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INCENTIVES AND LAWS

The main federal incentives for the purchase or conversion of individual alternative fuel vehicles (AFVs) are the federal income tax deductions of $2,000-$50,000 for clean fuel vehicles, and the income tax credit of up to $4,000 for electric vehicles (EVs). An income tax deduction is also available for the installation of refueling or recharging facilities for AFVs. Except for the federal tax credits and deductions, most of the federal incentives are programmatic grants oriented toward large investments such as infrastructure and larger purchases. The lead federal agencies for AFV programs are the U.S. Department of Treasury (i.e., IRS), the U.S. Department of Energy (DOE), the U.S. Department of Transportation (DOT), and the U.S. Environmental Protection Agency (EPA).

Federal Tax Deduction This is a deduction for clean fuel vehicles and certain refueling properties. A tax deduction for the purchase of a new original equipment manufacturer (OEM) qualified clean fuel vehicle, or for the conversion of a vehicle to use a clean-burning fuel, is provided under the Energy Policy Act of 1992 (EPAct), Public Law-102-486, Title XIX-Revenue Provisions, Sec. 179A.

Electric Vehicle Tax Credit.A tax credit for the purchase of qualified EVs and hybrid electric vehicles (HEVs) is provided under EPAct Public Law-102-486, . The size of the credit is 10% of the cost of the vehicle, up to a maximum credit of $4,000. Beginning in 2001, the size of the credit is reduced by 25% per year until the credit is fully phased out. To qualify for the credit, the vehicle must be powered primarily by an electric motor.
Clean Cities Program DOE\'s Clean Cities Program coordinates voluntary efforts between locally based government and industry to accelerate the use of alternative fuels and expand AFV refueling infrastructure.

Federal Incentives EPAct establishes an incentive program for the purchase of AFVs and conversion of conventional gasoline vehicles to alternative fuels. Through federal tax incentives, companies and private individuals can offset a portion of the incremental costs associated with the purchase or conversion of an AFV.

Clean Air Act Amendments of 1990 The Clean Air Act (CAA) was passed in 1970 to improve air quality nationwide. Congress amended the law in 1990, passing the Clean Air Act Amendments of 1990 (CAAA) and thus creating several initiatives to reinforce one of the original goals of the CAA to reduce mobile source pollutants. CAAA sets emissions standards for stationary and mobile sources. The CAAA establishes targets, standards, and procedures for reducing human and environmental exposure to a range of pollutants generated by industry and transportation.

Ford Motor Company is offering a $2,000 incentive on its dedicated F-Series NGV\'s and dedicated and bi-fuel Econoline NGV\'s. Incentives for the Crown Victoria NGV range from $1,500 to $2,025 depending on the purchase of Ford\'s Extended Range Package. Other incentives include $1,500 for the bi-fuel propane F-Series pickup and bi-fuel propane Econoline Van, and $1,000 for the Taurus Flexible Fuel Vehicle (FFV).




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