BILL REQ. #:  S-4413.1 

Read first time 02/11/14.   Referred to Committee on Ways & Means.

     AN ACT Relating to clarifying the application of tax exemptions for vehicles powered by clean alternative fuels; amending RCW 82.08.809 and 82.12.809; creating a new section; and declaring an emergency.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that the adoption of electric vehicles is negatively impacted by range anxiety, the fear that an alternatively powered vehicle has insufficient power to reach its destination. The legislature further finds range extenders, auxiliary power units used to regenerate the alternative fuel source, reduce range anxiety concerns. The legislature further finds, under current law, Washington provides a retail sales and use tax exemption on the purchase of new and qualifying used alternative fuel vehicles to incentivize consumers to purchase alternative fuel vehicles. The legislature further finds that range extended battery electric vehicles produce fewer emissions than similar models of conventional fuel vehicles, similarly to vehicles that currently qualify for the alternative fuel vehicle sales and use tax exemption. The legislature further finds range extended battery electric vehicles may accelerate the adoption of alternative fuel vehicles and should qualify for the alternative sales and use tax exemption.
     (2)(a) This subsection is the tax preference performance statement for the alternative fuel vehicle tax exemption provided in RCW 82.08.809 and 82.12.809. The performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility to preferential tax treatment.
     (b) The legislature categorizes this tax preference as one intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).
     (c) It is the legislature's specific public policy objective to extend the alternative fuel sales and use tax exemption to range extended battery electric vehicles for the duration of the tax exemption program, which expires July 1, 2015.
     (d) To measure the effectiveness of the exemption provided in this act in achieving the specific public policy objective described in (c) of this subsection, the joint legislative audit and review committee must, at minimum, evaluate the following:
     (i) The number of range extended battery electric vehicles, by model, purchased from the effective date of this act to the expiration date of this act; and
     (ii) A comparison of the number of range extended battery electric vehicles, by model, sold during the first year of availability to the number of electric vehicles without range extenders, by model, sold during their first year of availability.
     (e)(i) The department of licensing must provide data needed for the joint legislative audit and review committee analysis in (d) of this subsection.
     (ii) In addition to the data source described under (e)(i) of this subsection, the joint legislative audit and review committee may use any other data it deems necessary in performing the evaluation under (d) of this subsection.

Sec. 2   RCW 82.08.809 and 2010 1st sp.s. c 11 s 2 are each amended to read as follows:
     (1)(a) The tax levied by RCW 82.08.020 does not apply to sales of new passenger cars, light duty trucks, and medium duty passenger vehicles, which are exclusively powered by a clean alternative fuel or a range extended battery electric vehicle.
     (b) The tax levied by RCW 82.08.020 does not apply to sales of qualifying used passenger cars, light duty trucks, and medium duty passenger vehicles, which were modified after their initial purchase, with an EPA certified conversion to be exclusively powered by a clean alternative fuel. "Qualifying used passenger cars, light duty trucks, and medium duty passenger vehicles" means vehicles that:
     (i) Are part of a fleet of at least five vehicles, all owned by the same person;
     (ii) Have an odometer reading of less than thirty thousand miles;
     (iii) Are less than two years past their original date of manufacture; and
     (iv) Are being sold for the first time after modification.
     (2) The seller must keep records necessary for the department to verify eligibility under this section.
     (3) ((As used in this section,)) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "Clean alternative fuel" means natural gas, propane, hydrogen, or electricity, when used as a fuel in a motor vehicle that meets the California motor vehicle emission standards in Title 13 of the California code of regulations, effective January 1, 2005, and the rules of the Washington state department of ecology.
     (b) "Range extended battery electric vehicle" means a vehicle powered predominantly by a zero emission energy storage device, able to drive for more than seventy-five all-electric miles, equipped with a backup auxiliary power unit, which does not operate until the energy storage device is fully depleted, and that meets standards in Title 13 of the California Code of Regulations, effective January 1, 2012.
     (4) This section expires July 1, 2015.

Sec. 3   RCW 82.12.809 and 2010 1st sp.s. c 11 s 3 are each amended to read as follows:
     (1)(a) Until July 1, 2015, the provisions of this chapter do not apply in respect to the use of new passenger cars, light duty trucks, and medium duty passenger vehicles, which are exclusively powered by a clean alternative fuel or a range extended battery electric vehicle.
     (b) Until July 1, 2015, the provisions of this chapter do not apply to the use of qualifying used passenger cars, light duty trucks, and medium duty passenger vehicles, which were modified after their initial purchase with an EPA certified conversion to be exclusively powered by a clean alternative fuel. As used in this subsection, "qualifying used passenger cars, light duty trucks, and medium duty passenger vehicles" has the same meaning as provided in RCW 82.08.809.
     (2) "Clean alternative fuel" ((has)) and "range extended battery electric vehicle" have the same meaning as provided in RCW 82.08.809.
     (3) A taxpayer is not liable for the tax imposed in RCW 82.12.020 on the use, on or after July 1, 2015, of a passenger car, light duty truck, or medium duty passenger vehicle exclusively powered by a clean alternative fuel, if the taxpayer used such vehicle in this state before July 1, 2015, and the use was exempt under this section from the tax imposed in RCW 82.12.020.

NEW SECTION.  Sec. 4   This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.