Tennessee Incentives and Laws

Last Updated June 2008

Tennessee is the home of the East Tennessee Clean Fuels Coalition (www.etcleanfuels.org) and Clean Cities of Middle Tennessee (www.tennesseecleanfuels.org). Coordinator contact information is listed in the Points of Contact section.

State Incentives

Biodiesel Infrastructure Grants

The Tennessee State Energy Office, Department of Economic and Community Development, Energy Division offers grants to county governments for the installation of biodiesel infrastructure, including biodiesel tanks, pumps, and card readers, that can be used to provide biodiesel fuel for county and city owned vehicles, including school buses, maintenance vehicles, heavy equipment, and other vehicles powered by diesel fuel. Grant funding is available for up to 50% of total project costs, but not more than $12,000 may be awarded per individual grant. Grants are limited to one per county and are available through June 2010.

Point of Contact

Terry Ellis
Program Manager
Tennessee State Energy Office, Department of Economic and Community Development, Energy Division
Phone (800) 342-1340 or (615) 741-2994
Fax (615) 741-5070
terry.ellis@state.tn.us
http://www.state.tn.us/ecd/energy_biodiesel.htm

Biofuels Fueling Infrastructure Grants

The Tennessee Department of Transportation (TDOT) engages in public-private partnerships with transportation fuel providers, including, but not limited to farmer cooperatives, to install fueling facilities. Fueling facilities include storage tanks and fuel pumps dedicated to dispensing biofuels, including ethanol (E85) and biodiesel (B20). TDOT administers the Biofuel Green Island Corridor Grant Project, to provide financial assistance to help pay the capital costs of purchasing, preparing, and installing fuel storage tanks and fuel pumps for biofuels at private sector fuel stations. (Reference Tennessee Code 54-1-136 and Executive Order 33, 2006)

Point of Contact

Linda Tidwell
Grant Coordinator
Tennessee Department of Transportation
Phone (615) 253-2860
Fax (615) 741-1098
linda.tidwell@state.tn.us
http://www.biotenn.org

Alternative Fuel Innovations Grant

The Tennessee Department of Environment and Conservation administers a grant program to support the use of alternative fuels by local governments and public universities. Eligible projects include covering the incremental fuel costs, engine maintenance, conversion or installation of infrastructure, and promotional materials.

Point of Contact

Greg Riggs
Grant Coordinator
Tennessee Department of Agriculture
Phone (615) 532-0567
greg.riggs@state.tn.us
http://state.tn.us/environment/altfuels/pdf/grantapp.pdf

Agricultural Feedstock Processing Demonstration Loan Program

The Tennessee Department of Economic and Community Development will disperse loans of up to $500,000 for projects that increase Tennessee farm income and production of alternative fuel feedstock. Eligible facilities include those that process more than 200,000 bushels each year.

Point of Contact

Jeff Bolton
Director, Economic Development Grants and Loans
Tennessee Department of Economic and Community Development
Phone (615) 741-6201
Fax (615) 253-1870
jeff.bolton@state.tn.us
http://www.state.tn.us/ecd/feedstockgrant.htm

Biodiesel Production Incentive

The Tennessee biodiesel manufacturers' incentive fund provides $0.20 per gallon of biodiesel fuel produced and sold to Tennessee companies. Each manufacturer is eligible to receive incentives for producing up to 10 million gallons of biodiesel annually. Biodiesel is defined as mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats that meet the registration requirements for fuels and fuel additives established by the U.S. Environmental Protection Agency and conform to ASTM specification D6751. (Reference Tennessee Code 67-3-103 and 67-3-423)

Infrastructure Development Program

FastTrack Infrastructure Development Program funds may be used for alternative fueling infrastructure improvements. Funds may be used in situations where there is a commitment by certain private sector businesses to locate or expand in the state and to create or retain jobs for Tennesseans.

Point of Contact

Philip Trauernicht
Director, Program Management, Community Development
Tennessee Department of Economic and Community Development
Phone (615) 253-1903
Fax (615) 253-1870
philip.trauernicht@state.tn.us
http://www.state.tn.us/ecd/progman_tiip.htm

State Laws and Regulations

High Occupancy Vehicle (HOV) Lane Exemption

Effective January 1, 2009, Inherently Low Emission Vehicles (ILEVs) or Low Emission and Energy-Efficient Vehicles (LEEEVs) with a gross vehicle weight rating of 26,000 pounds or less are permitted in HOV lanes regardless of the number of people. Such vehicles must be identified by a state decal provided by the state Department of Revenue. (Reference Senate Bill 2716, 2008, and Tennessee Code 55-8-188)

Energy Task Force

The Governor’s Task Force on Energy Policy was established to develop a state energy plan to facilitate energy efficiency and the use of alternative and renewable fuels in the state. The energy plan will include the following: a summary of opportunities for the state government to use an energy-efficient approach in purchasing and managing the state vehicle fleet; prospective policies, legislation, and incentives to encourage energy efficiency; possible public-private partnerships to encourage research and development of clean energy technologies; and strategies for expanding the use of alternative and renewable fuels. (Reference Executive Order 54, 2008)

Biofuels Production Promotion

The state legislature supports the federal 25 by 25 Initiative, under which 25% of the total energy consumed in the U.S. by 2025 would be produced by domestic agriculture. (Reference Senate Joint Resolution 728, 2008)

Alternative Fuel and Fuel-Efficient Vehicle Use Requirements

All state agencies, universities, and community colleges that have more than 10 state-owned vehicles in their fleet are required to incorporate alternative fuel, hybrid electric, or other fuel-efficient or low-emission vehicles in order to reduce or displace at least 20% of the fleet's consumption of petroleum by January 1, 2010. If the fleet includes vehicles modified for educational, emergency, or public safety purposes or vehicles used for emergency or law enforcement purposes, the fleet must provide for a minimum 10% petroleum use reduction. (Reference Tennessee Code 4-22-101)

Energy-Efficient Vehicle Acquisition Requirement

State fleets are encouraged to make every effort to ensure that at least 30% of newly purchased motor vehicles are energy-efficient vehicles. Energy-efficient vehicles are defined as passenger vehicles that are: alternative fuel vehicles as identified by the Energy Policy Act of 1992 (Public Law 102-486) including those using ethanol, biodiesel, or other alternative fuel; a hybrid electric vehicle; or a conventional gasoline vehicle achieving an average fuel economy of at least 25 miles per gallon or greater. Beginning June 30, 2008, the Commissioner of General Services will compile information on motor vehicles owned and leased by the state including a categorization of vehicles by an energy-efficiency rating. (Reference Tennessee Code 4-3-1109)

Provision for Establishing an Alternative Fuel Research and Development Program

The Tennessee Department of Agriculture is authorized to develop and implement an alternative fuel research program to stimulate public and private research in fuel-related conversion technology. This research should address converting Tennessee agricultural products, such as soybeans, switchgrass, and other biomass, into alternative fuels, as well as the production capabilities needed to deliver such alternative fuels to Tennessee consumers. (Reference Tennessee Code 54-1-136)

Biofuels Strategy and Outreach Campaign

The Governor's Interagency Alternative Fuels Working group, supported administratively by the Tennessee Department of Environment and Conservation, was established to develop a comprehensive state alternative fuels strategy to make Tennessee a leader in the production, distribution, and use of biofuels. The Working Group developed BioTENN, a comprehensive, statewide public education and outreach campaign to increase public awareness and understanding of alternative fuels, particularly biofuels. Furthermore, state agencies should strive to use ethanol and biodiesel in appropriate state-owned vehicles whenever possible and should support the development of biofuels fueling infrastructure. (Reference Executive Order 33, 2006)

Liquefied Petroleum Gas (LPG) Liability Immunity

An individual or entity involved in the business of supplying, handling, transporting, or selling LPG at a retail station is immune from civil liability if injury or damage is caused by the use of the LPG equipment in a manner or purpose other than that for which the LPG equipment was intended. (Reference Tennessee Code 29-34-207)

Biofuels Specifications

The Tennessee Department of Agriculture has the authority to inspect and test biofuels under the Kerosene and Motor Fuels Quality Inspection Act of 1989. (Reference Tennessee Code 47-18-1306)

Liquefied Gas Tax

A use tax of $0.14 per gallon is imposed on liquefied gas used for the propulsion of motor vehicles on public highways, in addition to an annual vehicle tax according to the following:

Government agencies are exempt from the Liquefied Gas Tax. Liquefied gas is all combustible gas that exists in the gaseous state at 60 degrees Fahrenheit and at a pressure of 14.7 pounds per square inch, but does not include gasoline or diesel fuel or compressed natural gas.
(Reference Tennessee Code 67-3-1101, 67-3-1102, 67-3-1103, and 67-3-1106)

Compressed Natural Gas (CNG) Tax and Permit

A use tax of $0.13 per gallon is imposed on CNG used for the propulsion of motor vehicles on public highways. For the purpose of determining the tax on CNG, a gallon equivalent factor of 5.66 pounds per gallon is used. Government agencies are exempt from this tax. A CNG vehicle user must apply for and obtain a CNG user's permit from the Commissioner of Revenue. (Reference Tennessee Code 67-3-1113, and 67-3-1114)

Low- and Medium-Speed Vehicle Access to Roadways

A low-speed vehicle is any four-wheeled electric vehicle, excluding golf carts, with a top speed greater than 20 mph but not greater than 25 mph, including neighborhood vehicles. Medium-speed vehicles have a top speed between 30 mph and 35 mph. Low- and medium-speed vehicles must comply with the safety standards in Title 49 of the Code of Federal Regulations, section 571.500. Low-speed vehicles are allowed access to roadways with speed limits of up to 35 mph. Low- and medium-speed vehicles may cross an intersection where the road or street has a posted speed limit of more than their top speeds. (Reference Senate Bill 2857, 2008, and Tennessee Code 55-8-101 and 55-8-191)

Utilities/Private Incentives

Natural Gas Infrastructure Technical Assistance

Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling 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

Points of Contact:

NAME/EMAIL	AGENCY	TITLE	PHONE/FAX
Jonathan Overly jgoverly@utk.edu	East Tennessee Clean Fuels Coalition	Executive Director	Phone: (865) 974-3625 Fax: (865) 974-1838
Dave Pelton davepelton@worldnet.att.net	Clean Cities of Middle Tennessee	Clean Cities Coordinator	Phone: (615) 482-4849 Fax: (615) 340-5005
Stefan Peter-Contesse stefanpc@hotmail.com	Clean Cities of Middle Tennessee	Assistant Clean Cities Coordinator	Phone: (615) 340-5005 Fax: (615) 340-5005
Andrew Couch andrew@wtccc.com	West Tennessee Clean Cities Coalition (Not Yet Designated)	Clean Cities Coordinator	Phone: (901) 448-1974 Fax: (901) 448-8850
Steven Richardson steven.richardson@netl.doe.gov	U.S. Department of Energy, National Energy Technology Laboratory	Project Manager	Phone: (304) 285-4185 Fax: (304) 285-4638
Terry Ellis terry.ellis@state.tn.us	Tennessee State Energy Office, Department of Economic and Community Development, Energy Division	Program Manager	Phone: (800) 342-1340 or (615) 741-2994 Fax: (615) 741-5070
Linda Tidwell linda.tidwell@state.tn.us	Tennessee Department of Transportation	Grant Coordinator	Phone: (615) 253-2860 Fax: (615) 741-1098
Greg Riggs greg.riggs@state.tn.us	Tennessee Department of Agriculture	Grant Coordinator	Phone: (615) 532-0567 Fax:
Philip Trauernicht philip.trauernicht@state.tn.us	Tennessee Department of Economic and Community Development	Director, Program Management, Community Development	Phone: (615) 253-1903 Fax: (615) 253-1870
Jeff Bolton jeff.bolton@state.tn.us	Tennessee Department of Economic and Community Development	Director, Economic Development Grants and Loans	Phone: (615) 741-6201 Fax: (615) 253-1870
Walter C. Miller walter.c.miller@atmosenergy.com	Atmos Energy	Energy Services Consultant	Phone: (817) 303-2903 Fax: (817) 303-2929
Parks Wells pwells@tnsoybeans.org	Tennessee Soybean Promotion Council	Executive Director	Phone: (731) 668-2850 Fax: (731) 668-2772
Dale Aspy aspy.dale@epa.gov	U.S. Environmental Protection Agency	Environmental Engineer, Region 4	Phone: (404) 562-9041 Fax: (404) 562-9019
Alan Powell powell.alan@epa.gov	U.S. Environmental Protection Agency	Environmental Engineer, Region 4	Phone: (404) 562-9045 Fax: (404) 562-9019
Wes Allen wes.allen@gsa.gov	U.S. General Services Administration	Transportation Specialist, Southeast Region	Phone: (404) 608-2217 Fax: (404) 608-2222