New CNG-friendly Legislation Proposed in the U.S.

The natural gas vehicles might receive an economic boost in the U.S., as two senators, John Kerry, D-Mass., and Joe Lieberman, I-Conn., have proposed a climate change legislation that would support the production and purchase of natural gas vehicles.

Called, the American Power Act, the legislation includes multiple natural gas vehicle-related provisions, with the most important one targeting the establishment of new tax credit caps for fleet vehicles.

"Natural gas is the cleanest burning alternative transportation fuel commercially available today and can reduce greenhouse gases emissions by almost 30 percent. We are very encouraged to see that support for natural gas vehicles is a part of this climate legislation," said Richard Kolodziej, president of NGVAmerica.

The new proposed caps would be as follows:

Vehicle Size                                           Current Tax    Proposed Tax
                                                               Credit Cap     Credit Cap
Light-Duty (under 8,501 lbs)                   $5,000           $10,000
Medium-Duty (8,501-14,000 lbs)            $10,000          $20,000
Med.-Heavy-Duty (14,001-26,000 lbs.)   $25,000         $50,000
Heavy-Duty (over 26,000 lbs.)                $40,000         $80,000

Fleet owners would be eligible for a tax credit of between 50 to 80 percent of the cap, depending on the emissions level. The new legislation would also bring incentives for bi-fuel vehicles (vehicles that can run on both their original fuel and natural gas). The incentives would be available for a period of 10 years.

In addition to the extension and expansion of the vehicle purchase incentive, the legislation also would create natural gas bonds, which would help stimulate the use of natural gas vehicles by government bodies, and a tax incentive program for vehicle manufacturers, which would make manufacturing of natural gas vehicles more cost effective,” stated the press release.
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