H.R. 6570 (110th): New Alternative Transportation to Give Americans Solutions Act

110th Congress, 2007–2009. Text as of Jul 22, 2008 (Introduced).

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I

110th CONGRESS

2d Session

H. R. 6570

IN THE HOUSE OF REPRESENTATIVES

July 22, 2008

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 and Energy and Commerce, 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 encourage increased production of natural gas vehicles and to provide tax incentives for natural gas vehicle infrastructure.

1.

Short title

This Act may be cited as the New Alternative Transportation to Give Americans Solutions Act.

2.

Sense of Congress regarding natural gas vehicles

(a)

Findings

Congress finds that—

(1)

according to the Energy Information Administration (EIA), the transportation sector accounts for 69 percent of United States oil consumption;

(2)

natural gas is cleaner and cheaper than gasoline;

(3)

98 percent of natural gas consumed in the United States is produced in North America;

(4)

recent shale discoveries and technology development is increasing the American supply of natural gas;

(5)

natural gas vehicles are growing in popularity in Europe, South America, and elsewhere; and

(6)

the diversification of transportation fuel sources would help the United States meet rapidly growing domestic and global energy demands, reduce the dependence of the United States on oil imported from volatile regions of the world that are politically unstable, stabilize the cost and availability of energy, and safeguard the economy and security of the United States.

(b)

Sense of Congress

It is the sense of Congress that it is the goal of the United States that, not later than December 31, 2018, 10 percent of new vehicles sold in the United States should be natural gas vehicles.

3.

Increases in natural gas refueling property credit; nonbusiness credit limitation doubled; extension of credit

(a)

Increase in credit percentage for natural gas refueling property

Subsection (a) of section 30C of the Internal Revenue Code of 1986 (relating to alternative fuel vehicle refueling property credit) is amended by adding at the end the following new sentence: In the case of qualified clean-fuel refueling property (as defined in section 179A(d)) which is described in section 179A(d)(3) with respect to natural gas fuel, the preceding sentence shall be applied by substituting 50 percent for 30 percent.

(b)

Increase in limitation

Subsection (b) of section 30C of such Code is amended to read as follows:

(b)

Limitation

(1)

In general

The credit allowed under subsection (a) with respect to all qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year at a location shall not exceed—

(A)

$30,000 in the case of a property of a character subject to an allowance for depreciation, and

(B)

$1,000 in any other case.

(2)

Increased credit for natural gas refueling property

(A)

Business property

The limitation under paragraph (1)(A) shall be increased by the lesser of—

(i)

$60,000, or

(ii)

50 percent of the cost of qualified clean-fuel refueling property (as defined in section 179A(d))—

(I)

which is described in section 179A(d)(3) with respect to natural gas fuel,

(II)

which is of a character subject to an allowance for depreciation, and

(III)

which is placed in service during the taxable year.

(B)

Nonbusiness property

The limitation described in paragraph (1)(B) shall be increased by the lesser of—

(i)

$1,000, or

(ii)

50 percent of the cost of qualified clean-fuel refueling property (as defined in section 179A(d))—

(I)

which is described in section 179A(d)(3) with respect to natural gas fuel,

(II)

which is not of a character subject to an allowance for depreciation, and

(III)

which is placed in service during the taxable year.

.

(c)

Extension of credit through 2017

Subsection (g) of section 30C of such Code is amended to read as follows:

(g)

Termination

This section shall not apply to any property placed in service after December 31, 2017.

.

(d)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2008, in taxable years ending after such date.

4.

Energy security bonds

(a)

In general

Subpart H of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable credit to holders of certain bonds) is amended by adding after section 54B the following new section:

54C.

Energy security bonds

(a)

Energy security bond

For purposes of this subchapter, the term energy security bond means any bond issued as part of an issue if—

(1)

100 percent of the available project proceeds of such issue are to be used for qualified purposes,

(2)

the bond is issued by a qualified issuer,

(3)

the issuer designates such bond for purposes of this section, and

(4)

repayments of principal and applicable interest on financing provided by the issue are used not later than the close of the 3-month period beginning on the date the repayment (or complete repayment) is received—

(A)

to redeem bonds which are part of the issue, or

(B)

for any qualified purpose.

For purposes of paragraph (4), the term applicable interest means so much of the interest on any loan as exceeds the amount payable at a 1 percent rate.
(b)

Qualified purpose

For purposes of this section—

(1)

In general

The term qualified purpose means the making of grants and low-interest loans for the purpose of placing in service natural gas refueling property at retail motor fuel stations located in the United States.

(2)

Limitation on loans

Such term shall not include—

(A)

any loan of more than $200,000 for property located at any one retail motor fuel station, and

(B)

any loan for more than 50 percent of the cost of such property and its installation.

(3)

Natural gas refueling property

The term natural gas refueling property means qualified clean-fuel refueling property (as defined in section 179A(d)) which is described in section 179A(d)(3) with respect to natural gas fuel.

(4)

Low-interest loan

The term low-interest loan means any loan the rate of interest on which does not exceed the applicable Federal rate in effect under section 1288(b)(1) determined as of the issuance of the loan.

(c)

Limitation on amount of bonds designated

The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated to such issuer under subsection (e).

(d)

National limitation on amount of bonds designated

There is a national energy security bond limitation of $2,600,000,000.

(e)

Allocation

(1)

In general

The Secretary shall make allocations of the amount of the national energy security bond limitation under subsection (d) among qualified issuers in such manner as the Secretary determines appropriate.

(2)

Reservation for property in metropolitan area

50 percent of the national energy security bond limitation under subsection (d) may be allocated only for loans to provide natural gas refueling property located in metropolitan statistical areas (within the meaning of section 143(k)(2)(B)).

(3)

Percentage of stations receiving loans

In making allocations under paragraph (1), the Secretary shall attempt to ensure that at least 10 percent of the retail motor fuel stations in the United States received loans from the proceeds of energy security bonds.

(f)

Qualified issuer

For purposes of this section, the term qualified issuer means any State or any political subdivision or instrumentality thereof.

(g)

Termination

This section shall not apply with respect to any bond issued after December 31, 2017.

.

(b)

Coordination with refueling property credit

Subsection (e) of section 30C of such Code is amended by adding at the end the following new paragraph:

(6)

Coordination with energy security bonds

The cost otherwise taken into account under this section with respect to any property shall be reduced by the portion of such cost which is financed by any loan provided from the proceeds of any energy security bond (as defined in section 54C).

.

(c)

Conforming amendments

(1)

Paragraph (1) of section 54A(d) of such Code is amended to read as follows:

(1)

Qualified tax credit bond

The term qualified tax credit bond means—

(A)

a qualified forestry conservation bond, or

(B)

an energy security bond,

which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).

.

(2)

Subparagraph (C) of section 54A(d)(2) of such Code is amended to read as follows:

(C)

Qualified purpose

For purposes of this paragraph, the term qualified purpose means—

(i)

in the case of a qualified forestry conservation bond, a purpose specified in section 54B(e), and

(ii)

in the case of an energy security bond, a purpose specified in section 54C(b).

.

(3)

The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

Sec. 54C. Energy security bonds..

(d)

Effective date

The amendments made by this section shall apply to obligations issued after December 31, 2008.

5.

Credit for producing vehicles fueled by natural gas or liquified natural gas

(a)

In general

Subpart D of part IV of subchapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by inserting after section 45P the following new section:

45Q.

Production of vehicles fueled by natural gas or liquified natural gas

(a)

In general

For purposes of section 38, in the case of a taxpayer who is a manufacturer of natural gas vehicles, the natural gas vehicle credit determined under this section for any taxable year with respect to each eligible natural gas vehicle produced by the taxpayer during such year is an amount equal to the lesser of—

(1)

10 percent of the manufacturer's basis in such vehicle, or

(2)

$2,000.

(b)

Aggregate credit allowed

The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $100,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years.

(c)

Definitions

For purposes of this section—

(1)

Eligible natural gas vehicle

The term eligible natural gas vehicle means any motor vehicle (as defined in section 30(c)(2))—

(A)

which is only capable of operating on natural gas or liquified natural gas, and

(B)

the final assembly of which is in the United States.

(2)

Manufacturer

The term manufacturer has the meaning given such term in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

(d)

Special rules

For purposes of this section—

(1)

In general

Rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.

(2)

Controlled groups

(A)

In general

All persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single producer.

(B)

Inclusion of foreign corporations

For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.

(3)

Verification

No amount shall be allowed as a credit under subsection (a) with respect to which the taxpayer has not submitted such information or certification as the Secretary, in consultation with the Secretary of Energy, determines necessary.

(e)

Termination

This section shall not apply to any vehicle produced after December 31, 2017.

.

(b)

Credit To be part of business credit

Section 38(b) of such Code is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting , plus, and by adding at the end the following:

(34)

the natural gas vehicle credit determined under section 45Q(a).

.

(c)

Conforming amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45P the following new item:

Sec. 45Q. Production of vehicles fueled by natural gas or liquified natural gas.

.

(d)

Effective date

The amendments made by this section shall apply to vehicles produced after December 31, 2008.

6.

Tax-credit bond financing for equipment to manufacture natural gas vehicles

(a)

In general

Subpart H of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable credit to holders of certain bonds) is amended by adding after section 54C the following new section:

54D.

Natural gas vehicle production bonds

(a)

Natural gas vehicle production bonds

For purposes of this subchapter, the term natural gas vehicle production bond means any bond issued as part of an issue if—

(1)

100 percent of the available project proceeds of such issue are to be used for qualified purposes,

(2)

the bond is issued by a qualified issuer,

(3)

the issuer designates such bond for purposes of this section, and

(4)

repayments of principal and applicable interest on financing provided by the issue are used not later than the close of the 3-month period beginning on the date the repayment (or complete repayment) is received—

(A)

to redeem bonds which are part of the issue, or

(B)

for any qualified purpose.

For purposes of paragraph (4), the term applicable interest means so much of the interest on any loan as exceeds the amount payable at a 1 percent rate.
(b)

Qualified purpose

For purposes of this section, the term qualified purpose means the making of grants and low-interest loans for the purpose of assisting businesses to manufacture natural gas vehicles, including costs associated with design, engineering, testing, certification, and materials and component parts of eligible natural gas vehicles (as defined in section 45Q(c)).

(c)

Limitation on amount of bonds designated

The maximum aggregate face amount of bonds which may be designated under subsection (a) by any issuer shall not exceed the limitation amount allocated to such issuer under subsection (e).

(d)

National limitation on amount of bonds designated

There is a national natural gas vehicle production bond limitation of $5,000,000,000.

(e)

Allocation

The Secretary shall make allocations of the amount of the natural gas vehicle production bond limitation under subsection (d) among qualified issuers in such manner as the Secretary determines appropriate, taking into consideration each State’s contribution to the Nation’s automotive manufacturing output.

(f)

Qualified issuer

For purposes of this section, the term qualified issuer means any State or any political subdivision or instrumentality thereof.

(g)

Termination

This section shall not apply with respect to any bond issued after December 31, 2017.

.

(b)

Coordination with production credit

Subsection (d) of section 45Q of such Code, as added by this Act, is amended by adding at the end the following new paragraph:

(4)

Coordination with natural gas vehicle productions bonds

The cost otherwise taken into account under this section with respect to any property shall be reduced by the portion of such cost which is financed by any loan provided from the proceeds of any natural gas vehicle production bond (as defined in section 54D).

.

(c)

Conforming amendments

(1)

Paragraph (1) of section 54A(d) of such Code, as amended by section 4, is amended by striking or at the end of subparagraph (A), by adding or at the end of subparagraph (B), and by inserting after subparagraph (B) the following new subparagraph:

(C)

a natural gas vehicle production bond,

.

(2)

Subparagraph (C) of section 54A(d)(2) of such Code, as amended by section 4, is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii) and inserting , and, and by adding at the end the following new clause:

(iii)

in the case of a natural gas vehicle production bond, a purpose specified in section 54D(b).

.

(3)

The table of sections for subpart I of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

Sec. 54D. Natural gas vehicle production bonds..

(d)

Effective date

The amendments made by this section shall apply to obligations issued after December 31, 2008.

7.

Increased credit for purchase of vehicles fueled by natural gas or liquified natural gas; extension of credit

(a)

In general

Subsection (e) of section 30B of the Internal Revenue Code of 1986 (relating to new qualified alternative motor vehicle credit) is amended by adding at the end the following new paragraph:

(6)

Increased credit for natural gas vehicles

(A)

Increased credit percentage

In the case of any natural gas vehicle, the applicable percentage under paragraph (2) shall be 100 percent.

(B)

Higher incremental cost limits for fleet purchasers

In the case of a taxpayer who places in service 100 or more natural gas vehicles during the taxable year, paragraph (3) shall be applied for such year by doubling the amounts contained in such paragraph.

(C)

Natural gas vehicle

For purposes of this paragraph, the term natural gas vehicle means any new qualified alternative fuel motor vehicle fueled by natural gas or liquified natural gas.

.

(b)

Extension of credit for all new qualified alternative fuel vehicles through 2017

Paragraph (4) of section 30B(j) of such Code is amended by striking December 31, 2010 and inserting December 31, 2017.

(c)

Effective date

The amendments made by this section shall apply to vehicles placed in service after December 31, 2008, in taxable years ending after such date.

8.

Natural gas vehicles in Federal fleet

The General Services Administration, in consultation with the Environmental Protection Agency, shall conduct a study on whether or not the Federal fleet should increase the number of natural gas vehicles in their fleet, and transmit to the Congress a report on the results of that study.

9.

Natural gas fuel pumps

(a)

Requirement

Not later than January 1, 2018, each retail automotive fueling station owned by a major integrated oil company shall have at least 1 pump dispensing natural gas for automotive purposes.

(b)

Penalty

A major integrated oil company that has failed to comply with subsection (a) as of January 1 of any year beginning with 2018 shall be liable for a civil penalty assessed by the Secretary of Energy in the amount of $100,000 for each fueling station not in compliance.

(c)

Definition

For purposes of this section, the term major integrated oil company has the meaning given that term in section 167(h)(5)(B) of the Internal Revenue Code of 1986.