Recap of Major Benefits for Propane Industry With Passage of Omnibus/Tax Extenders Bill

Congressional leaders reached a major agreement on federal spending and tax extenders and the bill was signed into law by President Obama on Dec. 18. The National Propane Gas Association (NPGA), in a letter from association president and CEO Rick Roldan, said that the large Omnibus and Tax Extenders deal, including the extension of the 50-cent-per-gallon alternative fuels tax credit, is “a much-anticipated victory for the propane industry.” Roldan described the major policy provisions that he said “will help our industry grow and compete.”

NPGA succeeded in getting four major tax provisions included in the agreement.

“Extending several important expired tax provisions has been a priority for NPGA throughout 2015, and we are thrilled that this year-end deal includes extensions of the provisions that benefit our industry,” Roldan stated.

He noted that there are several noteworthy extensions in this deal that have been at the top of NPGA’s agenda. Specifically, the legislation includes a two-year extension of both the Alternative Fuels Tax Credit and the Alternative Fuel Vehicle Refueling Property Credit. Importantly, the Alternative Fuel Credit would stay at the full 50 cents per gallon level for the balance of 2015; it will then be adjusted for energy content for fuel sales after Jan. 1, 2016. This adjustment should set the credit at approximately 36 cents per gallon. Maintaining the full credit for 2015 was a major victory for NPGA. The Refueling Property Credit remains at 30% of the costs of the system up to $30,000.

The legislation also includes a permanent extension of the increased Section 179 small business expensing limits. When enacted, the limitation and phase-out amounts will increase to $500,000 and $2 million, respectively, and these figures will be indexed for inflation in the future. NPGA weighed in with Congress earlier this year in support of a permanent extension of this provision. Many of NPGA’s members qualify for this expensing and are able to take advantage of the increased limits. Bonus depreciation, another business-based tax extender, was also extended for five years in this deal. For 2015-2017, bonus depreciation will remain at 50%. In 2018, it will be phased down to 40%, and reduced again to 30% in 2019. This is another provision that NPGA has also been vocal in supporting.

The association also succeeded in getting relief from the Department of Transportation (DOT) regulation changing the 34-hour restart provision to require two 1 a.m.-5 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 NPGA 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 Department of Energy (DOE) research on propane/LPG direct-injection engines, and $6 million for DOE research on micro-CHP. “I believe these provisions move us closer to our goal of parity with other alternative fuels and technologies being studied by DOE. It also confirms the fact that focused NPGA lobbying can have tangible results for our industry,” Roldan wrote.

“NPGA thanks its members who were helpful in lobbying for these extensions,” he said. For information regarding this legislation, contact Matt Bisenius at (202) 355-1326.