Indiana Laws and Incentives for Natural Gas

The list below contains summaries of all Indiana laws and incentives related to Natural Gas.

Utility/Private Incentives

Natural Gas Vehicle (NGV) Rebate for Fleets

Citizens Gas & Coke Utility (Citizens) offers rebates for qualified compressed natural gas (CNG) vehicle conversions or for the purchase of an original equipment manufacturer dedicated or bi-fuel CNG vehicle. Used NGVs may also qualify. Rebates are available to fleet operators on a case-by-case basis. Citizens will examine each project 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

State Incentives

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any motor vehicle equipped with an auxiliary power unit or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 400 pounds to compensate for the added weight of the idle reduction technology. Any NGV may exceed the limits by up to 2,000 pounds. (Reference Indiana Code 9-20-4-1)

Natural Gas Tax Credit

A carrier operating a commercial compressed natural gas (CNG) vehicle on any Indiana highway may claim a credit equal to 12% of the road taxes imposed on its CNG consumption in the previous calendar quarter. The credit is refundable. (Reference Indiana Code 6-6-4.1-1 and 6-6-12)

Natural Gas Tax Exemption for Public Transportation

Natural gas purchased by a public transportation corporation to fuel a vehicle used for public transportation is exempt from the state gross retail tax until December 31, 2017. (Reference Indiana Code 6-2.5-5-27)

Alternative Fuel Vehicle (AFV) Inspection and Maintenance Exemption

Dedicated AFVs are exempt from inspection and maintenance requirements if they operate exclusively on natural gas, propane, ethanol, hydrogen, or methanol. (Reference 326 Indiana Administrative Code 13-1.1)

Vehicle Research and Development Grants

The Indiana 21st Century Research and Technology Fund provides grants and loans to support economic development in high technology industry clusters. Incentives are available for qualified alternative fuel technologies and fuel-efficient vehicle development and production. For more information, see the Elevate Ventures 21st Century Fund website. (Reference Indiana Code 5-28-16-2)

Diesel Vehicle Retrofit and Improvement Grants

The Indiana Department of Environmental Management (IDEM) administers two DieselWise Indiana grant programs to support projects that reduce diesel emissions. The Clean Diesel Across Northern Indiana program provides grants ranging from $25,000 to $200,000 for projects in the Gary, Hammond, Michigan City, South Bend, Elkhart, and Fort Wayne areas. The Clean Diesel Across Indiana program provides grants ranging from $10,000 to $75,000 for projects in central and south Indiana. Eligible applicants include private and public entities that operate equipment serving the public, including private bus fleets and sanitation fleets. Eligible projects include replacing or converting a diesel vehicle or vehicle component with one that operates on alternative fuel, as well as installing exhaust retrofit technologies, idle reduction technologies, aerodynamic technologies, and low rolling resistance tires. For more information, including current solicitations, see the IDEM DieselWise website.

Laws and Regulations

Special Fuel Tax

Certain special fuels sold or used to propel motor vehicles are subject to a license tax. Liquefied natural gas is subject to a tax of $0.16 per diesel gallon equivalent. Compressed natural gas, butane, and propane are subject to a tax of $0.16 per gasoline gallon equivalent. The tax does not apply to nominal biodiesel blends of at least 20% (B20); special fuel used only for a personal, noncommercial use and not for resale; and biodiesel used by a biodiesel producer holding an exemption certificate. Other exemptions apply. For more information, see the Indiana Miscellaneous Tax Rates website. (Reference Indiana Code 6-6-2.5)

Alternative Fuel Motor Carrier Fuel Tax

A person who operates a commercial motor vehicle on any highway in Indiana is subject to a surcharge tax on the consumption of motor fuel. The tax rate is $0.11 per diesel gallon equivalent for liquefied natural gas and $0.11 per gasoline gallon equivalent for compressed natural gas, butane, or propane. For more information, see the Indiana Miscellaneous Tax Rates website. (Reference Indiana Code 6-6-4.1-1)

Certified Technology Park Designation

The Indiana Economic Development Corporation (IDEC) 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 the public's 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. For more information, see the IEDC Indiana Certified Technology Parks website. (Reference Indiana Code 36-7-32)

Clean Vehicle Acquisition Requirements

Each state entity must purchase or lease a clean energy vehicle, unless the Indiana Department of Administration (Department) determines that the purchase or lease of the vehicle is inappropriate for its intended use, or the purchase or lease would cost 20% more than a comparable non-clean energy vehicle. Additional exemptions apply. A clean energy vehicle is defined as a vehicle that operates on one or more alternative energy sources, including the following: a rechargeable energy storage system, hydrogen, natural gas, and propane. Each state entity must annually submit to the Department information regarding its use of clean energy vehicles. (Reference Indiana Code 5-22-5-8.5)

Alternative Fuel and Special Fuel Definitions

The definition of alternative fuel includes liquefied petroleum gas (propane). Special fuel is defined as all combustible gases and liquids that are suitable for powering an internal combustion engine or motor or are used exclusively for heating, industrial, or farm purposes. Special fuels include biodiesel, blended biodiesel, and natural gas products, including liquefied and compressed natural gas. (Reference Indiana Code 6-6-2.5-1 and 6-6-2.5-22)

  

More Laws and Incentives

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