The propane industry claimed several victories in major year-end COVID-19 relief and appropriations legislation signed into law Dec. 27, 2020.
H.R. 133, an omnibus package, contained appropriations funding for research and development projects through the Department of Energy (DOE), an extension of alternative fuel tax credits, COVID-19 relief for small businesses and other broad energy provisions, according to the National Propane Gas Association (NPGA).
“The propane industry is a clear winner in Congress’ year-end legislation,” says Steve Kaminski, NPGA’s president and CEO, in an alert to association members. “NPGA worked tirelessly with its member companies and allies in Washington, D.C., to secure the inclusion of several policy priorities in the final legislative package of the 116th Congress.”
Kaminski says he’s most excited about what was left out of the bill, as NPGA advocated to remove a building code provision that would have raised housing costs and favored electrification over the use of propane and other traditional energy sources.
Among other energy provisions in the bill is propane’s application as an environmentally friendly alternative to hydrofluorocarbons, commercial-grade refrigerants that are being phased out in the U.S. due to their potency as a greenhouse gas.
Another notable item in the year-end legislation, Kaminski says, is a “tax fix” tied to the Paycheck Protection Program (PPP). The legislation specifies that the IRS will not include forgiven PPP loans as taxable income, and it allows the deductibility of business expenses related to the loans.
Also, on the COVID-19 relief front, the legislation created the Emergency Rental Assistance Program, which provides funds for home energy costs and arrearages.
With the alternative fuel tax credits, extended through 2021, propane is covered at 36 cents a U.S. gallon, according to Roush CleanTech. The credit is available alongside the alternative fuel refueling infrastructure credit. Fueling equipment for propane and natural gas is eligible for a tax credit of 30 percent of the cost, not to exceed $30,000 per property, says the supplier of propane autogas fueling systems.
“It’s great for our customers, both financially and to help strengthen their belief in our product and the propane industry,” says Todd Mouw, president of Roush CleanTech, in a statement to LP Gas. “It also reinforces the mindset that it’s going to take all fuels to help us clean the environment and that there isn’t one single solution.”
These alternative fuel tax provisions, which were set to expire at the end of 2020, are worth more than $165 million annually to the propane industry, according to NPGA. They will help provide tax certainty to the propane industry and its customers, and help transition more Americans to autogas vehicles, the association adds.
“Autogas has consistently offered fleets great pricing differentials compared to gasoline and diesel. The extension of this tax credit is another step forward for expanding our industry,” says Ed Hoffman, president of Blossman Services, the autogas system distribution partner of Alliance AutoGas, in a statement to LP Gas. “For many of our end users, this allows them to convert more vehicles. The additional 36 cents a gallon will pay for half the conversion cost in the first year for higher-use customers.”
The infrastructure credit is not lost on companies like Superior Energy Systems, which manufactures propane autogas refueling dispensers.
“A tax credit of 30 percent of the cost of fueling equipment is certain to keep the momentum for propane autogas moving in the right direction in 2021, providing business, transit, school bus and other fleets with the most cost-effective and emissions friendly alternative to gasoline and diesel to meet their needs,” says Derek Rimko, vice president of operations at Superior Energy Systems, in a statement to LP Gas. To read the full article, click here.