Colorado Policy Data

Summary

	Owners of natural gas and propane vehicles are required to purchase an annual tax decal from the Colorado Department of Revenue or a decal vendor. As an "early adopter" with an AFV tax credit, and fuel tax exemption laws passed in 2000, Colorado has had a fairly active legislative NGV roster over the years. State legislatures extended the AFV tax credit from 2000 that would have expired in 2005 through 2009, and then again extended modified AFV tax credits through 2015. The state also has passed legislation that incorporates AFVs into State fleets. Click here to download the state profile sheet.

Vehicles

Current Estimated Fleet-based NGVs in Colorado

~365

Vehicles by Fuel Type

Stations

Current Public NGV Fueling Stations -22

Private NGV Fueling Stations -23

Fuel Taxes

Colorado Motor Fuel Taxation Website

CNG -6.0 ¢ / GGE (126.67cf)

LNG -5.0 ¢ / DGE (128K BTU)

Gasoline - 22.0 ¢ / Gallon

Diesel - 20.5 ¢ / Gallon

IFTA - IFTA taxes are applied to vehicles of 3+ axles, or weighing more than 26,000 pounds. IFTA tax tables can be found here

Incentives

Alternative Fuel, Advanced Vehicle, and Idle Reduction Equipment Tax Credit

An income tax credit is available from the Colorado Department of Revenue for a motor vehicle titled and registered in Colorado that uses or is converted to use an alternative fuel, is a hybrid electric vehicle (HEV), or has its power source replaced with one that uses an alternative fuel. Qualified idle reduction technologies are also eligible for the tax credit. Credits are based on defined vehicle and technology categories as follows:

Category	January (Jan.) 1, 2010, to Jan. 1, 2012	Jan. 1, 2012, to Jan. 1, 2013	Jan. 1, 2013, to Jan. 1, 2014	Jan. 1, 2014, to Jan. 1, 2015	Jan. 1, 2015, to Jan. 1, 2016
1 - Vehicle meeting Tier 2, Bin 1 federal emissions standards	85%	75%	75%	75%	75%
2 - Light-duty diesel-electric hybrid passenger vehicle with a minimum fuel economy of 70 miles per gallon (mpg)	65%	45%	25%	15%	15%
3 - Light-duty passenger vehicle, light-duty truck, or medium-duty diesel-electric truck conversion that increases original fuel economy by at least 40%; or a new diesel-electric or gasoline-electric hybrid medium-duty truck with 30% greater fuel economy than a comparable vehicle	75%	55%	35%	25%	25%
4 - Light-duty passenger vehicle, light-duty truck, or medium-duty truck natural gas or liquefied petroleum gas (propane) conversions	75%	55%	35%	25%	25%
5 - Idle reduction technologies	25%	25%	25%	25%	25%
6 - Vehicle meeting Tier 2, Bin 2 or 3 federal emissions standards, with a fuel economy of at least 40 mpg	75%	10%	10%	0%	0%

The credit is capped at $6,000 for the following: alternative fuel vehicles (AFVs), AFV conversions, HEVs, plug-in hybrid electric vehicles (PHEVs), PHEV conversions, idle reduction technologies, and power source replacements; there is no cap on natural gas and propane vehicle conversions. Beginning in 2012, the cap on PHEV conversions increases to $7,500. Individuals who claimed a tax credit in previous years for the purchase of a Model Year 2004 or newer HEV may be eligible to claim an additional credit for the conversion of the same vehicle to a PHEV. Credits claimed in tax years 2010 and 2011 for Category 3 and Category 4 vehicles that permanently replace vehicles or power sources at least 12 years old are eligible for 1.25 times the percentages displayed above, up to 100%. Credits generated in 2010 or 2011 that exceed the tax due are refundable but cannot be carried forward. Used vehicles may qualify with proof that the prior owners did not claim the tax credit. For additional information, see the Department of Revenue's Income 9 FYI publication.
(Reference House Bill 1081, 2011, and Colorado Revised Statutes 39-22-516)

Point of Contact
John Doty
Manager, Sales Tax Administration Unit
Colorado Department of Revenue
Phone: (303) 205-8211 x6889
jdoty@spike.dor.state.co.us

Low Emission Vehicle (LEV) Sales Tax Exemption

Vehicles, vehicle power sources, or parts used for converting a vehicle power source to reduce emissions are exempt from state sales tax. This exemption applies to vehicles, power sources, or parts for vehicles over 10,000 pounds gross vehicle weight rating that are certified to federal LEV standards. The vehicle power source includes the engine or motor and associated wiring, fuel lines, engine coolant system, fuel storage containers, and other components. (Reference Colorado Revised Statutes 39-26-719)

Alternative Fuel Vehicles and Infrastructure Grant Program

The Colorado Energy Office (CEO), the Regional Air Quality Council (RAQC), and the Colorado Department of Transportation provide grants through the ALT Fuels Colorado program for new, publicly accessible compressed natural gas (CNG) fueling equipment; co-located electric vehicle charging and propane station equipment at funded CNG stations; and CNG, propane, and electric vehicles. CEO will administer the station grants to advance infrastructure development along major state-wide transportation corridors. RAQC will administer the vehicle grants for fleets operating within counties with air quality nonattainment and maintenance areas. For more information, including application deadlines and annual award amounts, see the (Reference Refuel Colorado website.

Points of Contact
Wes Maurer
Transportation Program Manager
Colorado Energy Office
Phone: (303) 866-2064
wes.maurer@state.co.us

Steve McCannon
Mobile Sources Program Manger
Regional Air Quality Council
Phone: (303) 629-5450 x230
smccannon@raqc.org

Biogas Production Sales Tax Exemption

Biogas production systems, including sales and storage systems, that create a transportation fuel or renewable natural gas, are exempt from state sales and use tax. Towns, cities, and/or counties that currently have production sales or use taxes may choose to individually enforce or exempt producers from their local taxes. (Reference Reference - HB1159 Bill History, Reference - HB1159 Bill Text, and Colorado Revised Statutes 39-26-724)

Alternative Fuel Vehicle (AFV) Weight Limit Exemption

Gross vehicle weight rating limits for AFVs are 1,000 pounds greater than those for comparable conventional vehicles, as long as the AFVs operate using an alternative fuel or both alternative and conventional fuel, when operating on a highway that is not part of the interstate system. (Reference Colorado Revised Statutes 25-7-106.8 and 42-4-508)

AFV Fleet Technical Assistance

The Colorado Energy Office and the Regional Air Quality Council administer Refuel Colorado Fleets, a free energy coaching program for fleet managers and communities. The program helps fleet managers identify AFV options and develop a business case. Energy coaches guide fleet managers through the acquisition process by providing technical expertise on issues such as fueling, incentives, maintenance, and safety. Energy coaches also work with local leaders, fuel providers, and dealerships to encourage AFV development in each community. For more information, including a list of regional contacts, see the Refuel Colorado Fleets website.

Point of Contact
Cabell Hodge
Policy, Regulatory, and Emerging Markets Manager
Colorado Energy Office
Phone: (303) 866-2204
Fax: (303) 866-2930
cabell.hodge@state.co.us

Natural Gas Fueling Station Air Quality Permit Exemption

The Colorado Department of Public Health & Environment, Air Quality Control Commission, has determined that natural gas fueling stations are exempt from the requirement to file Air Pollutant Emission Notices. (Reference Colorado Air Quality Control Commission Regulations Number 3, Part A, Section II.D.1.hhh

CNG School Bus Matching Grants

Noble Energy is partnering with the Regional Air Quality Council (RAQC) to match grants to qualified Colorado school districts to fund CNG school bus purchases. School districts must apply to RAQC for an ALT Fuels Colorado program grant. Noble Energy will provide additional funds directly to the school district once RAQC approves the grant award. For more information, including additional requirements, see the Noble Energy Grant Program (PDF) information and and the ALT Fuels Colorado website)

Laws & Regs

Legislative Session Dates:	January 8 - May 7
Legislature Website:	http://leg.colorado.gov/

Alternative Fuels Tax

Compressed natural gas (CNG), liquefied natural gas (LNG), and liquefied petroleum gas (LPG) are subject to excise tax imposed on a per gallon basis as follows:

FUEL 2014 2015 2016 2017 2018 2019 & Beyond
CNG $0.03 $0.06 $0.09 $0.12 $0.15 $0.183
LNG $0.03 $0.05 $0.07 $0.08 $0.10 $0.12
LPG $0.03 $0.05 $0.07 $0.09 $0.11 $0.135

(Reference Colorado Revised Statutes 39-27-102.5)

Alternative Fuel Resale and Generation Regulations

A corporation or individual that resells alternative fuel supplied by a public utility for use in an alternative fuel vehicle (AFV) is not subject to regulation as a public utility. Additionally, a corporation or individual that owns, controls, operates, or manages a facility that generates electricity exclusively for use in AFV charging or fueling facilities is not subject to regulation as a public utility provided that the electricity is generated on the property where the charging or fueling facilities are located and the electricity is generated from a renewable resource. For the purposes of this definition, alternative fuel is defined as propane, liquefied natural gas, compressed natural gas, or electricity. (Reference House Bill 1258, 2012) (Reference Colorado Revised Statutes Chapter 40, Article 1, Sections 101-104))

Fleet Purchase and Pricing Agreement Requirements

The Colorado state fleet and the Colorado Department of Transportation (CDOT) must purchase natural gas vehicles (NGVs) where natural gas fueling is available or planned, whenever possible. Where NGVs are not viable options, other alternative fuel vehicles (AFVs) such as plug-in electric, hybrid electric, and propane vehicles, must be considered. All new vehicles purchased must be either alternatively fueled or exceed federal Corporate Average Fuel Economy standards.

In addition, CDOT and the Colorado Department of Personnel and Administration (DPA) must include AFVs in state pricing agreements; AFVs include compressed natural gas, hybrid electric, plug-in electric, and propane vehicles. CDOT and DPA must also determine opportunities to expand state pricing into alternative fuel and fuel-efficient heavy-duty equipment, as well as into idle reduction technologies and telematics.

(Reference Executive Order D 2015-013, 2015) )

Alternative Fuel Vehicle (AFV) Registration

Upon registering a motor vehicle with the Colorado Department of Revenue Division of Motor Vehicles, the vehicle owner must report the types of alternative fuel used to operate the vehicle and whether the vehicle is dedicated to one alternative fuel or uses more than one fuel. The Department of Revenue provides forms for the purpose of registering motor vehicles and must include space for the following fuel types: gasoline, diesel, propane, electricity, natural gas, methanol/M85, ethanol/E85, biodiesel, and other. (Reference Colorado Revised Statutes 42-3-113)

State Agency Alternative Fuel Use and Vehicle Acquisition Requirement

The Colorado Department of Personnel and Administration (DPA) has adopted a policy that requires all state-owned diesel vehicles and equipment to be fueled with a fuel blend of 20% biodiesel (B20), subject to the availability of the fuel and so long as the price differential is not greater than $0.10 more per gallon as compared to conventional diesel. Biodiesel is defined as fuel composed of mono-alkyl esters of long chain fatty acids derived from plant or animal matter that meets ASTM specifications and is produced in Colorado.
Additionally, DPA has adopted a policy to increase the use of alternative fuels and establish objectives to increase its use for each succeeding year. DPA must purchase motor vehicles that operate on compressed natural gas (CNG), subject to the availability of vehicles and adequate fueling infrastructure. If purchases of CNG vehicles are not possible due to the incremental cost being more than 10%, DPA must purchase another type of flexible fuel, hybrid electric, or all-electric vehicle, also subject to availability and incremental costs. DPA may adopt a policy to allow some vehicles to be exempt from this requirement.
Lastly, each state agency must develop a plan to improve commuting options for its employees. The plans should evaluate opportunities including plug-in electric vehicle charging. (Reference Executive Order D0012 07, 2007, and Colorado Revised Statutes 24-30-1104)

Point of Contact
Art Hale
Colorado State Fleet Manager
Colorado Department of Personnel and Administration, Division of Central Services
Phone: (303) 866-5531
Fax: (303) 866-5511
art.hale@state.co.us

Alternative Fuel Definition

Alternative fuel is defined as compressed natural gas, propane, ethanol, or any mixture containing 85% or more ethanol (E85) with gasoline or other fuels, electricity, or any other fuels, which may include, but are not limited to, clean diesel and reformulated gasoline, so long as the Colorado Air Quality Control Commission determines that these other fuels result in comparable reductions in carbon monoxide emissions and brown cloud pollutants. Alternative fuel does not include any fuel product that contains or is treated with methyl tertiary butyl ether (MTBE). (Reference Colorado Revised Statutes 25-7-106.8)

Gasoline and Diesel Gallon Equivalent (GGE) Definition

The term GGE is defined to equate the energy content of any motor fuel, including alternative fuels, to that of a gallon of gasoline. Any dispenser used for the sale of motor fuel in GGEs must display GGEs as the primary display information provided. (Reference Colorado Revised Statutes 8-20-232.5)

Vehicle Fleet Maintenance and Fuel Cost-Savings Contracts

Government fleets may finance the lease or purchase cost of alternative fuel vehicles and alternative fueling infrastructure through energy performance contracts where vehicle operational and fuel cost savings pay for the capital investment. Energy performance contracts must show that the annual cost savings associated with the fueling and maintenance of vehicles with higher efficiency ratings or alternative fueling methods is equal to or higher than the annual contract payments. (Reference Colorado Revised Statutes 24-30-2001 through 24-30-2003 and 29-12.5-101 through 29-12.5-104)

Natural Gas Fueling Station Regulations

The Colorado Department of Labor and Employment, Division of Oil and Public Safety, enforces regulations concerning the design, construction, siting, installation, and operation of retail natural gas fueling stations, including mobile refueling vehicles and equipment. (Reference 7 Code of Colorado Regulations 1101-16 and Colorado Revised Statutes 8-20-102 and 39-27-123)

(Reference Colorado Revised Statutes 24-30-2001 through 24-30-2003 and 29-12.5-101 through 29-12.5-104)

Proposed Bills

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2016 Session - Proposed Legislation

HB-1298

Amends current weight allowance provision to provide 2,000 pound weight allowance for natural gas and other alternative fuel trucks; previously was set at 1,000 lbs. Also strikes language limiting the allowance to state roads that that it now also covers interstate highway. Reference - HB1298 Bill History, Reference - HB1298 Bill Text Status: passed House 3/22/16. Enacted 5/4/16.

HB-1332

Amends current tax credits so that after 2017 the credits are based on specific dollar amounts instead of declining percentage. A separate table will be prepared. Other changes include repealing the tax credit for diesel hybrids and fuel efficient vehicles after 2017; making the tax credits transferable to a financing company, requiring leasee to enter into at least 2 year lease to qualify for credits; and require taxpayers to provide vehicle VIN numbers. Reference - HB1332 Bill History, Reference - HB1332 Bill Text Status: Cmte on Finance reports favorably 4/13/16 with amendments; to Committee on Appropriations; passed House 4/25/16; passed by Senate 5/4/16.

2015 Session - Proposed Legislation

HB-1228

Motor fuel taxation bill. Amendments include GGE language for CNG tax. Appears intended to allow fuel retailers to pay tax based on 5.66 lbs., 126.67 cu. ft (IRS Form 720 unit), or per definition in CO regulations. Status: passed House 4/27/2015 Reference - HB1228 Bill History, Reference - HB1228 Bill Text Signed by Governor 6/5/15

2014 Session - Proposed Legislation

HB-1159

Provides for a biogas system components sales and use tax exemption; exempts
from state sales and use tax components used in biogas production systems for the
production of biogas for sale to a power generator, as a transportation fuel, or as
renewable natural gas; provides local governments that currently impose sales or
use tax on such components may either continue to do so or may exempt from their
sales or use taxes. Reference - HB1159 Bill History, Reference - HB1159 Bill Text Signed by Governor 5/17/14

HB-1326

Expands income tax credits for alternative fuel vehicles to include new CNG or LNG vehicles or conversions above 26,000 pounds. Also provides a sales and use tax exemption for heavy duty trucks, including CNG and LNG trucks, above 26,000 lbs. if they are certified to the new HD GHG and FE standards; also includes exemption for new or converted natural gas vehicles 10,000 - 26,000 lbs. Provisions extend to dedicated and bi-fuel NGVs. These incentive take effect for vehicles purchased after July 1, 2014 and before Jan. 1, 2022. Tax credits are based on the value of the vehicle minus other incentives or credits multi-plied by a percentage that declines over time and is capped at various rates based on size of vehicle. The tax credits are refundable if they exceed tax obligation. Makes other changes to the light duty credits. Reference - HB1326 Bill History, Reference - HB1326 Bill Text Signed by Governor 6/6/14

SB-186

Energy efficiency and renewable energy performance contracting program that
includes among other things focus on using of alternative fuels in small or rural
community fleets.Reference - SB186 Bill History, Reference - SB186 Bill Text Signed by Governor 6/6/14

SB-200

Makes changes to the existing HOV exemption for low-emission and alternative fuel
vehicles. Low-emission vehicles would no longer qualify for exemption. AFVs would
continue to qualify and the number of stickers or exemptions would be increased
from 2,000 to 6,000. Also would allow use of transponder devices in addition to
stickers. The exemptions also apply to HOT lanes. Hybrids would continue to
qualify but not after 2018. Also the weight category would be restricted down from
26,000 lbs. to 19500 lbs.Reference - SB200 Bill History, Reference - SB200 Bill TextAction: 2014-04-25 - Senate Committee on Appropriations Postpone Indefinitely

SB-202

Contains provisions similar to SB 186 but this is a loan program for schools and it
expands bus program to include use of alternative fuels as well as efficiency
measures in school fleets.Reference - SB202 Bill History, Reference - SB202 Bill Text Enacted 5/15/14

2013 Session - Proposed Legislation

HB-1110 - Enacted 5/2013

Amends motor fuel taxes so that CNG and LNG are taxed at a lower rate for a six-year period and repeals the existing decal tax for natural gas and propane vehicles as of Jan. 1, 2014; exempts home fueling of natural gas through June 30, 2017. Imposes registration fee of $30 on plug-in electric vehicles. The phase-in rate for CNG is: 2014, 3 cents; 2015, 6 cents; 2016, 9 cents; 2017, 12 cents, 2018, 15 cents; 2019, 18 3/10 cents, thereafter. For LNG the phase-in tracks the same years but with the following rates: 3, 5, 7, 8, 10, and 12 cents thereafter. The bill includes language in the tax code (Title 39) that references the Labor and Industry Code (Title 8) definition of GGE but it is not clear how this definition is used in the tax code. The definition says GGE is 114,000 Btu LHV. The law takes effect Jan. 1, 2014. Preamendments made 2/13/2013 add new Environmental Response surcharge for LPG and natural gas ($25 per truckload) and appear to base the CNG tax based on IRS volumetric GGE - i.e., 126.67 cubic feet. Reference - HB1110 Bill History, Reference - HB1110 Bill Text Passed House 3/21/2013; Senate passed with amendments 4/19/2013; House concurs 4/22/2013; Signed by Governor 5/15/2013

HB-1247 - Enacted 5/2013

Amends the current alternative fuel tax credits to extend them until the end of 2021. The tax credit values also are amended to reflect a phase-in schedule that goes through 2021. The vehicle credits only extend to medium duty natural gas vehicles, i.e. up to 26,000 lbs. GVWR. The maximum credit for NGVs is $6,000 but may be less in some cases. The credit goes to the lessee not the lessor in case of leases. The phase-in schedule is not summarized here at this time. Amendments add plug-in hybrid to this credit. Reference - HB1247 Bill History, Reference - HB1247 Bill Text Amended 3/21/2013 / Passed House 4/12/2013; Signed by the Governor 5/15/2013

HB-1300

Revised explanation. The section of the statute involved here deals with the Colorado tax credits for natural gas and propane vehicles, conversions and OEM vehicles. The repeal as of Jan. 1, 2014 means that the alternative provision in the statute takes over and that provision is almost exactly the same except for it does NOT include propane. This is consistent with the explanation that the changes are non-substantive. Reference - HB1300 Bill History, Reference - HB1300 Bill Text

SB-70 - Enacted 4/2013

Amends current state law relating to purchase of CNG powered vehicles to expand this to other alternative fuels. Also establishes a deadline of March 31, 2013 for the submission of a report detailing progress made in purchasing CNG or other alternative fuel vehicles, and the impact of higher costs on such purchases, or lack of fueling. State law provides exemption from purchase requirement if AFVs cost 10% more or have greater than 10% higher life cycle costs. Reference - SB70 Bill History, Reference - SB70 Bill Text Passed Senate 2/13/2013; 3/21/2013 House passed with changes; Senate concurs 4/2/2013 / Enacted 4/26/2013

SB-200

Makes changes to the existing HOV exemption for low-emission and alternative fuel vehicles. Low-emission vehicles would no longer qualify for exemption. AFVs would continue to qualify and the number of stickers or exemptions would be increased from 2,000 to 6,000. Also would allow use of transponder devices in addition to stickers. The exemptions also apply to HOT lanes. Hybrids would continue to qualify but not after 2018. Also the weight category would be restricted down from 26,000 lbs. to 19500 lbs. Reference - SB200 Bill History, Reference - SB200 Bill Text postponed indefinitely 4/25/14

SB-254

Authorizes state agencies or political subdivision to enter into energy savings contracts that extend to fleet operations. Specifically contemplates purchase of alternative fuel vehicles and alternative fuel refueling to be managed by other entities as long as the savings exceed cost. Reference - SB254 Bill History, Reference - SB254 Bill Text Amended 4/22/2013 and passed Senate 4/23/2013; re-revised and passed House 5/3/2013; eligible for Governors office 5/14/2013
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This state was last examined and updated in December, 2016.