It’s all about the numbers. As we went to press in mid-December, the National Propane Gas Association had just announced positive news regarding the Omnibus/Tax Extenders Bill, and the numbers are good.
NPGA’s Matt Bisenius, director of legislative affairs and Phil Squair, Sr. VP, public and governmental affairs, reported the Omnibus/Tax Extenders Bill will provide “Major Benefits for the Propane Industry.”
Considered a significant victory for the propane industry, the bill extends several important expired tax provisions pursued by NPGA and its government affairs team in 2015.
Bisenius and Squair reported that the legislation includes a two year extension of both the Alternative Fuels Tax Credit and the Alternative Fuel Vehicle Refueling Property Credit. The Alternative Fuel Credit will stay at the full $0.50 per gallon level for 2015 and it will adjust for energy content for fuel sales after Jan. 1, 2016.
Maintaining the full credit for 2015 is a major victory for NPGA, and Bisenius and Squair said the adjustment should place the credit at approximately $0.36 per gallon in 2016. The Refueling Property Credit remains at 30% of the costs of the system up to $30,000.
Also part of the package 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 both will be indexed for inflation in the future. NPGA worked this issue with Congress early in 2015 in support of the permanent extension of this provision.
Many propane industry companies qualify for this expensing and are able to take advantage of the increased limits, said Bisenius and Squair.
50 to 40 to 30
Bonus depreciation, another business-based tax extender, was also extended–for five years–in this package. For 2015 – 2017, bonus depreciation will remain at 50%, in 2018 will move to 40% and in 2019 will reduce again to 30%. NPGA has been a vocal supporter and promoter of bonus depreciation.
NPGA also secured relief from DOT regulations 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”
Bisenius and Squair see this as unlikely.
5 and 6
With an eye toward moving propane closer to the industry goal of parity with other alternative fuels and technologies studied by the U.S. Department of Energy, NPGA’s efforts resulted in two funding earmarks important for propane growth technologies. Language provides for $5 million for DOE research on propane/LPG direct injection engines, and $6 million for DOE research on micro-CHP (Combined Heat & Power).
Though the Omnibus and Tax Extenders deal is still working its way through Congress at press time, NPGA says the leadership of both the House and Senate, as well as the White House, have indicated that enactment into law is virtually certain.
NPGA, Bisenius and Squair should be congratulated for a job well done on behalf of the industry.
Shane Sweet is an energy and management consultant with clients in the heating oil, propane and motor fuel sectors. He is a Partner with the firm of Lake Rudd & Company and is the Executive Director and Technical Director for the New York Propane Gas Association. He served the industry as President & CEO of the New England Fuel Institute “NEFI” from 2007 to 2011, and Executive VP/Director and Lobbyist for the Vermont Fuel Dealers Association “VFDA” from 1993 to 2007. He lives in Shaftsbury, Vermont and may be reached at firstname.lastname@example.org or 802-558-6101 cell/text. Suggestions by readers for future column content, as well as general comments, are welcome.