.

    The bill’s provisions related to clean energy include a large amount of funding and incentives dedicated to facilitating the purchase of clean fuels and vehicles and the development of alternative fueling infrastructure. Important provisions are highlighted below.

    Key Funding and Grants:

    • The Act authorizes $50 million for the Department of Energy’s Clean Cities Program, the program to which Louisiana Clean Fuels belongs, for fiscal year 2021. The authorization would increase each year to $100 million by 2025.
    • The Act provides $350 million a year in competitive grants for alternative fueling infrastructure. 
      • The primary criteria for grant selection is the extent to which the infrastructure would decrease GHG emissions and air pollution. Infrastructure must also be on established FHWA corridors.
      • Grant recipients are also not permitted to charge fees for use of a project assisted by the grant.
    • The Act establishes competitive Community Climate Innovation grants of $250 million per year for local investments in innovative strategies that reduce greenhouse gas emissions. 
      • In addition to effective GHG emission reduction, prioritized projects are ones that are cost-effective, provide diverse transportation options, and consider accessibility, environmental justice, and equity. 
    • The Act authorizes $3.5 billion per year through 2025 for the Energy Efficiency and Conservation Block Grants, which can be used broadly at the local level to implement strategies to advance alternative fuels, vehicles, and infrastructure.
    • The Act requires the Postal Service to replace at least 75% of its fleet with electric or zero emission vehicles and authorizes at least $6 billion for the purchase of new vehicles.
      • Post Offices open to the public would also be required to install EV charging stations by 2026.

     

    Key Tax Incentives:

    • The Act extends the tax incentives for biodiesel and for natural gas and propane.
      • The Act extends the production tax credit (PTC), which allows energy producers to claim a credit based on the amount of energy derived from renewable energy resources, for facilities beginning construction by the end of 2025.
      • The investment tax credit (ITC) allows taxpayers to claim a 30% credit of the cost of qualified energy property. The Act extends this credit to properties beginning construction by the end of 2025, and then phases out over the next few years. Biogas producers will be newly eligible for this credit where they produce biogas with at least 52% methane for productive use, such as electricity generation. 
      • Income and excise tax credits will be extended for biodiesel and biodiesel mixtures at $1.00 per gallon through 2022, and the credit phases down to $0.75 in 2023, $0.50 in 2024, expiring in 2025 at $0.33.
      • The Alternative Fuel Excise Tax Credit will be extended for alternative fuels and alternative fuel mixtures at the pre-expiration level of $0.50 per gallon through 2022 and phased down to $0.38 in 2023, $0.25 in 2024, and $0.17 in 2025 when it expires.
    • The Act extends the tax credit for alternative fueling infrastructure through 2025 and expands the credit for electric charging infrastructure by allowing a 20% credit for expenses in excess of $100,000. 
      • This expansion would begin in 2021. 
      • Though the EV infrastructure credit is uncapped, the vehicle refueling property must be intended for general public use and allow for payments with a credit card or charge no fee, or it must be intended for exclusive use by government and commercial fleets.
    • The Act increases the production cap for the electric vehicle tax credit to 600,000 per manufacturer.
      • Under the current plug-in electric drive motor vehicle credit, once a manufacturer sells 200,000 plug-in electric vehicles, the tax credit available to purchasers begins to phase out, becoming lower each quarter and expiring after five quarters.
      • Under the new provision, the tax credit will be reduced by $500 when the manufacturer has sold 200,000 to 600,000 vehicles (the transition period). The credit phases out in the second quarter after a manufacturer sells 600,000 vehicles. When phase out begins, the credit is reduced by 50% for one quarter, and then expires.
    • The Act authorizes tax credit for zero emission heavy vehicles and buses.
      • Manufacturers will receive credit for the sale of zero emission heavy vehicles (at least 14,000 pounds) from the date of enactment through the end of 2025. The credit is 10% of the sales price, capped at $100,000 per sale. 
      • To be eligible, vehicles must be for domestic use and be powered by an electric motor and no internal combustion engine.
    • The Act creates a new tax credit for buyers of used plug-in electric vehicles.
      • The base credit is $1,250 for qualified EVs, and possible additional incentive for battery capacity. The credit is capped at 30% of the sale price.
      • Buyers with up to $30,000 ($60,000 married filing jointly) adjusted gross income (AGI) can claim the full credit. For buyers with more than $30,000 AGI, the credit is reduced by $250 for every $1,000 over $30,000.
      • Assuming the Act passes, qualifying for the credit may prove difficult. Used EVs must meet existing requirements for new EVs, be under $25,000, be a model year within two years prior to the date of sale, and be purchased from a dealership. Further, the credit only applies to the first resale, and sales between relatives have further restrictions. 

     

    Key Programs Created or Expanded:

    • The Act reauthorizes DERA, the diesel emissions reduction program, at $500 million a year. 
      • The DERA is an existing program administered by the EPA that funds projects aimed at diesel emissions reduction.
    • The Act reauthorizes the Clean School Bus Program at $65 million a year through 2025.
      • $15 million is designated for replacing or retrofitting buses that serve disadvantaged communities.
    • The Act establishes a pilot program for the electrification of certain refrigerated vehicles. The program would provide grants, rebates, or low-cost loans to eligible entities.
    • The Act creates a $500 million a year Zero Emissions Ports Infrastructure Program. 
      • The program is funded through 2030 and assists ports and port users in replacing cargo handling equipment, port harbor craft, drayage trucks, and other equipment with clean or zero emissions technology.
      • A minimum of 25% of this funding will go to areas in non-attainment status.
      • A portion of this funding will also be used to help ports develop clean microgrids that directly power their facilities with cleaner energy.

     

    Several other bills have been introduced with clean energy and alternative fuels in mind. America’s Transportation Infrastructure Act of 2019 (S.2302) would fund alternative fueling infrastructure and reauthorize the DERA program. It has been introduced in the Senate. Similarly, the Clean Corridors Act of 2019 (S.674, H.R.2616) would award grants to government entities and planning organizations for the installation of electric vehicle charging and hydrogen fueling infrastructure along designated alternative fuel corridors, like the one in Louisiana. The bill has been introduced in both the House and Senate. 

    The Moving Forward Act has been characterized as the House’s first offer in infrastructure-related negotiations. While smaller bills like the Clean Corridors Act or the Transportation Infrastructure Act may be passed on their own, a larger infrastructure package like the Moving Forward Act may be drafted by the Senate as a counteroffer to the House’s act, or sweeping reforms beneficial to the alternative fuels sector may wait until Congress’s next session. In either case, it seems there will be some federal aid for alternative fuels infrastructure in the near future. 

    Sources:

    House Summary of each section of the Moving Forward Act

    National Law Review: House of Representatives Passes Sweeping Infrastructure Bill

    Forbes: Moving Forward Act is a $1.5 Trillion Congressional Bill that Loves Electric Vehicles

    American Biomass Council: Moving Forward Act can Boost Biogas Industry




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    Alternative Fuel Tax Incentives Update

    Key alternative fuel incentives retroactively extended in Final FY 2020 Spending Bill

    NOTE: This incentive originally expired on December 31, 2017, but was retroactively extended through December 31, 2020, by Public Law 116-94.

    Alternative fuel excise credits extended

    The excise tax credit covers fuels including compressed natural gas and liquefied natural gas (both naturally occurring CNG and LNG, and that derived from biomass), propane autogas, and liquefied hydrogen when used as a motor fuel. A tax credit in the amount of $0.50 per gallon* is available for the following alternative fuels:

    • natural gas (CNG& LNG)
    • liquefied hydrogen,
    • propane,
    • and compressed or liquefied gas derived from biomass

    *For propane and natural gas sold after December 31, 2015, the tax credit is based on the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE). For taxation purposes, one GGE is equal to 5.75 pounds (lbs.) of propane and 5.66 lbs. of compressed natural gas. One DGE is equal to 6.06 lbs. of liquefied natural gas. Example: the propane tax credit ends up being about 37 cents a GGE.

    For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS). The incentive must first be taken as a credit against the entity's alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits.

    For more information about claiming the credit, see IRS Form 4136, which is available on the IRS Forms and Publications website. (Reference Public Law 116-94, Public Law 115-123, Public Law 114-113, and 26 U.S. Code 6426)

    Point of Contact
    Excise Tax Branch
    U.S. Internal Revenue Service Office of Chief Counsel
    Phone: (202) 317-6855
    http://www.irs.gov/

    Sourcehttps://afdc.energy.gov/laws/319


    infrastructure tax credits also extended

    Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed through December 31, 2020, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment (such as EV Charging equipement) prior to December 31, 2020, may receive a tax credit of up to $1,000. (Source: https://afdc.energy.gov/laws/10513 )

    IRS Forms and Links

    How do you file for credits? The Alternative Fuels Data Center says the Treasury Department will provide more details on the process on March 11. Claims may be submitted after Treasury issues guidance. Claims will be paid within 60 days after receipt.

     

    Other retroactively extended tax credis in HR 1865:

    • the $1.00-per-gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon, retroactively for 2018 and 2019 and prospectively through 2022 (for more information: https://afdc.energy.gov/laws/395 ) ;
    • the alternative fuel excise credit retroactively for 2018 and 2019 and through 2020;
    • the alternative fuel infrastructure credit retroactively for 2018 and 2019 and through 2020; and
    • the credit for qualified fuel cell vehicles retroactively for 2018 and 2019 and through 2020 (for more information: https://afdc.energy.gov/laws/350 ).

    The bill also:

    • includes $40 million for the DOE Clean Cities program – a nearly $3 million increase over last year;
    • includes $87 million for the EPA Diesel Emission Reduction grants; and
    • requires the Federal Highway Administration to approve all clean vehicle projects submitted prior to April 17, 2018, using the previous criteria (final assembly in the United States) and it directs the agency to review and respond to Buy America waiver requests within 60 days of submission.

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    Diesel Emissions Reduction Act (DERA) National Grants Now Open: 2020 Request for Applications

    Deadline to Apply - February 26, 2020 (11:59 p.m. ET)

    The U.S. Environmental Protection Agency (EPA) is excited to announce the availability of approximately $44 million in Diesel Emission Reduction Program (DERA) grant funds to support projects aimed at reducing emissions from the nation's existing fleet of older diesel engines. Under this competition, between 40 and 60 awards are anticipated to be made to eligible applicants.

    Application packages must be submitted electronically to EPA through Grants.gov (www.grants.gov) no later than Wednesday, February 26, 2020, at 11:59 p.m. (ET) to be considered for funding.

    Visit the DERA web page for more information

    Important Dates

    Activity Date
    Request for Applications (RFA) OPEN Monday, December 9, 2019
    Information Session Webinars
    Wednesday, December 11, 2019; 1:00 p.m. (ET)
     
    Wednesday, December 18, 2019; 3:00 p.m. (ET)
     
    Tuesday, January 14, 2020; 3:00 p.m. (ET)
     
    1+ (202) 991-0477, 4149804# (audio dial-in number)
    Questions and Answers Document
    Deadline for Submittal of Questions
    February 14, 2020 at 4 p.m. ET
    Deadline for Applications Wednesday, February 26, 2020, at 11:59  p.m. (ET)
    Notification of Selected Applicants May 2020
    Funding of Awards June-October, 2020


    Eligible Applicants

    The following U.S. entities are eligible to apply for DERA National Grants:

    • Regional, state, local or tribal agencies/consortia or port authorities with jurisdiction over transportation or air quality
    • Nonprofit organizations or institutions that represent or provide pollution reduction or educational services to persons or organizations that own or operate diesel fleets or have the promotion of transportation or air quality as their principal purpose.


    School districts, municipalities, metropolitan planning organizations (MPOs), cities and counties are all eligible entities to the extent that they fall within the definition above.


    Eligible Uses of Funding

    Eligible diesel vehicles, engines and equipment include:

    • School buses
    • Class 5 – Class 8 heavy-duty highway vehicles
    • Locomotive engines
    • Marine engines
    • Nonroad engines, equipment or vehicles used in construction, handling of cargo (including at ports or airports), agriculture, mining or energy production (including stationary generators and pumps).


    Grant funds may be used for diesel emission reduction projects including:


    Funds awarded under this program cannot be used to fund emission reductions mandated by federal law. Equipment for testing emissions or fueling infrastructure is not eligible for funding.

    Please refer to the full RFA for specific information about this competition.

    Informational Webinars

    2020 DERA National Grants

    Wednesday, December 11, 2019 at 12 to 1 p.m. CST
    Join at: https://meet.lync.com/usepa/swift.faye/TG550JGJ

    Wednesday, December 18, 2019 at 2 to 3 p.m. CST
    Join at: https://meet.lync.com/usepa/swift.faye/GKLCM5S6

    Wednesday, January 14, 2019 at 2 to 3 p.m. CST
    Join at: https://meet.lync.com/usepa/swift.faye/Q4CD0Z03

    Dial-In: (202) 991-0477
    Participant Code: 4149804#

    Webinar Highlights

    • Program Details
    • Changes This Year
    • Eligible Entities, Projects, Vehicles, Engines & Equipment
    • Funding: Availability, Project Funding Percentage, Restrictions
    • Proposal Submission
    • Evaluation Criteria
    • Potential Pitfalls
    • Tools, Resources and Support
    • Question & Answer Period


    If you have questions, please contact [email protected].

    Visit the DERA web page for more information


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