Statement for the RecordNAFA Fleet Management Associationforthe United - PDF document

1 Statement for the RecordNAFA Fleet Manag
Statement for the RecordNAFA Fleet Management Associationforthe United States House of Representatives Committee on Ways and Means Subcommittee on Select Revenue Measures Hearing: Temporary Policy n The Internal Revenue CodeMarch , 2019Phillip E. Russo, CAEChief Executive OfficerNAFA Fleet Management Association Fleet Solutionsfor Fleet Professionals 2 Chairman Thompson, Ranking Member Smith, and members of the committeethank you for providing the opportunity to submit a statementfor the record of the hearing held on March entitled “Temporary Policy in The Internal Revenue CodeNAFA Fleet Management Association (NAFA) appreciates the subcommitteeefforts to examine the current state oftemporary tax policy and discuss ways to make tax policy forwardlooking.NAFA agrees with the Subcommittee’s goal of reviewing allthe “tax extenders” and evaluating how they will best serve the American people in the future.We believe that tax provisions that provide incentives for the use of alternatives to conventional fuels continue to be needed to encourage the continued use of alternative, such as biodiesel, propane and natural gas, and to commercialize vehicle technologies.NAFA urges Congress to extend for five years the incentives for:the $0.50gallon alternative fuel tax creditfor compressed natural gas, liquefied natural gas, propane autogasandother alternative transportation fuels26 USC § 6426(d) ); the $1.00gallon tax credit for biodiesel26 USC § 40A ; and the 30% alternative fuel infrastructure tax credit26 USC § 30C ). NAFA has more than 2,000 individual fleet manager Members who are employed by corporations, universities, governments agencies (

2 federal, state, municipal, provincial),
federal, state, municipal, provincial), utilities, and any other entity that uses vehicles in its normal conduct of business or needs to move people or goods from one place to another. The fleets managed by NAFA’s Members run the gamut from lighto medium, and even heavyduty vehicles, including sedans, vans, emergency response vehicles, utility trucks, delivery vehicles, buses, and specialized equipment.Depending on the employer’s mission, these fleets may be contained to one specific geographic area, dispersed among multiple regions or states, or be in multiple countries.Regardless of the fleets’ location, the similarity among them is that they are run by a NAFA Member who is responsible for each vehicle’s selection, specification, acquisition, maintenance, repair, fueling, safety, and eventual remarketing.NAFA Members are in control of more than 4.2 million vehicles and manage assets in excess of billion (USD).These vehicles travel more than 84billion miles each year.Fleets have been the early adopters of biodiesel and alternative fuel vehicles. A fleet’s decision to adopt these fuels and vehicleshas often been in response to public policies that urge, or often mandatethat fleets go green. Others do so to reduce the fleets’ environmental impactwhile improving the bottom line. Fleets have used millions of gallons of biodiesel and acquired thousands of alternative fuel vehicles. Existing alternative fuel tax credits play a significantrole in a company or government agency’s vehicle and fuel purchasing decisions. It is welldocumentedthat these credits help make the business case for biodiesel and alternative fuel vehicles. Without these cr

3 edits, it is often difficult to justify
edits, it is often difficult to justify the purchase of these fuels and vehiclesUnfortunately, these credits lapsed as 3 of December 31, and many fleet managers for businesses and government agencies are unable to plan future investments as they manage current uncertainty. Fuel tax credits have helped accelerate the adoption of natural gas and propane as motor fuels. These credits help offset the higher acquisition cost of alternative fuel vehicles by reducing operating costs and help ensure the longterm demand and commercial viability of alternative fuel technologies. With respect topropane, it allows a fleet to extend maintenance intervals and keep vehicles longer, thereby reducing capital costs over time.The biodiesel credit is reflectedin the price a fleet pays for fuel and is a significant factor in projecting fuel costs. However, without the tax credit, biodiesel can be significantly more expensive than conventional diesel fuel making it more difficult for companies and state and local governments to justify the cost of biodiesel. In addition to supporting fleets, the biodiesel credit has proven to be a powerful policy mechanism to create jobs and helplocal economies.For taxexempt entities, such as state and local governments and nonprofits, the fuel incentiveare the only incentives that directly benefit them. Taxexempt entities cannot claim the vehicle and infrastructure creditsThank you for the opportunity to submit this testimony. If you or your staff have any questionsor need additional information, please feel free to contact me or Patrick O’Connor, NAFA’s U.S. Legislative Counsel at 703/351Sincerely,Phillip E. Russo, CAEChief Executive Office