Natural Gas Parity Act
A BILL
To promote national security and jobs through the use of natural gas to fuel heavy-duty trucks and fleet vehicles.
Sec. 2 Extension of alternative fuels credit
In general— Section 6426(d)(5) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2017” and inserting “December 31, 2022”.
Outlay payment of alternative fuels credit— Section 6427(e)(6)(C) of such Code is amended by striking “December 31, 2017” and inserting “December 31, 2022”.
Effective date— The amendments made by this section shall apply to fuels sold or used after December 31, 2017.
Sec. 3 Partial exclusion from excise tax imposed on heavy trucks sold at retail for alternative fuel trucks
In general— Section 4051(a) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:
“(5) Partial exclusion for alternative fuel trucks
“(A) In general—In the case of any automobile truck chassis, automobile truck body, or tractor subject to tax under paragraph (1) which is fueled wholly or partially by an alternative fuel, the rate of tax shall be reduced by 35 percent.
“(B) Alternative fuel—For purposes of subparagraph (A), the term alternative fuel means compressed natural gas, liquefied natural gas, liquefied petroleum gas, renewable natural gas, hydrogen, and any liquid at least 85 percent of the volume of which consists of methanol.”
Effective date— The amendment made by subsection (a) shall apply to sales after the date of the enactment of this Act.
Sec. 4 Credit for new qualified natural gas motor vehicles
Natural gas motor vehicle credit— Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“30E. New qualified natural gas motor vehicles
“(a) Allowance of credit—There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the credit amount determined under subsection (b) with respect to each new qualified natural gas motor vehicle placed in service by the taxpayer during the taxable year.
“(b) Per vehicle dollar limitation
“(1) In general—The amount determined under this subsection with respect to any new qualified natural gas motor vehicle is—
“(A) $7,500, in the case of a new qualified natural gas motor vehicle which has a gross vehicle weight rating of less than 14,000 pounds,
“(B) $15,000, in the case of a new qualified natural gas motor vehicle which has a gross vehicle weight rating of at least 14,000 pounds and not greater than 26,000 pounds, and
“(C) $25,000, in the case of a new qualified natural gas motor vehicle which has a gross vehicle weight rating of more than 26,000 pounds.
“(2) Reduced credit for certain partially fueled natural gas vehicles—In the case of any vehicle which—
“(A) is not fueled wholly by specified natural gas, and
“(B) is not equipped with a dual-fuel compression engine that is engineered and designed to only operate on 90 percent or more specified natural gas,
“(c) Application with other credits
“(1) Business credit treated as part of general business credit—So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
“(2) Personal credit—For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
“(d) New qualified natural gas motor vehicle—For purposes of this section—
“(1) In general—The term new qualified natural gas motor vehicle means a motor vehicle—
“(A) the original use of which commences with the taxpayer,
“(B) which is acquired for use or lease by the taxpayer and not for resale,
“(C) which is made by a manufacturer,
“(D) which is treated as a motor vehicle for purposes of title II of the Clean Air Act,
“(E) which is fueled wholly or partially by specified natural gas, and
“(F) in the case of a motor vehicle which is not fueled wholly by specified natural gas, has a driving range on specified natural gas of—
“(i) in the case of a motor vehicle which has a gross vehicle weight rating of less than 8,500 pounds, at least 150 miles, and
“(ii) in any other case, at least 200 miles.
“(2) Application to after-market converted vehicles—The requirement of paragraph (1)(A) shall be treated as satisfied with respect to a motor vehicle if—
“(A) such vehicle was originally manufactured and certified to operate on gasoline or diesel fuel,
“(B) such vehicle has been modified to have the capability to operate on specified natural gas, and
“(C) the original use of such vehicle after such modification commences with the taxpayer.
“(3) Motor vehicle; manufacturer—The terms motor vehicle and manufacturer have the meaning given such terms under paragraphs (2) and (3) of section 30D(d), respectively.
“(4) Specified natural gas—The term specified natural gas means compressed natural gas, liquefied natural gas, and renewable natural gas.
“(e) Limitation on number of new qualified natural gas motor vehicles eligible for credit
“(1) In general—In the case of a new qualified natural gas motor vehicle sold during the phaseout period with respect to such vehicle, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.
“(2) Phaseout period—For purposes of this subsection, the phaseout period is—
“(A) in the case of a new qualified natural gas motor vehicle described in subsection (b)(1)(A), the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of new qualified natural gas motor vehicles described in subsection (b)(1)(A), manufactured by the manufacturer of such vehicle, and sold for use in the United States after December 31, 2018, is at least 200,000, and
“(B) in the case of a new qualified natural gas motor vehicle described in subparagraph (B) or (C) of subsection (b)(1), the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the combined number of new qualified natural gas motor vehicles described in subparagraph (B) or (C) of subsection (b)(1), manufactured by the manufacturer of such vehicle, and sold for use in the United States after December 31, 2018, is at least 100,000.
“(3) Applicable percentage—For purposes of paragraph (1), the applicable percentage is—
“(A) 50 percent for the first 2 calendar quarters of the phaseout period,
“(B) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and
“(C) 0 percent for each calendar quarter thereafter.
“(4) Controlled groups—Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.
“(f) Application of certain rules—Rules similar to the rules of section 30D(f) shall apply for purposes of this section.”
Credit made part of general business credit— Section 38(b) of such Code is amended by striking “plus” at the end of paragraph (31), by striking the period at the end of paragraph (32) and inserting “plus”, and by adding at the end the following new paragraph:
“(33) the portion of the new qualified natural gas motor vehicle credit to which section 30E(c)(1) applies.”
Conforming amendments—
Section 1016(a) of such Code is amended by striking “and” at the end of paragraph (37), by striking the period at the end of paragraph (38) and inserting “, and”, and by adding at the end the following new paragraph:
“(39) to the extent provided in section 30E(f).”
Section 6501(m) of such Code is amended by inserting “30E(f),” after “30D(e)(4),”.
The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2017.
Sec. 5 Extension and increase of alternative fuel vehicle refueling property credit
Extension of credit— Section 30C(g) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2017” and inserting “December 31, 2022”.
Modification of dollar limitation— Section 30C(b)(1) of such Code is amended by striking “$30,000” and inserting “$100,000”.
Effective dates—
Extension of credit— The amendment made by subsection (a) shall apply to property placed in service after December 31, 2017.
Modification of dollar limitation— The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2017.
Sec. 6 Liquefied natural gas equivalent for purposes of Inland Waterways Trust Fund financing rate
In general— Section 4042(b)(2)(A) of the Internal Revenue Code of 1986 is amended to read as follows:
“(A) The Inland Waterways Trust Fund financing rate is 29 cents per gallon (per energy equivalent of a gallon of diesel, in the case of liquefied natural gas).”
Energy equivalent of a gallon of diesel— Section 4042(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(5) Energy equivalent of a gallon of diesel with respect to liquefied natural gas—For purposes of paragraph (2)(A), the term energy equivalent of a gallon of diesel means 6.06 pounds of liquefied natural gas.”
Effective date— The amendments made by this section shall apply to any sale or use of fuel after December 31, 2018.
Sec. 7 Federal acquisition of alternative fueled vehicles
Acquisition of natural gas vehicles by General Services Administration—
In general— Not later than 180 days after the date of the enactment of this Act, in order to increase the acquisition of natural gas vehicles, the Administrator of General Services shall—
review statutory requirements and regulations for impediments against the acquisition of natural gas vehicles; and
work with third-party vendors to develop regulations and adopt procedures that will make the acquisition of natural gas vehicles easier for Federal agencies, including extending acquisition cycles and lease periods for aftermarket converted vehicles and allowing third-party vendors to offer natural gas vehicles on a regional basis.
Reports—
Initial report— Not later than one year after the date of the enactment of this Act, the Administrator of General Services shall submit to Congress an initial report on—
the results of the review conducted under paragraph (1)(A); and
the regulations developed and procedures adopted under paragraph (1)(B).
Final report— Not later than one year after the submission of the initial report under subparagraph (A), the Administrator of General Services shall submit to Congress a final report on the impact of the regulations developed and procedures adopted under paragraph (1)(B) on the acquisition of natural gas vehicles.
Minimum acquisition requirement— Notwithstanding any other provision of law, of the total number of motor vehicles acquired by the Administrator of General Services, at least 25 percent in fiscal year 2022 and each fiscal year thereafter shall be natural gas vehicles.
Definitions— In this subsection:
Aftermarket converted vehicle— The term aftermarket converted vehicle means a motor vehicle that—
originally was manufactured and certified to operate on gasoline or diesel fuel; and
has been modified to have the capability of operating on an alternative fuel (as defined in section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211)).
Federal agency— The term Federal agency has the meaning given the term Executive agency in section 105 of title 5, United States Code.
Natural gas vehicle— The term natural gas vehicle means a motor vehicle that has the capability of operating on natural gas, including renewable natural gas.
Third-party vendor— The term third-party vendor means any private entity that is in the business of arranging the lease or procurement of motor vehicles for other businesses, or for the Federal Government.
Minimum Federal fleet requirement relating to acquisition of medium and heavy duty motor vehicles— Subsection (b) of section 303 of the Energy Policy Act of 1992 (42 U.S.C. 13212) is amended to read as follows:
“(b) Percentage requirements
“(1) Light duty motor vehicles—Of the total number of light duty motor vehicles acquired by a Federal fleet, at least the following percentages shall be alternative fueled vehicles:
“(A) 25 percent in fiscal year 1996.
“(B) 33 percent in fiscal year 1997.
“(C) 50 percent in fiscal year 1998.
“(D) 75 percent in fiscal year 1999 and each fiscal year thereafter.
“(2) Medium duty passenger vehicles and heavy duty motor vehicles—Of the total number of medium duty passenger vehicles and heavy duty motor vehicles acquired by a Federal fleet, at least the following percentages shall be alternative fueled vehicles:
“(A) 25 percent in fiscal year 2020.
“(B) 33 percent in fiscal year 2021.
“(C) 50 percent in fiscal year 2022.
“(D) 75 percent in fiscal year 2023 and each fiscal year thereafter.
“(3) Exception—With respect to paragraph (1) or (2), as the case may be, the Secretary, in consultation with the Administrator of General Services, where appropriate, may permit a Federal fleet to acquire a smaller percentage than is required in such paragraph, so long as the aggregate percentage acquired by all Federal fleets is at least equal to the required percentage.
“(4) Definitions—In this subsection:
“(A) Federal fleet—The term Federal fleet means 20 or more light duty motor vehicles, medium duty passenger vehicles, or heavy duty motor vehicles, located in a metropolitan statistical area or consolidated metropolitan statistical area, as established by the Bureau of the Census, with a 1980 population of more than 250,000, that are centrally fueled or capable of being centrally fueled and are owned, operated, leased, or otherwise controlled by or assigned to any Federal executive department, military department, Government corporation, independent establishment, or executive agency, the United States Postal Service, the Congress, the courts of the United States, or the Executive Office of the President. Such term does not include—
“(i) motor vehicles held for lease or rental to the general public;
“(ii) motor vehicles used for motor vehicle manufacturer product evaluations or tests;
“(iii) law enforcement vehicles;
“(iv) emergency vehicles;
“(v) motor vehicles acquired and used for military purposes that the Secretary of Defense has certified to the Secretary must be exempt for national security reasons; or
“(vi) nonroad vehicles, including farm and construction vehicles.
“(B) Medium duty passenger vehicle—The term medium duty passenger vehicle has the meaning given that term in subsection (f)(1).
“(C) Heavy duty motor vehicle—The term heavy duty motor vehicle means a motor vehicle with a gross vehicle weight rating equal to or in excess of 8,501 pounds, but does not include any medium duty passenger vehicle.”
Sec. 8 Research, development, and demonstration of natural gas vehicles
There are authorized to be appropriated to the Secretary of Energy $25,000,000 for fiscal year 2019 through 2023 for research, development, and demonstration activities with respect to natural gas vehicles, including advanced efficiency for natural gas vehicle engines, continuation of ARPA–E Methane Opportunities for Vehicular Energy projects, and development of low nitrogen oxide or advanced high pressure direct injection engines.
Sec. 9 Clean Cities program deployment grants
There is authorized to be appropriated to the Secretary of Energy $50,000,000 for fiscal year 2019 for natural gas vehicle deployment grants under the Clean Cities program.
Sec. 10 Diesel emissions reduction settlement amounts
At least 50 percent of amounts provided for under a settlement agreement regarding alleged violations of environmental law in which a defendant agrees to perform a diesel emissions reduction Supplemental Environmental Project under subtitle G of title VII of the Energy Policy Act of 2005 (42 U.S.C. 16131 et seq.) shall be used for alternative fuel vehicle deployment grants.
Sec. 11 Sense of Congress on the Smartway Program
It is the sense of the Congress that—
the Smartway Program of the Environmental Protection Agency should include recognition of the energy security, fuel efficiency and environmental benefits of using domestic natural gas, including renewable natural gas;
the Environmental Protection Agency should incorporate incentives that reward businesses that deploy natural gas trucks; and
such incentives should specifically quantify and reward users for the full fuel cycle emission reductions associated with using renewable natural gas.
Sec. 12 Sense of Congress on infrastructure and public works projects
It is the sense of the Congress that—
any future infrastructure and public works legislation should include incentives that encourage the greater use of domestic natural gas;
the increased use of abundant, low-cost domestic natural gas provides numerous economic and environmental benefits that could be further encouraged by rewarding projects and programs that pave the way for expanded use of natural gas such as upgrading or extending natural gas pipelines, expanding access to natural gas in areas underserved by natural gas, and linking natural gas supplies to existing or new manufacturing hubs, airports, port facilities and other industrial or commercial centers; and
such legislation should encourage businesses to use natural gas to fuel motor vehicles and nonroad equipment by providing a point scoring system that rewards businesses with not less than a 10 percent and no more than a 20 percent advantage for using natural gas to fuel a majority of their vehicles used to carryout infrastructure development or public works projects.