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State and Federal Incentives and Laws

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United States (Federal)

Air Pollution Control Program

The Air Pollution Control Program assists state, local, and tribal agencies in planning, developing, establishing, improving, and maintaining adequate programs for prevention and control of air pollution or implementation of national air quality standards. Plans may emphasize alternative fuels, vehicle maintenance, and transportation choices to reduce vehicle miles traveled. Eligible applicants may receive federal funding for up to 60% of project costs to implement their plans. (Reference 42 U.S. Code 7405)

Point of Contact

U.S. Environmental Protection Agency
Phone (202) 272-0167
http://www.epa.gov

Clean School Bus USA

Clean School Bus USA is a public-private partnership that focuses on reducing children's exposure to harmful diesel exhaust by limiting school bus idling, implementing pollution reduction technologies, improving route logistics, and switching to clean fuels. Clean School Bus USA is part of the U.S. Environmental Protection Agency's National Clean Diesel Campaign and provides funding for projects designed to retrofit and/or replace older diesel school buses. Eligible applicants are school districts, state and local government programs, federally recognized Indian tribes, and non-profit organizations.

Point of Contact

Jennifer Keller
National Clean Diesel Campaign
U.S. Environmental Protection Agency
Phone (202) 343-9541
keller.jennifer@epa.gov
http://www.epa.gov/cleandiesel/

Renewable Energy Systems and Energy Efficiency Improvements Grant

Competitive grant funding and guaranteed loans are available from the U.S. Department of Agriculture Office of Rural Development's Section 9006 Energy Program for the purchase of renewable energy systems and energy improvements for agricultural producers and small rural businesses. Qualified projects must occur in a rural area and implement technology that is pre-commercial or commercially available and replicable. Research and development does not qualify. Applicants must provide at least 75% of eligible project costs, and grant assistance to a single individual or entity may not exceed $750,000. Eligible projects include biofuels, hydrogen, and energy efficiency improvements, as well as solar, geothermal, and wind. The Section 9006 Energy Program has not been funded for Fiscal Year 2008. For more information, visit the Section 9006 Program Web site, and contact the appropriate State Rural Development Office. (Reference 7 U.S. Code 8106)

Point of Contact

Office of Rural Development
U.S. Department of Agriculture
Phone (202) 690-4730
http://www.rurdev.usda.gov/rd/energy/

State Energy Program (SEP) Funding

The SEP provides grants to states to assist in designing, developing, and implementing renewable energy and energy efficiency programs. Funding from the SEP is directed to state energy offices, and each state's energy office manages all SEP-funded projects. States may also receive project funding from technology programs in the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) for SEP Special Projects. EERE distributes the funding through an annual competitive solicitation to state energy offices. For more information about the SEP, including SEP project descriptions, visit the SEP Web site.

Point of Contact

U.S. Department of Energy
Phone (800) 342-5363
Fax (202) 586-4403
http://www.energy.gov

Clean Cities

The mission of Clean Cities is to advance the energy, economic, and environmental security of the United States by supporting local initiatives to adopt practices that reduce the use of petroleum in the transportation sector. Clean Cities carries out this mission through a network of more than 80 volunteer coalitions, which develop public/private partnerships to promote alternative fuels and advanced vehicles, fuel blends, fuel economy, hybrid vehicles, and idle reduction. Clean Cities provides information about financial opportunities, coordinates technical assistance projects; updates and maintains databases and Web sites, and publishes fact sheets, newsletters, and related technical and informational materials. For more information, visit the Clean Cities Web site.

Point of Contact

U.S. Department of Energy
Phone (800) 342-5363
Fax (202) 586-4403
http://www.energy.gov

SmartWay Transport Partnership

The SmartWay Transport Partnership is a voluntary partnership between the U.S. Environmental Protection Agency (EPA) and the ground freight industry. It was designed to reduce greenhouse gases and air pollution through increased fuel efficiency. EPA provides Partners with benefits and services that include fleet management tools, technical support, information, public recognition, and use of the SmartWay Transport Partner logo. The SmartWay Transport Partnership is working with states, banks, and other organizations to develop innovative financing options that help Partners purchase devices that save fuel and reduce emissions. Grants are available to states, nonprofits, and academic institutions to demonstrate innovative idle reduction technologies for the trucking industry.

Point of Contact

SmartWay Transport Partnership
U.S. Environmental Protection Agency
Phone (734) 214-4767
Fax (734) 214-4052
smartway_transport@epa.gov
http://www.epa.gov/smartway

Updated Fuel Economy Test Procedures and Labeling

The U.S. Environmental Protection Agency (EPA) is responsible for motor vehicle fuel economy testing. Manufacturers test their own vehicles and report the results to the EPA. The EPA reviews the results and confirms a portion of them using their own testing facilities. Beginning with Model Year (MY) 2008 vehicles, all fuel economy estimates are based on new test methods that better account for actual driving conditions that can reduce fuel economy, such as high speeds, aggressive driving, use of air conditioning, and cold temperature operation. As a result of the new methods, it is anticipated that the estimates for most MY 2008 models will be lower than their MY 2007 counterparts. To aid consumers shopping for new vehicles, the EPA has also redesigned the fuel economy window sticker posted on all new cars and light trucks to be easier to read and understand. The EPA is responsible for providing the posted fuel economy data. For more information, visit the Fuel Economy Web site. (Reference 40 CFR 600)

Point of Contact

U.S. Environmental Protection Agency
Phone (202) 272-0167
http://www.epa.gov

Vehicle Acquisition and Fuel Use Requirements for State and Alternative Fuel Provider Fleets

Under the Energy Policy Act (EPAct) of 1992, certain state government and alternative fuel provider fleets are required to acquire alternative fuel vehicles (AFVs). Compliance is required by fleets that operate, lease, or control 50 or more light-duty vehicles within the U.S. Of those 50 vehicles, at least 20 must be used primarily within a single Metropolitan Statistical Area/Consolidated Metropolitan Statistical Area. Those same 20 vehicles must also be capable of being centrally fueled. Covered fleets earn credits for each vehicle purchased, and credits earned in excess of their requirements can be banked or traded with other fleets. Additionally, fleets that use fuel blends containing at least 20% biodiesel (B20) in medium- and heavy-duty vehicles may earn credits toward their annual AFV acquisition requirements.

On March 20, 2007, the U.S. Department of Energy (DOE) issued a final rule on Alternative Compliance (PDF 2.5 MB), which allows fleets the option to choose a petroleum reduction path in lieu of acquiring AFVs. Download Adobe Reader. Interested fleets must obtain a waiver from DOE by proving that they will achieve petroleum reductions equivalent to that achieved by having AFVs running on alternative fuels 100% of the time.

For more information, visit the EPAct State and Alternative Fuel Provider Fleets Web site, or contact the Regulatory Information Line at (202) 586-9171 or regulatory_info@afdc.nrel.gov.

(Reference 42 U.S. Code 13251 and 13263a, and 10 CFR 490)

Point of Contact

Dana O'Hara
State and Alternative Provider Rule
U.S. Department of Energy
Phone (202) 586-8063
dana.o'hara@ee.doe.gov
http://www1.eere.energy.gov/vehiclesandfuels/epact/state_alt_fleets.html

Vehicle Acquisition and Fuel Use Requirements for Federal Fleets

Under the Energy Policy Act (EPAct) of 1992, 75% of new light-duty vehicles acquired by certain federal fleets must be AFVs. As amended in January 2008, Section 301 of EPAct of 1992 defines AFVs to include hybrid electric vehicles, fuel cell vehicles, and advanced lean burn vehicles. Federal fleets are also required to use alternative fuels in dual-fuel vehicles unless the U.S. Department of Energy (DOE) determines an agency qualifies for a waiver; grounds for a waiver include the lack of alternative fuel availability and cost restrictions. Fleets that use fuel blends containing at least 20% biodiesel (B20) in medium- and heavy-duty vehicle may earn credits toward their annual requirements. Additionally, Executive Order 13423 requires federal agencies with 20 vehicles or more in their U.S. fleet to decrease petroleum consumption by 2% per year, relative to their Fiscal Year (FY) 2005 baseline, through FY 2015. Agencies must also continue to increase their alternative fuel use by 10% per year, relative to the previous year. For more information, visit the Federal Fleet Management Web site.

Additional requirements for federal fleets were included in the Energy Independence and Security Act of 2007, including low greenhouse gas emitting vehicle acquisition requirements and renewable fuel infrastructure installation. These requirements are dependent upon formal rulemaking by DOE.

(Reference 42 U.S. Code 13212, and Executive Order 13423)

Point of Contact

Federal Fleet Requirements
U.S. Department of Energy
fed_fleets@afdc.nrel.gov
http://www1.eere.energy.gov/femp/about/fleet_mgmt.html

Energy Independence and Security Act of 2007 Signed Into Law

President Bush signed the Energy Independence and Security Act (EISA) of 2007 (House Resolution 6), designed to improve vehicle fuel economy and help reduce U.S. dependence on oil. EISA aims to increase the supply of alternative fuel sources by setting a mandatory Renewable Fuel Standard (RFS) requiring transportation fuel sold in the U.S. to contain a minimum of 36 billion gallons of renewable fuels by 2022, including advanced and cellulosic biofuels and biomass-based diesel. In addition, the law requires the Corporate Average Fuel Economy (CAFE) standard to reach 35 miles per gallon by the year 2020. The EISA is projected to reduce energy consumption by 7% and greenhouse gas emissions by 9% by 2030. For a summary of the major provisions set forth by the legislation, visit the Energy Independence and Security Act of 2007 page of the Federal Incentives & Laws Web site. The complete legislation can be viewed on the Library of Congress Web site.

Ninth Circuit Court of Appeals Rules That NHTSA Must Set New Light Truck Emissions Standards

The Ninth U.S. Circuit Court of Appeals rejected new fuel economy standards for light trucks, saying the National Highway Traffic Safety Administration (NHTSA) did not properly assess greenhouse gas emissions when it set new minimum fuel economy requirements for Model Years 2008 to 2011. The court ordered NHTSA to develop new standards "as expeditiously as possible." The complete ruling can be viewed on the Ninth Circuit Court's Web site (PDF 396KB). Download Adobe Reader

Corporate Average Fuel Economy (CAFE)

CAFE is the sales weighted average fuel economy, expressed in miles per gallon, of a manufacturer's fleet of passenger cars or light trucks with a gross vehicle weight rating of up to 8,500 pounds manufactured for sale in the U.S. for any given model year. The National Highway Traffic Safety Administration (NHTSA) is responsible for establishing, amending, and enforcing the CAFE standards, and the U.S. Environmental Protection Agency is responsible for calculating the average fuel economy for each manufacturer. Manufacturers are encouraged to produce vehicles capable of operating on alternative fuels and may receive credits toward average fuel economy for every alternative fuel vehicle produced, including dual fuel and flexible fuel vehicles. For more information about CAFE, including current standards for passenger cars and light trucks, visit the CAFE Web site. (Reference 49 U.S. Code Chapter 329)

Point of Contact

National Highway Traffic Safety Administration
U.S. Department of Transportation
Phone (888) 327-4236
http://www.nhtsa.gov/

National Clean Diesel Campaign (NCDC)

The NCDC was established by the U.S. Environmental Protection Agency to reduce pollution emitted from diesel engines through the implementation of varied control strategies and the involvement of national, state, and local partners. The NCDC includes programs for existing diesel fleets, regulations for clean diesel engines and fuels, and regional collaborations and partnerships.

Point of Contact

Jennifer Keller
National Clean Diesel Campaign
U.S. Environmental Protection Agency
Phone (202) 343-9541
keller.jennifer@epa.gov
http://www.epa.gov/cleandiesel/

Advanced Technology Vehicle (ATV) Manufacturing Incentives

Through the Advanced Technology Vehicles Manufacturing Loan Program, manufacturers of ATVs and components for such vehicles may be eligible for direct loans for up to 30% of the cost of re-equipping, expanding, or establishing manufacturing facilities in the U.S. used to produce qualified ATVs or ATV components. Qualified ATVs must be light-duty vehicles that meet specified federal emission standards and fuel economy requirements. Qualified components must be designed for ATVs and installed for the purpose of meeting ATV performance requirements, as determined by the U.S. Department of Energy. (Reference Public Law 110-140, Section 136)

Point of Contact

U.S. Department of Energy
Phone (800) 342-5363
Fax (202) 586-4403
http://www.energy.gov

U.S. DOT Announces New Fuel Economy Standards for Model Year 2011 Vehicles

The U.S. Department of Transportation (DOT) has issued a final rule establishing the average fuel economy standards for Model Year (MY) 2011 passenger cars and light trucks. The new standards will raise the industry-wide combined average to 27.3 miles per gallon (mpg), as estimated by the National Highway Traffic Safety Administration, which is an increase of 2 mpg over the 2010 model year average. The standards will save an estimated 887 million gallons of fuel and reduce carbon dioxide emissions by 8.3 million metric tons. The MY 2011 standards will use an attribute-based system, which sets fuel economy standards for individual vehicle models based on size. DOT is working on a multi-year fuel economy plan to ensure that the industry-wide combined average of all new passenger cars and light trucks is not less than 35 miles per gallon by MY 2020. This plan will include an evaluation of fuel saving technologies, market conditions, and future product plans from the manufacturers. DOT will to coordinate with interested stakeholders and other federal agencies, including the U.S. Environmental Protection Agency. For more information, see the final rule published in the Federal Register (PDF 897 KB). Download Adobe Reader.

U.S. EPA and U.S. DOT Announce Upcoming Joint Rulemaking to Establish Federal Vehicle Standards

The U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), on behalf of the U.S. Department of Transportation (DOT), have issued a Notice of Upcoming Joint Rulemaking to establish federal vehicle greenhouse gas (GHG) emission and fuel economy standards. This action follows President Obama's announcement of a national policy to reduce GHG emissions and increase fuel economy for new passenger cars, light-duty-trucks, and medium-duty passenger vehicles sold in the U.S. As EPA is responsible for regulating air pollution under the Clean Air Act (CAA) and NHTSA is responsible for regulating Corporate Average Fuel Economy (CAFE) standards, the two agencies will work in coordination to propose standards for GHG emissions and fuel economy, respectively. The standards will apply to Model Years 2012 through 2016 and will take into account the expected cost and commercial availability of new technologies. For more information see the Notice of Upcoming Joint Rulemaking and the White House press release.

U.S. DOT to Implement Car Allowance Rebate System

President Obama has enacted the Consumer Assistance to Recycle and Save Act of 2009, which establishes an incentive program to encourage consumers to trade in older, less fuel efficient cars and trucks for newer, more fuel efficient vehicles. The U.S. Department of Transportation's (DOT) National Highway Traffic Safety Administration (NHTSA) will implement the voluntary Car Allowance Rebate System (CARS) program. Consumers may receive $3,500 or $4,500 toward the purchase or lease of a new vehicle at a participating dealership. The incentive amount depends on the type of vehicle purchased and the improvement in fuel economy of the purchase vehicle as compared to the trade-in vehicle. In general, trade-in vehicles must have a combined city/highway fuel economy rating of 18 miles per gallon (mpg) or less and must be in drivable condition, less than 25 years old, and registered and insured for the full year prior to trade-in. For passenger vehicles, the purchase vehicle must be at least 4 mpg more fuel efficient than the trade-in vehicle. For vans, sport utility vehicles, and pickups, the purchase vehicle must be at least 2 mpg more fuel efficient. NHTSA will publish rules for the program within 30 days of enactment and the program will end November 1, 2009, or when DOT exhausts the funds set aside for the program, whichever comes first.