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Alternative Fuel School Bus Grant and Loan Program

The Oregon Department of Energy (ODOE) administers the Cool Schools Program, a four-year pilot program to provide technical and financial assistance for energy efficiency or clean energy projects at schools in Oregon. Under this program, school districts may be eligible for grants and loans to retrofit school bus fleets to operate on compressed natural gas, propane, or other alternative fuels, or to operate with highly efficient engine technologies, such as hybrid electric engines. Funds may also be used to replace school buses with buses that operate on these fuels or technologies. This incentive is not currently available for alternative fuel projects (verified September 2013). For more information, please see the ODOE Cool Schools Program website. (Reference Oregon Revised Statutes 470.800 through 470.815)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit for Residents

Through the Residential Energy Tax Credit program, qualified residents may receive tax credits for the purchase of new AFVs, the conversion of vehicles to operate on an alternative fuel, and the purchase of alternative fuel infrastructure. The credit for a new AFV is 25% of the incremental cost or $750, whichever is less. AFV conversions and fueling infrastructure may receive 25% of the project cost or $750, whichever is less. Residents are allowed to claim a tax credit for both a vehicle and fueling infrastructure. Leased vehicles may qualify with permission from the vehicle owner. AFV conversions must be certified by the U.S. Environmental Protection Agency. Qualified alternative fuels include electricity, propane, hydrogen, and other fuels the Oregon Department of Energy approves. Gasoline blended with at least 85% ethanol (E85) qualifies as an alternative fuel for the infrastructure credit, but flexible fuel vehicles and low-speed vehicles are not eligible for the vehicle incentives. A company that constructs a dwelling in Oregon and installs fueling infrastructure in the dwelling may claim the credit. The AFV credit is available through December 31, 2011; the fueling infrastructure credit is available through December 31, 2017. (Reference House Bills 3672 and 3606, 2011, and Oregon Revised Statutes 316.116, 317.115, and 469.160-469.180 (NOTE: Renumbered 469B.100-469B.130 in 2011)

Alternative Fueling Infrastructure Tax Credit for Businesses

Beginning January 1, 2011, business owners and others may be eligible for a tax credit of 35% of eligible costs for qualified alternative fuel infrastructure projects. Qualified infrastructure includes facilities for mixing, storing, compressing, or dispensing fuels for vehicles operating on electricity, ethanol, natural gas, and propane. Unused credits can be carried forward up to five years. Non-profit organizations and public entities that do not have an Oregon tax liability may receive the credit for an eligible project but must "pass-through" or transfer their project eligibility to a pass-through partner in exchange for a lump-sum cash payment. The Oregon Department of Energy (ODOE) determines the rate that is used to calculate the cash payment. The pass-through option is also available to a project owner with an Oregon tax liability who chooses to transfer their tax credit. The credit is available through December 31, 2018. (Reference House Bill 3672, 2011)

Alternative Fuel Loans

The Oregon Department of Energy administers the State Energy Loan Program (SELP) which offers low-interest loans for qualified projects. Eligible alternative fuel projects include fuel production facilities, dedicated feedstock production, fueling infrastructure, and fleet vehicles. Loan recipients must complete a loan application and pay a loan application fee. (Reference House Bill 3672, 2011, and Oregon Revised Statutes 470)

Pollution Control Equipment Exemption

Dedicated original equipment manufacturer natural gas vehicles and all-electric vehicles are not required to be equipped with a certified pollution control system. (Reference Oregon Revised Statutes 815.300)

Natural Gas and Propane Vehicle License Fee

Beginning July 1, 2015, drivers using natural gas or propane to fuel a vehicle may pay a special use fuel license fee annually in lieu of the state fuel excise tax of $0.30 per gallon. The fee is determined by multiplying a base amount in the table below by the current tax rate and dividing by 12.

Combined Vehicle Weight (pounds) Base Amount
0 - 10,000 $60
10,001 - 26,000 $300
26,001 and above $400
ReferenceHouse Bill 4131, 2014, and Oregon Revised Statutes 319)

Alternative Fuel Excise Tax

Compressed natural gas motor fuel is subject to the state fuel excise tax at the rate of $0.30 per 120 cubic feet, measured at 14.73 pounds per square inch and 60 degrees Fahrenheit. Propane motor fuel is subject to the excise tax $0.30 per 1.3 gallons at 60 degrees Fahrenheit. (Reference Oregon Revised Statutes 319.530)

Establishment of Clean Transportation Fuel Standards

The Oregon Department of Environmental Quality (DEQ) developed a proposed low carbon fuel standard for all transportation fuels, including a lifecycle greenhouse gas (GHG) emission standard for the production, storage, transportation and combustion of fuels. DEQ will conduct a formal rulemaking process to seek review and comments in 2011. The proposed standards aim to reduce average GHG emissions per unit of fuel energy by 10% below 2012 levels by 2022. For more information, see the DEQ Low Carbon Fuel Standard website. (Reference House Bill 2186, 2009)

Alternative Fuel Vehicle (AFV) Acquisition, Fuel Use, and Emissions Reductions Requirements

All state agencies and transit districts must purchase AFVs and use alternative fuels to operate those vehicles to the maximum extent possible, except when it is not economically or logistically possible to purchase or fuel an AFV. Each state agency must develop and report a greenhouse gas reduction baseline and determine annual reduction targets. Reports to the Oregon Department of Administrative Services must include the volume of ethanol and biodiesel used by state agency fleets, as well as any cost savings attributable to driving more fuel-efficient vehicles and using alternative fuels. (Reference Oregon Revised Statutes 283.327 and 267.030, and Executive Order 06-02, 2006)

Alternative Fuel Vehicle Parking Space Regulation

An individual is not allowed to park a motor vehicle within any parking space specifically designated for public parking and fueling of AFVs unless the motor vehicle is an AFV fueled by electricity, natural gas, methanol, propane, gasoline blended with at least 85% ethanol (E85), or other fuel the Oregon Department of Energy approves. Eligible AFVs must also be in the process of fueling or charging to park in the space. A person found responsible for a violation is subject to traffic violation penalties. (Reference Oregon Law 208

2015 Session - Proposed Legislation

HB-2092

Tax credits for electric and zero emission vehicles. Tax credits are auctioned and have a value of up to $30 million per biennium. The incentive would be available starting Jan. 1, 2016 and run through 2021. Reference - HB2092 Bill History, Reference - HB2092 Bill Text

HB-2086

Imposes carbon tax on different fuels. Does not appear to cover natural gas sold as transportation. It does cover liquid fuels but has narrow definition that does not include LNG or diesel. Reference - HB2086 Bill History, Reference - HB2086 Bill Text

HB-2159

Imposes carbon tax on different fuels. Appears to be quite broad. Reference - HB2159 Bill History, Reference - HB2159 Bill Text

HB-2447

Long bill modifies and extends certain credits for alternative fuel devices including
residential fueling devices. Extends until end of 2021; currently expires at end of
2017. Removes language relating to tax credits for individuals who purchase AFVs
because those credits expired after 2012. Reference - HB2447 Bill History, Reference - HB2447 Bill Text Status: to Joint Committee for Taxation 5/20/15.

HB-2448

Extends tax credits for AFV transportation projects until end of 2021; currently expires at end of 2017. Reference - HB2448 Bill History, Reference - HB2448 Bill Text

HB-2449

Expands program to provide tax credits for biogas production. Reference - HB2449 Bill History, Reference - HB2449 Bill Text

SB-260

Expands existing programs to create new grant program for clean energy deployment including natural gas and other alternative fuel school buses. Reference - SB260 Bill History, Reference - SB260 Bill Text

SB-324

Repeals sunset on provisions related to low carbon fuel standards. Prohibits Environmental Quality Commission from requiring compliance with low carbon fuel standards if division of Oregon Department of Administrative Services that serves as office of economic analysis finds that projected incremental cost of compliance would exceed four percent of projected average annual cost of gasoline or diesel in Oregon. Requires commission to suspend requirements to comply with low carbon fuel standards upon certain findings by division. Allows commission to reinstate requirements to comply with low carbon fuel standards upon certain findings by division.Ù Extends target date for meeting certain emission goals under phased implementation of low carbon fuel standards. Requires Environmental Quality Commission to adopt by rule provisions for managing and containing costs of compliance with low carbon fuel standards. Prohibits fuels that contain biodiesel from being considered alternative fuels unless certain standards are met. Adds certain exemptions to low carbon fuel standards. Declares emergency, effective on passage. Reference - SB324 Bill History, Reference - SB324 Bill Text Status: Enacted 3/18/2015; Effective date, March 12, 2015.

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2014 Session - Proposed Legislation

HB-4107

Extends the AFV Revolving Loan Fund Program to include certain private entities beginning in 2015. Reference - HB4107 Bill History, Reference - HB4107 Bill Text Passed, Signed by Governor 3/6/2014

HB-4131

Authorizes paying an annual fee in lieu of the excise tax for natural gas and propane vehicles. The rates includes a base fee that is multiplied by the excise tax in effect and then divided by 0.12. The fees are as follows: 0 - 10,000 lb. vehicle - $60, 10,001 lb. - 26,000 lb. - $300, 26,001 & up - $400. The fuel tax is 30 cents. E.g., ($300 x .30)/.12 = $1,000 fee. Reference - HB4131 Bill History, Reference - HB4131 Bill TextPassed, Signed by Governor 3/3/2014

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2013 Session - Proposed Legislation

HB-2300

Requires Director of the State Department of Energy to promote use of compressed natural gas; gives highest priority for energy facility tax credits to distribution facilities for compressed natural gas; applies to applications for preliminary certification submitted on or after effective date of Act; takes effect on 91st day following adjournment sine die.HB-2300, 2013 Failed on July 8 2013

HB-2497

Would impose a carbon tax of no more than 6% of the value of oil and natural gas sold in the state.HB-2497, 2013 Failed on July 8 2013

HB-2758

Requires the Dept. of Transportation to study issues relating to alternative fuel vehicles and proposals relating to the increased use of such vehicles in Oregon. Report due Nov. 1, 2013 Reference - HB2758 Bill History, Reference - HB2758 Bill Text Failed on July 8 2013

HB-2894

Amends existing alternative fuel transportation tax credits to increase allowable amounts from $20,000 to $50,000 and would expand transportation projects to include not only transit related projects but also replacement of an alternative fuel vehicle fleet (as of Jan. 1, 2015) Reference - HB2894 Bill History, Reference - HB2894 Bill Text Failed on July 8 2013

HB-3105

Makes it illegal to park in space reserved for alternative fuel vehicle refueling; sets fine at a maximum of $250. Reference - HB3105 Bill History, Reference - HB3105 Bill Text Failed on July 8 2013

HB-3227

Allows natural gas and propane users to pay a annual decal or license fee in lieu of paying the per gallon tax. The base fee would vary by vehicle weight: 0 - 6,000 lbs., $120; 6,001 - 10,000, $120; 10,001 - 18,000, $180; 18,001 - 28,000, $240; 28,001 - 36,000, $360; 36,001 & above, $480. The base fee is then multiplied by the tax rate (currently 30 cents) and then divided .12 to calculate the actual fees which range from $300 - $1,200. Reference - HB3227 Bill History, Reference - HB3227 Bill Text Failed on July 8 2013

SB-583

Establishes Alternative Fuel Vehicle Revolving Fund to be administered by the Dept. of Energy to provide loans to public entities to purchase alternative fuel vehicles. Rates for loans may be zero to market rates at discretion of the Dept. of Energy. Reference - SB583 Bill History, Reference - SB583 Bill Text Passed on August 21 2013.