Report Title:

Motor Vehicles; Alternative Fuels

Description:

Requires 10% of state-owned bi-fueled vehicles to use only alternative fuels by 7/1/10. Establishes an income tax credit for the purchase of vehicles that use alternative fuels. Allows certain low-emission vehicles or hybrid vehicles to use HOV lanes regardless of the number of passengers in those vehicles.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

1326

TWENTY-SECOND LEGISLATURE, 2003

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to alternative fuels.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The purpose of this Act is to encourage the use of alternative fuels in Hawaii by:

(1) Requiring at least ten per cent of all state-owned vehicles that can use both gasoline and an alternative fuel to use only alternative fuels by July 1, 2010;

(2) Establishing an income tax credit for the purchase of vehicles, including hybrid vehicles, that use alternative fuels; and

(3) Allowing certain low-emission vehicles or hybrid vehicles to use high occupancy vehicle lanes regardless of the number of passengers in those vehicles.

SECTION 2. Chapter 105, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§105- State vehicles; alternative fuel. (a) By July 1, 2010, at least ten per cent of all state-owned bi-fueled vehicles shall be fueled exclusively with an alternative fuel. The department of accounting and general services may adopt rules pursuant to chapter 91 to implement this section.

(b) As used in this section:

"Alternative fuel" has the same meaning as defined in section 243-1.

"Bi-fueled vehicle" means a motor vehicle, which may be purchased to comply with applicable federal requirements, including the federal Energy Policy Act of 1992, 42 U.S.C. Sec. 13257, and 42 U.S.C. Sec. 7587, that can operate on both an alternative fuel and a traditional fuel or that can operate alternately on a traditional fuel and an alternative fuel.

"Traditional fuel" means gasoline or other petroleum-based motor fuel commonly used on the highways of this State."

SECTION 3. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Income tax credit for purchase of vehicles using alternative fuels. (a) As used in this section, unless the context otherwise requires:

"Alternative fuel" has the same meaning as defined in section 243-1.

"Hybrid vehicle" means a motor vehicle with a hybrid propulsion system that uses an alternative fuel by operating on both an alternative fuel, including electricity, and a traditional fuel.

"Motor vehicle" means any self-propelled vehicle required to be licensed or subject to licensing for operation upon the highways of this State, including a vehicle that uses a hybrid propulsion system.

"Near zero-emitting vehicle" means a motor vehicle exhibiting emissions characteristics that are near those of a zero-emitting vehicle. To qualify as a near zero-emitting vehicle, a motor vehicle must meet at least one of the following minimum requirements:

(1) The vehicle must be certified by the United States Environmental Protection Agency as meeting an emission standard between the ultra-low-emitting vehicle emission standard and the zero-emitting vehicle emission standard; or

(2) The vehicle must be certified by the United States Environmental Protection Agency as meeting the federal ultra-low-emitting vehicle emission standard and must be certified by any state as provided in the Federal Clean Air Act to an emission standard between the ultra-low-emitting vehicle emission standard and the zero-emitting vehicle emission standard.

"Power source" means the engine or motor and associated wiring, fuel lines, engine coolant system, fuel storage containers, and miscellaneous components.

"Traditional fuel" means gasoline or other petroleum-based motor fuel commonly used on the highways of this State.

"Uses an alternative fuel" or "to use an alternative fuel" means to operate solely on an alternative fuel, to operate on both an alternative fuel and a traditional fuel, or to operate alternately on a traditional fuel and an alternative fuel.

(b) With respect to tax years commencing after June 30, 2003, but prior to July 1, 2005, there shall be allowed to any person a credit against the tax imposed by this chapter for each motor vehicle owned by the person that:

(1) Is titled and registered in this State;

(2) Is used in connection with a business; and

(3) Uses or is converted to use an alternative fuel or has its power source replaced with a power source that uses an alternative fuel.

(c) With respect to tax years commencing after June 30, 2005, but prior to July 1, 2016, there shall be allowed to any person a credit against the tax imposed by this chapter for each motor vehicle owned by the person that:

(1) Is titled and registered in this State; and

(2) Uses or is converted to use an alternative fuel, is a hybrid vehicle, or has its power source replaced with a power source that uses an alternative fuel.

(d) The amount of the credit allowed pursuant to this section shall be an amount equal to the percentage, as set forth in subsection (e), of the following:

(1) The difference between the actual cost incurred by the person during the tax year in purchasing a motor vehicle that uses an alternative fuel and the cost of the same motor vehicle that uses a traditional fuel or, if the same vehicle is not available, then the cost of the most similar vehicle, taking into account the model, make, engine size, and options, that uses a traditional fuel;

(2) The difference between the actual cost incurred by the person during the tax year in replacing an existing power source in a motor vehicle that uses a traditional fuel with a power source that uses an alternative fuel and the cost of replacing the existing power source in the motor vehicle with the same type of power source that uses a traditional fuel; or

(3) The actual cost incurred by the person during the tax year in converting the motor vehicle to a fuel system that uses an alternative fuel.

(e)(1) For the purposes of subsection (d), except as otherwise provided in paragraph (2), the percentage of the difference in actual cost incurred or the percentage of the actual cost incurred that may be claimed as a credit pursuant to subsection (c) shall be as follows:

(A) For tax years commencing after June 30, 2003, but prior to July 1, 2011:

(i) Low-emitting vehicles: fifty per cent;

(ii) Ultra-low-emitting vehicles or inherently low-emitting vehicles: seventy-five per cent; and

(iii) Zero-emitting vehicles, eighty-five per cent;

(B) For tax years commencing after June 30, 2011, but prior to July 1, 2016:

(i) Low-emitting vehicles: twenty-five per cent;

(ii) Ultra-low-emitting vehicles or inherently low-emitting vehicles: fifty per cent; and

(iii) Zero-emitting vehicles: seventy-five per cent; and

(C) For tax years commencing after June 30, 2014, but prior to July 1, 2019:

(i) Low-emitting vehicles: zero per cent;

(ii) Ultra-low-emitting vehicles or inherently low-emitting vehicles: twenty-five per cent; and

(iii) Zero-emitting vehicles, fifty per cent.

(2) For a motor vehicle purchase or power source replacement that permanently displaces a motor vehicle or power source that is ten years old or older, the percentage specified in paragraph (1) that may be claimed pursuant to this subsection shall be multiplied by two, but in no event shall the percentage exceed one hundred per cent. For the purposes of this paragraph, "permanently displaces a motor vehicle or power source" means the vehicle or power source being replaced by the alternative fuel vehicle or power source will no longer be operated upon the highways of this State.

(f) The certification levels set forth in subsection (e) shall have the same meanings as set forth in the regulations promulgated by the United States Environmental Protection Agency in 40 CFR part 88 governing clean fuel vehicles.

(g) A near zero-emitting vehicle shall be treated as a zero-emitting vehicle for all purposes under this section.

(h) For a motor vehicle that was not used solely and exclusively for business purposes during the tax year for which a credit is claimed, the amount of the credit allowed pursuant to this section shall be prorated in proportion to the percentage of time during the tax year that the motor vehicle was used for business purposes.

(i) No more than one tax credit shall be granted pursuant to subsection (e) for any individual motor vehicle.

(j) For income tax years commencing after December 31, 2002, but prior to July 1, 2016, a motor vehicle, conversion, or power source certified to the low-emitting vehicle emissions standard that is purchased by a person shall be eligible for a credit pursuant to this section.

(k) The credit allowed under this section shall be claimed against the net income tax liability, if any, imposed by this chapter for the taxable year in which the tax credit is properly claimed.

(l) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted. All claims, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit. (m) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

SECTION 4. Section 291C-53, Hawaii Revised Statutes, is amended to read as follows:

"§291C-53 Restrictions on use of controlled-access roadway or highway. (a) The director of transportation by rules adopted in accordance with chapter 91, and the counties by ordinance, may regulate or prohibit the use of any controlled-access roadway or highway within their respective jurisdictions by any class or kind of traffic which is found to be incompatible with the normal and safe movement of traffic. Persons operating motorcycles [which] that are otherwise permitted on a controlled-access roadway or highway, and motor vehicles with a gross vehicle weight of twenty-six thousand pounds or less that are either inherently low-emission vehicles or hybrid vehicles, shall be permitted to use any high occupancy vehicle lane designated on such roadway or highway.

For the purposes of this subsection[, "high]:

"Alternative fuel" has the same meaning as defined in section 243-1.

"High occupancy vehicle lane" means a designated lane of a laned roadway where the use of such designated lane is restricted to vehicles carrying at least two persons and to other vehicles as provided by rules adopted in accordance with chapter 91, or by county ordinance.

"Hybrid vehicle" means a motor vehicle with a hybrid propulsion system that uses an alternative fuel by operating on both an alternative fuel, including electricity, and a traditional fuel.

"Inherently low-emission vehicle" means:

(1) A light-duty vehicle or light-duty truck, regardless of whether the vehicle or truck is part of a motor vehicle fleet, that has been certified by the federal environmental protection agency as conforming to the inherently low-emission vehicle guidelines, procedures, and standards as published in the federal register at 58 FR 11888 (March 1, 1993) and 59 FR 50042 (September 30, 1994), as amended from time to time; and

(2) A heavy-duty vehicle powered by an engine that has been certified as set forth in paragraph (1).

"Traditional fuel" means gasoline or other petroleum-based motor fuel commonly used on the highways of this State.

(b) Notwithstanding any law to the contrary, no person shall operate a neighborhood electric vehicle on any controlled-access roadway or highway.

[(b)] (c) The director of transportation or a county adopting any such prohibition shall erect and maintain official traffic-control devices on the controlled-access roadway or highway on which such prohibitions are applicable, and when in place, no person shall disobey the restrictions stated on such devices."

SECTION 5. Section 291C-221, Hawaii Revised Statutes, is amended by amending the definition of "high occupancy vehicle lane" to read as follows:

""High occupancy vehicle lane" means a designated lane of a laned roadway where the use of the designated lane is restricted to school buses, vehicles carrying at least two persons, and to other vehicles as provided by section 291C-53, rules adopted in accordance with chapter 91, or by county ordinance."

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2003; provided that section 3, upon its approval, shall apply to taxable years beginning after December 31, 2002.

INTRODUCED BY:

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