MCLI Model Law - Tax Credits for Clean Freight Vehicles

For most states, the transportation sector is one of the largest sources of greenhouse gas and other air pollutant emissions. Heavy-duty freight trucks and delivery vehicles are a significant contributor of transportation emissions. Moreover, emissions from these vehicles are disproportionately located in nonattainment areas and in disadvantaged communities. When compared to conventional heavy-duty vehicles, advanced technology freight vehicles – including zero-emission vehicles (ZEVs) such as battery-electric and hydrogen fuel cell trucks, and near-zero-emission vehicles (NZEVs) such as hybrid-electric trucks – have dramatically lowered tailpipe emissions of greenhouse gases and other air pollutants. Decreasing these emissions has significant and localized public health benefits, in addition to associated climate change-related benefits. By using no or less fossil fuels, companies can also save money over time when operating these vehicles. Federal policy previously provided commercial clean vehicle tax credits to defray initial incremental costs. A state's adoption of a complementary corporate tax credit will help address the gap created by the termination of the federal credit, accelerate fleet electrification, decrease contributions to climate change, and advance public health. The Model Climate Laws Initiative model law is state-level legislation that would create a corporate tax credits for placing eligible vehicles into service.