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Clean Vehicle Tax Credit Guidance

Clean Vehicle Tax Credit Guidance (IR-2022-218) – On December 12, 2022, the Treasury Department and Internal Revenue Service issued a Revenue Procedure setting out key processes for manufacturers and sellers of clean vehicles.  Specifically, the guidance applies to manufacturers of vehicles eligible for the clean vehicle credit under § 30D of the Code (§ 30D credit), vehicles eligible for the credit for qualified commercial clean vehicles under § 45W of the Code (§ 45W credit), and vehicles eligible for the credit for previously-owned clean vehicles under § 25E of the Code (§ 25E credit). The processes discussed in the guidance are required for vehicles to be eligible for one or more clean vehicle tax incentives, including tax credits for new and previously owned clean vehicles, as well as for commercial clean vehicles.

For vehicle manufacturers, Revenue Procedure 2022-42 provides guidance on new rules in the tax law added by the Inflation Reduction Act on how to enter into a written agreement with the IRS and how to provide periodic written reports containing specified information related to each clean vehicle manufactured. Per the guidance, qualified manufacturers must file reports with the IRS on a monthly basis, by the fifteenth of the month. Qualified manufacturers must send an email  to [email protected] indicating their intent to submit monthly reports and the IRS will respond with instructions on how to submit their reporting information.

This revenue procedure also provides the procedures for persons selling vehicles to report specified information to the IRS for a vehicle to be eligible for the credit for new or previously owned clean vehicles.  For vehicle sales occurring in calendar year 2023 and later, Sellers must file reports with the IRS within fifteen days after the end of the calendar year (i.e., the first report will be due Jan. 15, 2024).

NOTE: This revenue procedure is not the issuance of proposed guidance with respect to the critical minerals and battery components requirements under § 30D(e). The Treasury Department and the IRS will explicitly identify when they are issuing proposed guidance with respect to the critical minerals and battery components requirements under § 30D(e).

CARB Advanced Clean Fleets Regulation

On Aug. 30, 2022, CARB issued a notice announcing that it will conduct a public hearing on Oct. 27, 2022 where it will consider adopting the proposed Advanced Clean Fleets (ACF) regulation.

The proposed regulation includes four components:

• requirements for State and local government fleets,
• requirements for drayage truck fleets,
• requirements for high priority and federal fleets, and
• a 100% ZEV sales requirement for medium- and heavy-duty truck manufacturers.

The deadline for submitting comments on the proposal is October 17, 2022.

All documents for this rulemaking can be found here. 

Regulatory and Legislative Tracking Reports for Vehicle Manufacturers and Suppliers

Since 1999, Kardos & Associates LLC has supplied the auto industry with the most comprehensive regulatory and legislative tracking reports available. We currently offer clients the following:

Motor Vehicle Safety & Emissions Regulatory Update (the REG UPDATE)

The REG UPDATE has been tracking US and Canadian regulatory activity impacting the auto industry for over twenty years. Regulations developed by the NHTSA, FMCSA, EPA, FCC, CARB, Transport Canada, and Environment Canada are the focus. For each rulemaking, the Reg Update provides a description of the rulemaking, comment deadlines, effective dates, a docket reference, and links to documents available online. Deadlines and critical path items are color-coded so that you can quickly identify what’s new and important. In addition to being an excellent tool for tracking regulatory activity, the Reg Update is a great archive of past actions. The report contains information on virtually every rulemaking affecting automakers from the past two decades. Approximately 400 pages in length.

U.S. Safety & Fuel Economy Regulatory & Legislative Update
The U.S. Safety & Fuel Economy Regulatory & Legislative Update provides a snapshot of the past month’s legislative and regulatory activities relating to safety, emissions and fuel economy. The report provides brief summaries of notices issued by DOT, EPA, CARB and others. With regard to federal legislation, the report covers newly introduced bills, information on committee hearings, etc. Activities at the state level pertaining to emerging technologies (e.g., automated vehicles, advance driver assistance systems, EVs and EV infrastructure, etc.) are also covered.

Federal Legislation Tracking Report
Our legislative tracking report focuses on matters relating to environment and energy, safety and fuel economy/climate change. The report covers two years-worth of bills (the length of each Congressional session) and includes summaries and status updates for each tracked bill. Links to bill text and related information are provided.

All of our reports are distributed monthly via email as a PDF. Subscribers also get access to an online archive of past reports.

For pricing, contact Dale Kardos at (202) 3064997 or [email protected]. For more information about Kardos & Associates LLC, see www.kardosllc.com.

For a PDF of this information, click here.

FMCSA Grants Bosch - Mekra Camera Monitor System Exemption Petition

On Sep. 17, 2020, FMCSA published a notice in the Federal Register announcing a decision to grant Bosch and Mekra Lang a limited 5-year exemption to allow motor carriers to operate commercial motor vehicles (CMVs) with the companies’ CV (Commercial Vehicle) Digital Mirror System installed as an alternative to the two rear-vision mirrors required by the Federal Motor Carrier Safety Regulations (FMCSRs). The exemption is effective Sep. 17, 2020 and ends Sep. 17, 2025.

Bosch and Mekra Lang applied for an exemption on May 16, 2019 from 49 CFR 393.80(a) to allow its CV Digital Mirror System to be installed as an alternative to the two rear-vision mirrors required on CMVs.  FMCSA requested public comment on the petition in the Federal Register published Jan. 30, 2020.  FMCSA received three comments, from the American Bus Association and two individuals.  ABA supported the petition while the two individuals expressed concerns.  FMCSA decided to grant the petition given they believe that use of the CV Digital Mirror System will provide CMV drivers with an enhanced field of view when compared to the required rear-vision mirrors because:

(1) it eliminates the blind spots on both sides of the vehicle created by the required rear-vision mirrors,

(2) the multi-camera system expands the field of view compared to the required rear-vision mirrors by an estimated 25 percent, and

(3) the system uses high definition cameras and monitors that include features such as color night vision, low light sensitivity, and light and glare reduction that together help provide drivers with improved vision in the field of view when compared to traditional rear-vision mirrors.

In the notice, FMCSA emphasizes that this exemption is limited to the Bosch and Mekra Lang CV Digital Mirror System, and does not apply to any other camera-based mirror replacement system/technology.  The notice also states that interested parties possessing information that would demonstrate that motor carriers operating CMVs utilizing the Bosch and Mekra Lang CV Digital Mirror System installed as an alternative to two rear-vision mirrors are not achieving the requisite statutory level of safety should immediately notify FMCSA. The Agency will evaluate any such information and, if safety is being compromised or if the continuation of the exemption is not consistent with 49 U.S.C. 31136(e) and 31315(b), will take immediate steps to revoke the exemption.

Medium- and Heavy-Duty Truck Fuel Economy

The National Academy of Sciences (NAS) has released the Phase Two Final Report discussing fuel consumption and GHG emissions for medium- and heavy-duty vehicles (downloadable here). The report focuses on a possible third phase of regulations that could be promulgated for the post-2027 timeframe.   Delivered to its sponsor (the US DOT) last October, the report relies on work conducted between 2014 and the end of 2017.  The report was originally to have been delivered by March 2018, however, a prolonged lapse of funding from the US DOT resulted in an extended delay.

EPA Heavy Duty Engine Test Procedures NPRM

On May 12, 2020, the EPA published an NPRM in the Federal Register proposing changes to the test procedures for heavy-duty engines and vehicles to improve accuracy and reduce testing burden.  In the NPRM, EPA also proposes other regulatory amendments concerning light-duty vehicles, heavy-duty vehicles, highway motorcycles, locomotives, marine engines, other nonroad engines and vehicles, stationary engines. These would affect the certification procedures for exhaust emission standards, and related requirements. EPA is proposing similar amendments for evaporative emission standards for nonroad equipment and portable fuel containers. These amendments would increase compliance flexibility, harmonize with other requirements, add clarity, correct errors, and streamline the regulations. 

Products affected by the rulemaking include:

• Light-duty vehicles
• Heavy-duty vehicles and engines
• Motorcycles (highway and nonroad)
• Marine engines
• Locomotives
• Other nonroad engines and equipment
• Stationary engines
• Portable fuel containers

Comments on the NPRM will be due June 26, 2020.

Docket reference: EPA–HQ–OAR-2019-0307.

EPA contact: Alan Stout, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4805; email address: [email protected].

Pronto.ai Application for Exemption

On April 20, 2020, FMCSA published a notice in the Federal Register requesting public comment on an application from Pronto.ai, Inc. (‘‘Pronto’’) on behalf of its interstate motor carrier customers, for a renewable five-year exemption from the 11-hour driving limit and the 14-hour driving window in the Agency’s hours-of-service (HOS) requirements. Pronto is requesting that drivers operating commercial motor vehicles (CMVs) equipped with the Copilot by Pronto advanced driver assistance systems (ADAS), the SmartDrive® Video Safety Program, and operating under certain other safeguards, be allowed to drive up to 13 hours during a period of 15 consecutive hours after coming on duty following 10 consecutive hours off duty. Comments on the application are requested on or before May 20, 2020. Docket reference: FMCSA–2020–0116. FMCSA contact: Mr. Richard Clemente, FMCSA Driver and Carrier Operations Division; Office of Carrier, Driver and Vehicle Safety Standards; Telephone: 202–366– 4225. Email: [email protected].

Cleaner Trucks Initiative (CTI) ANPRM

On Jan. 21, 2020, the US EPA published an ANPRM in the Federal Register requesting comments on potential regulatory measures that would reduce emissions from heavy vehicles.  Topics covered in the ANPRM include the following:

- emission control technologies for reducing NOx

- standards and test cycles

- in-use emission standards

- extended regulatory useful life

- ensuring long-term in-use emissions performance

- certification and compliance streamlining

- incentives for early emission reductions

An EPA summary document is available here.

The EPA website for the rulemaking is available here.

Docket reference: EPA–HQ–OAR–2019–0055

Comments are due Feb. 20, 2020.

CARB Proposed Advanced Clean Trucks (ACT) Regulation and Draft Environmental Analysis (EA)

On Oct. 22, 2019, CARB released it proposed Advanced Clean Trucks (ACT) Regulation and Draft Environmental Analysis (EA) for public comment.   The proposal, if finalized, would require manufacturers of incomplete or complete vehicles > 8500 lbs GVWR with 500 or more annual sales in CA to begin to electrify their fleets starting in 2024. Fleet compliance percentages vary by year and vehicle class.  By 2030, one out of every two Class 4-8 vehicles will need to be electrified.

The rule will be considered by the Board at a hearing which will take place in Sacramento, CA on Dec. 12, 2019 starting at 9 am (PST).

Written comments on the proposal must be submitted no later than Dec. 9, 2019.

All documents concerning the rulemaking are available online at https://ww2.arb.ca.gov/rulemaking/2019/advancedcleantrucks.

NHTSA Camera Mirror System ANPRM

On Oct. 10, 2019, NHTSA published an Advance notice of proposed rulemaking (ANPRM) seeking public input on permitting camera-based rear visibility systems, commonly referred to as “Camera Monitor Systems” or “CMS,” as an alternative to inside and outside rearview mirrors. Federal motor vehicle safety standard (FMVSS) No. 111, “Rear Visibility,” currently requires that vehicles be equipped with rearview mirrors to provide drivers with a view of objects that are to their side or to their side and rear. The notice responds to two rulemaking petitions from manufacturers seeking permission to install CMS, instead of outside rearview mirrors, on both light vehicles and heavy trucks. The ANPRM builds on the agency’s prior efforts to obtain supporting technical information, data, and analysis on CMS so that the agency can determine whether these systems can provide the same level of safety as the rearview mirrors currently required under FMVSS 111. Note that comments on NHTSA’s Aug. 28, 2019 FR notice which sought input on planned research relating to this matter are due Oct. 28, 2019.

Comments in response to the ANPRM are due Dec. 9, 2019.

Docket ref: NHTSA-2018-0021.

NHTSA contacts: Contact Mr. Andrei Denes, Office of Crash Avoidance Standards (Phone: 202-366-9544) or Mr. Daniel Koblenz, Office of Chief Counsel (Phone: 202-366-2992).