Pennsylvania offers several tax credits and grant programs for alternative vehicles and vehicle infrastructure each year. Funding and availability varies.

In 2009, the Pennsylvania House passed a resolution commissioning a feasibility study for retrofitting state-owned vehicles with natural gas. The resolution was referred to House committees and has not yet been approved.

The Legislature also passed a law creating tax for alternative fuels and establishing a gallon equivalent structure.

Click here to download the state profile sheet.

Pennsylvania Motor Fuel Taxation Website

CNG -40.7 ¢ / GGE - Reference

LNG - 26.5 ¢ / GGE - Reference

Gasoline - 40.7 ¢ / Gallon - Reference

Diesel - 51.0 ¢ / Gallon

Pennsylvania charges a fuel tax and an oil company franchise tax. The two combined equal the total state fuel tax. Alternative fuels are taxed on an energy equivalency basis - 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.

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2016 Session - Proposed Legislation

HB-22515

Provides increase weight allowance of up to 2,000 pounds for natural gas trucks. Effective date is 60 days after enactment. Reference - HB2215 Bill History, Reference - HB2215 Bill Text

SB-984

Transportation services bill that includes longer service life of 12 years instead of 10 for alternative fuel vehicles. Reference - SB984 Bill History, Reference - SB984 Bill Text Status: passed Senate last year; in House laid on table 5/4/16; removed from table 10/17/16, amended in House and passed on 10/18/16; Senate concurs with House amendments 10/24/16; signed by governor 11/4/16.

2015 Session - Proposed Legislation

HB-265

Exempts new vehicles from emission inspection for first five years. Permanently exempts alternative fuel vehicles from emission inspection. However, requires visual inspection of vehicles to ensure the emission systems have not been tampered with. The anti-tampering provision applies to new or newer vehicles and also to alternative fuel vehicles. Reference - HB265 Bill History, Reference - HB265 Bill Text

HB-525

Provides 2,000 pound weight allowance for construction vehicles that operate on alternative fuels. It says has been retrofitted so it raises question of whether OEM vehicles would qualify. Reference - HB525 Bill History, Reference - HB525 Bill Text

SB-984

Transportation services bill that includes longer service life of 12 years instead of 10 for alternative fuel vehicles. Reference - SB984 Bill History, Reference - SB984 Bill Text Status: amended 10/27 and read first time in Senate 10/27 (amendments do not appear to impact alternative fuel treatment).

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2014 Session - Proposed Legislation

HB-2276

Amends state motor fuel tax statute. Extensive bill. Appears to incorporate alternative tuels fully into the existing requirements for motor fuels. Need to more fully review. Reference - HB2276 Bill History, Reference - HB2276 Bill Text Pending: House Transportation Committee

HB-2036

Amends state fleet provisions intended to encourage greater use of alternative fuel and natural gas vehicles to include propane vehicles in provisions that specifically singled out natural gas vehicles for preference. Reference - HB2036 Bill History, Reference - HB2036 Bill Text Pending: House Transportation Committee

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2013 Session - Proposed Legislation

HB-301

Creates new Natural Gas Fleet Vehicle Tax Credit. Applicant must be a company that owns 5 or more vehicles. The tax credits are available on a competitive basis to companies that demonstrate they will convert large portion of their fleet to natural gas (CNG and LNG), and will use a large amount of fuel with at least 900 GGE per day. NGVs must be dedicated or 90/10 LNG/diesel/gasoline. Only open to vehicles at or above 14,000 GVWR. Credits values are: 60% of incremental cost of vehicles 14,000 - 26,000 lbs. with maximum incremental cost of $25,000 (credit max. $15K); and 50% of incremental cost of vehicles at 26,001 lbs. or more with maximum incremental cost of $50,000 (credit max. $25K). Credits may be sold or assigned with permission. Funding is $25 million each FY. No tax credits are available after 2016. Reference - HB301 Bill History, Reference - HB301 Bill TextAction: 2013-04-24 - Referred to FINANCE

HB-302

Keystone Transit Act for SMALL transit authorities - less than 245,000 vehicle revenue hours. Very similar to HB 303 but this is a GRANT program not loan program. Authorizes $5 million for grants from the Oil and Gas Lease Fund. Grants for federally assisted buses may equal the full incremental cost, and for non-federally assisted purchases, 50% of incremental cost. Includes incremental cost cap of $50,000 for buses over 26,000 lbs. and $25,000 for buses of 26,000 lbs. or less; no funding for buses at or below 14,000 lbs. Transit authorities must contract with a private entity to provide fueling for buses and priority given to projects that provide public access to CNG stations. Reference - HB302 Bill History, Reference - HB302 Bill TextAction: 2013-12-18 - Laid on the table

HB-303

Clean Transit Act - for LARGE transit agencies (i.e., 245,000 revenue vehicle hours). Authorize transfer or $7.5 million from the Oil and Gas Lease Fund to be used for the purpose of providing LOANS to funding for the incremental cost of purchasing CNG transit buses. Loans are at rate of 2% and limited to full incremental cost for federally assisted purchases and, for non-federally assisted purchases, 50% of incremental cost. Includes incremental cost cap of $50,000 for buses over 26,000 lbs. and $25,000 for buses of 26,000 lbs. or less; no funding for buses at or below 14,000 lbs. Loans must be paid within 5 years of disbursement and before Jan. 1, 2023. Program ends June 30, 2023. Transit authorities must contract with a private entity to provide fueling for buses and priority given to projects that provide public access to CNG stations. Reference - HB303 Bill History, Reference - HB303 Bill TextAction: 2013-12-18 - Laid on the table

HB-304

Public Transportation and Natural Gas Act. Mandates. Requires large transit agencies (defined as 245,000 revenue vehicle hours) to begin to phase in larger percentage of NG buses into fleets. Phase-in requirement: 2013 - 2017 - 25% of new bus purchases, 2018 - 2022 - 50%, 2023 - 2027 - 75%, 2028 and later - 100%. Includes CNG and LNG buses. Reference - HB304 Bill History, Reference - HB304 Bill TextAction: 2013-12-18 - Laid on the table

HB-306

Amends the state AFV Incentive Fund and changes it to the Keystone Incentive Fund. In future, only CNG would qualify for this program. Funding would go to: 10% to taxicabs; 65% to businesses, government and non-profit entities; and 23% to individuals for purchase new CNG vehicles or conversions. Bi-fuel vehicles would have to have at least 5 GGE CNG storage to qualify. Dedicated definition includes 90NG/10 petroleum operation. Changes fleet definition from 10 to 5 vehicles. For grants, a $10,000 incremental cap applies to taxis and bi-fuel vehicles purchased by individuals. For businesses and government agencies it appears they can only get grants for HD vehicles - 14,000 lbs. GVWR or more. Other caps apply to how much an individual school district or county may receive. Reference - HB306 Bill History, Reference - HB306 Bill TextAction: 2013-12-18 - Laid on the table

HB-307

Codifies the exception for natural gas and LPG vehicles from having to be certified under 13 CCR 2030 (CARB aftermarket regulations) Reference - HB307 Bill History, Reference - HB307 Bill TextAction: 2013-04-26 - Referred to ENVIRONMENTAL RESOURCES AND ENERGY

HB-308

Creates the Keystone Vehicle Grants for CNG and LNG dedicated vehicles to be administered by PA DEP. Dedicated includes 90/10 CNG/diesel-gasoline or 901/10 LNG/diesel-gasoline vehicle. Must be a company that owns 5 or more vehicles. Requires companies have a plan to convert fleet to natural gas. Authorizes funding of $6 million for FYs 2013-2014 through FYs 2018-2019 to be made available annually from the Clean Air Fund. Requirements - conversion plan, minimum fuel usage of 324,000 GGE per year or a agreement with natural gas provider to provide fueling; only for HD at or above 33,000 lbs.; grants are for vehicles and worth 50% of the incremental cost with cap of $50,000 or maximum credit of $25,000 Reference - HB308 Bill History, Reference - HB308 Bill TextAction: 2013-12-18 - Laid on the table

HB-309

Creates new Natural Gas Vehicle Tax Credit. Open to taxpayers who purchase heavy-duty CNG or LNG dedicated vehicles at or above 33,000 GVWR. Dedicated includes 90 percent LNG and 10% gasoline or diesel fuel. Only extends to OEM NGVs. Credits are worth lesser of 50% of the incremental cost or $12,500. Taxpayers have to apply for credits and may also apply for permission to sell or transfer credits. Funding for credits is as follows: FY 2013 - 2014, $30 million; FY 2014 - 2015, $30 million; FY 2015 - 2016 $30 million. Pro rate distribution shall be used if the applications for credits exceed the amount available in any year. Reference - HB309 Bill History, Reference - HB309 Bill TextAction: 2013-04-24 - Referred to FINANCE

HB-628

Modifies the current tax on alternative fuels so that it now includes diesel fuel; both are to be taxed on gallon equivalent basis - PA already taxes NG on gasoline gallon equivalent basis. It appears this would tax diesel on a GGE basis but not certain. Also says that the rate is to be reduced by 6 cents per gallon. Reference - HB628 Bill History, Reference - HB628 Bill TextAction: 2013-02-08 - Referred to TRANSPORTATION

HB-991

Provides weight exemption for any construction truck that is retrofitted to operate on alternative fuel up to 2,000 pounds. Reference - HB991 Bill History, Reference - HB991 Bill TextAction: 2013-03-13 - Referred to TRANSPORTATION

HB-1015

Provides a tax credit for the conversion of farm equipment to operate on natural gas. The definition section refers to dedicated LNG equipment and proceeds to define this as equipment that operates 90% or more on CNG fuel and 10% or less on gasoline or diesel. Credits are worth 75% of the cost of conversion or purchase, or maximum of $75,000 to a single taxpayer in a fiscal year. Also establishes limit of $25 million in tax credit certificates per fiscal year. Requires conversion plan , application to state authorities., and issuance of tax certificates. Credits may be sold or transferred to others. Reference - HB1015 Bill History, Reference - HB1015 Bill TextAction: 2013-03-18 - Referred to FINANCE

SR-38

Directs the Department of General Services to conduct a study to determine the associated costs and feasibility of converting and retrofitting State-owned vehicles with compressed natural gas and liquefied natural gas engines for the purpose of modernizing the State fleet. Reference - SR38 Bill History, Reference - SR38 Bill TextAction: 2013-03-01 - Referred to STATE GOVERNMENT

SB-332

Exempts new vehicles from emission inspection requirements for 10 years. Exempts electric vehicles and CNG vehicles are exempt from the emission inspection requirement also. But it does require visual inspection to ensure that conversions comply with anti-tampering requirements. Reference - SB-332 Bill History, Reference - SB-332 Bill TextAction: 2013-07-03 - Laid on the table