US Senator Robert Menendez (D-NJ) last week introduced new legislation, co-sponsored by Senate Majority Leader Harry Reid (D-NV) and Senator Orrin Hatch (R-UT) that extends and increases tax credits for natural gas vehicle purchasing, refueling and manufacturing.
Under the NAT GAS (New Alternative Transportation to Give Americans Solutions) bill (S. 1408), the purchase tax credit cap for a light-duty natural gas vehicle would be increased to $12,500, up from the current $5,000. For the three other covered vehicle weight classes, the purchase tax credit cap would double; the maximum credit would be $80,000 (up from $40,000).
Other provisions of the bill include:
A 10-year extension for alternative fuel credits for natural gas used as a vehicle fuel, the purchase of natural gas-fueled vehicle, and the installation of natural gas vehicle refueling property credit.
All dedicated natural gas-fueled vehicles would be eligible for a credit equal to 80% of the vehicle’s incremental cost. Only some dedicated natural gas vehicles currently can qualify for an 80% federal tax credit.
Makes all bi-fuel natural gas-fueled vehicles eligible for a credit equal to 50% of the vehicle’s incremental cost. This is the first time bi-fuel vehicles would be eligible for a federal tax credit.
Includes conversions and repowers. The bill includes a “Sense of the Senate” provision that the Environmental Protection Agency should streamline the process for certification of natural gas vehicle retrofit kits.
Increases the refueling property tax credit from $50,000 to $100,000 per station.
Allows the natural gas vehicle and natural gas fueling infrastructure credits to be transferred by the taxpayer back to the seller or to the lessor.
Allows state and local governmental entities to issue tax exempt bonds in order to finance natural gas vehicle projects.
Allows 100% of the cost of a natural gas vehicle manufacturing facility that is placed in service before January 1, 2015 to be expensed and to be treated as a deduction in the taxable year in which the facility was placed in service. This decreases to 50% after December 31, 2014 and is phased out by January 1, 2020
Requires that when complying with mandatory federal fleet alternative fuel vehicle purchase requirements, federal agencies shall purchase dedicated alternative fuel vehicles unless the agency can show that alternative fuel is unavailable or that purchasing such vehicles would be impractical.
Provides for grants for light- and heavy-duty natural gas engine development, with an annual cap of $30 million.
S.1408 amends the Internal Revenue Code, and was referred to the Senate Committee on Finance. T. Boone Pickens joined the three Senators to announced the introduction of the bill.