Alabama Laws and Incentives

Listed below are the summaries of all current Alabama laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Alternative Fuel and Idle Reduction Revolving Loan Program for Private Entities

The Alabama Department of Economic and Community Affairs (ADECA) provides low-interest rate energy efficiency loans through its AlabamaSAVES program to commercial, industrial, and non-profit entities. Eligible energy efficiency improvements include those involving idle reduction equipment, natural gas and propane vehicle conversions or purchases, and alternative fueling infrastructure installation at existing facilities in Alabama. Dedicated and bi-fuel vehicles are eligible, and the loan may cover incremental and conversion costs. As of April 2016, the Program is no longer accepting applications.

Point of Contact
Liz Cochran
Program Manager
Alabama Department of Economic and Community Affairs
Phone: (334) 353-4380
Fax: (334) 242-0552
liz.cochran@adeca.alabama.gov

Alternative Fuel and Idle Reduction Revolving Loan Program for Public Entities

The Alabama Department of Economic and Community Affairs (ADECA) provides low-interest energy efficiency loans through its Local Government Energy Loan program to local governments and educational institutions. Eligible energy efficiency improvement projects include those involving idle reduction equipment and natural gas and propane vehicle conversions or purchases. Dedicated and bi-fuel vehicles are eligible, and the loan may cover incremental and conversion costs. Local governments and public colleges and universities can borrow up to $350,000; K-12 public schools may borrow up to $350,000 per campus or $500,000 per school system. The minimum loan amount is $50,000 and the maximum loan term is five years.

Point of Contact
Liz Cochran
Program Manager
Alabama Department of Economic and Community Affairs
Phone: (334) 353-4380
Fax: (334) 242-0552
liz.cochran@adeca.alabama.gov

Biofuel Production Jobs Tax Credit

Companies that invest in the development of a biofuel production facility may be eligible for a tax credit of 3% of the previous year's annual employee wages. Companies may claim this credit against the utility gross receipts and utility service use taxes for up to 10 years; the credit may be refundable during the incentive period or claimed as a credit against utility taxes paid with a carryforward for earned but unused amounts. Companies may also be eligible for a tax credit of 1.5% of qualified capital investment annually for up to 10 years. Companies may claim this credit against the income tax, estimated income taxes, financial institution excise tax, or the insurance premium tax; the credit may be claimed as a credit against taxes paid with a carryforward for earned but unused amounts.

For the purposes of the credit, biofuel is defined as a motor vehicle fuel that is produced from grain, starch, oilseeds, vegetable, algae, animal materials, or other biomass. To be eligible for the tax credits, companies must execute a project agreement with the Governor.

(Reference Code of Alabama 2-2-90 and 40-18-370 through 40-18-383)

Idle Reduction Weight Exemption

Any motor vehicle equipped with an auxiliary power unit (APU) or other idle reduction technology may exceed the gross, axle, tandem, or bridge formula weight limits by up to 400 pounds. To be eligible for the weight exemption, the vehicle operator must be able to provide written proof or certification of the weight of the APU and demonstrate or certify that the idle reduction technology is fully functional at all times. (Reference Code of Alabama 32-9-20)

Utility/Private Incentives

Plug-In Electric Vehicle (PEV) Charging Rate Incentive - Alabama Power

Alabama Power offers a Business Electric Vehicle Time-of-Use (BEVT) rate for electricity purchased to charge PEVs used for fleet purposes. The electricity used for vehicle charging is metered separately from all other electricity use. For more information, see the BEVT rate guidance. In addition, Alabama Power offers a Residential PEV rate for customers that can verify possession of a qualified PEV. For more information, see the Residential PEV rate guidance.

Plug-In Electric Vehicle (PEV) and Charging Infrastructure Incentive - Alabama Power

Alabama Power offers commercial customers $500 per port for qualified commercial electric vehicle supply equipment. Funding is available on a first-come, first-served basis through 2016.

Laws and Regulations

Alternative Fuel Tax

The state road tax for vehicles that operate on propane (liquefied petroleum gas or LPG) is paid through the purchase of an annual flat fee sticker, and the amount is based on the vehicle's gross vehicle weight rating. Each person owning and/or operating a vehicle that operates on propane must obtain an annual decal from the Alabama LPG Board. The decal must be affixed to the vehicle according to LPG Board specification as proof that the issuance fee and decal fee have been paid. Vehicle owners must apply for a decal within 10 days of converting a vehicle to operate on propane, or a 20% penalty will be applied to the decal fee. Out-of-state alternative fuel vehicle operators that purchase propane within the state must pay the current Alabama motor fuel tax or they may elect to purchase the annual flat fee decal. The propane dealer or supplier must remit these funds to the LPG Board before the 20th of the month following the date of sale. Decal and road tax requirements for natural gas fuels are suspended until October 1, 2016. (Reference Code of Alabama 40-17-160 through 40-17-165)

Point of Contact
Mark Nelson
Administrator
Alabama Liquefied Petroleum Gas Board
Phone: (334) 241-8887
Fax: (334) 240-3255
mark.nelson@lpgb.alabama.gov
http://www.lpgb.alabama.gov/

Fuel-Efficient Green Fleets Policy and Fleet Management Program Development

The Alabama Green Fleets Review Committee (Committee) is establishing a Green Fleets Policy (Policy) outlining a procedure for procuring state vehicles based on criteria that includes fuel economy and life cycle costing. State fleet managers must classify their vehicle inventory for compliance with the Policy and submit annual plans for procuring fuel-efficient vehicles. These plans must reflect a 4% annual increase in average fleet fuel economy for light-duty vehicles, a 3% annual increase in average fleet fuel economy for medium-duty vehicles, and a 2% annual increase in average fleet fuel economy for heavy-duty vehicles per fiscal year. The Policy will also require that government entities manage and operate their fleets in a manner that is energy efficient, minimizes emissions, and reduces petroleum dependency by using specified proven technology the Committee identifies.

In addition, the Alabama Department of Transportation appointed and employed a fleet manager to develop a statewide fleet management program (Program). The Office of Fleet Management will propose fleet management policies, procedures, and guidelines for all state agency, board, commission, and department fleets and will address future cooperation between the Department of Finance and the Committee to ensure compliance with the Green Fleets Policy.

(Reference Code of Alabama 41-17A-1 through 41-17A-6, and Executive Order 38, 2013)

Alternative Fuels Promotion and Information

The Center for Alternative Fuels (Center) promotes alternative fuels as viable energy sources in the state. The Center must assess the current status and development of sources of alternative fuels, ensuring that all alternative fuels sold in the state meet ASTM standards, and act as an information center for alternative fuels and a clearinghouse for available federal grant funding for alternative fuel development. The Center may administer a grant program using income tax check-off program funds from the Alabama Alternative Fuels and Research Development Fund. For more information, refer to the Center for Alternative Fuels website. (Reference Code of Alabama 2-2-90 and 2-2-91)