Fuel Systems Solutions, Inc. (FSYS)

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Natural Gas Act....

Now that health care legislation is being side-lined, there is growing speculation that the Nat Gas Act will become a priority (see #msg-45827854).

For reference, I am appending links to the three major legislative pieces at the end of this message.

As a primer, I am including here the highlights of the Senate bills as summarized by NGV Global News last July; i.e. http://www.ngvglobal.com/new-us-nat-gas-act-of-2009-introduced-on-energy-independence-day-0708 :

.... U.S. Senate Majority Leader Harry Reid, Republic Senator Orrin Hatch and Democrat Senator Robert Menendez were joined by Pickens to tout new legislation (S1408) that would boost natural gas vehicles (NGVs). The NAT GAS Act of 2009, introduced by Menendez and co-sponsored by Reid and Hatch, aims to extend and increase tax credits for NGVs and refueling.

The bill joins its House of Representatives companion (H.R. 1835) that was introduced April 1 and already has 70 bi-partisan co-sponsors. Like the House version, the Senate version of the NAT GAS Act will provide incentives for consumers, commercial truckers, and state and local governments to aggressively move from using vehicles burning polluting, imported gasoline and diesel to vehicles running on clean, domestic natural gas.

A Pickens Press Release states the legislation, in its existing format –

• Expands and modifies the alternative fueled vehicle and refueling property tax credits as follows:

.... Makes all dedicated natural gas-fueled vehicles eligible for a credit equal to 80% of the vehicle’s incremental cost. Only some dedicated natural gas vehicles currently can qualify for an 80% federal tax credit

.... Makes all bi-fuel natural gas-fueled vehicles eligible for a credit equal to 50% of the vehicle’s incremental cost. This is the first time bi-fuel vehicles would be eligible for a federal tax credit

• Increase the allowable incremental cost limits to more accurately reflect the cost of producing or converting natural gas vehicles:

.... For light-duty vehicle, the purchase tax credit cap would be increased to $12,500 (currently $5,000)

.... For all other vehicle weight classes, the purchase tax credit cap would be doubled

• Increases the refueling property tax credit from $50,000 to $100,000 per station

• Allows the natural gas vehicle and natural gas fueling infrastructure credits to be transferred by the taxpayer back to the seller or to the lessor

• Allows state and local governmental entities to issue tax exempt bonds in order to finance natural gas vehicle projects

• Allows 100% of the cost of a natural gas vehicle manufacturing facility that is placed in service before January 1, 2015 to be expensed and to be treated as a deduction in the taxable year in which the facility was placed in service. This decreases to 50% after December 31, 2014 and is phased out by January 1, 2020

• Requires that when complying with mandatory federal fleet alternative fuel vehicle purchase requirements, federal agencies shall purchase dedicated alternative fuel vehicles unless the agency can show that alternative fuel is unavailable or that purchasing such vehicles would be impractical

• Provides for grants for light- and heavy-duty natural gas engine development

Fueling America Act

Another bi-partisan action, this time by Senators Mark Pryor and Jim Inhofe, has seen the introduction last week of the Fueling America Act of 2009 (S. 1350) to the US Senate. The bill seeks “to encourage increased production of natural gas and liquefied petroleum gas vehicles and to provide tax incentives for natural gas and liquefied petroleum gas vehicle infrastructure, and for other purposes.

In his introductory remarks, Sen. Pryor said the Fueling America Act would make it easier and more practical for people to buy these clean, green vehicles, creating a cleaner environment and lessening dependence on foreign oil through utilization of ample domestic natural gas resources.

The legislation includes several important initiatives to promote the use of natural gas as a transportation fuel. Specifically, the bill would:

• Extend for five years the tax credit for the purchase of NGVs and the tax credit for the installation of natural gas refueling stations

• Establish an NGV research and development program within the Department of Energy (this provision is identical to HR 1622, which earlier was reported out by the House Science Committee)

• Require the General Services Administration to study increasing natural gas used by the federal fleet

• Extend and expand the funding program for CNG-powered school buses (this provision is similar to legislation introduced last year by then Senator Obama)

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2009-07-08 S1408 http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:s1408is.txt.pdf

2009-06-25 S1350 http://frwebgate6.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:s1350is.txt.pdf

2009-04-01 HR 1835 http://www.gpo.gov/fdsys/pkg/BILLS-111hr1835IH/pdf/BILLS-111hr1835IH.pdf