Congress Passes Tax Extender Legislation that Positions Propane Industry to Grow and Compete

A letter sent from National Propane Gas Association (NPGA) President and Chief Executive Officer, Richard Roldan, announced that congressional leaders reached a major agreement on federal spending and tax extenders late on Dec. 15, 2015. Roldan described some of the major policy provisions that will help the propane industry grow and compete. The following are four of the major tax provisions included in the agreement:

  • A two-year extension of the Alternative Fuels Tax Credit.  This refundable credit remains at 50cpg for 2015, but then will be energy content adjusted to 36cpg for 2016, reflecting the changed energy content calculation of excise tax on autogas that was enacted earlier this year.
  • A two-year extension of the refueling property credit.  Allows a credit for 30% of costs associated with installation of refueling stations, up to $30,000
  • Permanent expansion of Section 179 expensing.  This provision increases the expensing limitation and phase-out amounts to $500,000 and $2 million, respectively, and these levels are indexed for inflation in the future.
  • A five-year extension of Bonus Depreciation.  This provision will phase-down over five years, but it will be 50% for 2015-2017; 40% for 2018; and 30% for 2019.

The NPGA succeeded in getting relief from the DOT regulation changing the 34-hour restart provision to require two 1:00 a.m.-5:00 a.m. periods. Under the agreement, the original 34-hour restart provision remains in effect, unless DOT can prove that drivers operating under the revised restart provision demonstrated "statistically significant improvement in all outcomes related to safety, operator fatigue, driver health and longevity, and work schedules," which Roldan doubts will happen.  
 
Roldan also highlighted the fact that NPGA succeeded in inserting two funding earmarks for important propane growth technologies. The language provides $5 million for DOE research on propane/LPG direct injection engines, and $6 million for DOE research on micro-CHP.  These provisions move the industry closer to its goal of parity with other alternative fuels and technologies being studied by DOE.  It also confirms the fact that focused NPGA lobbying had tangible results for the industry.