Oregon Propane Laws and Incentives
State Incentives
Alternative Fuel Production and Infrastructure Tax Credit
Business owners and others who invest in alternative fuel production and fueling infrastructure projects in Oregon may be eligible for a tax credit of up to 50% of eligible project costs through the Business Energy Tax Credit. Some projects (e.g., propane, compressed natural gas, liquefied natural gas) may only qualify for a tax credit of 35% of eligible costs. The tax credit is filed over five years. For projects with eligible costs of $20,000 or less, the tax credit may be taken in one year. Unused credits can be carried forward up to eight years.
An eligible applicant (a project owner) must meet the following requirements:
1) Be a trade, business, or rental property owner with a business site in Oregon or be an Oregon non-profit organization, tribe, or public entity that partners with an Oregon business or resident;
2) Own or be the contract buyer of the project; and
3) Use the equipment or lease it to another person or business in Oregon.
Non-profit organizations, schools, and other public entities that do not have an Oregon tax liability may receive the credit for an eligible project but must "pass-through" or transfer their project eligibility to a pass-through partner in exchange for a lump-sum cash payment. The Oregon Department of Energy determines the rate that is used to calculate the cash payment. The pass-through option is also available to a project owner with an Oregon tax liability who chooses to transfer his or her tax credit. For additional information on possible tax implications in using the pass-through option, please consult a tax professional.
(Reference Oregon Revised Statutes 316.116, 317.115, 469.160-469.180, and 469.185-469.225)
Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Tax Credit
The Oregon Department of Energy offers two income tax credits for AFVs and HEVs, one for residents and one for business owners. Oregon residents are eligible for a Residential Energy Tax Credit, which provides credits of up to $1,500 toward the purchase of qualified AFVs and HEVs; currently, flexible fuel vehicles are not eligible. A credit of up to $750 is also available for the cost of converting vehicles to operate on an alternative fuel.
Oregon business owners who invest in new HEVs for business use are eligible for a Business Energy Tax Credit of up to 35% of the incremental cost of the HEV. Business owners without an Oregon tax liability, non-profit organizations, and public entities may choose to "pass-through" or transfer their tax credit eligibility to a business or individual with an Oregon tax liability in exchange for a cash payment equal to the pass-through rate at the time of application. Business owners with a tax liability may also choose to transfer their tax credit.
(Reference Oregon Revised Statutes 316.116, 469.160-469.180, and 801.375)
Alternative Fuel Loans
The Oregon Department of Energy offers a loan program for energy efficiency, renewable resource, and alternative fuel projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling stations, and fleet vehicles. The program issues Oregon general obligation bonds to provide funds for the loans. Loan recipients must complete a loan application and pay a loan application fee. (Reference Oregon Revised Statutes 470.050)
State Laws and Regulations
Provision to Establish Low Carbon Transportation Fuel Standards
The Oregon Environmental Quality Commission (Commission) may adopt low carbon fuel standards for all transportation fuels, including a lifecycle greenhouse gas (GHG) emission standard for the production, storage, transportation and combustion of fuels. The Commission may adopt a schedule to implement standards that reduce average GHG emissions per unit of fuel energy by 10% below 2010 levels by 2020. (Reference House Bill 2186, 2009)
Alternative Fuel Infrastructure Working Group
In order to reduce the state's dependency on gasoline and diesel fuels and to reduce carbon emissions, the Governor of Oregon has convened a Working Group to study and promote alternative fuel vehicles and infrastructure. The Working Group will:
1) Review and evaluate market and policy research on existing alternative fuel infrastructure policies and programs;
2) Identify and encourage opportunities to consistently design, standardize, and operate electric vehicle charging stations;
3) Develop a plan to work with the private sector to build and maintain state alternative fueling stations by October 1, 2010; and
4) Work with the public to ensure that alternative fuel technologies enhance communities and livability and to ensure that the public understands how to utilize investments in infrastructure.
The Working Group is required to provide recommendations to the Governor by December 31, 2009. (Reference Executive Order 08-24, 2008)
Regional Climate Change Initiative
Governors of Oregon, Washington, and California approved a series of recommendations for action to combat global warming, as detailed in the West Coast Governors' Global Warming Initiative. It was determined that the three states must act individually and regionally to reduce greenhouse gases (GHGs). The initiative includes adopting standards to reduce GHG emissions from vehicles by expanding markets for efficiency, renewable energy and alternative fuels, including creating a working group on developing hydrogen fuel. Building upon this commitment, Oregon joined other western states and several Canadian provinces and signed an agreement establishing the Western Climate Initiative, a joint effort to reduce GHG emissions and address climate change.
Alternative Fuel Vehicle (AFV) Acquisition, Fuel Use, and Emissions Reductions Requirements
State law requires that all state agencies and transit districts purchase AFVs and use alternative fuels to operate these vehicles to the maximum extent possible, except when it is not economically or logistically possible to purchase or fuel an AFV. Additionally, each state agency is required to develop and report a greenhouse gas reduction baseline and determine annual reduction targets. Reports to the Oregon Department of Administrative Services must include the volume of ethanol and biodiesel used by state agency fleets, as well as any cost savings attributable to driving more fuel-efficient vehicles and using alternative fuels. (Reference Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)
