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Legislators Consider Tax Incentives For Natural Gas Cars

A bill would provide an income tax credit for three years in an attempt to encourage people to switch to natural gas powered vehicles.

natural gas station

Photo: Scott Lowe (flickr)

A car fills up at a natural gas station in Los Angeles.

House and Senate negotiators will be hashing out the best way to encourage vehicle fleets to convert to natural gas.

The Senate could vote as early as Tuesday on a proposal to apply the state gas tax to other fuels, to make sure the state does not lose too much money as more vehicles turn away from gasoline. In the House, that plan was coupled with a temporary tax credit for trucking companies for switching to natural gas vehicles.

Rep. Randy Frye (R-Greensburg), the bill‘s author, says the credit would cover about a third of the cost of a new natural-gas-fueled vehicle.

His bill would allow the tax credit for three years. He says that should be long enough to encourage enough natural-gas filling stations to open to meet the demand.

Once vehicle owners have places to fill up, he says, the significantly cheaper cost of natural gas should be enough of an incentive to convert. He says consumers would save about 40 percent of their fuel costs.

“Not only you‘re saving the money, but the money‘s staying in the United States,” he says. “The United States currently has more than 100 years of natural gas reserves

Right now, the state has about a dozen natural-gas stations. Frye expects that number to double by year‘s end, but says the state needs 10 times that many.

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