BILL REQ. #:  S-3668.1 

Read first time 01/20/14.   Referred to Committee on Ways & Means.

     AN ACT Relating to extending the alternative fuel vehicle retail sales and use tax exemption; amending RCW 82.08.809 and 82.12.809; creating a new section; and providing an expiration date.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that alternative fuel vehicles cost more than comparable models of conventional fuel vehicles. The legislature further finds the higher cost of alternative fuel vehicles incentivize consumers to purchase comparable models of conventional fuel vehicles. The legislature further finds the federal government provides federal tax credits and, 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 incentivizing consumers to purchase alternative fuel vehicles is an important step to reduce vehicle greenhouse gas emissions.
     (2)(a) This subsection is the tax preference performance statement for the alternative fuel vehicle tax exemptions 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 for preferential tax treatment.
     (b) The legislature categorizes the tax preference as one intended to induce certain designated behavior by taxpayers and to improve industry competitiveness indicated in RCW 82.32.808(2) (a) and (b).
     (c) It is the legislature's specific public policy objective to provide a sales and use tax exemption to increase sales of alternative fuel vehicles by ten percent by 2023 and reduce the difference of average cost between comparable models of alternative fuel vehicles and conventional fuel vehicles.
     (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) Changes in number of alternative fuel vehicles registered in Washington;
     (ii) Changes in the cost of alternative fuel vehicles;
     (iii) Changes in the difference of average cost between comparable models of alternative fuel vehicles and conventional fuel vehicles.
     (e)(i) The department of licensing and department of revenue 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.
     (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) For sellers who electronically file their taxes, the department must provide a separate tax reporting line for exemption amounts claimed under this section.
     (4) As used in this section, "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.
     (((4))) (5) This section expires July 1, ((2015)) 2023.

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)) 2023, 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.
     (b) Until July 1, ((2015)) 2023, 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 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)) 2023, 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)) 2023, and the use was exempt under this section from the tax imposed in RCW 82.12.020.