Expired, Repealed, and Archived Kentucky Incentives and Laws
The following is a list of expired, repealed, and archived incentives, laws, regulations, funding opportunities, or other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality.
Through the Incentives for Energy Independence Act program, the Kentucky Economic Development Finance Authority (KEDFA) provides tax incentives to construct, retrofit, or upgrade an alternative fuel production or gasification facility that uses coal or biomass as a feedstock. KEDFA also provides tax incentives for energy-efficient alternative fuel production facilities and for up to five alternative fuel production facilities that use natural gas or natural gas liquids as a feedstock. Energy-efficient alternative fuels are defined as homogeneous fuels that are produced from processes designed to densify feedstocks such as coal, waste coal, or biomass resources and have an energy content that is greater than the feedstock. The incentives may consist of: 1) a refund of up to 100% of the state sales tax paid on the purchase of personal property used to construct, retrofit, or upgrade the facility; 2) a credit of up to 100% of an approved company's state income tax and limited liability entity tax that the project generates; 3) up to 4% of the wage assessment of employees whose jobs were created as a result of the construction, retrofit, upgrade, or operation of a qualified facility; and 4) a credit for up to 80% of the severance tax paid for coal, natural gas, or natural gas liquids used as a feedstock. KEDFA may allow advance incentive disbursement to encourage the use of in-state labor for facility construction.
The incentives expire at the time of receipt of the authorized amount or 25 years from activation of the project, whichever occurs first. Approved companies may recover up to 50% of their capital investment via the authorized tax incentives. The minimum capital investment for incentive eligibility is $25 million for an alternative fuel or gasification facility that uses biomass as the primary feedstock; $100 million for an alternative fuel or gasification facility that uses coal, oil shale, or tar sands as the primary feedstock; $25 million for an energy-efficient alternative fuel facility; and $1 million for a facility that uses natural gas or natural gas liquids as the primary feedstock.
To apply for the incentive, an eligible taxpayer must submit a $1,000 non-refundable application fee and remit payment for any other fees in connection with the project, including administrative, legal, and consulting fees. For more information, see the Kentucky Business Incentives and Financial Programs website. KEDFA will not accept applications after August 1, 2018.
(Reference House Bill 557, 2018, and Kentucky Revised Statutes 154.27-010 to 154.27-090)
The Kentucky Department of Education (Department) must consider the use of clean transportation fuels in school buses as part of its regular procedure for establishing and updating school bus standards and specifications. If the Department determines that school buses may operate using clean transportation fuels while maintaining the same or a higher degree of safety as fuels currently allowed, it must update the standards and specifications to allow for such use. (Reference Kentucky Revised Statutes 156.153)
The Kentucky Finance and Administration Cabinet (Cabinet) must develop a strategy to replace at least 50% of commonwealth motor fleet light-duty vehicles with energy-efficient vehicles including hybrid electric, advanced lean burn, fuel cell, and alternative fuel vehicles. The Cabinet must also develop a strategy to increase the use of ethanol (including cellulosic ethanol), biodiesel, and other alternative fuels in commonwealth motor vehicle fleets. The Cabinet must report the life-cycle cost comparison of vehicles and targeted vehicle and fuel usage amounts annually. (Reference Kentucky Revised Statutes 45A.625)
The Kentucky Department for Energy Development and Independence (Department) oversees the development and implementation of a comprehensive energy strategy. Specifically, the Department must develop and implement a strategy for the production of alternative transportation fuels and synthetic natural gas from fossil energy resources and biomass resources, including biodiesel and ethanol. A commonwealth energy plan, Intelligent Energy Choices for Kentucky's Future, was developed in 2008. This plan proposes seven strategies to support a renewable and efficiency portfolio standard and to develop an alternative transportation fuel standard and set fuel production goals. For more information, see the Department's Energy Plan website. (Reference Kentucky Revised Statutes 152.720)
In 2012, Kentucky joined Arkansas, Colorado, Louisiana, Maine, Mississippi, New Mexico, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming in signing a memorandum of understanding (MOU) to stimulate the production and demand for original equipment manufacturer (OEM) NGVs. The MOU aims to encourage OEMs to offer functional and affordable light- and medium-duty NGVs, aggregate state vehicle procurement through a joint request for proposals (RFP), boost private investment in natural gas fueling infrastructure, and encourage greater coordination between state and local agencies. Also in 2012, National Association of State Procurement Officials coordinated the solicitation of a joint RFP, which the Oklahoma Department of Central Services (DCS) issued on behalf of the MOU signatories and additional states. As a result, state fleets have access to more affordable NGVs through dealerships now included in state vehicle purchasing bids. For more information, including awarded vehicles by state and vehicle purchase information for state fleets, see the DCS Statewide Contract for NGVs solicitation page.
The Executive Task Force on Biomass and Biofuels Development must facilitate the development of a sustainable biomass and biofuels industry in Kentucky. The Executive Task Force Final Report recommends key strategic actions to develop the industry, including identifying a single agency to coordinate development efforts, developing policies to mitigate demand and supply risks, ensuring the industry's sustainability, and developing capitalization mechanisms. For more information, see the Executive Task Force Final Report. (Reference Executive Order 2009-817, 2009)
The Kentucky House of Representatives (House) requested that universities in the state report their most recent research on second generation biofuels, including cellulosic ethanol, to the House by January 7, 2014. Second generation biofuels are defined as biofuels produced from biomass sources including wood, grasses, or the inedible parts of plants. The universities are also encouraged to intensify research efforts on second generation biofuels to identify alternative fuel resources and reduce the crude oil and petroleum products consumed in the United States each year. (Reference House Resolutions 168, 2013)
The Kentucky Department for Energy Development and Independence (Department) encourages the responsible use of transportation fuels by supporting academic research, public education, and collaborative partnerships involving alternative fuels and alternative fuel vehicles (AFVs). The Department facilitates projects that promote the use of AFVs and establish alternative fuel infrastructure in Kentucky. For more information, see the Department website.
The Kentucky Energy and Environment Cabinet offers grants through the Biofuels for Schools Program (Program). The Program seeks to identify high schools that design, implement, and evaluate student projects that incorporate awareness and knowledge of biodiesel, pollution prevention, and resource conservations principles. Grants are also available to high schools that enable the long-term policies and planning for expanded use of biodiesel. Qualified schools will receive between $500 and $2,000. As of April 2012, the application period has closed.
Kentucky Utilities Company (KU) is offering $250,000 in grant funding to assist with the cost of PEV acquisition in fleets owned by governmental and quasi-governmental bodies. KU will reimburse selected applicants for the incremental cost of PEVs, specifically passenger cars and light- or medium-duty trucks. KU will also fund the cost of one DC fast charge EVSE, up to $3,500, for each selected applicant. Applications for funding must be submitted for consideration by June 15, 2012. For more information, see the Program Criteria and Application.
The Kentucky Transportation Cabinet and the Kentucky Finance and Administration Cabinet must establish procurement contracts that maximize the market availability of ethanol and biodiesel fuel blends. Additionally, employees using conventional vehicles in the Transportation Cabinet's fleet must use either a 10% blend of ethanol (E10) or a 2% blend of biodiesel (B2) as their primary fueling option, and the Transportation Cabinet must maximize the use of E85 in its flexible fuel vehicle fleet. The Transportation Cabinet must promote clean fuels through employee education, vendor identification, and by holding employees accountable for electing to use clean fuels in commonwealth vehicles. (Reference Executive Order 2005-124, 2005)
Organizations or individuals located in non-attainment areas are eligible for Congestion Mitigation and Air Quality Improvement Program vehicle rebates for dedicated Original Equipment Manufactured (OEM) alternative fuel vehicles (AFVs): $2,000 per dedicated light or medium-duty AFV and $4,000 per dedicated heavy-duty AFV. There is a limit of five vehicles per fleet per calendar year, and mandated fleets are not eligible. Each participant must pay a minimum of 20% of the incremental cost. Rebates are also available for hybrid electric vehicles and low speed vehicles operating within a fleet. This rebate program expires June 30, 2004.