Maryland Incentives and Laws

Last Updated May 2009

Maryland is the home of the Maryland Clean Cities Coalition (www.energy.maryland.gov/incentives/transportation/cleancities/index.asp). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Cellulosic Ethanol Research and Development Tax Credit

An individual or corporation may claim a credit against the state income tax of up to 10% for qualified research and development expenses for cellulosic ethanol technology. The total amount of approved credits may not exceed $250,000 per calendar year. If the credit allowed exceeds the tax liability of the individual or corporation for that taxable year, the credit may be applied to future taxable years until the credit is exhausted or for up to 15 taxable years after the qualified expenses were incurred, whichever occurs first. This tax credit does not apply to qualified expenses incurred after December 31, 2016. (Reference Maryland Statutes 10-205j, 10-306f, and 10-726)

Hybrid Electric Vehicle (HEV) and Electric Vehicle (EV) Tax Credit

A tax credit is allowed against the excise tax imposed for the purchase of qualified HEVs and EVs. For qualified EVs, the tax credit may not exceed $2,000. For qualified HEVs, the credit may not exceed: a) $250 if the vehicle battery provides at least 5% but less than 10% of maximum power available; b) $500 if the vehicle battery provides at least 10% but less than 20% of maximum power available; c) $750 if the vehicle battery provides at least 20% but less than 30% of maximum power available; d) $1,000 if the vehicle battery provides at least 30% of maximum power available. Additional tax credits of $125 to $500 are available for HEVs equipped with regenerative braking systems that meet certain requirements, depending on the amount of energy created from breaking. A qualified EV must meet the definition set forth in the Internal Revenue Code. A qualified HEV must meet the current vehicle exhaust standard set under the federal Tier 2 program for passenger vehicles. (Reference Maryland Statutes, Transportation Code 13-815)

Biofuels Production Incentive

Qualified ethanol and biodiesel producers are eligible for ethanol and biodiesel production incentives in the form of per gallon credits. To be eligible for the incentive, the producer must first apply to the Renewable Fuels Incentive Board (Board) and receive certification as a producer. Credits may be offered to certified producers in Maryland for ethanol or biodiesel produced on or after December 31, 2007. The Board may not pay credits for ethanol or biodiesel produced after December 31, 2017.

Ethanol production credits are as follows: a) $0.20 per gallon of ethanol produced from small grains such as wheat, rye, triticale, oats, and hulled or hull-less barley; and b) $0.05 per gallon of ethanol produced from other agricultural products. The Board may not certify ethanol production credits for more than a total of 15 million gallons per calendar year, of which at least 10 million gallons must be produced from small grains.

Biodiesel production credits are as follows: a) $0.20 per gallon of biodiesel produced from soybean oil (the soybean oil must be produced in a facility or through expanded capacity of a facility that began operating after December 31, 2004), and b) $0.05 per gallon for biodiesel produced from other feedstocks, including soybean oil produced in a facility that began operating on or before December 31, 2004. The Board may not certify biodiesel production credits for more than a total of five million gallons per calendar year, of which at least two million gallons must be from soybean oil produced in a facility as described above.

(Reference Maryland Statutes, Agriculture Code 10-1501 through 10-1507)

Hybrid Electric Vehicle (HEV) Exemption from Vehicle Testing Requirements

Qualified HEVs and zero-emission vehicles are exempt from certain mandatory motor vehicle emissions and inspection testing requirements for the first three years after the vehicle is originally registered in the state, if the vehicle obtains a rating from the U.S. Environmental Protection Agency of at least 50 miles per gallon during city fuel economy tests. A qualified HEV must meet the current vehicle exhaust standard set under the federal Tier 2 program gasoline-powered passenger vehicles, and can draw propulsion energy from the following on-board sources of stored energy: 1) gasoline or diesel fuel; and 2) a rechargeable energy storage system. This exemption expires September 30, 2012. (Reference Maryland Statutes, Transportation Code 23-206.3 through 206.4)

State Laws and Regulations

Low Emission Vehicle (LEV) Standards

Maryland has adopted the California motor vehicle emission standards in Title 13 of the California Code of Regulations, beginning with Model Year 2011. The Maryland Department of Environment may adopt regulations to exempt certain vehicles from the program, including motor vehicles sold for registration outside of Maryland and motor vehicles that would be exempted from the LEV program established under California law. In addition, the Maryland Clean Car and Energy Policy Task Force was established and authorized through December 31, 2010, to study the activities of neighboring states, the state of California, and the U.S. Environmental Protection Agency relating to vehicle emissions standards. The Task Force may also consider strategies to develop alternative fuels and fuel efficiency measures to improve the state's air quality. (Reference Maryland Statutes, Environment Code 2-1101 through 2-1108, and Transportation Code 13-110, 13-406, 23-206.3 and 23-206.4)

Biodiesel Use

At least 50% of state vehicles must use a minimum biodiesel blend of B5. This requirement does not apply to any state vehicles for which the use of biodiesel will void the manufacturer's warranty for that vehicle. (Reference Maryland Statutes, State Finance and Procurement Code 14-408)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

Maryland established an AFV goal under the plan for 'Sustaining Maryland's Future with Clean Power, Green Buildings and Energy Efficiency.' The state will revise fleet policy and purchasing guidelines to offer more flexibility in purchasing, where practical, low emission vehicles and AFVs for its fleet. The state must ensure that an average of 50% of the fuel used to operate bi-fuel and flexible fuel vehicles are alternative fuel. The state must also help develop the refueling and maintenance infrastructure required to make using certain types of AFV use practical. The state may provide technical assistance and other incentives to use clean technology, where practical, in state transit fleets. (Reference Executive Order 01.01.2001.02 (PDF 49 KB)) Download Adobe Reader

Idle Reduction Requirement

A motor vehicle engine may not operate for more than five consecutive minutes when the vehicle is not in motion, with the following exceptions: 1) traffic conditions or mechanical difficulties; 2) operation of heating, cooling or auxiliary equipment installed on the vehicle; 3) bring vehicle to manufacturer's recommended operating temperature; or 4) when it is necessary to accomplish the intended use of the vehicle. Violators may be subject to a fine of up to $500. (Reference Maryland Statutes, Transportation Code 22-402 and 27-101)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled electric vehicle that has a minimum speed capability of 20 miles per hour (mph) and a maximum of 25 mph. A low-speed vehicle must be registered with the state Motor Vehicle Administration and comply with federal safety standards contained in Title 49 of the Code of Federal Regulations, section 571.500. The State Highway Administration or any local authority may prohibit the use of low-speed vehicles on any controlled access highway in its jurisdiction. Low-speed vehicles are only permitted on highways with a maximum speed limit of up to 30 mph but may, except in certain situations, cross highways for which the maximum speed limit exceeds 45 mph. (Reference Maryland Statutes, Transportation Code 11-130.1, 21-313, 21-1125, and 22-101)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Maryland.

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Chris Rice Maryland Clean Cities Coordinator	Maryland Energy Administration	Phone:(410) 260-7207 Fax:(410) 974-2250
George Nichols Washington Metropolitan Clean Cities Coordinator	Metropolitan Washington Council of Governments	Phone:(202) 962-3355 Fax:(202) 962-3201
Howard Simons Manager-Air Quality Programs	Maryland Department of Transportation	Phone:(410) 865-1296 Fax:(410) 850-9263
Erin Russell-Story Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-7334 Fax:
Tim Shepherd Division Chief, Mobile Sources Control Program	Maryland Department of the Environment, Air and Radiation Management Administration	Phone:(410) 537-3236 Fax:(410) 537-4435
Susanne Zilberfarb Biodiesel Project Leader	Maryland Soybean Board	Phone:(703) 437-0995 Fax:
Lynne Hoot Executive Director	Maryland Grain Producers Association	Phone:(410) 956-5771 Fax:(410) 956-0161
Sylvia McMillan Alternative Fuel Coordinator	U.S. General Services Administration	Phone:(202) 619-8909 Fax:(202) 619-8929