The Akron Legal News

House panel OKs bill promoting alternative fuel

TIFFANY L. PARKS
Special to the Legal News
Published: September 10, 2015

An Ohio House committee recently approved legislation designed to promote the use of compressed natural gas and other alternative auto fuels in the state through tax breaks and other incentives.

State Rep. Dave Hall, R-Millersburg, who has lamented Ohio’s lack of a comprehensive compressed natural gas policy in relation to neighboring states, partnered with Rep. Sean O’Brien, D-Hubbard, to sponsor House Bill 176. The measure would establish the Gaseous Fuel Vehicle Conversion Program to make grants to eligible public entities and nonprofit corporations for the purpose of promoting the use of vehicle fleets that operate on cleaner fuels.

“Many neighboring states are already developing CNG infrastructure and taking advantage of this great resource,” he said. “We are in a unique position because our supply of natural gas is much higher than states that have already begun to modernize their policies. The market will drive CNG in the private sector; however, it is necessary for Ohio’s public policy to begin the change through regulatory reform and incentives for companies.”

The bill would subject compressed natural gas to the motor fuel tax if it is to be used to power vehicles on public roads. However, before the bill was reported out of the House Ways and Means Committee, lawmakers approved an amendment that would make compressed and liquid natural gas not subject to fuel taxes for three years, rather than five years as previously outlined.

“Companies such as Coca-Cola and Smith Dairy have modernized their fleets with CNG and have cut their transportation costs by about half,” Hall said. “Ohioans too would save more than 50 percent at the pump because of the lower cost of CNG.”

Since production of CNG is looking to take place in Ohio, Hall said “a lot of jobs have already come to our great state and more are ready to come in, but they are waiting for Ohio to make the changes necessary to begin infrastructure development.”

The bill would appropriate $16 million per year in fiscal years 2016 and 2017 from the General Revenue Fund to fund the proposed grant program.

In addition, HB 176 would reduce the amount of sales tax due on the purchase or lease of a qualifying electric vehicle by up to $500 for purchases and leases before 2016.

The bill also would authorize a nonrefundable income tax or commercial activity tax credit for the purchase of a new alternative fuel vehicle or the conversion of a traditional fuel vehicle to an alternative fuel vehicle.

Laura Koprowski, director of public and government affairs for the Mid-Ohio Regional Planning Commission, lauded the bill’s financial incentives for the purchase or conversion of alternative fueled vehicles.

“This legislation benefits Ohio in a variety of ways,” she said. “Our manufacturers will be more competitive by saving on shipping costs. The transportation logistics industry will cut costs and become more competitive. Local governments will save tax dollars from reduced fleet operations costs. Our growing shale gas development industry and surrounding communities will see new markets open for natural gas and propane. Ohioans will benefit from job growth in these respective industries.”

Most importantly, Koprowski said, as cleaner burning natural gas and propane vehicles are deployed onto the state’s roads, residents will breathe a little easier.

“Electric vehicles, especially those completely run on battery, have little to no tail pipe emissions. Natural gas is the cleanest burning fossil fuel today and natural gas for vehicles produce the fewest emissions of all vehicle fuel types. The emissions natural gas does give off contain significantly less pollutants than gasoline and release fewer emissions at the pump.”

Alan Rosenfield of the League of Women Voters said the organization is pleased to endorse the bill.

“We have supported similar legislation in previous sessions of the General Assembly and have been disappointed that the earlier bills were not enacted,” he said. “The time has long passed for enacting legislation encouraging alternative transportation fuels. We would prefer that all alternative fuels, particularly renewable fuels, be included in HB 176. Therefore we consider this bill only as a good start. Even so, we urge quick passage.”

Ohio Propane Gas Association President Robert Herron also encouraged lawmakers to respond favorably to HB 176.

“One of the factors affecting growth in the propane autogas market is favorable policy, both on the federal and state level,” he said, adding that U.S. tax policy has incentivized the use of alternative fuels, such as natural gas and propane, for nearly a decade.

“Over that period of time, alternative fuel use in vehicles has grown slowly, yet significantly, displacing the demand for foreign fuels and decreasing harmful emission.”

Herron said a state alternative fuel tax initiative would provide a significant opportunity for Ohio to complement federal policy. He went on to say propane autogas reduces dependence on foreign oil.

“It is produced in Ohio and keeps jobs here. With more than 70 percent of propane production coming from domestic natural gas, the U.S. produces enough of its own propane to exceed customer demand,” Herron said.

The increasing use of propane-powered vehicles by Ohio schools and fleet owners has proven the value of propane autogas.

“Yet movement to this economical, environmentally-friendly alternative has been hampered by the natural tendency to stick with the familiar,” Herron said.

“We believe that tax incentives will help to jump start conversions to propane as they have in other states.”

The bill’s incentives and grant program would sunset after five years.

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