Kansas Incentives and Laws
Last Updated June 2009
Kansas is the home of the Kansas City Regional Clean Cities Coalition (http://www.kcenergy.org/transportation.html). Coordinator contact information is listed in the Points of Contact section.
State Incentives
Biofuel Equipment Tax Credits
A Storage and Blending Equipment Credit is available for tax years 2007 through 2011 for investment in the purchase, construction, or installation of equipment used for storing and blending petroleum-based fuel with biodiesel, ethanol, or other biofuel. The tax credit is equal to 10% of the taxpayer's qualified investment for the first $10,000,000 invested and 5% of the investment in excess of $10,000,000. The credit may be taken in 10 equal annual installments beginning with the year in which the equipment is placed into service. Any excess credits may be carried over for deduction from the taxpayer's income tax liability in subsequent years for a maximum of 14 years after the first installment. In order to be eligible for the tax credit, the taxpayer must continue to operate the equipment for at least 10 years.
Biofuel blenders may also be eligible for an income tax deduction based on the accelerated depreciation for storage and blending equipment. This deduction extends over a 10-year period and is equal to 55% of the depreciated value for the first year and 5% of the depreciated value for each of the nine subsequent years that the equipment remains in production.(Reference Kansas Statutes 79-232 and 79-32,251 - 79-32,255)Cellulosic Ethanol Production Incentive
The Kansas Development Finance Authority (KDFA) is authorized to issue revenue bonds to cover the costs of construction or expansion of a biomass-to-energy facility. A qualifying biomass-to-energy facility includes any industrial process plant that produces at least 500,000 gallons of cellulosic alcohol fuel, liquid or gaseous fuel, or other source of energy in a quantity having a British thermal unit (BTU) value equal to, or greater than, 500,000 gallons of cellulosic alcohol fuel. In addition, any newly constructed or expanded biomass-to-energy facility is exempt from state property taxes for a period of up to 10 taxable years immediately following the taxable year in which construction or installation is completed. Expansion of an existing biomass-to-energy facility means expansion of the facility's production capacity by a minimum of 10%. (Reference Kansas Statutes 74-8949b, 79-32,233, and 79-229)
Renewable Fuel Retailer Incentive
A licensed retail motor fuel dealer may receive a quarterly incentive for selling and dispensing renewable fuels, including biodiesel. Qualified motor fuel dealers are eligible for up to $0.065 for every gallon of renewable fuel sold and up to $0.03 for every gallon of biodiesel sold, if the required threshold percentage is met. The threshold percentage for the incentive payment will increase on an annual incremental basis from 10% for renewable fuel and 2% for biodiesel in 2009 to 25% for each fuel type beginning on January 1, 2024. This incentive is currently on hold until further notice. (Reference Kansas Statutes 79-34, 171 through 79-34, 176)
Point of Contact
Cindy Mongold
Public Service Administrator II
Kansas Department of Revenue
Phone (785) 296-7048
Fax (785) 296-4993
cindy_mongold@kdor.state.ks.us
http://www.ksrevenue.org
Biodiesel Production Incentive
A biodiesel production incentive is available in the amount of $0.30 per gallon of biodiesel fuel sold by a qualified Kansas biodiesel producer. The incentive is payable to producers from the Kansas Qualified Biodiesel Fuel Producer Incentive Fund. Qualified biodiesel producers may file for the incentive on a quarterly basis. (Reference Kansas Statutes 79-34,158).
Alternative Fuel Vehicle (AFV) Tax Credit
The state offers an income tax credit worth up to 40% of the incremental or conversion cost for qualified AFVs placed into service after January 1, 2005, as outlined in the table below. Qualified AFVs include vehicles that operate on a combustible liquid derived from grain starch, oil seed, animal fat, or other biomass, or produced from a biogas source.
| GVWR | Credit |
|---|---|
| Less than 10,000 pounds (lbs.) | Up to $2,400 |
| 10,000 to 26,000 lbs. | Up to $4,000 |
| Over 26,000 lbs. | Up to $40,000 |
(Reference Kansas Statutes 79-32,201)
Point of Contact
Ray Hammarlund
Kansas Energy Office
Phone (785) 271-3179
Fax (785) 271-3268
r.hammarlund@kcc.ks.gov
http://www.ksrevenue.org/taxcredits-altfuel.htm
Alternative Fueling Infrastructure Tax Credit
The state offers an income tax credit for alternative fueling stations placed into service after January 1, 2009. The tax credit, worth up to 40% of the total costs, may not exceed $100,000. This tax credit must be deducted from the taxpayer's income tax liability for the taxable year in which the expenditures are made. In the event the credit is more than the taxpayer's tax liability for that year, the remaining credit may be carried over for up to three years after the year in which the expenditures were made. (Reference Kansas Statutes 79-32,201)
Point of Contact
Ray Hammarlund
Kansas Energy Office
Phone (785) 271-3179
Fax (785) 271-3268
r.hammarlund@kcc.ks.gov
http://www.ksrevenue.org/taxcredits-altfuel.htm
Ethanol Production Incentive
The Kansas Qualified Agricultural Ethyl Alcohol Producer Fund enables qualified agricultural ethyl alcohol (ethanol) producers to apply for a production incentive with the state Department of Revenue. If an ethanol producer who was in production prior to July 1, 2001 increases production capacity by 5,000,000 gallons over the producer's base sales, $0.075 may be collected for each gallon sold to an alcohol blender that is in excess of the producer's base sales, up to 15,000,000 gallons. Producers who began production on or after July 1, 2001, and who have sold at least 5,000,000 gallons to an alcohol blender may receive $0.075 for each gallon sold, up to 15,000,000 gallons. A producer may not collect the incentive for more than seven years. (Reference Kansas Statutes 79-34,163)
Point of Contact
Patricia Platt
Public Service Administrator II
Kansas Department of Revenue
Phone (785) 291-3670
Fax (785) 296-2703
patricia_platt@kdor.state.ks.us
State Laws and Regulations
Fuel Economy Requirement for State Vehicles
The average fuel economy for state-owned motor vehicles purchased during Fiscal Year (FY) 2011 must be at least 10% higher than the average fuel economy of state-owned motor vehicles purchased during FY 2008. (Reference House Bill 295, 2009)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
When purchasing a motor vehicle, state agencies must purchase a vehicle that is capable of operating on E85 fuel unless the vehicle model to be purchased is not available with an E85-capable engine or the cost of the vehicle is $250 or more as compared to a vehicle that does not utilize E85. When leasing a motor vehicle, state agencies must lease a vehicle that is capable of operating on E85 fuel unless no such vehicle is available for lease. (Reference Kansas Statutes 75-4617)
Regional Biofuels Promotion Plan
Kansas has joined Indiana, Iowa, 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.
Idle Reduction Weight Exemption
Any vehicle or combination of vehicles equipped with idle reduction technology may exceed the state's gross and axle weight limits by up to 400 pounds to compensate for the additional weight of the added idle reduction technology. (Reference Kansas Statutes 8-1908, 8-1909, and 8-1917).
Point of Contact
Tom Whitaker
Executive Director
Kansas Motor Carriers Association
Phone (785) 267-1641
Fax (785) 266 -6551
tomw@kmca.org
http://www.kmca.org
E85 Tax Rate Reduction and Definition
The minimum motor vehicle fuel tax rate on E85 is $0.17 per gallon, compared to the conventional motor fuel tax rate of $0.24 per gallon, until July 1, 2020. Beginning July 1, 2020, the minimum tax rate on E85 will be $0.11 per gallon, compared to the conventional motor fuel tax rate of $0.18 per gallon. E85 is defined as an alternative fuel that is a blend of denatured ethanol and hydrocarbon and typically contains 85% ethanol by volume, but must contain at least 70% ethanol by volume and complies with ASTM specification D5798-99. (Reference Kansas Statutes 79-3401, 79-3490, and 79-34,141)
Alternative Fuels Tax
Any individual using or selling compressed natural gas (CNG), liquefied natural gas (LNG), or liquefied petroleum gas (LPG) as a motor fuel is required to report fuel use annually to the Kansas Department of Revenue. The minimum tax imposed on CNG, LNG, and LPG is $0.23 per gallon, compared to the conventional motor fuel tax rate of $0.24 per gallon. Beginning July 1, 2020, the minimum tax rate imposed on LPG will be $0.17 per gallon, compared to the conventional motor fuel tax rate of $0.18 per gallon. (Reference Kansas Statutes 79-34,141; 79-3490; and 79-3491a - 79-3492e)
Biofuels Use Requirement
State-owned diesel-powered vehicles and equipment must use a biodiesel blend that contains at least 2% biodiesel (B2), where available, as long as the incremental price of biodiesel is not more than $0.10 per gallon as compared to the price of diesel fuel. Individuals operating state-owned motor vehicles must purchase fuel blends containing at least 10% ethanol (E10), as long as these fuel blends are not more than $0.10 per gallon as compared to the price per gallon of regular gasoline fuel. (Reference Kansas Statutes 75-3744a)
Biodiesel and Renewable Fuel Definitions
Biodiesel is defined as a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from vegetable oils or animal fats and meets the specifications adopted by rules and regulations of the Kansas Secretary of Agriculture pursuant to current law. The specification must meet the ASTM D6751-07 specification for biodiesel fuel (B100) blend stock for distillate fuels, but may be more stringent regarding biodiesel quality and usability. Renewable fuels are defined as combustible liquids derived from grain starch, oil seed, animal fats, or other biomass; or produced from biogas source, including any non-fossilized, decaying, organic matter which is capable of powering spark ignition machinery. (Reference Kansas Statutes 79-34,155 and 79-34,170)
Low-Speed Vehicle Access to Roadways
Low-speed vehicles may only travel on roads with a posted speed limit of up to 40 miles per hour (mph) and must be appropriately licensed. A low-speed vehicle is defined as any four-wheeled electric vehicle whose top speed is greater than 20 mph but not greater than 25 mph and is manufactured in compliance federal standards for low-speed vehicles as referenced in Title 49, Code of Federal Regulations, part 571.500. (Reference Kansas Statutes 8-15,101; 8-1488; 8-1701; and 8-2118)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
Beginning in Model Year 2000 and each year thereafter, 75% of new light-duty motor vehicles acquired by the state fleet and its agencies, which are used primarily within a metropolitan statistical area or a consolidated metropolitan statistical area, are required to be AFVs. Light-duty motor vehicles include those with a gross vehicle weight rating of up to 8,500 pounds. (Reference Kansas Statutes 75-4616)
Utilities/Private Incentives
There are currently no known utility or private incentives offered in Kansas.
Points of Contact:
| NAME/EMAIL/TITLE | AGENCY | PHONE/FAX |
|---|---|---|
| Kelly Gilbert Clean Cities Coordinator | Kansas City Regional Clean Cities Coalition | Phone:(816) 561-1625 Fax:(816) 531-4846 | Kay Kelly Project Manager | U.S. Department of Energy, Golden Office | Phone:(303) 275-6037 Fax: | Ray Hammarlund | Kansas Energy Office | Phone:(785) 271-3179 Fax:(785) 271-3268 | Patricia Platt Public Service Administrator II | Kansas Department of Revenue | Phone:(785) 291-3670 Fax:(785) 296-2703 | Cindy Mongold Public Service Administrator II | Kansas Department of Revenue | Phone:(785) 296-7048 Fax:(785) 296-4993 | Tom Whitaker Executive Director | Kansas Motor Carriers Association | Phone:(785) 267-1641 Fax:(785) 266 -6551 | Robert Smith Fleet Acquisition Coordinator | U.S. General Services Administration, Regional Fleet Management Office | Phone:(314) 263-3024 Fax:(314) 263-3009 | Lachala Kemp Environmental Engineer, Region 7 | U.S. Environmental Protection Agency | Phone:(913) 551-7214 Fax:(913) 551-7844 |
