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Financing
is a central issue in the acquisition of propane fleet vehicles.
There is a wide variety of incentives offered at the federal,
state and local levels to encourage the expanded use of propane
vehicles.
Federal
Incentives
Clean Fuel Vehicle Federal Tax Deduction
The EPAct established an incentive program for the purchase
of AFVs and conversion of conventional gasoline vehicles to
alternative fuels. Through the federal Clean Fuel Vehicle
Federal Tax Deduction Program (effective through December
31, 2004), companies and private individuals can offset a
portion of the incremental costs associated with the conversion
of vehicles or the purchase of an AFV:
- Tax deduction is available for the purchase of a new
original equipment manufacturer (OEM) qualified clean-fuel
vehicle, or for the conversion of a vehicle to a clean-burning
fuel. Dual-fuel vehicles qualify, but only the incremental
cost associated with the clean fuel will be taken into
account.
- The deduction cannot be amortized and must be taken
in the year the vehicle is acquired or the conversion
performed. The amount of the tax deduction is based on
the gross vehicle weight (gvw) and type of vehicle.
- A tax deduction of up to $100,000 per location is available
for qualified clean-fuel refueling property used in a
trade or business.
Clean
Fuel Vehicle Federal Tax Deductions
| Clean
Fuel Vehicle |
Criteria |
2002
Maximum Deduction |
2003
Maximum Deduction |
2004
Maximum Deduction |
| Truck
or van |
gvw
of 10,000-26,000 lbs. |
$3,750 |
$2,500 |
$1,250 |
| Truck
or van |
gvw
more than 26,000 lbs. |
$37,500 |
$25,000 |
$12,500 |
| Buses |
seating
capacity of 20+ adults |
$37,500 |
$25,000 |
$12,500 |
| All
other vehicles |
off-road
vehicles excluded |
$1,500 |
$1,000 |
$500 |
The
real dollar value of these deductions will depend upon the
depreciation method used and the individual or company's
income tax rate. More information on the tax deductions
can be obtained by calling the Internal Revenue Service
at (800) 829-3676 for a free copy of Publication 535, "Business
Expenses," or by contacting Alternative Fuels Tax Provisions
at (202) 622-3110 (ph) or (202) 622-4779 (fax).
The
Clean Fuels Grant Program
The Clean Fuels Grant Program was designed to accelerate the
deployment of advanced bus technologies by supporting the
use of low-emission vehicles in transit fleets. The program
assists transit agencies in the following areas:
- Purchase of low-emission buses and related equipment
- Construction of alternative fuel stations
- Modification of garage facilities to accommodate clean
fuel vehicles
- Assistance in the utilization of bio-diesel fuel
For additional information, go to the Federal Transit Administration
(FTA) web sites:
http://www.fta.dot.gov/library/policy/prgms/bbr.html
http://www.fta.dot.gov/library/policy/prgms/cffgp.html
Or contact:
U.S. Department of Transportation (DOT)
Federal Transit Administration (FTA)
400 7th Street, SW, Washington, DC 20590
Phone: (202) 366-4000
Bus
and Bus-Related Grants
Bus and Bus-Related Grants help finance bus and bus-related
capital projects that benefit the country's transit systems.
Funding is provided for a variety of uses including the following:
- Acquisition of buses for fleet and service expansion
- Bus maintenance
- Administrative facilities
- Transfer facilities
- Bus malls
- Transportation centers
- Bus rebuilds
- Bus preventive maintenance
- Garage equipment
For additional information, go to the FTA Web sites at:
http://www.fta.dot.gov/library/policy/prgms/bbr.html
http://www.fta.dot.gov/library/policy/prgms/cffgp.html
Or contact:
U.S. Department of Transportation (DOT)
Federal Transit Administration (FTA)
400 7th Street, SW, Washington, DC 20590
Phone: (202) 366-4000
State
and Alternative Fuel Provider Fleets Program
The Energy Policy Act established the State and Alternative
Fuel Provider Program that requires state and alternative
fuel provider fleets to purchase AFVs as a portion of their
annual light-duty vehicle acquisitions. Fleets earn credits
for each vehicle purchased and credits earned in excess of
their requirements can be banked or traded with other fleets.
More information on this program can be found on the EPAct
Web site at
http://www.ott.doe.gov/epact/state_fleets.shtml or by
calling the National Alternative Fuels Hotline at (800) 423-1DOE
or (800) 423-1363 or e-mail at hotline@afdc.nrel.gov.
Department
of Energy State Energy Program
Under the DOE's State Energy Program, individual states implement
comprehensive State Energy Plans that promote energy conservation,
renewable energy technologies, and reduction of dependence
on imported oil. Under these plans, grants and/or financial
assistance are available to accelerate the use of alternative
transportation fuels for government vehicles, fleet vehicles,
taxis, mass transit, and privately-owned vehicles. For more
information, contact your State Energy Office.
Department
of Energy Clean Cities Program
The DOE's Clean Cities Program coordinates voluntary efforts
between local governments and industries to accelerate the
use of alternative fuels and to expand the AFV refueling infrastructure.
For more information, please see the Clean Cities Web site
at
http://www.ccities.doe.gov.
State
and Local Incentives
Monetary
Incentives
Most states offer monetary incentives to promote the purchase
or conversion of AFVs. Some may also be used to lease an AFV.
Currently, 46 states offer some type of monetary incentive
applicable to propane fleet vehicles. The programs and states
are summarized in the table below.
State
AFV Purchase Incentives
| Program |
States |
| Individual
Income Tax Credit or Deduction |
AZ,
GA, KS, LA, MD, MT, NJ, NY, RI, UT, VA, WV |
| Retail
Sales Tax Reduction or Exemption |
AZ,
CO, CT, ME |
| License
or Titling Fee Reduction |
AZ,
CA, FL, ME, VA |
| Corporate
Tax Credit or Deduction |
CT,
OR, VA |
| Grants
or Rebates to Individuals |
AR,
CA, CO, IL, IN, MD, NJ, NY, OK, PA, TX |
| Grants
or Rebates to Local Governments |
DE,
FL, GA, NJ, NY, PA, TX, VA, WI, WV |
| Grants
to Small Businesses |
IN |
| Low
Interest Loans to Local Governments |
IA,
MO, OK, UT |
Source: "State Incentives for Cleaner Transportation
Technologies", by the Office of Policy Analysis and Review,
US Environmental Protection Agency, September 2001.
For
details on these programs, go to:
http://www.epa.gov/otaq/market/rpt914.htm#_Toc5
Non-Fiscal
Incentives
Non-fiscal incentive programs are also available to reduce
the cost or time associated with operating propane fleet vehicles.
Local rather than state governments offer many of these programs.
Examples include:
- AFVs are allowed to use high-occupancy-vehicle lanes
with less than the required number of vehicle occupants.
This incentive is offered in at least six states (Arizona,
California, Colorado, Georgia, Hawaii and Virginia).
- Preferential parking spaces are provided for AFVs at
employment locations. This incentive is often promoted
by local Clean Cities coalitions.
- Alternative-fueled delivery trucks are given preferential
curbside parking in urban areas. New York City has proposed
a program called "Green Stripe Parking" that allows short-term
curbside parking for alternative fueled delivery trucks.
- Many states provide in-kind resources to encourage local
governments (and possibly the private sector) to establish
an alternative fuels program, e.g. free training on AFV
maintenance for municipal fleet managers.
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