Maine Legislature, Session 123, LD 1347
Committee: Utilities and Energy
Sponsors: PINGREE, TURNER, ADAMS, BERRY, BRAUTIGAM, CONOVER, CUMMINGS, MIRAMANT, PRA IT, WEBSTER
Amends: 35-A MRSA §122, 35-A MRSA §3210

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No. 1347 
Legislative Document 
H.P.956 
House of Representatives, March 12,2007 
An Ad To Establish Alternative Fuel Incentive Grants To Stimulate 
the Production~ Distribution and Use of Biofuels 
Reference to the Committee on Utilities and Energy suggested and ordered printed. 
Presented by Representative PINGREE of North Haven. 
Cosponsored by Senator TURNER of Cumberland and 
'IY/~ /J7. 7ll1!£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: ADAMS of Portland, BERRY of Bowdoinham, BRAUTIGAM of Falmouth, 
CONOVER of Oakland, Speaker CUMMINGS of Portland, MIRAMANT of Camden, PRA IT 
of Eddington, WEBSTER of Freeport. 
Pdlile.1 un ft'cyded paper 
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Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 35-A MRSA §122 is enacted to read: 
§122. Alternative fuels incentive assessment 
The commission shall annually transfer the assessments received from public utilities 
and competitive service providers pursuant to Title 38, section 3108 to the Alternative 
Fuels Incentive Fund established under Title 38, section 3106. 
Sec. 2. 
35-A MRSA §3210, sub-§6, as enacted by PL 1999, c. 372, §2, IS 
amended to read: 
6. Fund. There is established the Renewable Resource Fund, referred to in this 
subsection as the "fl:lAd." "the fund." The fund is a nonlapsing fund administered by the 
State Planning Office. All funds collected by the commission pursuant to subsection 5 
must be deposited in the fund for distribution by the State Planning Office in accordance 
with subsection 5. 
The State Planning Office may seek and accept funding for the 
program established pursuant to subsection 5 from other sources, public or private. Any 
funds accepted for use in the program established pursuant to subsection 5 must be 
deposited in the fund. Money transferred to the fund pursuant to Title 38, section 3 108 
must be used for the purposes established in that section. 
Sec. 3. 38 MRSA c. 33 is enacted to read: 
CHAPTER 33 
AL TERNA TIVE FUELS INCENTIVE ACT 
§3104. Short title 
This chapter is known and may be cited as "the Alternative Fuels Incentive Act." 
§3105. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Alcohols. "Alcohols" means fuels composed of 85% ethanol or methanol and 
15% gasoline. 
2. 
Alternative enerey source. 
"Alternative energy source" means a source of 
energy, other than a conventional source such as those conventional sources listed in 
subsection 5, that includes but is not limited to wind._ solar photo voltaic systems, solar 
thermal systems, combined heat and power. integrated gasification combined cycles, 
geothermal systems, low-impact hydroelectric power, biomass fuels, biologically derived 
methane gas, coal bed methane gas, fuel ceJls, wash:: coal a!1d distributed generatiol! 
systems. 
3. 
Alternative fuel vehicle. 
"Alternative fuel vehicle" means a self-propelled 
vehicle operating on an alternative fuel designed for transporting persons or property. It 
includes, but is not limited to, a bi-fuel vehicle, dual-fuel vehicle, hybrid vehicle and 
dedicated vehicle. 
4. Alternative fuel producer. "Alternative fuel producer" means a producer of an 
alternative fuel whose alternative fuel production facility is located within this State. 
5. 
Alternative fuels. 
"Alternative fuels" 
means motor vehicle fuels and fuel 
systems that when compared to conventional gasoline or reformulated gasoline, diesel 
fuel, oil or coal will result in lower emissions of oxides of nitrogen, volatile organic 
compounds, carbon monoxide or particulates, toxic air pollutants, greenhouse gases or 
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any combination thereof. "Alternative fuels" includes, but is not limited to, compressed 
natural gas, liquefIed natural gas, liquid propane gas, 
alcohols, hydrogen, hythane, 
biofuels and electricity. 
6. Bi-fuel vehicle or dual-fuel vehicle. "Bi-fuel vehicle" or "dual-fuel vehicle" 
IS 
means a vehicle that operates on an alternative fuel and gasoline or an alternative fuel and 
diesel fuel. This term includes an OEM vehicle and a retrofitted vehicle. 
7. Biodiesel fuel. "Biodiesel fuel" means either: 
A. A biofuel derived from vegetable oils or animal fats that is designated B 1 00 and 
meets the American Society of Testing and Materials International specification 
d6751; or 
B. A fuel comprised of 20% biodiesel with 80% diesel fuel that is designated B20. 
8. Biofuels. "Biofuels" means fuels derived from alcohols, ether, esters and other 
chemicals made from cellulosic biomass such as herbaceous and woody plants, 
agricultural and forestry residues and a large portion of municipal solid and industrial 
waste. 
9. Dedicated vehicle. "Dedicated vehicle" means a vehicle that runs exclusively on 
an alternative fuel. This term includes an OEM vehicle and a retrofitted vehicle. 
10. Diesel fuel. "Diesel fuel" means diesel engine fuel and all other liquids except 
gasoline suitable for the generation of power for the propulsion of motor vehicles. 
11. Fleet. "Fleet" means a group of 10 or more vehicles, comprised of passenger 
cars, light-duty trucks, buses and heavy-duty trucks up to 26,000 pounds gross vehicle 
weight that is owned and operated by a single school district, political subdivision, 
nonprofit entity, corporation, limited liability company or partnership located within the 
State. 
12. Gallon. "Gallon" means the quantity of fluid or liquid at a temperature of 60 
degrees Fahrenheit necessary to completely fill a United States standard gallon liquid 
measure. 
13. Gasoline. "Gasoline" means motor fuel and includes: 
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A. 
Every liquid petroleum product, or combination thereof, other :han ,,()Ivent~ 
having an Atmospheric Pressure Index gravity of 46 degrees or above at a 
temperature of 60 degrees Fahrenheit; and 
B. 
Every liquid having an Atmospheric Pressure Index gravity of less than 46 
degrees at a temperature of 60 degrees Fahrenheit that is compounded,,-.blended, 
manufactured or otherwise produced by mixing or blending gasoline or solvents with 
blending materials when the blended product can be used for generating power in 
internal combustion engines. 
14. Hybrid vehicle. "Hybrid vehicle" means a motor vehicle that draws propulsion 
energy from on-board sources of stored energy that contain: 
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A. An internal combustion engine using combustible fuel; and 
B. A rechargeable energy storage system. 
15. Hythane. "Hythane" means any combination of compressed natural gas and 
hydrogen. 
16. Incremental cost. "Incremental cost" means: 
A. The difference between the purchase price of an alternative fuel vehicle and the 
purchase price of a same or similar model gasoline-only or diesel-only fueled vehicle; 
or 
B. The difference between the base price of diesel fuel and biodiesel fuel. 
17. OEM. "OEM" means the original equipment manufacturer. 
18. OEM vehicle. "OEM vehicle" means a vehicle originally manufactured to run 
on an alternative fuel. 
19. Retrofit. "Retrofit" means install an alternative fuel system into a gasoline-
fueled vehicle. 
20. Stationary power facility. "Stationary power facility" means a fixed, in-place 
facility that generates electric power for distribution into the electric distribution system 
or for use on-site as primary power or backup power for critical need or at adjacent 
locations not connected to the electricity grid for primary power. 
§3106. Alternative Fuels Incentive Fund 
1. Establishment. There is established a separate account in the State Treasury to be 
known as "the Alternative Fuels Incentive Fund" and referred to in this chapter as "the 
fund." The department shall administer the Alternative Fuels Incentive Fund. The fund 
consists of the money transferred by the Public Utilities Commission from the assessment 
on public utilities and competitive service providers as set forth in section 3109. 
2. Expenditures. The department shall establish a program to distribute money 
from the fund. 
Except as provided in section 3107, money from the fund may be 
expended by the department as: 
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6-,-__ ~Jrants to school districts, political subdivisions, nonprofit entities, corporations, 
limited liability companies or partnerships incorporated or registered in the State to 
pJ:ovide funding for: 
( 1) The expenses relative to retrofitting vehicles to operate on alternative fuels as 
either a bi-fuel. dual-fuel, hybrid or dedicated vehicl~ 
(2) The incremental cost of purchase of bi-fuel, dual-fuel, hybrid or dedicated 
vehicles; 
(3) 
The cost to purchase and install the necessary fleet refueling or home-
refueling equipment for bi-fuel, dual-fuel, hybrid or dedicated vehicles; and 
(4) The cost to perform research, training development and demonstration of 
new applications or next-phase technology related to alternative fuel vehicles; 
B. Grants to individual residents of the State who purchase an alternative fuel vehicle 
for the cost to purchase and install the necessary home refueling equipment for bi-
fuel, dual-fuel, hybrid or dedicated vehicles; 
C. Grants to school districts, political subdivisions and nonprofit entities to cover the 
incremental cost to purchase biofuel; 
D. Rebates to residents of the State to meet the incremental cost to individuals who 
purchase a bio-fuel, dual-fuel, hybrid or dedicated vehicle; and 
E. Reimbursement of up to 5¢ per gallon for up to 12,500,000 gallons of alternative 
fuels produced by an alternative fuels producer in a calendar year. 
By January 1, 2008 and annually thereafter, the department shall evaluate the amount of 
funding under this chapter to determine whether an adjustment in funding level is 
appropriate. 
The evaluation criteria must be based on economic and regulatory 
conditions that affect the feasibility of alternative fuels and the financial solvency of the 
fund. 
No more than 2% of the fund may be used to administer the provisions of this chapter. 
No more than 10% of the fund may be awarded to anyone school district, political 
subdivision, nonprofit entity, corporation, limited liability company, partnership or 
resident of the State in anyone year, and the total amount of grants awarded and rebates 
provided to grant and rebate recipients within a political subdivision in a year may not 
exceed 15% of the fund. However, if the total grant and rebate money to be awarded in 
that year is less than the total grant money available for that year, the department may 
increase the 10% and 15% funding levels established under this paragraph, but not to 
exceed 40% of the fund. 
3. Grant program. The department shall establish a formula and method for the 
awarding of grants under the program. The department also shall establish a method by 
which grant applications are prioritized according to, but not limited to, the following 
goals and criteria: 
A. The improvement ofthe State's air quality; 
B. The fulfillment of the State's responsibilities under the Clean Air Act, 69 Stat. 
322,42 United States Code, Section 7401, et seq.; 
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C. 
The protection of the State's natural environment, including land, water and 
wildlife; 
D. The advancement of economic development in the State and the promotion of the 
State's indigenous resources; 
E. 
The reduction of the State's dependence on imported crude oil and other 
petroleum products; 
F. The most cost-effective use of private and public funding; and 
G. The transfer and commercialization of innovative alternative energy technologies. 
4. Rebate program. A rebate program is established within the department for 
individuals residing in this State who purchase a hybrid vehicle. 
A. The department shall establish a formula and method for the awarding of rebates 
under this program. The department shall publish this information annually. Rebates 
must be provided to the extent that funding is available for this purpose. To the 
extent that applications for rebates exceed the available funds for this program, the 
department may award rebates on a pro rata basis. 
B. A request for a rebate must be submitted to the department no later than 6 months 
after the purchase date of a hybrid vehicle in a form and manner prescribed by the 
department. The department shall provide an application form to an individual upon 
request, and the department may make the application form available on its publicly 
accessible site on the Internet or through the place of purchase of hybrid vehicles. 
C. Applicants shall provide a copy of a valid Maine vehicle registration and proof of 
purchase when making a request for a rebate under this program. 
§3107. Annual report 
The department shall annually submit a report to the joint standing committee of the 
Legislature having jurisdiction over natural resources matters on the activities undertaken 
pursuant to this chapter, including, but not limited to, the number of grants awarded and 
rebates given and other expenditures from the fund. 
§3108. Interfund transfer 
1. 
General rule. 
The department may transfer money from the fund to the 
Renewable Resource Fund established in Title 35-A. section 3210, subsection 6 one time 
during the fiscal year beginning July 1,2007. 
2. Use of transferred funds. Funds transferred to the Renewable Resource Fund 
under this section may be used only to: 
A. 
Provide financial assistance for research directly related to alternative energy 
sources and for the development and installation of stationary power facilities within 
the State that use alternative energy sources to produce electric power. The financial 
assistance offered under this section is limited to grants and low-interest loans at or 
below prevailing interest rates and loan guarantees; and 
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B. Support the establishment of public or private partnerships among postsecondarY 
iDgill:!ti 0 11_~i!!l~Ii vCll~ __ ~_(;!9LQ!~an iza ti on s. Th~.ml121if_QrmiYClt~~~<:;JQr_l?~r:1Il:~u;l!lr_~ 
must be designed t<L§l!.Qport a broad progril.111 __ oj~[e55_~IrJLglI}9_S!~yflQ111)~D_L9J 
alternative energy sources. Research funds must be directed toward those projects 
that clearly demonstrate that the technology being studied can be practically applied. 
3. Development of guidelines. Prior to anv use of the funds transferred to the 
Renewable Resource Fund, the department ~.baILdJ'.'yS!loj:l guidelines for the application 
and use of these funds, including all applicable eligibility criteria, which must describe 
the manner of aPl~lication for financial assistance and an application for assistance under 
this section. Financial assistance may not be J2[9vidc;:d to an applicant until guidelines are 
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issued and the general public has been provided a reasonable opportunity to apply for 
funds under this section. 
4. Lapse. Any unexpended funds from the transfer lapse to the General Fund on 
June 30, 2009. 
§3109. Assessment 
Every public utility, as defined in Title 35-A, section 102, subsection 13, and 
competitive service provider, as defined in Title 35-A, section 102, subsection 2-A, is 
subject to an assessment on its intrastate gross operating revenues to produce a total of 
$3,000,000 in revenues annually for the purpose of carrying out the provisions of this 
chapter. The Public Utilities Commission shall determine the assessments annually prior 
to May I st and assess each public utility and competitive service provider for its pro rata 
share for the next fiscal year. Each public utility and competitive service provider shall 
pay the assessment on or before July 1 st of each year. Pursuant to Title 35-A, section 
122, revenue raised under this section must be transferred by the Public Utilities 
Commission to the Alternative Fuels Incentive Fund established under section 3106. The 
Public Utilities Commission shall adopt rules to implement this section. Rules adopted 
pursuant to this section are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
§3110. Rules 
Except as provided under section 3109, the department shall adopt rules necessary to 
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carry out the purposes of this chapter. Rules adopted pursuant to this section are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill creates the Alternative Fuels Incentive Act. It establishes a fund known as 
the Alternative Fuels Incentive Fund. The fund is administered by the Department of 
Environmental Protection and consists of an annual assessment on public utilities and 
competitive service providers. 
The;; fund pays for grants to school districts, political 
subdivisions, nonprofit entities, corporations, limited liability companies and partnerships 
incorporated or registered in the State. A rebate program is established for residents of 
the State who purchase a hybrid vehicle.