Alternative Fuel for Vehicles

A clean fuel vehicle is a motor vehicle that is powered by propane, compressed natural gas, electricity, or a similar fuel designed to reduce air pollution. (See Section 9-1-702, Utah Code Ann. 1953). Most vehicles are not originally manufactured with clean fuel capabilities and require installation of conversion equipment in order to be powered by clean fuels.

H.B. 323:

During the 2000 General Session, the legislature passed H.B. 323, Incentives to Purchase Clean Fuel Vehicles. The bill provides for an income tax credit to an individual or corporation for purchase of clean fuel vehicles or conversion equipment. The amount of the income tax credit for clean fuel vehicles is determined on the basis of "incremental cost," the difference between the cost of the vehicle as originally manufactured and the cost of the vehicle after installation of conversion equipment that provides clean fuel capabilities. At that time, hybrid electric vehicles were not readily available to consumers in the United States.

What is a hybrid electric vehicle?

A hybrid electric vehicle is a motor vehicle that is originally manufactured with clean fuel capabilities using a combination of electricity and traditional combustion engines. Hybrid electric vehicles have significantly increased fuel efficiency and decreased emissions. Two types of hybrid electric vehicles are currently available to consumers: The Honda Insight and the Toyota Prius.

Implementation problem:

Since the enactment of H.B. 323, hybrid electric vehicles have become more readily available on the market. Hybrid electric vehicles are originally manufactured with clean fuel capabilities. There is no need for conversion equipment and, consequently, no incremental cost on which to base the amount of the income tax credit. Because there is no incremental cost for a hybrid electric vehicle, the statute has been interpreted to exclude hybrid electric vehicles from eligibility for the income tax credit for clean fuel vehicles.

Question for the committee:

Should the statute be changed to allow hybrid electric vehicles with clean fuel capabilities to qualify for the income tax credit for clean fuel vehicles?