Title: Natural Gas Parity Act
Policy area: Taxation

Summary:
Natural Gas Parity Act
This bill modifies several tax provisions and federal programs related to the sale, purchase, and use of natural gas.
The bill modifies tax provisions related to natural gas to
The bill modifies several federal programs and requirements to

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5959 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 5959

To promote national security and jobs through the use of natural gas to 
               fuel heavy-duty trucks and fleet vehicles.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 24, 2018

 Mr. Mullin (for himself and Mr. Larson of Connecticut) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
 and in addition to the Committees on Oversight and Government Reform, 
 Energy and Commerce, and Science, Space, and Technology, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To promote national security and jobs through the use of natural gas to 
               fuel heavy-duty trucks and fleet vehicles.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Natural Gas Parity 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Extension of alternative fuels credit.
Sec. 3. Partial exclusion from excise tax imposed on heavy trucks sold 
                            at retail for alternative fuel trucks.
Sec. 4. Credit for new qualified natural gas motor vehicles.
Sec. 5. Extension and increase of alternative fuel vehicle refueling 
                            property credit.
Sec. 6. Liquefied natural gas equivalent for purposes of Inland 
                            Waterways Trust Fund financing rate.
Sec. 7. Federal acquisition of alternative fueled vehicles.
Sec. 8. Research, development, and demonstration of natural gas 
                            vehicles.
Sec. 9. Clean Cities program deployment grants.
Sec. 10. Diesel emissions reduction settlement amounts.
Sec. 11. Sense of Congress on the Smartway Program.
Sec. 12. Sense of Congress on infrastructure and public works projects.

SEC. 2. EXTENSION OF ALTERNATIVE FUELS CREDIT.

    (a) 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''.
    (b) 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''.
    (c) 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.

    (a) 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.''.
    (b) 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.

    (a) 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:

``SEC. 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,
        paragraph (1) shall be applied by substituting for the dollar 
        amount which is otherwise applicable for such vehicle an amount 
        equal to 50 percent of such otherwise applicable amount.
    ``(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.''.
    (b) 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.''.
    (c) Conforming Amendments.--
            (1) 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).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30E(f),'' after ``30D(e)(4),''.
            (3) 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:

``Sec. 30E. New qualified natural gas motor vehicles.''.
    (d) 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.

    (a) 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''.
    (b) Modification of Dollar Limitation.--Section 30C(b)(1) of such 
Code is amended by striking ``$30,000'' and inserting ``$100,000''.
    (c) Effective Dates.--
            (1) Extension of credit.--The amendment made by subsection 
        (a) shall apply to property placed in service after December 
        31, 2017.
            (2) 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.

    (a) 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).''.
    (b) 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.''.
    (c) 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.

    (a) Acquisition of Natural Gas Vehicles by General Services 
Administration.--
            (1) 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--
                    (A) review statutory requirements and regulations 
                for impediments against the acquisition of natural gas 
                vehicles; and
                    (B) 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.
            (2) Reports.--
                    (A) 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--
                            (i) the results of the review conducted 
                        under paragraph (1)(A); and
                            (ii) the regulations developed and 
                        procedures adopted under paragraph (1)(B).
                    (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.
            (3) 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.
            (4) Definitions.--In this subsection:
                    (A) Aftermarket converted vehicle.--The term 
                ``aftermarket converted vehicle'' means a motor vehicle 
                that--
                            (i) originally was manufactured and 
                        certified to operate on gasoline or diesel 
                        fuel; and
                            (ii) 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)).
                    (B) Federal agency.--The term ``Federal agency'' 
                has the meaning given the term ``Executive agency'' in 
                section 105 of title 5, United States Code.
                    (C) 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.
                    (D) 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.
    (b) 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--
            (1) 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;
            (2) the Environmental Protection Agency should incorporate 
        incentives that reward businesses that deploy natural gas 
        trucks; and
            (3) 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--
            (1) any future infrastructure and public works legislation 
        should include incentives that encourage the greater use of 
        domestic natural gas;
            (2) 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
            (3) 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.
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