I
104TH CONGRESS
2D SESSION
H. R. 4288
To encourage the increased use of domestic natural gas as a transportation
fuel, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 28, 1996
Mr. BARTON of Texas (for himself, Mr. BILBRAY, Mr. BONO, Mr. COMBEST,
Mr. GINGRICH, Mr. MCCRERY, Mr. REGULA, Mr. TAUZIN, Mr.
THORNBERRY, and Mr. WISE) introduced the following bill; which was re-
ferred to the Committee on Commerce, and in addition to the Committees
on Transportation and Infrastructure, Ways and Means, National Secu-
rity, and Government Reform and Oversight, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
A BILL
To encourage the increased use of domestic natural gas
as a transportation fuel, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
TITLE I—GENERAL PROVISIONS
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Natural Gas Vehicle
Incentives Act of 1996’’.
SEC. 2. FINDINGS.
(a) PRINCIPAL FINDING.—The Congress finds that
it is in the interest of the United States to encourage the
increased use of domestic natural gas as a transportation
fuel and thereby realize the broad societal benefits associ-
ated with such use, including improved environmental
quality, enhanced energy security, and increased domestic
economic activity.
(b) GENERAL FINDINGS.—The Congress finds that—
(1) the United States currently imports ap-
proximately 50 percent of the petroleum consumed
within the country, and this figure is expected to in-
crease to 73 percent by the year 2000;
(2) the transfer of wealth from the United
States to oil exporting countries in 1994 was ap-
proximately $45,000,000,000;
(3) the transportation sector in the United
States is 97 percent dependent upon petroleum and
accounts for approximately 67 percent of the Na-
tion’s demand for petroleum;
(4) emissions from transportation sources con-
tribute approximately 57 percent of the total criteria
pollutants within the United States and one-third of
the total greenhouse gas emissions within the United
States;
(5) approximately 62,000,000 Americans live in
areas that are in violation of the air quality stand-
ards established by the Clean Air Act, and many of
these Americans, especially those in urban areas, in-
creasingly are suffering adverse health consequences
resulting from poor air quality;
(6) natural gas is a plentiful, domestically avail-
able alternative to petroleum;
(7) in comparison to a gasoline-powered vehicle,
a typical natural gas vehicle substantially reduces
emissions of carbon monoxide, nonmethane organic
gases, oxides of nitrogen, and particulate matter;
(8) the environmental risks inherent in the pro-
duction, refining, transportation, and storage of pe-
troleum-based fuels are far greater than the cor-
responding environmental risks associated with the
production, transportation, and storage of natural
gas used as a transportation fuel;
(9) the technology to maximize the potential so-
cietal benefits resulting from the increased use of
natural gas as a transportation fuel is available in
the commercial marketplace today;
(10) the financial assistance of the Federal
Government is needed to provide incentives to stimu-
late the mass production of natural gas vehicles; and
(11) incentives to the private sector are the
most efficient and effective means of producing long-
term reductions in motor vehicle emissions and oil
imports.
TITLE II—EMISSION REDUCTION
CREDITS
SEC. 201. EMISSION REDUCTION CREDITS.
Part A of title I of the Clean Air Act (42 U.S.C. 7401
et seq.) is amended by adding the following new section
at the end thereof:
‘‘SEC. 132. CREDIT PROGRAM FOR NATURAL GAS VEHICLES
AND FUELING INFRASTRUCTURE.
‘‘(a) ESTABLISHMENT OF CREDIT PROGRAM.—With-
in 1 year after the date of enactment of this section, the
Administrator shall promulgate regulations establishing
an emission reduction credit program for natural gas vehi-
cles, ULEV-certified alternative fuel vehicles that operate
on alternative fuel, and fueling infrastructure. The regula-
tions shall provide that credits shall be usable beginning
no later than 18 months after the date of enactment of
this section.
‘‘(b) STANDARDS FOR VEHICLES.—The rules promul-
gated under subsection (a) shall base emission reduction
credits for natural gas vehicles and ULEV-certified alter-
native fuel vehicles on the difference in emission levels be-
tween in-use gasoline and diesel vehicles and the levels of
emissions from natural gas vehicles and ULEV-certified
alternative fuel vehicles of similar type and weight, based
on data developed by the Administrator for purposes of
emissions certification of natural gas vehicles and ULEV-
certified alternative fuel vehicles. The rules shall be based
on the following:
‘‘(1) Credits shall be available to owners or op-
erators of natural gas vehicles or ULEV-certified al-
ternative fuel vehicles that certify annual use of at
least 1,500 gallons or gallon equivalents of natural
gas, or alternative fuel in the case of ULEV-certified
alternative fuel vehicles, per year, per natural gas
vehicle or ULEV-certified alternative fuel vehicle.
‘‘(2) The right to obtain credits or hold credits
shall be freely transferable.
‘‘(3) Credits may be used to offset any require-
ments in effect pursuant to this title (A) to reduce
emissions of nitrogen oxides, volatile organic com-
pounds, nonmethane organic gas, carbon monoxide,
and particulates, including those applicable to motor
vehicles or stationary sources; and (B) to implement
transportation control measures, including high oc-
cupancy vehicles restrictions and employee trip re-
duction programs.
‘‘(6) Procedures established by the Adminis-
trator related to such credits shall be simple and not
require burdensome recordkeeping.
‘‘(d) DEFINITIONS.—For purposes of this sub-
section—
‘‘(1) NATURAL GAS VEHICLE.—The term ‘natu-
ral gas vehicle’ means a vehicle that will operate on
natural gas alone or natural gas in combination with
another fuel in a dual-fuel configuration.
‘‘(2) NATURAL GAS.—The term ‘natural gas’
includes compressed natural gas and liquefied natu-
ral gas.
‘‘(3) NATURAL
GAS
FUELING
STATION.—The
term ‘natural gas fueling station’ means any prop-
erty or equipment necessary to dispense natural gas
as a vehicular fuel.
‘‘(4) ALTERNATIVE
FUEL
AND
ALTERNATIVE
FUEL VEHICLE.—The terms ‘alternative fuel’ and
‘alternative fuel vehicle’ have the same meanings as
in section 301 of the Energy Policy Act of 1992.
‘‘(5) ULEV-CERTIFIED ALTERNATIVE FUEL VE-
HICLE.—The term ‘ULEV-certified alternative fuel
vehicle’ means any vehicle that operates on alter-
native fuel and has been certified by the California
Air Resources Board or by the Administrator to
meet the current ultra-low emission vehicle standard
as established by the California Air Resources Board
or as established under title II of this Act.
‘‘(e) BIFUEL NATURAL GAS VEHICLES.—The rules
issued under this section shall permit bifuel vehicles that
are capable of operating both on natural gas and gasoline
to receive credits.’’.
TITLE III—TAX INCENTIVES
SEC. 301. CREDITS FOR NATURAL GAS VEHICLES, FUELING
STATIONS, AND FUEL.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45D. CREDITS RELATED TO NATURAL GAS VEHICLES.
‘‘(a) CREDIT FOR VEHICLES.—
‘‘(1) IN GENERAL.—For purposes of section 38,
the natural gas vehicle property credit for any tax-
able year is an amount equal to 50 percent of the
cost of any qualified natural gas vehicle property
placed in service by the taxpayer during such taxable
year.
‘‘(2) QUALIFIED NATURAL GAS VEHICLE PROP-
ERTY.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘qualified natural gas vehi-
cle property’ means any property which would
be qualified clean-fuel vehicle property as de-
fined in section 179A(c) if—
‘‘(i) paragraph (2) thereof did not
apply, and
‘‘(ii) the only clean-burning fuels
under such section were natural gas and
liquefied natural gas.
‘‘(B) 
VEHICLE
MUST
BE
PART
OF
FLEET.—Property shall not be treated as quali-
fied natural gas vehicle property unless the
motor vehicle of which it is a part is part of a
fleet which includes at least 5 motor vehicles
which are used by the taxpayer in a trade or
business.
‘‘(3) TERMINATION.—
‘‘(A) IN GENERAL.—This subsection shall
not apply to property placed in service after the
first calendar year after the termination year.
‘‘(B) TERMINATION YEAR.—For purposes
of subparagraph (A), the termination year is
the first calendar year in which the number of
qualified natural gas vehicles placed in service
is at least 10 percent of the total number of all
motor vehicles placed in service during such
year.
‘‘(C) DEFINITIONS.—For purposes of sub-
paragraph (B)—
‘‘(i) QUALIFIED NATURAL GAS VEHI-
CLE.—The term ‘qualified natural gas ve-
hicle’ means any motor vehicle capable of
operating on compressed natural gas or
liquefied natural gas.
‘‘(ii) MOTOR
VEHICLE.—The term
‘motor vehicle’ has the meaning given such
term by section 179A(e)(2).
‘‘(b) CREDIT FOR FUELING STATIONS.—
‘‘(1) IN GENERAL.—For purposes of section 38,
the natural gas fueling property credit for any tax-
able year is an amount equal to the lesser of—
‘‘(A) $25,000, or
‘‘(B) 10 percent of the cost of any quali-
fied natural gas vehicle fueling property placed
in service by the taxpayer during such taxable
year.
‘‘(2) QUALIFIED NATURAL GAS VEHICLE FUEL-
ING PROPERTY.—For purposes of this section, the
term ‘qualified natural gas vehicle fueling property’
means any property—
‘‘(A) which is placed in service to fuel
qualified natural gas vehicles;
‘‘(B) the original use of which commences
with the taxpayer; and
‘‘(C) which is of a character subject to the
allowance for depreciation.
‘‘(3) TERMINATION.—This subsection shall not
apply to property placed in service after the first cal-
endar year after the termination year (as defined in
subsection (a)(3)).
‘‘(c) CREDIT FOR NATURAL GAS USED AS A TRANS-
PORTATION FUEL.—
‘‘(1) IN GENERAL.—For purposes of section 38,
the natural gas motor fuel credit for any taxable
year is an amount equal to—
‘‘(A) 25 cents per gallon of liquefied natu-
ral gas, and
‘‘(B) 25 cents per gasoline gallon equiva-
lent (as determined by the National Conference
on Weights and Measures) of compressed natu-
ral gas,
used during such taxable year by the taxpayer as a
fuel to propel a natural gas vehicle.