AN ACT

 

1Amending the act of November 29, 2004 (P.L.1376, No.178),
2entitled "An act relating to alternative fuels; establishing
3the Alternative Fuels Incentive Fund; authorizing grants and
4rebates to promote the use of alternative fuels; imposing
5duties on the Department of Environmental Protection;
6providing for an annual report; allocating funds collected
7from the utilities gross receipts tax; making an
8appropriation; abrogating regulations; and making a repeal,"
9further providing for title of act, for short title, for
10definitions, for the Alternative Fuels Incentive Fund and for
11biomass-based diesel production incentives; and making
12editorial changes.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. The title of the act of November 29, 2004
16(P.L.1376, No.178), known as the Alternative Fuels Incentive
17Act, is amended to read:

18AN ACT

19Relating to [alternative fuels] compressed natural gas;
20establishing the [Alternative Fuels] Keystone Fuel Incentive
21Fund; authorizing grants [and rebates] to promote the use of

1[alternative fuels] compressed natural gas; imposing duties
2on the Department of Environmental Protection; providing for
3an annual report; allocating funds collected from the
4utilities gross receipts tax; making an appropriation;
5abrogating regulations; and making a repeal.

6Section 2. Section 1 of the act is amended to read:

7Section 1. Short title.

8This act shall be known and may be cited as the [Alternative
9Fuels] Keystone Fuel Incentive Act.

10Section 3. Sections 2, 3 and 3.1 of the act, amended or
11added July 10, 2008 (1st Sp.Sess., P.L.1891, No.2), are amended
12to read:

13Section 2. Definitions.

14The following words and phrases when used in this act shall
15have the meanings given to them in this section unless the
16context clearly indicates otherwise:

17["Accredited laboratory." A laboratory accredited by the
18American Society for Testing and Materials International.

19"Alcohols." Fuels composed of 85% ethanol or methanol and
2015% gasoline.

21"Alternative energy source." Includes, but is not limited
22to, any of the following sources of energy: wind, solar
23photovoltaic, solar thermal, combined heat and power, integrated
24gasification combined cycle, geothermal, low-impact
25hydroelectric, biomass, biologically derived methane gas, coal
26bed methane gas, fuel cells, waste coal and distributed
27generated systems.

28"Alternative fuel producer." A producer of an alternative
29fuel whose production facility of alternative fuel is located
30within this Commonwealth.

1"Alternative fuel vehicle." A self-propelled vehicle
2operating on an alternative fuel designed for transporting
3persons or property. This term includes a bi-fuel vehicle, dual-
4fuel vehicle, hybrid vehicle and dedicated vehicle.

5"Alternative fuels." Motor vehicle fuels and fuel systems
6which when compared to conventional gasoline or reformulated
7gasoline, diesel fuel, oil or coal will result in lower
8emissions of oxides of nitrogen, volatile organic compounds,
9carbon monoxide or particulates, toxic air pollutants,
10greenhouse gases or any combination thereof. These shall
11include, but are not limited to, compressed natural gas (CNG),
12liquefied natural gas (LNG), liquid propane gas (LPG), alcohols
13(ethanol - e85 and methanol - m85), hydrogen, hythane (any
14combination of CNG and hydrogen), biofuels and electricity.

15"American Society for Testing and Materials International."
16The nonprofit organization which develops consensus standards
17for materials, products, systems and services.]

18"Bi-fuel vehicle." [or "dual-fuel vehicle."] A vehicle that
19operates on [an alternative fuel] compressed natural gas and
20gasoline or [an alternative fuel] compressed natural gas and
21diesel fuel and has a minimum fueling capacity of five gasoline 
22gallon equivalents of compressed natural gas. This term includes
23original equipment manufacturer (OEM) and retrofitted vehicles.

24["Biodiesel fuel." Either of the following:

25(1) A biofuel derived from vegetable oils or animal fats
26that is designated B100 and meets the American Society of
27Testing and Materials International specification D6751.

28(2) Fuel comprised of 20% biodiesel with 80% diesel fuel
29that is designated B20.

30"Biofuels." Fuels derived from alcohols, ether, esters and

1other chemicals made from cellulosic biomass such as herbaceous
2and woody plants, agricultural and forestry residues and a large
3portion of municipal solid and industrial waste.

4"Biomass-based diesel." The term shall have the meaning set
5forth in section 211(o)(1)(D) of the Clean Air Act (69 Stat.
6322, 121 Stat. 1519, 42 U.S.C. § 7545(o)(1)(D)) and shall meet
7the ASTM Specification D6751 Standard Specification for
8Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels or
9its successor standard.]

10"Compressed natural gas vehicle." A self-propelled,
11dedicated vehicle operating on compressed natural gas designed
12for transporting persons or property.

13"Dedicated vehicle." [A vehicle that runs exclusively on an
14alternative fuel. This term includes an original equipment
15manufacturer or retrofit vehicle.] A vehicle that is produced by 
16an original equipment manufacturer or a small volume 
17manufacturer that operates on 90% or more compressed natural gas 
18fuel and 10% or less on gasoline or 90% or more on compressed 
19natural gas fuel and 10% or less on diesel fuel.

20"Department." The Department of Environmental Protection of
21the Commonwealth.

22["Diesel fuel." Diesel engine fuel and all other liquids
23suitable for the generation of power for the propulsion of motor
24vehicles except gasoline.]

25"Fleet." A group of [ten] five or more vehicles, [comprised
26of passenger cars, light-duty trucks, buses and heavy-duty
27trucks up to 26,000 pounds gross vehicle weight] that is owned
28and operated by a single school district, municipal authority,
29political subdivision, nonprofit entity, corporation, limited
30liability company or partnership located within this

1Commonwealth.

2"Fund." The [Alternative Fuels] Keystone Fuel Incentive Fund
3established under section 3.

4["Gallon." The quantity of fluid or liquid at a temperature
5of 60 degrees Fahrenheit necessary to completely fill a United
6States standard gallon liquid measure.

7"Gasoline." The same as a motor fuel and also means every
8liquid petroleum product, or combination thereof, other than
9solvents having an Atmospheric Pressure Index gravity of 46
10degrees or above at a temperature of 60 degrees Fahrenheit and
11at atmospheric pressure and includes drip, casing head or
12natural gasoline. The term includes liquid of less than 46
13degrees Atmospheric Pressure Index gravity at a temperature of
1460 degrees Fahrenheit compounded, blended, manufactured or
15otherwise produced by mixing or blending gasoline or solvents
16with blending materials when the blended product can be used for
17generating power in internal combustion engines.

18"Hybrid vehicle." A motor vehicle that draws propulsion
19energy from onboard sources of stored energy that are both:

20(1) An internal combustion engine using combustible
21fuel.

22(2) A rechargeable energy storage system.

23"Incremental cost." Either of the following:

24(1) The difference between the purchase price of an
25alternative fuel vehicle and the purchase price of a same or
26similar model gasoline-only or diesel-only fueled vehicle.

27(2) The difference between the base price of
28conventional diesel fuel and biodiesel fuel.]

29"Incremental cost." The excess cost of any new compressed
30natural gas motor vehicle over the price for a gasoline or

1diesel fuel motor vehicle of the same model or cost to retrofit
2a vehicle to run on compressed natural gas.

3"OEM." The original equipment manufacturer.

4"OEM vehicle." A vehicle originally manufactured to run on
5[an alternative fuel] compressed natural gas.

6["Qualified biomass-based diesel producer." A producer of
725,000 gallons or more of biomass-based diesel per month with
8its principal production facility in this Commonwealth that has
9complied with the requirements of section 3.1(a)(2) and that is
10in compliance with all laws and current in all obligations to
11the Commonwealth.

12"Renewable energy." Energy derived from solar, wind,
13geothermal and hydroelectric sources.]

14"Retrofit." [Install an alternative fuel system into a
15gasoline-fueled vehicle] Installation of a compressed natural 
16gas system into a gasoline-fueled or diesel-fueled vehicle.

17["Stationary power facility." A fixed, in-place facility
18that generates electric power for distribution into the electric
19distribution system or for use onsite as primary power or backup
20power for critical need or at adjacent locations not connected
21to the electricity grid for primary power.]

22"Taxi." A motor vehicle designed for carrying no more than
23eight passengers, exclusive of the driver, on a call and demand
24service, and used for the transportation of persons for
25compensation.

26Section 3. [Alternative Fuels] Keystone Fuel Incentive Fund.

27(a) Establishment.--There is hereby established a separate
28account in the State Treasury to be known as the [Alternative
29Fuels] Keystone Fuel Incentive Fund. This fund shall be
30administered by the department. The fund shall consist of that

1portion of revenues allocated from the utilities gross receipts
2tax as set forth in section 5.

3(b) Expenditures.--

4(1) Moneys from the fund shall be expended by the
5department as follows:

6[(i) As grants to school districts, municipal
7authorities, political subdivisions, nonprofit entities,
8corporations, limited liability companies or partnerships
9incorporated or registered in this Commonwealth to
10provide funding for:

11(A) The expenses relative to retrofitting
12vehicles to operate on alternative fuels as either a
13bi-fuel, dual-fuel, hybrid or dedicated vehicle.

14(B) The incremental cost of purchase of bi-fuel,
15dual-fuel, hybrid or dedicated vehicles.

16(C) The cost to purchase and install the
17necessary fleet refueling or home-refueling equipment
18for bi-fuel, dual-fuel, hybrid or dedicated vehicles.

19(D) The cost to perform research, training
20development and demonstration of new applications or
21next-phase technology related to alternative fuel
22vehicles.

23(ii) As grants to individual residents of this
24Commonwealth who purchase an alternative fuel vehicle for
25the cost to purchase and install the necessary home
26refueling equipment for bi-fuel, dual-fuel, hybrid or
27dedicated vehicles.

28(iii) As grants to school districts, municipal
29authorities, political subdivisions and nonprofit
30entities to cover the incremental cost to purchase

1biofuel.

2(iv) As rebates to residents of this Commonwealth to
3meet the incremental cost to individuals who purchase a
4bi-fuel, dual-fuel, hybrid or dedicated vehicle.]

5(i) Ten percent of the money from the fund shall be
6expended as grants to taxi companies and operators for
7the incremental cost of purchasing dedicated compressed
8natural gas taxis. Incremental cost for this subparagraph
9shall be capped at $10,000.

10(ii) Sixty-five percent of the money from the fund
11shall be expended as grants to school districts,
12municipal authorities, political subdivisions, nonprofit
13entities, corporations, limited liability companies or
14partnerships incorporated or registered in this
15Commonwealth to provide funding for the incremental cost
16of purchasing dedicated compressed natural gas vehicles
17with a gross vehicle weight rating of 14,000 pounds or
18more. Grant applications from school districts, municipal
19authorities and political subdivisions shall be given
20priority.

21(iii) Twenty-three percent of the money from the
22fund shall be expended as grants to individual residents
23of this Commonwealth for the purchase of bi-fuel
24vehicles. The grant amount shall be limited to the
25incremental cost of the bi-fuel vehicle and may not
26exceed $10,000.

27[(2) Moneys from the fund may be expended by the
28department as reimbursement of up to 10¢ per gallon in a
29calendar year for up to 12,500,000 gallons of renewable fuels
30produced by a qualified renewable fuels producer.]

1(3) One year after the effective date of this act and
2for every year thereafter, the amount of funding by the
3department under this subsection shall be evaluated to
4determine whether an adjustment in funding level is
5appropriate. The evaluation criteria shall be based on
6economic and regulatory conditions that affect the
7feasibility of [alternative fuels] compressed natural gas and
8the financial solvency of the fund. At no time shall the
9grant [or rebate] funding amount be below the amounts
10specified in this section.

11(4) No more than 1.5% of the fund may be used to
12administer the provisions of this act.

13(4.1) No more than 0.5% of the fund may be used to
14educate and do outreach to car dealers and consumers about
15this program.

16(5) No more than [10%] 15% of the fund may be awarded to
17any one school district, municipal authority, political
18subdivision, nonprofit entity, corporation, limited liability
19company, partnership or resident of this Commonwealth in any
20one year, provided that the total amount of grants awarded
21[and rebates provided to grant and rebate] to grant
22recipients within a [political subdivision] county in a year
23shall not exceed [15%] 30% of the fund. However, if the total
24grant [and rebate] money to be awarded in that year is less
25than the total grant money available for that year, the
26department may increase the [10%] 15% and [15%] 30% funding
27levels established under this paragraph not to exceed 40% of
28the fund at the department's discretion.

29[(6) Beginning fiscal year 2008-2009, through and
30including fiscal year 2010-2011, the department may expend up

1to $100,000 annually from the fund for a nitrogen tire
2inflation grant program. The department may award matching
3grants of up to 50% of the costs of purchasing and installing
4a nitrogen tire inflation system to automotive service
5providers who sell tires in this Commonwealth. Individual
6grants may not exceed $5,000 per nitrogen tire inflation
7system. The department shall publish guidelines as necessary
8to implement the provisions of this subsection and maintain a
9registry of all grant recipients on the department's publicly
10accessible World Wide Web site.]

11(c) Grant program.--The department shall establish a formula
12and method for the awarding of grants under the program. The
13department also shall establish a method by which grant
14applications will be prioritized. For grants under subsection 
15(b)(1)(ii), the department shall prioritize grant applications
16according to, but not limited to, the following goals and
17criteria:

18[(1) The improvement of this Commonwealth's air quality.

19(2) The fulfillment of the Commonwealth's
20responsibilities under the Clean Air Act (69 Stat. 322, 42 
21U.S.C. § 7401 et seq.).

22(3) The protection of this Commonwealth's natural
23environment, including land, water and wildlife.

24(4) The advancement of economic development in this
25Commonwealth and the promotion of this Commonwealth's
26indigenous resources.]

27(5) The reduction of this Commonwealth's dependence on
28imported crude oil and other petroleum products.

29[(6) The most cost-effective use of private and public
30funding.

1(7) The transfer and commercialization of innovative
2alternative energy technologies.]

3(8) The total estimated gasoline gallon equivalent of
4compressed natural gas usage.

5(9) Amount of private capital invested as a percentage
6of the total compressed natural gas conversion project cost
7including refueling infrastructure.

8(10) Whether the project provides for public access to
9compressed natural gas refueling infrastructure.

10(c.1) Appeal process.--Applicants that are not awarded 
11grants under this act shall not have the right to a hearing or 
12the issuance of an adjudication under section 4 of the act of 
13July 13, 1988 (P.L.530, No.94), known as the Environmental 
14Hearing Board Act, regarding the department's decision.

15[(d) Rebate program.--There is hereby established a rebate
16program within the department for individuals residing in this
17Commonwealth who purchase a hybrid, plug-in hybrid or other
18alternative fuel vehicle as follows:

19(1) The department shall establish a formula and method
20for the awarding of rebates under this program. The
21department shall publish this information yearly in the
22Pennsylvania Bulletin and may also publish this information
23on the department's World Wide Web site. Rebates shall be
24provided to the extent that funding is available for this
25purpose. To the extent that applications for rebates exceed
26the available funds for this program, the department may
27award rebates on a pro rata basis.

28(2) A request for a rebate must be submitted to the
29department no later than six months after the purchase date
30of the hybrid, plug-in hybrid or other alternative fuel

1vehicle, in a form and manner prescribed by the department.
2The department shall provide an application form to an
3individual upon request, and the department may make the
4application form on its World Wide Web site or through the
5place of purchase of a hybrid, plug-in hybrid or other
6alternative fuel vehicle.

7(3) Applicants shall provide a copy of a valid
8Pennsylvania vehicle registration and proof of purchase when
9making a request for a rebate under this program.

10Section 3.1. Biomass-based diesel production incentives.

11(a) Incentives.--The department shall expend up to
12$5,300,000 annually from the fund unless the balance of the fund
13is less than $5,300,000 on the first day of the fiscal year, in
14which case the department shall expend up to one-third of the
15balance of the fund:

16(1) As a production incentive of 75¢ per gallon for
17biomass-based diesel produced in this Commonwealth beginning
18July 1, 2008, and sold in this Commonwealth for commercial
19transportation purposes or for residential heating. In the
20case of biomass-based diesel, this incentive shall be
21available through June 30, 2011. If the total monthly amount
22of production incentives applied for by all qualified
23applicants exceeds the remaining amount available for those
24incentives, then the incentive shall be prorated among all
25qualified applicants. An individual qualified biomass-based
26diesel producer shall not receive more than $1,900,000 in
27incentives in any one fiscal year. For purposes of this
28section, all facilities under common ownership shall be
29counted as a single facility.

30(2) A producer of biomass-based diesel in this

1Commonwealth shall file for the production incentive on a
2monthly basis on a form furnished by the department. The form
3shall require the producer to submit proof of production of
4the biomass-based diesel and the number of gallons sold
5during the previous calendar month and such other information
6as the department deems appropriate. A biomass-based diesel
7producer shall also submit a certificate of analysis from an
8accredited laboratory for every 500,000 gallons of biomass-
9based diesel produced showing that the biodiesel meets the
10ASTM Specification D6751, Standard Specification for
11Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels
12or its successor standard.

13(b) Exception.--A qualified biomass-based diesel producer
14who receives an incentive under this section shall not be
15eligible to receive an incentive under section 3.]

16Section 4. This act shall take effect in 60 days.