1	2005 Energy & Highway Bills Funding Opportunities
2	Clean School Bus Program Sec. 741 EPA run program Open to school districts and related organizations for replacement, repower or retrofit of school buses Program must achieve an “appropriate balance” in spending for replacement buses and retrofitting existing buses
3	Clean School Bus Program Sec. 741 Replacement buses eligible – Alt Fuel like Natural Gas and Propane and Clean Diesel Any engine in MY 2005 or 2006 that achieves 1.8 in NOx plus NMHC emissions and .01 PM are eligible for 50% of the cost of a new bus Diesel engines using a std. of 2.5 NOx + .01 PM are eligible for 25% of the cost of new bus Same level of funding (50% & 25%) relates to MY 2007, 2008 & 2009 if any engine achieves a .2 NOx rating, with diesel engines achieving only 1.8 NOx
4	Clean School Bus Program Sec. 741 Funding level for first 2 years is $55 million each year and no state can receive more than 10% of these funds Following years funding provides such sums as are necessary It is presumed that pre 1987 buses will receive priority in the application process when replacement buses are concern and the details are released
5	Clean School Bus Program Sec. 741 Estimated number of buses that will be replaced here in Texas will depend on how many are Alt fuel vs. diesel = 45 – 135 Funds are combinable with the new state Clean School Bus program from TERP
6	Advanced Vehicle Pilot Demonstration Program Sec. 721-723 Competitive grant program handled thru Clean Cities to reduce emissions, displace fossil fuels, promote advancement in technology and promote sustainable transportation systems Limited to state and local government agencies and MPO No project can receive more than $15 million
7	Advanced Vehicle Pilot Demonstration Program Sec. 721-723 Grants can pay for the following: AFVs Medium and Heavy Duty Hybrid Vehicles Fuel Cell Vehicles Ultra Low Sulfur Heavy Duty Diesel Vehicles Acquisition & installation of fueling infrastructure Operation & maintenance of vehicles, infrastructure and equipment
8	Diesel Engine Emission Reduction Grant Program Sec 791 - 797 $200 Million per year to fund the reduction of emissions from diesel engines in non-attainment areas specifically for state, local governments and non profit organizations 50% must go to public fleets CARB/EPA certified or verified technologies only Assume grants will be awarded on a competitive cost effective basis School Districts eligible
9	Credit for Installation of Alternative Fueling Stations Sec. 1341 Provides tax credit up to 30% of the cost of the station up to a maximum of $30,000 Provides tax credit of $1,000 for home refueling appliances like the new Phill from FuelMaker Non-tax paying entities the seller can take the credit and pass it on the equipment sale Credit runs from 1/1/06 to 12/31/09 Credit available to all alternative fuels including Hydrogen, Propane, CNG and LNG Repeals $100,000 deduction for fueling stations after 12/31/05
10	CAFE Credits Extended Sec 772 Automakers were given an extension of CAFE credits for selling AFVs Includes credits for dedicated, bi-fuel and flex fuel vehicles
11	Fuel Credits Sec 1113 of Hwy Bill For Alternative Fuels Starting 10/1/06 for 3 years an excise tax credit called “VECTC” for CNG & LNG fuels $.50 per gallon (gge) for light duty vehicles $.50 per liquid gallon for heavy duty vehicles using LNG or about $.64 per dge Credits offset by increase in federal excise tax CNG increases from $.043 cost per gge to $.183 LNG increases from $.119 cost per liquid gallon to $.243 or $.435 per dge
12	Fuel Credits Sec 1113 of Hwy Bill For Alternative Fuels Net result: CNG = $.36 gge and LNG = $.55 dge Credits are for 3 years but excise tax increases are permanent Non tax paying entities will be able to claim credits by modifying IRS forms 720 & 8849, probably on a quarterly basis with proof of fuel use State excise tax may further offset some credits Hydrogen and Propane will also receive credits, amount yet to be determined, but probably $.50 per gge as well.
13	Alternative Motor Vehicle Credits Section 1341 Provides a tax credit to the buyer of new dedicated AFV of 50% of incremental cost of vehicle Additional 30% if the vehicle meets certain tighter emission standards Credits range from $400 to $32,000 depending on the size of the vehicles For non-tax paying entities, the seller can take the credit and pass it on at time of sale Credits available from 1/1/06 to 12/31/10
14	Alternative Motor Vehicle Credits Also provides credit for light, medium and heavy duty fuel cell vehicles, hybrids and dedicated propane, natural gas, hydrogen and M85 alt fuel vehicles and light burn lean burn diesel vehicles less than 8,500 lbs Natural Gas Civic to qualify for $3,600 credit Complex system to figure for hybrid vehicles Two credits apply Fuel efficiency over standard version from $400 to $2,400 Conservation credit based upon lifetime fuel savings from $250 to $1,000 Credits then limited to the first 60,000 produced for each model
15	Air Quality Enhancement Program Authorized $500 million from FY 2007 to 2011 Fund projects or installations that result in significant air quality improvements in non-attainment areas or substantially reduces the emission level of regulated pollutant and mercury air emissions Includes projects for pollution control that result in the mitigation or collection of more than one pollutant or projects designed to allow the use of the waste by-products or other by-products of the equipment
16	Some examples of the fuel credits for CNG & LNG: Company XYZ owns and operates a public CNG fueling station. For every gge they sell, they owe 18.3 cents of excise tax, but receive 50 cents worth of excise tax credit. They periodically submit a form to the IRS, submit no money and receive a check for 31.7 cents per gge sold. Transit company ABC owns their LNG station. They are exempt from paying the excise tax. They periodically submit a form to the IRS and receive a check for 50 cents per LNG gallon used. Company XYZ owns a CNG fueling station that sells fuel to a school district. Since school districts are exempt from the excise tax, XYZ owes no tax. They periodically submit a form to the IRS and receive a check for 50 cents per gge of CNG sold. Harry Homeowner owns a PHILL. For every gge he uses, he owes the IRS 18.3 cents of excise tax. He’s eligible for the excise tax credit, but, since he isn’t using the fuel in a trade or business, he can only receive a credit up to 18.3 cents a gge. What forms, if any, he will be required to submit to the IRS is unclear.
17	Other Incentive Programs Clean Cities SEP Grants EPA Clean School Bus Program CMAQ Funding Adopt School Bus Program TERP NOx Reduction Program TERP School Bus Program (New)