Virginia Incentives and Laws

Last Updated March 2009

Virginia is the home of the Hampton Roads Clean Cities Coalition (www.hrccc.org). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Biodiesel Production Tax Credit

Qualified biodiesel and green diesel fuel producers are eligible for a tax credit of $0.01 per gallon of biodiesel or green diesel fuels produced in a taxable year beginning on or after January 1, 2008. This credit is available for producers who generate up to two million gallons of biodiesel or green diesel fuel per year. The annual amount of credit may not exceed $5,000, and producers are only eligible for the credit for the first three years of production. Qualified producers must be certified by the Virginia Department of Mines, Minerals and Energy. (Reference Virginia Code 58.1-439.12:02)

Biofuels Production Grants

The Biofuels Production Incentive Grant Program provides grants to producers of advanced biofuels, specifically fuels derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass or algae. A qualified advanced biofuels producer is eligible for a grant of $0.125 for each gallon of neat advanced biofuels sold on or after January 1, 2008. A qualified producer of non-advanced neat biofuels, including neat biodiesel, green diesel, and ethanol fuel, is eligible for a grant of $0.10 per gallon of neat biofuels sold in the commonwealth on or after January 1, 2008. To qualify, a producer must produce at least one million gallons of neat biofuels in the calendar year in which the incentive is taken. If a producer began selling neat biofuels prior to January 1, 2008, the producer is eligible for a grant only if its production of neat biofuels for the given calendar year exceeds its production in the 2006 calendar year by at least one million gallons and in future years meets or exceeds that amount. Each producer is only eligible for six calendar years of grants. (Reference House Bill 2001, 2009, and Virginia Code 45.1-393 and 45.1-394)

High Occupancy Vehicle (HOV) Lane Exemption

Alternative fuel vehicles (AFVs) displaying the Virginia Clean Special Fuels license plate may use Virginia HOV lanes, regardless of the number of occupants, until July 1, 2010. For HOV lanes serving the I-95/395 corridor, only registered vehicles displaying Clean Special Fuels license plates issued prior to July 1, 2006, will be exempt from HOV lane requirements. Dedicated AFVs and some hybrid electric vehicles may qualify for the license plate and HOV exemption; see the Virginia Department of Motor Vehicles Web site for a complete list of qualifying vehicles. The annual fee for Clean Special Fuels license plates is $25 in addition to the prescribed fee for commonwealth license plates. (Reference Virginia Code 33.1-46.2 and 46.2-749.3)

Point of Contact

Virginia Department of Motor Vehicles
Phone (866) 368-5463 or (800) 435-5137
http://www.dmv.state.va.us/webdoc/citizen/vehicles/cleanspecialfuel.asp

Alternative Fuel Job Creation Tax Credit

Businesses involved with the manufacture of components for alternative fuel vehicles (AFVs), AFV conversions, or the production, storage, or dispensing of hydrogen as a vehicle fuel are eligible for a job creation tax credit for up to $700 per full-time employee. The credit is allowed in the taxable year in which the job is created and in each of the two succeeding years in which the job is continued. Qualifying businesses include AFV component manufacturers and vehicle conversion companies. Qualified AFVs include vehicles that operate using natural gas, hydrogen, or electricity. This credit is effective for taxable years through December 31, 2011. (Reference Virginia Code 58.1-439.1)

State Laws and Regulations

Idle Reduction Weight Exemption

Any motor vehicle equipped with an auxiliary power unit or other idle reduction technology is allowed up to an additional 400 pounds total in gross, single axle, tandem axle, or bridge formula weight limits to compensate for the added weight of the idle reduction technology. (Reference House Bill 2073, 2009, and Virginia Code 46.2-1129.1)

Alternative Fuel Use and Fuel-Efficient Vehicle Acquisition Requirements

All agencies and institutions must maximize biodiesel and ethanol use in commonwealth fleet vehicles except where the use of biodiesel will void warranties or incur unreasonable additional costs to the agencies. The Virginia Department of General Services (DGS) must make E85 and B20 available for agency use at sites selected based on the locations of commonwealth-owned flexible fuel and diesel vehicles. Agencies and institutions that independently purchase fuel must use E85 and B20 fueling sites to the maximum extent reasonably possible; vehicles used for law enforcement and emergency response are exempt from these requirements. Additionally, the DGS must include in its policies and procedures requirements for the purchase of fuel-efficient, low-emission commonwealth-owned vehicles, as well as procedures for leasing vehicles requirements that give a preference to compact, fuel-efficient, and low-emission vehicles. (Reference Executive Order 48, 2007)

State Energy Plan

The Virginia Energy Plan establishes policies for the commonwealth including the following: 1) support for increasing Virginia's reliance on biodiesel and ethanol, including the use of biodiesel and other alternative fuels in public transportation vehicles; 2) support for federal action that increases the Corporate Average Fuel Economy (CAFE) standards by promoting performance-based tax credits to facilitate the introduction and purchase of advanced technology, fuel-efficient vehicles; and 3) support for federal action that promotes market incentives and education programs to build demand for efficient, cleaner vehicles, including tax incentives for highly efficient vehicles. (Reference Virginia Code 67-101, 67-102, 67-500, 67-501, 67-800, 67-801)

Biofuels and Green Diesel Definitions

Advanced biofuels are defined as fuels derived from any cellulose, hemicellulose, or lignin that is derived from renewable biomass or algae. Biofuels are defined as neat biodiesel, green diesel, or ethanol fuels that are not blended with a traditional fuel such as gasoline or diesel. Biodiesel fuel is defined as a fuel composed of mono-alkyl esters of long-chain fatty acids derived from vegetable oils or animal fats that is designated B100 and meets the requirements of ASTM D6751. Green diesel fuel is a fuel produced from non-fossil renewable resources, including agricultural or silvicultural plants; animal fats; residue and waste generated from the production, processing, and marketing of agricultural products, silvicultural products, and other renewable resources; that meets applicable ASTM specifications. (Reference House Bill 2001, 2009, and Virginia Code 45.1-394 and 58.1-439.12)

Alternative Fuels Tax

A tax of $0.175 per gallon is imposed on liquid alternative fuels used to operate alternative fuel vehicles (AFVs). Alternatively, an annual license tax of $50.00 per vehicle is imposed on AFVs that are fueled from a private source. (Reference Virginia Code 58.1-2249)

Alternative Fuel License

The following individuals must obtain an alternative fuel license from the Virginia Department of Motor Vehicles: a provider of an alternative fuel; a bulk user of an alternative fuel; a retailer of an alternative fuel; and any person who fuels their alternative fuel vehicle from a private source that does not pay the alternative fuels tax. (Reference Virginia Code 58.1-2244)

Low-Speed Vehicle Access to Roadways

Low-speed vehicles may not operate at speeds greater than 25 miles per hour (mph) and may only be used on roads with posted speed limits of up to 35 mph. The vehicle must comply with safety standards contained in Title 49 of the Code of Federal Regulations, section 571.500, meet the standards set forth in Virginia Code 46.2-908.2, and meet the same titling, registration, and insurance requirements applicable to passenger cars. (Reference Virginia Code 46.2-100, 46.2-908.2, and 46.2-908.3)

Alternative Fuel Vehicle (AFV) Tax Reduction

Local governments have the option of reducing personal property taxes paid on AFVs, for vehicles that operate using natural gas, liquefied petroleum gas, hydrogen, or electricity. This provision does not apply to low-speed vehicles. (Reference Virginia Code 58.1-3506)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Loans

The Virginia Board of Education may use funding from the Literary Fund to grant loans to school boards that convert school buses to operate on alternative fuels or construct alternative fueling stations. (Reference Virginia Code 22.1-146)

Idle Reduction Requirement

Motor vehicles licensed for commercial or public service may not idle for more than three minutes in commercial or residential urban areas, unless the engine is providing auxiliary power for purposes other than heating or air conditioning. Tour buses and diesel vehicles are not permitted to idle for more than 10 minutes. (Reference Virginia Administrative Code 9-5-40-5670(B))

Alternative Fuel Vehicle (AFV) Signs

The Virginia Board of Education may provide, by regulation, for the display of appropriate signs or other markings on school buses using alternative fuels. Such signs or markings shall identify the vehicle as an AFV and indicate the type of alternative fuel used to operate the school bus. (Reference Virginia Code 46.2-1089.1)

Utilities/Private Incentives

Natural Gas Technical Assistance and Fuel Rate Reduction

Virginia Natural Gas provides technical support and training to customers who are interested in establishing a natural gas vehicle (NGV) fleet. Virginia Natural Gas offers two special fuel rates specifically for NGVs.

Point of Contact

Jimmy Conroy
Fleet Supervisor
Virginia Natural Gas
Phone (757) 466-5506
Fax (757) 545-1980
jconroy@aglresources.com

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling stations and assistance with vendor selection on a case-by-case basis.

Point of Contact

Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone (817) 303-2903
Fax (817) 303-2929
walter.c.miller@atmosenergy.com

Points of Contact:

NAME/EMAIL/TITLE	AGENCY	PHONE/FAX
Chelsea Jenkins Executive Director	Hampton Roads Clean Cities Coalition and Virginia Clean Cities	Phone:(757) 233-8982 Fax:
Erin Russell-Story Project Manager	U.S. Department of Energy, National Energy Technology Laboratory	Phone:(412) 386-7334 Fax:
Al Christopher Director, Energy Division	Virginia Department of Mines, Minerals and Energy	Phone:(804) 692-3216 Fax:(804) 692-3238
Jimmy Conroy Fleet Supervisor	Virginia Natural Gas	Phone:(757) 466-5506 Fax:(757) 545-1980
John Carlock Deputy Executive Director	Hampton Roads Planning District Commission	Phone:(757) 420-8300 Fax:(757) 523-4881
Walter C. Miller Energy Services Consultant	Atmos Energy	Phone:(817) 303-2903 Fax:(817) 303-2929
	Virginia Department of Motor Vehicles	Phone:(866) 368-5463 or (800) 435-5137 Fax:
Sylvia McMillan Alternative Fuels Specialist	General Services Administration	Phone:(202) 619-8909 Fax:(202) 619-8929