Virginia Incentives and Laws

Last Updated March 2006

State Incentives

Biofuels Production Grants

The Biofuels Production Fund is established to provide grants to producers of biofuels, specifically ethanol and biodiesel. Biodiesel fuels are defined as renewable, biodegradable, mono-alkyl ester combustible liquid fluid fuels from agricultural plant oils or animal fats that meet American Society for Testing and Materials (ASTM) specifications for Biodiesel Fuel (B100) Blend Stock for Distillate Fuels. Ethanol fuels must also meet applicable ASTM specifications and be denatured as specified in the Code of Federal Regulations Parts 20 and 21. A biofuels producer is eligible for a grant of $0.10 per gallon of neat biofuels sold in the Commonwealth from January 1, 2007 to January 1, 2017. To qualify, a biofuels producer must produce at least 10 million gallons of neat biofuels in the calendar year in which the incentive is taken. If a producer began selling neat biofuels prior to January 1, 2007, the producer is eligible for a grant only if its production of neat biofuels for the given calendar year exceeds its production in the 2006 calendar year by at least 10 million gallons and is maintained at a minimum of that level in future years. Each producer is only eligible for six calendar years of grants. (Reference House Bill 680, 2006 and Virginia Code 45.1-393 and 45.1-394)

High Occupancy Vehicle (HOV) Lane Exemption

AFVs displaying the Virginia 'Clean Special Fuels' license plate can use the Virginia HOV lanes, regardless of the number of occupants, until July 1, 2007. Dedicated AFVs and some hybrid electric vehicles (HEVs) may qualify; HEVs that may qualify include the Toyota Prius, Toyota Highlander, Lexus RX400, Ford Escape, Honda Insight, Honda Civic, and Mercury Mariner. On and after July 1, 2006, 'Clean Special Fuels' license plates will be issued with a design distinctively different from the design of 'Clean Special Fuels' license plates issued prior to July 1, 2006, and the annual fee for 'Clean Special Fuels' license plates will be $25 in addition to the prescribed fee for state license plates. For HOV lanes serving the I-95/395 corridor, only vehicles registered with and displaying 'Clean Special Fuels' license plates issued prior to July 1, 2006, will be exempt from HOV lane requirements. (Reference House Bill 1248, 2006, Senate Bill 454, 2006, and Virginia Code 33.1-46.2 and 46.2-749.3)

Point of Contact

Virginia Department of Motor Vehicles
Phone (866) 368-5463 or (800) 435-5137
http://www.dmv.state.va.us/webdoc/citizen/vehicles/cleanspecialfuel.asp
 

Alternative Fuel Job Creation Tax Credit

There is a job creation tax credit worth $700 per full-time employee for businesses involved with the manufacture of components for alternative fuel vehicles (AFVs), AFV conversions, or the production, storage, or dispensing of hydrogen as a vehicle fuel. The credit is allowed in the taxable year in which the job is created and in each of the two succeeding years in which the job is continued. Qualifying businesses include AFV component manufacturers and vehicle conversion companies. This credit is effective for taxable years beginning on or after January 1, 1996, through December 31, 2011. (Reference Senate Bill 690 and Virginia Code 58.1-439.1)

State Laws and Regulations

State Energy Plan

The Virginia Energy Plan establishes policies for the Commonwealth including the following: 1) support for increasing Virginia’s reliance on biodiesel and ethanol, including the use of biodiesel and other alternative fuels in vehicles providing public transportation; 2) support for federal action that provides for an increase the Corporate Average Fuel Economy (CAFÉ) standards by promoting performance-based tax credits to facilitate the introduction and purchase of advanced technology, fuel-efficient vehicles; and 3) support for federal action that provides for market incentives and education programs to build demand for high-efficiency, cleaner vehicles, including tax incentives for highly efficient vehicles. (Reference Senate Bill 262, 2006 and Virginia Code 67-101, 67-102, 67-500, 67-501, 67-800, 67-801)

Biodiesel Fuel Use Requirement

State agencies are requested to implement the use of biodiesel fuels, where feasible, in fleet vehicles owned or operated by the agency. The Secretary of Administration is required to submit to the Division of Legislative Automated Systems an executive summary and report of each agency’s progress by the first day of the 2007 Regular Session of the General Assembly. (Reference House Joint Resolution 148, 2006)

Alternative Fuel Vehicle (AFV) Tax Reduction

Local governments have the option of reducing personal property taxes for AFVs. (Reference Virginia Code 58.1-3506)

Alternative Fuel Vehicle (AFV) and Infrastructure Loans

The Virginia Board of Education may use funding from the state Literary Fund to grant loans to school boards that convert school buses to operate on alternative fuels or construct alternative fuel refueling stations. (Reference Virginia Code 22.1-146)

Alternative Fuels Tax

A tax of $0.16 per gallon is imposed on liquid alternative fuels used in AFVs. Alternatively, an annual license tax of $50.00 per vehicle is imposed on AFVs that are fueled from a private source. (Reference Virginia Code 58.1-2249)

Alternative Fuel License

The following people must obtain a license from the Virginia Department of Motor Vehicles: a provider of an alternative fuel; a bulk user of an alternative fuel; a retailer of an alternative fuel, and; any person who fuels their AFV from a private source that does not pay the special fuels tax described above. (Reference Virginia Code 58.1-2244)

Neighborhood Electric Vehicle (NEV) Access to Roadways

NEVs may not operate at a speed of more than 25 miles per hour (mph) and may only be used on roads that have a posted speed limit of less than 35 mph. The vehicle must comply with safety standards contained in Title 49 of the Code of Federal Regulations, section 571.500, meet the standards set forth in Virginia Code 46.2-908.2, and meet the same titling, registration and insurance requirements applicable to passenger cars. (Reference Virginia Code 46.2-100 and 46.2-908.3)

Alternative Fuel Vehicle (AFV) Signs

The Virginia Board of Education may provide by regulation for the display of appropriate signs or other markings on school buses using alternative fuels. Such signs or markings shall identify the vehicle as an AFV and indicate the type of alternative fuel used. (Reference Virginia Code 46.2-1089.1)

Idle Reduction Requirement

County governments are authorized to establish idle reduction measures for buses. Specifically, county governments may prohibit bus engine idling for more than 10 minutes when the bus is parked, left unattended, or stopped for reasons other than traffic or maintenance. Violators shall be subject to a civil penalty not to exceed $50.00, the proceeds from which shall be paid into the county's general fund. The provisions of this section shall not apply to school buses or public transit buses. (Reference Virginia Code 46.2-1224.1)

Utilities/Private Incentives

Natural Gas Technical Assistance and Fuel Rate Reduction

Virginia Natural Gas will provide technical support and training to customers who are interested in starting a natural gas vehicle (NGV) fleet. Virginia Natural Gas offers two special fuel rates specifically for NGVs.

Point of Contact

Dave Crouch
Fleet Supervisor
Virginia Natural Gas
Phone (757) 466-5446
Fax (757) 459-2780
dcrouch@aglresources.com
 

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas refueling stations and vendor selection on a case-by-case basis.

Point of Contact

Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone (817) 303-2903
Fax (817) 303-2929
walter.c.miller@atmosenergy.com
 

Virginia Points of Contact: