New Model Laws from the LPDD Team
Since the last newsletter update, the LPDD team has published three new model laws, listed below:
- New Model Carbon-Neutral Bioenergy Acquisition Law: As states consider carbon neutrality plans, the emissions profile of biomass as a resource in the statewide energy portfolio must be considered. A number of peer reviewed studies have maintained that some bioenergy sources are not actually “carbon neutral” and may even contribute to excess carbon emissions. This model law sets state acquisition rules to specifically control energy procurement, requiring that any contracts related to procurements of electricity generated from bioenergy utilize feedstocks that meet decarbonization criteria. Load-serving entities and power companies that propose to contract with the state government to sell electricity generated from bioenergy must acquire such energy according to such decarbonization criteria.
- New Model State Income Tax Credit Legislation For Purchasing New Alternative Fuel Vehicles (AFVs): This proposed state income tax credit legislation is designed to create economic incentives for the purchase or lease of Alternative Fuel Vehicles. The proposed legislation provides for options to the enacting state, so that it could elect to provide the tax credits: (i) only for Battery Electric Vehicles (BEVs) and Hydrogen Fuel Cell Vehicles (HFCVs); (ii) for BEVs, HFCVs and Plug-in Hybrid Vehicles (PHEVs); or (iii) for BEVs, HFCVs, PHEVs and simple hybrid electric vehicles (HEVs) that recharge predominantly through regenerative braking. The model statute differentiates between the credits due for sales and leases, and calls for the reduction of the credits over time, allowing the credits to phase out entirely by 2028.
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New Model State Income Tax Credit Legislation for Purchasing Used Alternative Fuel Vehicles (AFVs). This model state legislation is designed to incentivize the purchase of used AFVs, by (i) helping maintain the resale value of AFVs and (ii) making used AFVs more affordable. It has been drafted to provide policy makers with several options as to the types of used vehicles that would qualify for the tax credit, so the legislature can decide — based upon market or political considerations — which types of vehicles should qualify for a credit. To qualify for the tax incentive, the used AFV must be a model year that is no less than two and no more than six years earlier than the date of the sale. The proposed legislation also limits the tax incentive to lower income households. As drafted, the tax credit would remain in effect through December 31, 2030, with a schedule for drawing down the incentive over that period.
Highlighted New External Resources
LPDD.org is being continually updated with new, external legal resources. Below is a brief selection of recently added resources of special interest.
- Transportation and Climate Initiative Program Draft Model Rule: On March 1st, the Transportation and Climate Initiative took significant steps towards developing the nation’s first cap-and-trade program for transportation emissions. The Initiative published the draft model rule for the Transportation and Climate Initiative Program (TCI-P), which describes how suppliers of gasoline and on-road diesel fuel would have to purchase allowances at auction to cover the emissions associated with the fuel they sell over a 3-year compliance period. The Model Rule provides for each participating jurisdiction’s annual allowance budgets beginning in 2023, declining to achieve a 30% reduction by 2032. The model rule also includes equity provisions soliciting advice from and making investments in underserved and overburdened communities. In December 2020, Massachusetts, Connecticut, Rhode Island, and the District of Columbia announced that they would be the first jurisdictions to launch the Transportation & Climate Initiative Program (TCI-P).
- Petaluma Gas Station Ban: In March 2021, the Petaluma, CA City Council voted unanimously to prohibit the creation, expansion, reconstruction and relocation of gas stations, encouraging owners to transition to stations that serve electric and hydrogen-powered vehicles. The changes were tackled through the zoning code. It is believed to be the first city in the country to pass such a ban.
- NY’s Environmental Equity Legislation Package: In March 2021, the NY Senate approved a broad array of environmental equity legislation aimed at protecting frontline communities from fossil fuel pollution. This legislative package requires environmental impact statements for projects that may impact minority or economically distressed communities and prohibits approval of projects that may cause disproportionate pollution impacts to those communities; requires that energy efficiency projects and investments benefit environmental justice communities; requires permit applicants for projects that may impact an environmental justice community to prepare and implement a public participation plan; requires fossil-fuel burning peaker power plants in environmental justice communities to submit a plan to DEC for converting to renewable power generation, and requires phased-in use of bioheating fuel oil in buildings to reduce air pollution.
- Montgomery County MD Electric School Bus Agreement: In February, the Montgomery County School Board approved the largest contract for the provision of electric school buses in North America, at 326 buses. The fleet, managed by Highland Electric Transportation and its partners, will also serve as a grid resource from the newly electrified bus depots that serve it.
- Delaware River Basin Commission Fracking Ban: In February, the Delaware River Basin Commission, citing threats to drinking water for 13 million people, voted to ban fracking in the 13,500-square mile region. Representatives of Delaware, New Jersey, New York, and Pennsylvania voted unanimously to approve the measure, which makes permanent a 2010 moratorium imposed by the commission. The commission cited “significant immediate and long-term risks” from gas extraction, saying in a resolution that drillers have “adversely impacted surface-water and groundwater resources, including sources of drinking water, and have harmed aquatic life in some regions.” The ban applies to the entire watershed but, practically speaking, impacts Wayne and Pike counties in Pennsylvania’s northeastern tip. Both are part of the nation’s largest gas field, the Marcellus Shale.