The Indiana House of Representatives voted unanimously Wednesday night to pass H.B.1324, which contains a number of measures that promote alternative fuel use in transportation – most notably, the implementation of a tax credit for deploying heavy-duty natural gas vehicles (NGVs) that exceed 33,000 lbs. GVWR.
The credit, which will apply to taxable years starting after Dec. 31, 2013, and run through 2016, is designed to defray the incremental cost of acquiring heavy-duty NGVs equipped with either compressed natural gas (CNG) or liquefied natural gas (LNG) fuel systems.
‘Given the new technological advancements in extracting natural gas, it has become more economically feasible and environmentally friendly to be used as an everyday motor fuel,’ said State Rep. Randy Frye, who wrote the bill, in a statement. ‘We have large, plentiful reserves available to us right here in Indiana that can provide another option to gasoline without compromising convenience or productivity.’
The tax credit will cover up to 50% of the incremental cost of a heavy-duty NGV, capped at $18,000, and each qualified individual or fleet operator can access up to $180,000 in credits per taxable year. The overall program lays out a maximum of $3.6 million per year, and $10.8 million in total through tax years 2014-2016.
Frye's legislation proposes to collect state gross retail taxes on natural gas, propane and butane by defining the three as ‘special fuels’ for motor vehicle use under Indiana law. Presumably, the tax revenue derived from natural gas fuel sales will help fund the overall NGV incentive program.
The bill also calls for an increase in the threshold at which state agencies must purchase a ‘clean energy vehicle.’ This includes NGVs, propane autogas vehicles and others.
Right now, if the price of an alt-fuel vehicle is no more than 10% greater than the cost of a comparable gasoline- or diesel-powered vehicle, state-government fleets (excluding state police) are required to buy the alt-fuel vehicle. Frye's bill is increasing that figure to 20%, which will likely make NGVs and propane vehicles, in particular, fall into the must-buy category.
In addition, the legislation increases the maximum weight limitation for NGVs by 2,000 lbs. (in order to accommodate the added weight of the fuel and fuel systems), as well as provides a refundable road tax credit to fleets that use CNG in heavy-duty trucks.
The bill will next move into the Indiana Senate for consideration.