Indiana Incentives and Laws

Last Updated May 2009

Indiana is the home of the Central Indiana Clean Cities Alliance, Inc. (www.cicca.org) and the South Shore Clean Cities Coalition (www.southshorecleancities.org). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Alternative Fueling Station Grant Program

Effective July 1, 2009, the Alternative Fueling Station Grant Program, administered by the Indiana Office of Energy Development (OED), will offer grants of up to $20,000 for installing new alternative fueling stations or converting existing fueling stations to dispense alternative fuels. Eligible alternative fuels include liquefied petroleum gas and compressed natural gas. Applications for the grant program must be reviewed and approved by OED, and the amount of grants awarded for all fiscal years may not exceed $1 million. (Reference House Bill 1554, 2009, and Indiana Code 4-4-32.2)

Alternative Fuel Vehicle (AFV) Grant Program

Effective July 1, 2009, the Alternative Fuel Vehicle Grant Program, administered by the Indiana Office of Energy Development (OED), will offer grants to counties, cities, towns, townships, or school corporations to purchase Original Equipment Manufactured (OEM) AFVs and for AFV conversions, A recipient may be awarded $2,000 for each OEM AFV purchased, and up to $2,000 for each AFV conversion. Applications for the grant program must be reviewed and approved by OED, and the amount of grants awarded for all fiscal years may not exceed $1 million. (Reference House Bill 1554, 2009, and Indiana Code 4-4-32.3)

Alternative Fuel Vehicle (AFV) Manufacturer Tax Credit

The Indiana Economic Development Corporation (IEDC) may award tax credits under the Hoosier AFV Manufacturer Tax Credit to foster job creation, reduce dependency on imported energy sources, and reduce air pollution resulting from the manufacture or assembly of AFVs in Indiana. AFV manufacturers are eligible for tax credits of up to 15% of the qualified investment for which the credit is claimed. Qualified investments include expenditures in the state that are reasonable and necessary for the manufacture or assembly of AFVs. For the purpose of this incentive, AFVs are defined as vehicles designed to operate on E85, natural gas, liquefied petroleum gas, hydrogen, methanol, coal-derived liquid fuels, non-alcohol fuels derived from biological material, P-Series fuels, or electricity. Applications for this incentive must be reviewed and approved by the IEDC. The credit applies to taxable years beginning after December 31, 2006, and before December 31, 2012. Unused credits may be carried forward for up to nine consecutive taxable years. (Reference Indiana Code 6-3.1-31.9)

E85 Fueling Station Grant Program

Through the E85 Fueling Station Grant Program administered by the Indiana State Department of Agriculture (ISDA), grants of up to $20,000 per location are available toward the purchase of new E85 fueling equipment or the conversion of existing equipment to allow for E85 fueling. Eligible applicants include businesses, cities, towns, counties, townships, school corporations, colleges, or universities. Applications for this grant program must be reviewed and approved by the ISDA, and the total amount of grants awarded for all fiscal years may not exceed $1 million. (Reference House Bill 1193, 2009, and Indiana Code 15-11-11)

Point of Contact

Amy Eizinger-Ott
Regional Development Program Manager
Indiana State Department of Agriculture
Phone (317) 234-5263
Fax (317) 232-1362
aeizinger-ott@isda.in.gov

E85 Storage Tank Cleaning Grants

Licensed fuel retailers in Indiana may be eligible for grants of up to $5,000 to be used for cleaning fuel storage tanks prior to introducing E85 into the storage tank. This grant program is offered by the Indiana Corn Marketing Council. Eligible licensed fuel retailers must be willing to commit to selling and actively promoting E85 for a minimum of two years.

Point of Contact

Mark Walters
Biofuels Director
Indiana Corn Marketing Council
Phone (317) 347-3620
Fax (317) 347-3626
mwalters@indianacorn.org
http://www.incorn.org/docs/incga/TankCleaningGrantForm.pdf

Ethanol Production Tax Credit

An ethanol producer located in Indiana is entitled to a credit of $0.125 per gallon of ethanol produced, including cellulosic ethanol. Applications for this credit must be reviewed and approved by the Indiana Economic Development Corporation. The amount of credits granted to a single taxpayer may not exceed the following amounts for all taxable years:

Tax Credit	Annual Production
$2 million	More than 40 million and less than 60 million gallons of grain ethanol
$3 million	At least 60 million gallons of grain ethanol
$20 million	At least 20 million gallons of cellulosic ethanol

(Reference Indiana Code 6-3.1-28)

E85 Fuel Retailer Tax Credit

An E85 retailer is allowed to deduct $0.18 from the required state gross retail tax for every gallon of E85 sold during reporting periods ending before July 1, 2020. Reimbursement is contingent upon available funding from the Retail Merchant E85 Deduction Reimbursement fund, which is maintained by the Indiana State Budget Agency. Starting July 1, 2010, the Indiana Corn Marketing Council will transfer $500,000 to the Retail Merchant E85 Reimbursement fund and will ensure that $500,000 remains in the fund for each year thereafter; the fund may not exceed $500,000. (Reference House Bill 1398, 2009, and Indiana Code 6-2.5-7-5, 15-15-12-30.5, and 15-15-12-32.5)

E85 Fuel Use Incentive

A political subdivision, defined as a municipal corporation or special taxing district, is entitled to a monthly E85 incentive payment if at least 75% of the fuel purchased in the preceding calendar month by the political subdivision was E85 for use in flexible fuel vehicles (FFVs). The amount of the monthly payment is equal to $33.33 for each FFV owned by the political subdivision and only applies for FFVs that have been owned by the political subdivision for less than five calendar years. This credit expires January 1, 2015. (Reference Indiana Code 8-14-2-8 and 36-1-2-13)

Vehicle Research and Development Grants

The Indiana 21st Century Research and Technology Fund is administered by the Indiana Economic Development Corporation and provides grants and loans to support proposals for economic development in areas including alternative fuel technologies and fuel-efficient vehicle production. (Reference Indiana Code 5-28-16-2)

Point of Contact

Cathy Tripodi
Director, Energy
Indiana Economic Development Corporation
Phone (317) 233-5391
Fax (317) 232-4146
ctripodi@iedc.in.gov
http://www.21fund.org/

Biodiesel Price Preference

A governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to a 10% price preference for the purchase of fuels containing at least 20% biodiesel by volume or fuels that are primarily ester-derived (other than alcohol) made from biological materials, such as oilseeds and animal fats, for use in operating compression and ignition engines. (Reference Indiana Code 5-22-15-19)

Biodiesel Production Tax Credit

A biodiesel producer located in Indiana is entitled to a credit of $1.00 per gallon of biodiesel produced. Applications for this incentive must be reviewed and approved by the Indiana Economic Development Corporation (IEDC). The total amount of credits granted to single taxpayer may not exceed $3 million for all taxable years, but may be increased to $5 million with prior approval from the IEDC. This tax credit is contingent upon funding and is currently not available. (Reference Indiana Code 6-3.1-27-8)

Biodiesel Blending Tax Credit

A biodiesel blender located in Indiana is entitled to a credit of $0.02 per gallon of blended biodiesel produced at a facility located in Indiana. Applications for this incentive must be reviewed and approved by the Indiana Economic Development Corporation, and the total amount of credits granted to single taxpayer may not exceed $3 million for all taxable years. This tax credit is contingent upon funding and is currently not available. (Reference Indiana Code 6-3.1-27-9)

Biodiesel Retailer Tax Credit

Through December 31, 2010, a taxpayer that is a fuel retailer and distributes blended biodiesel for retail purposes is entitled to a credit of $0.01 per gallon of blended biodiesel distributed. This tax credit is contingent upon funding and is currently not available. (Reference Indiana Code 6-3.1-27-10)

State Laws and Regulations

Clean Vehicle Acquisition Requirements

Beginning January 1, 2010, a vehicle that is purchased or leased by a state entity must be a clean energy vehicle, unless the Indiana Department of Administration determines that the purchase or lease of the vehicle is inappropriate for its intended use, or the purchase or lease would cost 10% more than a comparable non-clean energy vehicle. A clean energy vehicle is defined as a vehicle that operates on one or more of the following energy sources: a rechargeable energy storage system; hydrogen; compressed natural gas (CNG); or liquefied natural gas (LNG). The Department of Administration will adopt rules or provide guidelines for the preferential purchase or lease of clean energy vehicles manufactured in Indiana or containing parts manufactured in Indiana. (Reference House Bill 1554, 2009, and Indiana Code 5-22-5-8.5)

Support for Use of Higher Ethanol Blends

The Indiana House supports education related to the use of higher ethanol blends in non-flexible fuel vehicles, citing studies that show environmental and economic benefits of using higher ethanol blends. The House also encourages the U.S. Environmental Protection Agency to authorize the use of higher ethanol blends in non-flexible fuel vehicles. (Reference House Resolution 77, 2009)

Regional Biofuels Promotion Plan

Indiana has joined Iowa, Kansas, Michigan, Minnesota, Ohio, South Dakota, and Wisconsin in adopting the Energy Security and Climate Stewardship Platform Plan (Platform) (PDF 2 MB), which establishes shared goals for the Midwest region, including increased biofuels production and use. Download Adobe Reader. Specifically, the Platform sets the following goals:

• Produce commercially available cellulosic ethanol and other low-carbon fuels in the region by 2012;
• Increase E85 availability at retail fueling stations in the region to 15% of stations by 2015, 20% by 2020, and 33% of all fueling stations in the region by 2025;
• Reduce the amount of fossil fuel that is used in the production of biofuels by 50% by 2025;
• By 2025, at least 50% of all transportation fuels consumed by the Midwest will be from regionally produced biofuels and other low-carbon transportation fuels.

The Platform also establishes a regional biofuels corridor program. The program directs state transportation, agriculture, and regulatory officials to develop a system of coordinated signage across the region for biofuels and advanced transportation fuels and to collaborate to create regional E85 corridors. The program requires standardized fuel product coding at fueling stations as well as increased education for retailers about converting existing fueling infrastructure to dispense E85.

Bio-based Products Purchase Requirement

A state governmental body or educational institution must purchase bio-based products whenever possible, provided that bio-based products are available and the purchase is economically feasible. Bio-based products are defined as commercial or industrial products other than food or feed produced from plant or animal sources, including renewable agricultural and forestry materials. (Reference Indiana Code 5-22-5-9)

Immunity for Misuse of E85

E85 sellers, suppliers, distributors, manufacturers, and refiners are immune from civil liability for personal injury of property damage resulting from a person fueling any vehicle with E85 that is not a flexible fuel vehicle. This includes any vehicle equipped to operate when fueled entirely by E85. This immunity does not apply if an E85 seller, supplier, distributor, manufacturer, or refiner does not display all E85 warning signs required by federal or state law. (Reference Indiana Code 34-30-24)

E85 Promotion and Education

The Department of Agriculture is required to work with automobile manufacturers to improve auto dealer and consumer awareness and labeling of E85 fuel, and will work with the appropriate companies to include E85 fueling stations in updates of global positioning navigation software. (Reference Indiana Code 15-11-2-4)

E85 Retail Sales Reporting

A retailer who dispenses E85 must report to the Indiana Department of Revenue the total number of gallons of E85 sold from a metered pump as prescribed in Indiana Code 6-2.5-6. (Reference Indiana Code 6-2.5-7-5)

E85 Definition

E85 is a fuel blend nominally consisting of 85% ethanol and 15% gasoline by volume that meets ASTM specification D5798. (Reference Indiana Code 6-6-1.1-103)

E85 Use

As part of the Indiana Greening the Government Initiative, all fleet vehicles based in Indianapolis that are capable of using E85 are directed to operate their vehicles using E85 fuel whenever possible. Use of other bio-based fuels and oils is also encouraged. (Reference Executive Order 05-21, 2005 (PDF 670KB)) Download Adobe Reader

Biodiesel Blend Fuel Tax Exemption

Biodiesel blends of at least 20% that are used for personal, noncommercial use by the individual that produced the biodiesel content of the fuel are exempt from the $0.16 per gallon license tax. The number of gallons of fuel for which the exemption may be claimed is based on the percentage volume of biodiesel in each gallon used. (Reference Indiana Code 6-6-2.5-30.5)

Biodiesel Definition

Biodiesel is defined as a renewable, biodegradable fuel derived from agricultural plant oils or animal fats that meet ASTM specification D6751. Blended biodiesel is a blend of biodiesel with petroleum diesel fuel so that the volume percentage of biodiesel in the blend is at least 2%. (Reference Indiana Code 6-3.1-27-2 and 6-6-2.5-1.5)

Biofuels Blend Use Requirement

Governmental entities and state educational institutions are required to fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel, fuel gasoline vehicles with ethanol blends of at least 10%, and fuel flexible fuel vehicles with E85 whenever possible. Governmental entities and state education institutions are also required to fuel gasoline vehicles with mid-level ethanol blends between 20% and 73%, unless the use of such blends is prohibited under federal regulations or has not been approved by the vehicle manufacturer. (Reference House Bill 1398, 2009, and Indiana Code 5-22-5-8 and 21-31-9-3)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled electric vehicle capable of achieving a maximum speed of 35 miles per hour (mph) that meets the standards in Title 49 of the Code of Federal Regulations, sections 571.500. An individual may not operate a low-speed vehicle on a highway that has a posted speed limit greater than 35 mph. (Reference Indiana Code 9-21-5-8.5 and 9-13-2-94.5)

Certified Technology Park Designation

The Indiana Economic Development Corporation may designate an area as a certified technology park if certain criteria are met, including a commitment from at least one business engaged in a high technology activity that creates a significant number of jobs. The establishment of high technology activities and public facilities within a technology park serves a public purpose and benefits general welfare by encouraging investment, job creation and retention, and economic growth and diversity. High technology activities include advanced vehicles technology, which is any technology that involves electric vehicles, hybrid electric vehicles, or alternative fuel vehicles, or components used in the construction of these vehicles. (Reference Indiana Code 36-7-32)

Alternative Fuel Vehicle (AFV) Decals

An individual may place alternative fuel into the fuel tank of a motor vehicle only if the vehicle has a valid alternative fuel decal affixed to the front windshield. Vehicle decals must be purchased annually for all heavy-duty AFVs and for light- and heavy-duty AFVs owned by public or private utilities. The cost of the decal varies according to vehicle type and the gross vehicle weight rating. The annual fee may be prorated if the vehicle is newly purchased, registered in Indiana, or converted to operate using an alternative fuel. (Reference Indiana Code 6-6-2.1-203 through 6-6-2.1-206)

Point of Contact

Fuel Tax Section
Indiana Department of Revenue
Phone (317) 615-2630
http://www.in.gov/dor

Natural Gas Vehicle (NGV) Safety Requirement

NGVs may not operate on a highway outside the corporate limits of a municipality from a half hour after sunset to a half hour before sunrise unless the vehicle carries at least three red electric lanterns or three portable red emergency reflectors. NGVs are prohibited from carrying a flare, fuse, or signal produced by flame. (Reference Indiana Code 9-19-5-6)

Utilities/Private Incentives

Natural Gas Vehicle (NGV) Rebate

Citizens Gas & Coke Utility offers rebates for qualified compressed natural gas (CNG) vehicle conversions or for the purchase of original equipment manufactured dedicated or bi-fuel CNG vehicles. Used NGVs may also qualify. Rebates are available to fleet operators on a case-by-case basis. Each project is examined on the merits of providing the rebate, based on hours of operation or miles driven, per vehicle, per year.

Point of Contact

Lane Dunagin
Industrial Sales Consultant
Citizens Energy Group
Phone (317) 694-2776
ldunagin@citizensenergygroup.com
http://www.citizensgas.com

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Kellie Walsh Executive Director	Central Indiana Clean Cities Alliance, Inc.	Phone:(317) 834-3754 or (317) 985-4380 Fax:(317) 834-3754
Carl Lisek Clean Cities Coordinator	South Shore Clean Cities, Inc.	Phone:(219) 365-4289 Fax:(219) 365-5465
Brad Beauchamp Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-7322 Fax:
Amy Eizinger-Ott Regional Development Program Manager	Indiana State Department of Agriculture	Phone:(317) 234-5263 Fax:(317) 232-1362
Cathy Tripodi Director, Energy	Indiana Economic Development Corporation	Phone:(317) 233-5391 Fax:(317) 232-4146
Mark Walters Biofuels Director	Indiana Corn Marketing Council	Phone:(317) 347-3620 Fax:(317) 347-3626
Fuel Tax Section	Indiana Department of Revenue	Phone:(317) 615-2630 Fax:
Lane Dunagin Industrial Sales Consultant	Citizens Energy Group	Phone:(317) 694-2776 Fax:
Shawn Seals Senior Environmental Planner	Indiana Department of Environmental Management, Office of Air Quality	Phone:(317) 233-0425 Fax:(317) 233-5967
Scott Benson Transportation Specialist, Great Lakes Region	U.S. General Services Administration	Phone:(312) 886-8682 Fax:(312) 353-0989