Congress passed H.R. 133 on December 21, 2020, an omnibus package, which includes COVID-19 relief and FY2020 appropriations legislation. This bill contains several significant wins for the propane industry, including appropriations funding for research and development projects through the Department of Energy, an extension of the alternative fuel tax credits, COVID-19 relief for small businesses, and other broad energy provisions. Political experts expect the President to sign this legislation into law in the coming days.
National Propane Gas Association (NPGA) President and CEO Stephen Kaminski applauded the work of Congress on passing critical year-end legislation that supports small businesses and energy consumers across the country.
“The propane industry is a clear winner in Congress’ year-end legislation,” Kaminski said. “NPGA worked tirelessly with its member companies and allies in Washington, DC to secure the inclusion of several policy priorities in the final legislative package of the 116th Congress.”
- Appropriations funding opportunities through the Department of Energy
- $5 million for vehicle engine technology including dimethyl ether (DME)
- Within available funds (WAF) for micro combined heat and power (CHP) combined with other renewables
- WAF for CHP micro-grids
- One-year extension of the alternative fuel credits
- Alternative Fuel Tax Credit
- Alternative Fuel Refueling Infrastructure Credit
- COVID-19 Relief
- Tax fix allowing the deductibility of business expenses related to PPP loans
- Emergency Rental Assistance Program including funds to be used to cover utilities and home energy costs and arrearages
- Energy Provisions
- Commitment to phase out the use of Hydrofluorocarbons
- Successfully lobbied against misguided building codes language that would have impacted housing affordability and favor electrification
NPGA engaged Congress throughout the year to build on the success of last year’s appropriations efforts. In February, NPGA conducted its first-ever appropriations-based fly-in to garner support for funding opportunities through the Department of Energy for vehicle engine technology including DME, micro-CHP combined with renewables, and CHP microgrids. House and Senate Energy and Water Appropriations Subcommittees included these provisions in their annual report, and ultimately in the year-end spending bill.
The year-end legislation also includes a one-year extension (through December 31, 2021) of the Alternative Fuel Tax Credit and the Alternative Fuel Refueling Infrastructure Credit. These provisions are worth more than $165 million annually to the propane industry and were set to expire at the end of 2020. In recent months, NPGA worked with a small business coalition to meet with tax-writing committee legislators and send a letter to Congress with signatures from over 400 organizations. These efforts helped secure an extension of the tax credits, which will provide tax certainty to the propane industry and its customers and help transition more Americans to autogas vehicles.
As the COVID-19 crisis continues to impact Americans struggling to pay their energy bills, NPGA engaged Congress for opportunities to help its customers. Although this relief legislation did not include additional emergency funding for the Low Income Home Energy Assistance Program (LIHEAP), it did create the Emergency Rental Assistance Program. This program provides funds for home energy costs and arrearages.
Additionally, NPGA worked with an industry coalition to fix an inconsistency in the Paycheck Protection Program (PPP). Due to Treasury guidance released earlier this year, if participants of the program had a portion of their loan forgiven, they may not have been able to deduct certain business expenses related to PPP loans. The year-end COVID-19 relief legislation fixes this issue, specifying that the IRS will not include forgiven PPP loans as taxable income, and deductions are allowed for expenses paid with proceeds of a forgiven PPP loan. This legislative fix ensures that participants of the PPP will not be hit with a surprise tax liability when filing their 2020 returns.
Congress also included several energy provisions in the year-end deal. The bill contains legislation that would phase out the use of hydrofluorocarbons (HFCs), commercial-grade refrigerants that are a potent greenhouse gas (GHG). Refrigerant-grade propane, better known as R-290, can be applied as an environmentally friendly alternative to HFCs. NPGA supported Congress this year as they drafted this legislation, highlighting propane as a green alternative to reduce HFCs. Additionally and importantly, as Congress considered various energy legislation to include in the package, NPGA successfully advocated to remove a building code provision that would have raised housing costs and favored electrification over the use of propane and other traditional energy sources.
“NPGA applauds the work of our Congressional champions for passing a year-end package that prioritizes small business and clean energy sources, like propane,” Kaminski said. “As a near-zero, low-cost, domestic fuel, propane is a fair and fast solution to the nation’s emissions reduction goals. The provisions included in this legislation demonstrate to the new Congress and incoming Administration Americans’ collective recognition that propane provides practical and proven planet protection for today and tomorrow.”
Contact Michael Baker, NPGA’s Senior Director of Legislative Affairs, with any questions.