Minnesota Policy Data

Summary

	Minnesota currently offers only a weight exemption for natural gas vehicles. The state has mandated to all state agencies that they develop a sustainability plan for reducing consumption of gasoline and adopting cleaner burning fuels and alternative fueled vehicles. In 2008, the state created tax rates for alternative fuels. Click here to download the state profile sheet.

Vehicles

Current Estimated Fleet-based NGVs in Minnesota

~23

Vehicles by Fuel Type

Stations

Current Public NGV Fueling Stations - 16

Private NGV Fueling Stations - 9

NGV Station Listing

Fuel Taxes

Minnesota Motor Fuel Taxation Website

CNG - 2.474 ¢ / Cubic Foott - Reference

LNG - 17.1 ¢ / Gallon

Gasoline - 28.5 ¢ / Gallon

Diesel - 28.5 ¢ / Gallon

Minnesota also has a .035 cent inspection and cleanup fee on fuels. - Reference

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

Natural Gas Vehicle Weight Exemption

A vehicle powered by natural gas may exceed the state's gross and axle vehicle weight limits by the amount of weight calculated as provided under U.S. Code of Federal Regulations Title 23, section 127(s), not to exceed 2,000 pounds. (Reference , and Minnesota Statutes 169.824)(Reference House File 3588, 2016 and Minnesota Statutes 169.824

Laws & Regs

Legislative Session Dates:	February 25 - May 21
Legislature Website:	http://www.leg.state.mn.us/

State Agency Sustainability Plan and Requirements

State agencies must establish interagency teams to develop and implement sustainability goals that reduce state vehicle petroleum consumption. In addition, each state department or agency must prepare an annual sustainability plan that includes ways to modify vehicle use practices, and report annually on progress towards implementing their plan. Each state agency plan must be based on following targets and mandates:

Using 2005 as a baseline, the state must achieve a 50% reduction in gasoline used to operate state agency owned on-road vehicles by 2015;

Using 2005 as a baseline, the state must achieve a 25% reduction in the use of petroleum-based diesel fuel for state owned on-road vehicles by 2015;

When reasonably possible, state agencies must purchase on-road vehicles that use alternative fuels, including biodiesel blends of 20% (B20) or greater, compressed or liquefied natural gas, ethanol blends of 70% (E70) or greater, hydrogen, propane, or electricity, or (with the exception of buses, snowplows, and construction vehicles) have a fuel economy rating that exceeds 30 miles per gallon (mpg) in the city and 35 mpg on the highway;

When reasonably possible, state employees must fuel vehicles capable of operating on an alternative fuel with that fuel;

State agencies must increase the use of renewable fuels derived from agricultural products or waste products; and

State agencies must increase the use of technology for delivering information and services in order to reduce reliance on the state's fleet.

(Reference Executive Order 11-13, 2011, and Minnesota Statutes 16C.135 and 16C.137)

State Agency Vehicle Procurement and Management Requirement

When purchasing a motor vehicle, a state agency must select one that is capable of being powered by cleaner fuels, including electricity and natural gas, if the total lifecycle cost of ownership is less than or comparable to that of a gasoline-powered vehicle.

A committee will be established to implement a state fleet reporting and information management system. The committee will submit findings to the governor and appropriate legislative committees on a bi-yearly basis with recommendations for goals, directives or legislative initiatives to meet these objectives.

(Reference Senate File 2887, 2014 and Minnesota Statutes 16C.137 and 16C.138)

Plug-In Electric Vehicle and Natural Gas Vehicle (NGV) Initiatives

All solicitation documents that include the purchase of passenger automobiles issued under the jurisdiction of the Minnesota Department of Administration must assert the intention of the state to begin purchasing all-electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), neighborhood electric vehicles, and NGVs as soon as they become commercially available. In order for this requirement to apply, vehicles must meet the state's performance specifications and have a total life-cycle cost of ownership less than or comparable to that of gasoline-powered vehicles. An EV is defined as a motor vehicle that can be powered by an electric motor drawing current from rechargeable storage batteries, fuel cells, or other portable sources of electrical current, and meets or exceeds applicable requirements in Title 49 of the U.S. Code of Federal Regulations, section 571, and future regulations. A PHEV is an EV containing an internal combustion engine that uses a battery-powered electric motor to deliver power to the drive wheels. When connected to the electrical grid via an electrical outlet, the vehicle must be able to recharge its battery. The vehicle must have the ability to travel at least 20 miles powered substantially by electricity. (Reference Minnesota Statutes 16C.138 and 169.011)

Alternative Fuel Tax

The Minnesota Department of Revenue imposes an excise tax on the first licensed distributor that receives E85 fuel products in the state and on distributors, special fuel dealers, or bulk purchasers of other alternative fuels. E85 is taxed at the pump at a rate of 20.25 cents per gallon, propane is taxed at 21.35 cents per gallon, liquefied natural gas is taxed at 17.1 cents per gallon, and compressed natural gas is taxed at the rate of $0.2474 per thousand cubic feet. Gasoline is taxed at the rate of 28.5 cents per gallon. (Reference Minnesota Motor Fuel Tax Reference Sheet January 2013 and Minnesota Statutes 296A.07 and 296A.08)

Proposed Bills

2016 Session - Proposed Legislation

HB-4

Large bill. Includes change in motor fuel excise tax to establish that it is based on the greater of 6.5% multiplied by $2.50 or the wholesale price of gasoline from previous year. Earlier versions did not address motor fuel tax. Reference - HB4 Bill History, Reference - HB4 Bill Text Status: does not appear to have passed - legislature is over.

HB-848

Amends motor fuel tax on CNG as follows: changes rate from $2.174 p/MCF to $1.974 p/MCF, and recognizes 5.66 lbs. or 126.67 cu. ft as GGE. Effective July 1, 2015. 5.66 lb. GGE already is recognized so the 126.67 is the new part. The tax rate is 25 cent per GGE. Also changes statutory finding that CNG contains 1,000 Btu per cu. ft. to 900 Btu. Does not change LNG tax of 15 cents per gallon. Status: to Conference Committee 5/4/15; agreed to by Senate and House as of 5/22/16. Reference - HB848 Bill History, Reference - HB848 Bill Text Status: to Conference Committee 5/4/15; agreed to by Senate and House as of 5/22/16; To the governor 5/24/16; Pocket Veto 6/7/16

HB-3463

Motor fuel tax bill. Modifies the tax on compressed natural gas to clarify that the rate is per 5.66 lbs. or 126.67 cubic feet; statute already specifies 5.66 pounds. Cleans up the provision to clarify that tax is $1.974 per thousand cubic feet instead or 25 cents per GGE. LNG continues to be taxed per gallon at rate of 15 cents. Effective after June 30, 2016. Reference - HB3463 Bill History, Reference - HB3463 Bill Text Status: Introduction and first reading, referred to Taxes

HB-3588

Provides weight allowance for natural gas vehicles as calculated under 23 USC 127(s), or not more than 2,000 pounds. Also clarifies that weight allowance provisions in this title are cumulative. Status: to Committee on Transportation Policy and Finance.Reference - HB3463 Bill History, Reference - HB3588 Bill Text Status: second reading in House; passed House on 5/12/16; signed by governor 5/23/16.

HB-3595

Rebate program for NGVs and natural gas fueling stations. Rebates for incremental cost of vehicles as follows: light duty up to 14,000 lbs. GVWR $5,000; 14,001 - 26,000 lbs GVWR vehicle $8,000; 26,001 lbs. GVWR and up $20,000. High horsepower applications up to $50,000 or incremental cost whichever is less. Stations 50% of cost or $400,000. Limits for businesses, individuals or government fleets: $100K for LD vehicles, $300K for MD vehicles, and $500K for HD vehicles. HHP maximum of $500K. Providing $5.5 million in funding with $3.5 million for vehicles and $2 million for stations. Status: to Committee on Commerce and Regulatory Reform 3/24/16. Reference - HB3595 Bill History, Reference - HB3595 Bill Text Status: Introduction and first reading, referred to Commerce and Regulatory Reform

HB-3919

Tax on motor fuels would be applied at a rate equal to 60% of the rate for LNG and at the same rate as that imposed on gasoline but on each 1,000 cubic foot. Reference - HB3919 Bill History, Reference - HB3919 Bill Text Status: Introduction and first reading, referred to Rules and Legislative Administration

SB-3109

Companion to HB 3595. Rebate program for NGVs and natural gas fueling stations. Rebates for incremental cost of vehicles as follows: light duty up to 14,000 lbs. GVWR $5,000; 14,001 - 26,000 lbs GVWR vehicle $8,000; 26,001 lbs. GVWR and up $20,000. High horsepower applications up to $50,000 or incremental cost whichever is less. Stations 50% of cost or $400,000. Limits for businesses, individuals or government fleets: $100K for LD vehicles, $300K for MD vehicles, and $500K for HD vehicles. HHP maximum of $500K. Providing $5.5 million in funding with $3.5 million for vehicles and $2 million for stations. Status: Senate Commerce 3/23/16. Reference - SB3109 Bill History, Reference - SB3109 Bill Text Status: Referred to Commerce

SB-3181

Companion to HB 3588. Provides weight allowance for natural gas vehicles as calculated under 23 USC 127(s), or not more than 2,000 pounds. Also clarifies that weight allowance provisions in this title are cumulative. Status: to Transportation and Public Safety. Reference - SB3181 Bill History, Reference - SB3181 Bill Text Status: HF substituted on General Orders HF3588

SB-3524

Companion to HB 3919. Tax on motor fuels would be applied at a rate equal to 60% of the rate for LNG and at the same rate as that imposed on gasoline but on each 1,000 cubic foot. Reference - SB3524 Bill History, Reference - SB3524 Bill Text Status: Referred to Finance

2015 Session - Proposed Legislation

HB-182

Modifies the motor fuel tax to adjust CNG tax so that it is 25 cents per DGE instead of per GGE. Currently the CNG and LNG rates are set so that they are basically the same as gasoline and diesel tax with is 28.5 cents (includes 3.5 cent surcharge). LNG is actually taxed on GGE basis with tax of 17.1 cent per 1.65 gallons per state revenue rules. March 2 amendment removes DGE language and moves tax back to GGE basis per 5.66 lbs. or 126.67 cu. ft.; also clarifies that the rate per thousand cubic feet is $1.974 instead of $2.174. CNG tax would be 25 cent per GGE. Change would be effective July 1, 2015 Reference - HB182 Bill History, Reference - HB182 Bill Text

HB-600

Amends the motor fuel tax so that it is based on a rate that is the greater of 10 cents or 6.5 % of the wholesale price of gasoline and other fuels including special fuels. Reference - HB600 Bill History, Reference - HB600 Bill Text

HB-1548

Companion to SB 1516. NGV Grant Program. Includes CNG and LNG, bi-fuel, dedicated, or dual-fuel vehicles, OEM or conversions. Rebates for vehicles are worth 50% of incremental cost up to maximum dollar amount: LDV - $5,000, MDV - $8,000, and HDV - $20,000 (MDV = 6,001 - 26,000 lbs., HDV - 26,001 & up). Fueling stations also qualify: retail stations 50% or up to $200,000, home-fueling 50% or $5,000. There are per year limits for individuals of no more than one vehicle rebate per year, businesses no more than $50,000 in LDV or MDV rebates, and no more than $100,000 in HDV rebates. Fueling station rebates also limited to one per year for individuals and businesses. Provides $6 million in FY 2016: $3 MM for vehicles, $2 MM for retail stations, and $1 MM for home fueling. Reference - HB1548 Bill History, Reference - HB1548 Bill Text

HB-1680

Imposes a gross receipts tax on fuels including natural gas. The rate imposed on CNG is the greater of 10 cent or 6.25% of the wholesale price of gasoline. Reference - HB1680 Bill History, Reference - HB1680 Bill Text

HB-2081

Requires electric and natural gas utilities to develop plans to promote the use of electric and CNG vehicles and to file these plans with the state public utilities commission. This would allow utilities to recover the cost of promoting electric vehicles and CNG vehicles. Also establishes a rebate program that is worth $3,000 for new vehicles and is available to individuals, businesses, non-profit organizations and political subdivisions. It does not specify the amount of funding to be made available in FY 2016 and 2017. Rebates will be available on a first come basis . Also appears that the rebates are funded by the state and not the utility rates. Reference - HB2081 Bill History, Reference - HB2081 Bill Text

SB-228

Imposes wholesale tax of 6.5% or 10 cent whichever is higher on motor fuels. This appears to be on top of existing tax. Effective date is Oct. 1, 2015. Reference - SB228 Bill History, Reference - SB228 Bill Text

SB-1516

NGV Grant Program. Includes CNG and LNG, bi-fuel, dedicated, or dual-fuel vehicles, OEM or conversions. Rebates for vehicles are worth 50% of incremental cost up to maximum dollar amount: LDV - $5,000, MDV - $8,000, and HDV - $20,000 (MDV = 6,001 - 26,000 lbs., HDV - 26,001 & up). Fueling stations also qualify: retail stations 50% or up to $200,000, home-fueling 50% or $5,000. There are per year limits for individuals of no more than one vehicle rebate per year, businesses no more than $50,000 in LDV or MDV rebates, and no more than $100,000 in HDV rebates. Fueling station rebates also limited to one per year for individuals and businesses. Provides $6 million in FY 2016: $3 MM for vehicles, $2 MM for retail stations, and $1 MM for home fueling. April 7 amended version removes residential fueling, lowers total funding to $5 MM, and adjusts the weight categories so that light duty is up to 14,000 lbs. GVWR. Reference - SB1516 Bill History, Reference - SB1516 Bill Text

SB-1948

Companion to HB 2081. Requires electric and natural gas utilities to develop plans to promote the use of electric and CNG vehicles and to file these plans with the state public utilities commission. This would allow utilities to recover the cost of promoting electric vehicles and CNG vehicles. Also establishes a rebate program that is worth $3,000 for new vehicles and is available to individuals, businesses, non-profit organizations and political subdivisions. It does not specify the amount of funding to be made available in FY 2016 and 2017. Rebates will be available on a first come basis . Also appears that the rebates are funded by the state and not the utility rates. Reference - SB1948 Bill History, Reference - SB1948 Bill Text

2014 Session - Proposed Legislation

HB-2392

Amends the directive to purchase cleaner vehicles so that it is no longer required that such vehicles have similar cost to other vehicles. Reference - HB2392 Bill History, Reference - HB2392 Bill Text Passed House, to Senate 4/22/14; Action: 2014-04-24 - Second reading

HB-2395

Amends the motor fuel taxes to add a 5% gross receipts tax and shall be no less
than 10 cents. Applies to gasoline and special fuels (CNG and LNG are covered as special fuels). ntended to generate revenues for transit projects. Amendments 3/24/14 to now include language for LNG with tax rate reduced from 15 cents to 12 cents per gallon and the CNG tax which already is per GGE of 5.66 pounds is reduced from 25 cents to 20 cents. Note that IFTA rates for LNG currently show tax at 17.1 cents for LNG gallon. Also reduces the gasoline and special fuel excise tax rates from 25 to 20 cents, so the reductions appear to cover all fuels. If the bill passes, these changes will be effective as of 10/1/14.Reference - HB2395 Bill History, Pending: House Taxes Committee

HB-2738

Intended to remove barriers to purchase of cleaner fueled vehicles. Establishes a Biomethane Task Force to evaluate barriers to use of biomethane as well as the environmental benefits of using biomethane as a transportation fuel; report is due Dec. 31, 2016. Also includes provisions dealing with increased use of PHEVs. Reference - HB2738 Bill History, Reference - HB2738 Bill Text Pending: House Government Operations Committee

HB-2786

Establishes a Biomethane Task Force to evaluate barriers to use of biomethane as well as the environmental benefits of using biomethane as a transportation fuel; report is due Dec. 1, 2016. Does not address PHEVs like HB 2738. Reference - HB2786 Bill History, Reference - HB2786 Bill Text Pending: House Transportation Policy Committee

HB-2787

Companion to SB 2355Reference - HB2787 Bill History, Reference - HB2787 Bill Text Pending: House Government Operations Committee

HB-2849

Amends the state purchase preference for PHEVs (like SB 2355) but expands the preference to include natural gas vehicles. In all cases, it requires the life cycle cost of the vehicles to be comparable or less in order to receive preference. Reference - HB2849 Bill History, Reference - HB2849 Bill Text Indefinitely postponed, see SB 2887

HB-2888

Tax credit for purchase of new natural gas vehicle or converting a vehicle to operate
on natural gas, and the cost of a home fueling appliance. The total cost allowed is limited to the incremental cost of the vehicle plus the cost of the fueling infrastructure. The maximum credit allowed is $8,000 and it is refundable.Reference - HB2888 Bill History, Reference - HB2888 Bill Text Pending: House Taxes Committee

SB-2352

Amends the state purchase directive to expand alternative vehicles state allowed to
consider to also include CNG and LNG in addition to ethanol, biodiesel, and hydrogen, which already are included.Reference - SB2352 Bill History, Reference - SB2352 Bill Text Action: 2014-03-31 - Second reading

SB-2887

Companion to HB 2849. Amends the state purchase preference for PHEVs (like SB
2355) but expands the preference to include natural gas vehicles. In all cases, it requires the life cycle cost of the vehicles to be comparable or less in order to receive preference. Reference - SB2887 Bill History, Reference - SB2887 Bill Text Enacted
5/16/2014

2013 Session - Proposed Legislation

HB-897

Provides 30% tax credit for alternative fuel fueling infrastructure placed in service after December 31, 2012 and before Jan. 1, 2017. The 30% applies to cost of equipment and installation and can be used by commercial or residential stations. CNG and LNG and other alternative fuels qualify. Reference - HB897 Bill History, Reference - HB897 Bill Text Pending: House Transportation Finance Committee

HB-931

This transportation and tax bill adjusts fees on motor vehicles and phases-in higher taxes on gasoline and special fuels. Also adjusts the rates on CNG and LNG; CNG already taxed per GGE of 5.66 pounds. New provision appears to attempt to tax LNG based on GGE but the numbers are slightly off. The new taxes for CNG are as follows (and track gasoline rate exactly): 10/01/13 - 06/30/14: $0.30; FY 2015: $0.315; FY 2016: $0.33; FY 2017 & after: $0.345. LNG rates PER GALLON for same years are as follows: $0.18, $0.189, $0.198, $0.207. Reference - HB931 Bill History, Reference - HB931 Bill Text Pending: House Transportation Policy Committee

HB-1449

Increases the tax on motor fuels. For CNG the rate is increased from $2.174 per MCF to $2.609, or $0.25 per 5.66 pounds or GGE to $0.30 per GGE. Does not appear to make other changes to CNG or LNG or establish GGE or DGE rate for LNG. Also includes additional surcharge on fuels. Reference - HB1449 Bill History, Reference - HB1449 Bill Text Pending: House Transportation Finance Committee

SB-891

Companion to HB 931. Reference - SB891 Bill History, Reference - SB891 Bill Text Pending: Senate Finance Committee

SB-993

Alternative fuel infrastructure tax credit for CNG and LNG and other alternative fuels. Tax credit worth 30% of the cost of equipment and the cost of installing equipment. Credit is available for 2013 - 2016. Reference - SB993 Bill History, Reference - SB993 Bill Text Pending: Senate Taxes Committee

This state was last examined and updated in December, 2016.