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Louisiana Adopts Incentives for CNG Vehicles

Louisiana Gov. Bobby Jindal has signed into law legislation that will increase income tax credits and incentives for purchasers of compressed natural gas (CNG), liquefied natural gas (LNG) and other alternative fuel vehicles.

The new law increases to as much as $3,000 an existing income tax credit for the purchase of qualified vehicles and increases from 20% to 50% an existing income tax credit for the purchase of equipment to convert gasoline-powered vehicles to CNG or other alternative fuels. The legislation also provides tax credits to companies that install equipment to fuel alternative fuel vehicles.

The legislation (HB 110), which was co-authored by Sen. Nick Gautreaux (D-Abbeville) and Rep. Jane Smith (R-Bossier City) (see NGI, March 30), will benefit taxpayers and consumers, and will be good for energy companies tapping into Louisiana's Haynesville Shale, the lawmakers said.

"With potentially the largest natural gas field in the United States, Louisiana is poised to support an energy policy that enhances our national security and promotes a cleaner environment in our country and state," said Gautreaux. "Louisiana now has some of the most aggressive incentives in the country for both consumers and companies to use clean-burning, truly American natural gas as transportation fuel."

Oklahoma recently enacted legislation to promote natural gas vehicles (NGV). Earlier this year Utah Gov. Jon Huntsman signed into law a bill allowing that state's Public Service Commission to continue to authorize a gas rate for natural gas vehicles that is below the actual cost of service, a move meant to encourage the use of natural gas as a transportation fuel.

The push for CNG vehicles and NGVs has accelerated this year. Earlier this month, bipartisan legislation was offered in the Senate that seeks to extend and expand federal tax credits for NGVs and refueling infrastructure (see NGI, July 13a). Other measures seeking to increase the tax credits for NGVs have been offered in the House and Senate. Congress first provided tax credits for NGVs in the Energy Policy Act of 2005.

Colorado Gov. Bill Ritter recently said his state is seeking $10 million in federal money to expand the use of NGVs in industries such as waste disposal and public transit (see NGI, July 13b).

More local and state governments and businesses are adding NGVs to their fleets, thanks to financial incentives adopted by municipal planning or air quality agencies, according to a study conducted by Emisstar LLC and commissioned by NGV America, which promotes vehicles powered by natural gas or hydrogen (see NGI, July 13c).

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