Earlier this week, Indiana House Bill 1324, which offers tax incentives to Indiana companies for running big-rig trucks on natural gas, passed the State Senate by a vote of 47 to 3.
The bill goes back to conference committee this coming week, where differences between the House and Senate versions will be addressed.
The legislation was authored by District 67 Representative Randy Frye (R-Greensburg), who’s been driving hard during his time in office to encourage the widespread adoption of natural-gas usage around the state.
In a December interview with the Daily News, Frye stated, “We’ve switched 600 [state-owned] vehicles to natural gas or propane, saving over $1.1 million per year. If we switched our entire fleet, we’d save roughly $10 million over 10 years.”
The savings, he went on to say, would be free and clear money not gleaned from taxes, which the state could put to good use on things like education and the upcoming implementation of the Patient Protection and Affordable Care Act (ObamaCare).
With 1324, Frye hopes to expand natural gas usage beyond state government and into the public domain.
To do so, Frye’s version of the bill offers tax incentives of up to $18,000 per long-haul vehicle to companies who fuel those vehicles with natural gas.
“Each would be limited to 10 trucks each,” Frye explained, “and the entire bill offers a maximum of 200 tax credits per year.”
Frye characterized his version of the bill as “revenue positive,” saying it would generate some $6.48 million over three years. It would do so, in part, by taxing natural gas fuel for the bill’s entire three-year span.
In Indiana, Frye explained, large corporations don’t pay fuel tax on gasoline or on natural gas. “We’ve got thousands of trucks in Indiana running on natural gas right now,” he said. “They’d all be paying that tax, too, thereby offsetting the cost of the tax incentives. The bill would pay for itself.”
Frye was quick to point out, too, that the fuel tax would expire with 1324.
1324 also allows the state to increase the percentage of dollars it can spend on an alternative fuel vehicle from 10 percent to 20 percent.
“Natural gas vehicles are generally more expensive than other types of alternative fuel vehicles,” Frye said. “But the fuel is much cheaper, meaning that extra 10 percent per vehicle purchase is an upfront investment. We’ll easily earn that money back in the long run.”
As 1324’s author, Frye will chair the conference committee, which is composed of members of both the House and the Senate. The committee will seek to bring the disparate versions of House and Senate into sync.
Frye expressed confidence that a deal on the bill could be reached, allowing it to make its way out of conference and ultimately to the governor’s desk for signature.
“Some of the senators don’t like the $18,000 tax credit,” he said, “but I think they largely misunderstand the measure and exactly how it works. I’ll make sure we fix that in committee. I suspect we’ll get it done next week. I’m very confident we’ll get it settled and out by April 29.”
By encouraging natural gas use in long-haul trucks, Frye hopes to make it easier for entrepreneurs to build natural gas fueling stations across the state.
“A natural gas fueling station needs to serve 200 cars a day to break even,” Frye said. “They only need to serve 18 big trucks a day to break even.”
Frye’s hope is that, as more and more trucks take advantage of natural gas usage, more business people will feel comfortable building fueling stations. The more stations that spring up, the more likely the general public is to have access to natural gas fuel and the more likely they are to make the switch, he said.
Contact: Rob Cox at 812-663-3111 x7011.