[atlas:bill]

AN ACT Relating to providing incentives to reduce air pollution through the use of clean alternative fuel vehicles; amending RCW 70.94.030; adding new sections to chapter 70.94 RCW; adding new sections to chapter 82.04 RCW; providing effective dates; and providing an expiration date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 70.94 RCW to read as follows:

The legislature finds that Washington state faces threats to its economic vitality, public health, and environment from the ongoing and increasing use of gasoline and diesel fuels in motor vehicles. Motor vehicle emissions from petroleum fuels account for more than half of all air pollutants and almost sixty percent of total carbon dioxide emissions in Washington. The legislature finds it is important to begin addressing the negative impacts of continued gasoline and diesel fuel use. Addressing motor vehicle emissions is further needed because of the expected increases in population and vehicle miles traveled, which threaten to erode air quality gains made over the last decade. To make net progress in improving air quality, reducing the threat of climate change, and protecting public health and the environment, the legislature finds it is necessary to encourage the use of clean alternative fuel vehicles.

Sec. 2. RCW 70.94.030 and 1993 c 252 s 2 are each amended to read as follows:

Unless a different meaning is plainly required by the context, the following words and phrases as hereinafter used in this chapter shall have the following meanings:

(1) "Air contaminant" means dust, fumes, mist, smoke, other particulate matter, vapor, gas, odorous substance, or any combination thereof.

(2) "Air pollution" is presence in the outdoor atmosphere of one or more air contaminants in sufficient quantities and of such characteristics and duration as is, or is likely to be, injurious to human health, plant or animal life, or property, or which unreasonably interfere with enjoyment of life and property. For the purpose of this chapter, air pollution shall not include air contaminants emitted in compliance with chapter 17.21 RCW.

(3) "Air quality standard" means an established concentration, exposure time, and frequency of occurrence of an air contaminant or multiple contaminants in the ambient air which shall not be exceeded.

(4) "Ambient air" means the surrounding outside air.

(5) "Authority" means any air pollution control agency whose jurisdictional boundaries are coextensive with the boundaries of one or more counties.

(6) "Best available control technology" (BACT) means an emission limitation based on the maximum degree of reduction for each air pollutant subject to regulation under this chapter emitted from or that results from any new or modified stationary source, that the permitting authority, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such a source or modification through application of production processes and available methods, systems, and techniques, including fuel cleaning, clean fuels, or treatment or innovative fuel combustion techniques for control of each such a pollutant. In no event shall application of "best available control technology" result in emissions of any pollutants that will exceed the emissions allowed by any applicable standard under 40 C.F.R. Part 60 and Part 61, as they exist on July 25, 1993, or their later enactments as adopted by reference by the director by rule. Emissions from any source utilizing clean fuels, or any other means, to comply with this subsection shall not be allowed to increase above levels that would have been required under the definition of BACT as it existed prior to enactment of the ((~~[federal]~~)) federal clean air act amendments of 1990.

(7) "Best available retrofit technology" (BART) means an emission limitation based on the degree of reduction achievable through the application of the best system of continuous emission reduction for each pollutant that is emitted by an existing stationary facility. The emission limitation must be established, on a case-by-case basis, taking into consideration the technology available, the costs of compliance, the energy and nonair quality environmental impacts of compliance, any pollution control equipment in use or in existence at the source, the remaining useful life of the source, and the degree of improvement in visibility that might reasonably be anticipated to result from the use of the technology.

(8) "Board" means the board of directors of an authority.

(9) "Clean alternative fuel vehicle" means a motor vehicle, as defined in RCW 46.04.320, originally designed and equipped by the manufacturer to operate: (a) Exclusively on alternative fuels; (b) as a hybrid vehicle powered by a combination of an electric motor and an engine powered by gasoline, diesel, or an alternative fuel, that has an average estimated fuel economy rating, as determined by the environmental protection agency's national vehicle and fuel emissions laboratory, of at least forty miles per gallon; or (c) as a fuel cell vehicle powered by gasoline or an alternative fuel. Vehicles less than twelve thousand pounds gross vehicle weight must also meet or exceed the federal emission standards for ultra-low emission vehicles. For purposes of this subsection, "alternative fuels" are defined as natural gas, propane, hydrogen, and electricity.

(10) "Control officer" means the air pollution control officer of any authority.

((~~(10)~~)) (11) "Department" or "ecology" means the department of ecology.

((~~(11)~~)) (12) "Emission" means a release of air contaminants into the ambient air.

((~~(12)~~)) (13) "Emission standard" and "emission limitation" mean a requirement established under the federal clean air act or this chapter that limits the quantity, rate, or concentration of emissions of air contaminants on a continuous basis, including any requirement relating to the operation or maintenance of a source to assure continuous emission reduction, and any design, equipment, work practice, or operational standard adopted under the federal clean air act or this chapter.

((~~(13)~~)) (14) "Lowest achievable emission rate" (LAER) means for any source that rate of emissions that reflects:

(a) The most stringent emission limitation that is contained in the implementation plan of any state for such class or category of source, unless the owner or operator of the proposed source demonstrates that such limitations are not achievable; or

(b) The most stringent emission limitation that is achieved in practice by such class or category of source, whichever is more stringent.

In no event shall the application of this term permit a proposed new or modified source to emit any pollutant in excess of the amount allowable under applicable new source performance standards.

((~~(14)~~)) (15) "Modification" means any physical change in, or change in the method of operation of, a stationary source that increases the amount of any air contaminant emitted by such source or that results in the emission of any air contaminant not previously emitted. The term modification shall be construed consistent with the definition of modification in Section 7411, Title 42, United States Code, and with rules implementing that section.

((~~(15)~~)) (16) "Multicounty authority" means an authority which consists of two or more counties.

((~~(16)~~)) (17) "New source" means (a) the construction or modification of a stationary source that increases the amount of any air contaminant emitted by such source or that results in the emission of any air contaminant not previously emitted, and (b) any other project that constitutes a new source under the federal clean air act.

((~~(17)~~)) (18) "Permit program source" means a source required to apply for or to maintain an operating permit under RCW 70.94.161.

((~~(18)~~)) (19) "Person" means an individual, firm, public or private corporation, association, partnership, political subdivision of the state, municipality, or governmental agency.

((~~(19)~~)) (20) "Reasonably available control technology" (RACT) means the lowest emission limit that a particular source or source category is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility. RACT is determined on a case-by-case basis for an individual source or source category taking into account the impact of the source upon air quality, the availability of additional controls, the emission reduction to be achieved by additional controls, the impact of additional controls on air quality, and the capital and operating costs of the additional controls. RACT requirements for a source or source category shall be adopted only after notice and opportunity for comment are afforded.

((~~(20)~~)) (21) "Silvicultural burning" means burning of wood fiber on forest land consistent with the provisions of RCW 70.94.660.

((~~(21)~~)) (22) "Source" means all of the emissions units including quantifiable fugitive emissions, that are located on one or more contiguous or adjacent properties, and are under the control of the same person, or persons under common control, whose activities are ancillary to the production of a single product or functionally related group of products.

((~~(22)~~)) (23) "Stationary source" means any building, structure, facility, or installation that emits or may emit any air contaminant.

NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:

(1) Persons who are taxable under this chapter may take a credit for the purchase, or the lease for a period of at least three years, of new clean alternative fuel vehicles as defined in RCW 70.94.030(9) (a), (b), or (c), if the vehicles are exclusively used in business operations. The credit is based upon the following schedule:

VEHICLE TONNAGE CREDIT

Less than 12,000 pounds gross 25 percent of the base cost

vehicle weight or $5,000, whichever is less

Over 12,000 pounds gross 25 percent of the base cost

vehicle weight or $20,000, whichever is less

(2) The credit may not exceed the amount of tax that would otherwise be due under this chapter. The credit may be accrued and carried over until it is used. Refunds shall not be granted in place of credits. The maximum amount of credit under this section that may be claimed, by each person, for any calendar year shall not exceed two hundred thousand dollars.

(3) Tax credit may not be claimed for expenditures that occurred before the effective date of this section or expenditures that occur after the date specified in section 6 of this act.

(4) The tax credit for vehicles defined under RCW 70.94.030(9)(b) expires June 30, 2004.

NEW SECTION. Sec. 4. A new section is added to chapter 82.04 RCW to read as follows:

(1) Persons who are taxable under this chapter and provide financial assistance for the purchase, or the lease for a period of at least three years, of new clean alternative fuel vehicles as defined in RCW 70.94.030 to school districts, transit agencies, and local governments may take a credit for amounts paid, if the vehicles are used for public transit. School buses are considered public transit for purposes of this section.

(3) Tax credit may not be claimed for financial assistance that occurred before the effective date of this section or financial assistance that occurs after the date specified in section 6 of this act.

NEW SECTION. Sec. 5. A new section is added to chapter 82.04 RCW to read as follows:

(1) Persons who are taxable under this chapter may take a credit for the costs expended for acquiring and installing alternative fuel and electric vehicle recharging equipment, including alternative fuel storage tanks. "Alternative fuel" means natural gas, propane, hydrogen, fuel containing a minimum of eighty‑five percent ethanol, and fuel containing a minimum of twenty percent biodiesel. The credit is based upon the following schedule:

(a) Fifty percent of the costs incurred at facilities open to the public not to exceed two hundred thousand dollars; and

(b) Twenty‑five percent of the costs incurred at facilities not open to the public not to exceed one hundred thousand dollars.

(3) Tax credit may not be claimed for expenditures that occurred before the effective date of this section or expenditures that occur after the date specified in section 6 of this act.

NEW SECTION. Sec. 6. A new section is added to chapter 82.04 RCW to read as follows:

Tax credits under sections 3 through 5 of this act are not allowed for expenditures that occur after December 31, 2010.

NEW SECTION. Sec. 7. A new section is added to chapter 70.94 RCW to read as follows:

The Washington State University energy program, in consultation with the departments of ecology, revenue, and licensing; local governments; vehicle manufacturers and suppliers; and other interested parties shall collect and review the relevant data associated with the provisions of chapter . . ., Laws of 2002 (this act) and evaluate the effectiveness of these incentives in improving air quality and increasing the use of clean alternative fuel vehicles. The Washington State University energy program shall present its findings and make recommendations as appropriate to the legislature biennially on or before November 30th, beginning in 2005.

NEW SECTION. Sec. 8. Sections 1 through 6 of this act take effect August 1, 2002.

NEW SECTION. Sec. 9. Section 7 of this act takes effect January 1, 2003.

NEW SECTION. Sec. 10. Section 7 of this act expires December 31, 2010.