Maine Incentives and Laws

Last Updated April 2006

State Incentives

Biofuels Production Incentive

There is a state income tax credit of $0.05 per gallon for the commercial production of biofuels for use in motor vehicles or otherwise used as a substitute for liquid fuels. A taxpayer claiming this credit must provide information to the Commissioner of Environmental Protection regarding the biofuel being produced, including the type of forest or agricultural product being utilized, the nature and composition of the biofuel, the proportion and composition of any non-biofuel with which the biofuel is blended and the type of application for which it is intended to be used. Upon review of the information, the commissioner will provide the taxpayer with a letter of certification that the biofuel produced during the taxable year is eligible for this tax credit. For blends of biofuels with petroleum or other non-biofuels the credit is allowed only on the portion of that blend that the biofuel constitutes. Any portion of unused credits may be carried over for the succeeding five taxable years. (Reference Maine Revised Statutes Title 36 Section 5219-X)

Alternative Fuel Refueling Infrastructure Tax Credit

A tax credit is available for the construction or installation of, or improvements to, any refueling or charging station for the purposes of providing clean fuels to the general public for use in motor vehicles. The qualifying percentage is 25% for expenditures made from January 1, 2002 to December 31, 2008. (Reference Legislative Document 1968, 2006 and Maine Revised Statutes Title 36, Section 5219-P)

State Laws and Regulations

State Fleet Fuel Economy Mandate

The Departments of Administrative and Financial Services, Transportation, Public Safety, and other agencies shall continue to improve the overall fuel economy of the state fleet. (Reference Executive Order 11, 2004)

Low-Speed Vehicle Access to Roadways

Low-speed vehicles may only be used on roads that have a posted speed limit of 35 miles per hour or less. Low-speed vehicles must be registered for and must meet specified safety equipment requirements. A person operating a low-speed vehicle must possess a valid Class A, Class B or Class C driver's license. (Reference Maine Revised Statutes Title 29-A, Sections 1925 and 2089)

Alternative Fuel Promotion

The Energy Resources Council, in coordination with the Department of Environmental Protection, shall study the costs and benefits of state government actions to stimulate an increase in the use of alternative fuels and alternative fuel vehicles as well as stimulate the use and production of biofuels in the state. (Reference Maine Revised Statutes Title 5, Section 3327 and Title 35-A Section 3211-A and Executive Order 11, 2004)

State Agency Emissions Reduction Requirement

Maine has adopted the California vehicle exhaust emissions requirements, excluding the zero emission vehicle mandate. This regulation applies to any Model Year (MY) 2001 and subsequent MY passenger cars and light duty trucks; MY 2003 and subsequent MY medium-duty vehicles; MY 2005 and 2006 heavy-duty vehicles and diesel engines; and all 2008 and subsequent model year heavy-duty diesel vehicles and engines. Beginning with MY 2009, manufacturers must meet the zero emissions vehicle sales requirement. (Reference New Motor Vehicle Emission Standards, Department of Environmental Protection, Chapter 127)

Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Loans

The Finance Authority of Maine manages the Clean Fuel Vehicle Fund, a non-lapsing revolving loan fund that may be used for direct loans to finance all or part of any clean-fuel vehicle project. The Authority may also insure up to 100% of mortgage payments with respect to mortgage loans for clean-fuel vehicle projects. (Reference Maine Revised Statutes Title 10, Sections 1023-K and 1026-A)

Biofuels Production Incentive

The Agriculturally Derived Fuel Fund was developed to provide direct loans and subsidies to a business or cooperative for the design and construction of a facility to produce agriculturally derived fuel, such as methanol and ethanol. It is a non-lapsing fund, which is controlled by the Finance Authority of Maine. (Reference Maine Revised Statutes Title 10, Section 997-A)

Alternative Fuel Tax

The State Highway tax for each special fuel used in transportation is based on each fuel's energy content relative to gasoline. Ethanol (E85) is taxed at a rate of $0.183 per gallon, propane (LPG) at $0.188 per gallon, and compressed natural gas (CNG) at $0.224 per 100 standard cubic feet. Gasoline is taxed at a rate of $0.259 per gallon. New rates will go into effect July 1, 2006; for more information, see the Maine Revenue Services Web site. (Reference Maine Revised Statutes Title 36, Section 3203)

Provision for Establishment of Alternative Fuel Vehicle (AFV) Incentives

An insurer may credit or refund any portion of the premium charges for an insurance policy for a clean-fuel vehicle in order to encourage its policyholders to use clean-fuel vehicles if insurance premiums on other vehicles are not increased to fund these credits or refunds. (Reference Maine Revised Statutes Title 24-A Section 2303-B)

Fuel Efficient Vehicle Acquisition Requirements

Except for cars and light-duty trucks purchased for law enforcement and other special use purposes as designated by the State Purchasing Agent, the State Purchasing Agent may not purchase or lease any car or light-duty truck for use by the State or any department or agency of the State unless, beginning January 1, 2000, the car has a manufacturer's estimated highway mileage rating of at least 45 miles per gallon and the light-duty truck has a manufacturer's estimated highway mileage rating of at least 35 miles per gallon. (Reference Maine Revised Statutes Title 5 Section 1812-E)

Alternative Fuel Promotion

In addition to promoting improved vehicle fuel efficiency, state agencies shall promote the procurement of dedicated alternative fuel vehicles, dual fuel vehicles (AFVs) and supporting refueling infrastructures. (Reference Executive Order 5, 2002)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Maine

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