Indiana Laws and Incentives

Listed below are the summaries of all current Indiana 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

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)

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.

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)

E85 Fuel Use Incentive

A political subdivision that purchases E85 for use in flexible fuel vehicles (FFVs) may be entitled to a monthly incentive payment of $33.33 for each FFV owned by the political subdivision for fewer than five years. The political subdivision is eligible if 75% of its motor vehicle fuel purchases were E85 in the previous month. A political subdivision is defined as a municipal corporation or special taxing district. This incentive expires January 1, 2019. (Reference Indiana Code 6-6-1.1-103, 8-14-2-8, and 36-1-2-13)

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)

Biodiesel Price Preference

A governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to a 10% price preference for the purchase of fuels containing at least 20% biodiesel (B20) by volume or fuels that are primarily ester-derived (other than alcohol) made from biological materials, such as oilseeds and animal fats, for use in operating compression and ignition engines. (Reference Indiana Code 5-22-15)

Biodiesel Blend Tax Exemption

Biodiesel blends of at least 20% (B20) that are used for personal, noncommercial use by the individual that produced the biodiesel portion of the fuel are exempt from the $0.16 per gallon license tax. The maximum number of gallons of fuel for which the exemption may be claimed is based on the percentage volume of biodiesel in each gallon used. For more information, see the Indiana Department of Revenue Fuel & Environmental (Gasoline) Tax Forms website. (Reference Indiana Code 6-6-2.5-1.5, 6-6-2.5-28, and 6-6-2.5-30.5)

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)

Propane Equipment and Infrastructure Liability Exemption

Propane equipment, infrastructure, and fuel providers are exempt from civil liability for personal injury or property damage resulting from an individual who modifies, repairs, materially alters, or uses propane equipment or fuel for purposes not intended by the manufacturer or fuel producer. (Reference Indiana Code 34-31-11.2)

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

Plug-In Electric Vehicle (PEV) Charging Rates - Indianapolis Power & Light

The Indianapolis Power & Light Co (IPL) offers special PEV charging rates, including year-round time-of-use based options, for residential and fleet customers who own a licensed PEV. Customers who are considering purchasing Level 2 electric vehicle supply equipment should contact IPL to discuss the benefits and requirements of participating in the program. Restrictions apply. For more information, see the IPL Electric Vehicle Charging website.

Point of Contact
Cole Willis
Electric Vehicle Program Manager
Indianapolis Power & Light Company
Phone: (317) 261-5178
electric.vehicle@aes.com

All-Electric Vehicle (EV) Rebate - NIPSCO

NIPSCO customers and employees are eligible for a $10,000 rebate for the purchase of a new 2016 or 2017 Nissan Leaf at participating dealerships. Rebates are available through March 31, 2017, or until funds are exhausted. For more information, see the NIPSCO Nissan Leaf Rebate Flyer and the IN-Charge EV Program website.

Residential Electric Vehicle Charging Incentive - NIPSCO

NIPSCO's IN-Charge At Home Electric Vehicle Program (Program) offers free plug-in electric vehicle charging during off-peak hours for those enrolled in the Program. The Program is in effect until January 31, 2017. For more information, see the NIPSCO IN-Charge Electric Vehicle Program website.

Public Electric Vehicle Supply Equipment (EVSE) Funding - NIPSCO

NIPSCO's IN-Charge Around Town Electric Vehicle Program (Program) offers funding for the cost of up to two public EVSE, specifically for universities, workplaces, apartments, governmental public areas, major transportation corridors, and commercial and retail locations. NIPSCO offers 50% of the cost to purchase and install qualified public EVSE, up to $3,000 for Level 2 and up to $37,500 for DC fast. The Program is in effect until January 31, 2017, and is available on a first-come, first-served basis. The Program has reached capacity as of March 2016, but applicants may join a wait list for funding. For more information, see the NIPSCO IN-Charge Electric Vehicle Program 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)

Propane Vehicle Decals

An individual may place propane into the fuel tank of a motor vehicle only if the vehicle has a valid alternative fuel decal affixed to the front windshield or the individual has submitted an application for a decal within the last 30 days. The cost of the decal varies according to vehicle type and the gross vehicle weight rating. The annual fee may be prorated if the vehicle is newly purchased, registered in Indiana, or converted to operate using an alternative fuel. For propane vehicles registered outside of Indiana, owners must purchase a temporary trip permit from a licensed propane dealer. For more information, see the Indiana Department of Revenue Fuel & Environmental (Gasoline) Tax Forms website. (Reference Indiana Code 6-6-14, 6-6-2.5-22, and 6-6-2.5-67)

Point of Contact
Special Tax Division
Indiana Department of Revenue
Phone: (317) 615-2630

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)

Vehicle Idling Policy Requirements

Schools must adopt and enforce a written policy to address idling vehicles on school grounds. This policy must be modeled after the Indiana State Department of Health's manual of best practices for managing indoor air quality in schools and must be available for review. (Reference 410 Indiana Administrative Code 33-4-3)

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)

Immunity for Misuse of E85

E85 sellers, suppliers, distributors, manufacturers, and refiners are immune from civil liability for personal injury or property damage resulting from a person fueling any vehicle with E85 that is not a flexible fuel vehicle. This includes any vehicle equipped to operate when fueled entirely with E85. This immunity does not apply if an E85 seller, supplier, distributor, manufacturer, or refiner does not display all E85 warning signs that federal or state laws require. (Reference Indiana Code 34-30-24)

E85 Promotion and Education

The Indiana State Department of Agriculture must work with automobile manufacturers to improve awareness and labeling of E85 and must coordinate with the appropriate companies to include E85 fueling stations in updates of global positioning navigation software. (Reference Indiana Code 15-11-2-4)

E85 Retail Sales Reporting

A retailer who dispenses E85 must report to the Indiana Department of State Revenue the total number of gallons of E85 sold from a metered pump. (Reference Indiana Code 6-2.5-6 and 6-2.5-7-5)

E85 Definition

E85 is a fuel blend nominally consisting of 85% ethanol and 15% gasoline by volume that meets ASTM specification D5798. (Reference Indiana Code 6-6-1.1-103)

Biodiesel Definition

Biodiesel is defined as a renewable, biodegradable fuel derived from agricultural plant oils or animal fats that meet ASTM specification D6751. Blended biodiesel is a blend of biodiesel with petroleum diesel fuel so that the volume percentage of biodiesel in the blend is at least 2% (B2). (Reference Indiana Code 6-6-2.5-1.5)

Biofuels Blend Use Requirement

Whenever possible, governmental entities and state educational institutions must fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel (B2), gasoline vehicles with mid-level ethanol blends between 20% and 73%, and flexible fuel vehicles with E85. This requirement does not apply if such blends are prohibited under federal regulations or have not been approved by the vehicle manufacturer. Additional exemptions apply. (Reference Indiana Code 5-22-5-8, 6-3.1-27-2, and 21-31-9-3)

Low-Speed Vehicle Access to Roadways

A low-speed vehicle is defined as a four-wheeled electric vehicle capable of achieving a speed of up to 35 miles per hour (mph) that meets the standards in Title 49 of the U.S. Code of Federal Regulations, section 571.500. An individual may not operate a low-speed vehicle on a highway that has a posted speed limit greater than 35 mph. (Reference Indiana Code 9-21-5-8.5 and 9-13-2-94.5)

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)