An Act To Create an Alternative Fuel Vehicle Income Tax Credit and an Alternative Fuel Vehicle Rebate
Maine Legislature, Session 123, LD 0302
Committee: Taxation
Sponsors: CEBRA, BARTLETT, ADAMS, BROWNE, FLETCHER, LANSLEY, RINES, ROBINSON, THOMAS, COURTNEY
Amends: 36 MRSA §5219-C

Legislative Document 
No. 302 
H.P.246 
House of Representatives, January 19,2007 
An Act To Create an Alternative Fuel Vehicle Income Tax Credit 
and an Alternative Fuel Vehicle Rebate 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative CEBRA of Naples. 
Cosponsored by Senator BARTLETT of Cumberland and 
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MILLICENT M. MacFARLAND 
Clerk 
Representatives: ADAMS of Portland, BROWNE of Vassalboro, FLETCHER of Winslow, 
LANSLEY of Sabattus, RINES of Wiscasset, ROBINSON of Raymond, THOMAS of Ripley, 
Senator: COURTNEY of York. 
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Prilltt:u l m recyc leu papt"r 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRS A §5219-BB is enacted to read: 
§5219-BB. Alternative fuel vehicle credit 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Alternative fuel" means compressed natural gas; propane; ethanol or any mixture 
of ethanol containing 85% or more ethanol by volume with gasoline or other fuels; 
electricity; or any other fuels, including, but not limited to clean diesel and 
reformulated gasoline, if these other fuels make comparable reductions in carbon 
monoxide emissions and brown cloud pollutants as determined by the Department of 
Environmental Protection. 
B. "Alternative fuel vehicle" means a motor vehicle, as defined by section 1752, 
subsection 7, that may be propelled by an alternative fuel. 
C. 
"Traditional fuel" means a petroleum-based motor fuel commonly used in 
vehicles on the highways of this State in the year 2000. 
2. Credit allowed. A taxpayer is allowed a credit against the tax otherwise imposed 
by this Part for each alternative fuel vehicle purchased or converted from traditional fuel 
during the taxable year and that is titled and registered in the State. 
3. Credit base. The amount of the credit is equal to a percentage, as specified in 
subsection 4, ofthe following credit base: 
A. The difference between the actual cost incurred by a taxpayer during the taxable 
year in purchasing the alternative fuel vehicle and the cost of the same vehicle that 
uses a traditional fuel or, if the same vehicle is not available, then the cost of the most 
similar vehicle, taking into account the model, make, engine size and options, that 
uses a traditional fuel; 
B. The difference between the actual cost incurred by a taxpayer during the taxable 
year in replacing an existing power source in a motor vehicle that uses a traditional 
fuel with a power source that uses an alternative fuel and the cost of replacing the 
existing power source in the motor vehicle with the same type of power source that 
uses traditional fuel; or 
C. The actual cost incurred by a taxpayer during the taxable year in converting the 
motor vehicle to use an alternative fuel source. 
4. Credit percentage. The percentage of credit base that may be claimed as a credit 
is as set out in this subsection. 
A. 
For low-emitting vehicles, as certified by the United States Environmental 
Protection Agency, the credit percentage is: 
(1) For tax years beginning in 2008 to 2010,50%; and 
(2) For tax years beginning in 2011 and 2012, 25%. 
Page I - 123LR1l66(Ol)-1 
~-"--J:-g.!. ultra-low-emitting vehicles or inherent Iv low-emittiIl£, vehicles. as certified b"y 
the United States Environmental Protection Agency, the credit percentage is: 
(1) For tax years beginning in 2008 to 2010, 75%; and 
(2) For tax years beginning in 2011 and 2012,50%. 
C. 
For zero-emitting vehicles or near zero-emitting vehicles, as certified by the 
United States Environmental Protection Agency, the credit percentage is: 
(1) For tax years beginning in 2008 to 2010, 85%; and 
(2) For tax years beginning in 2011 and 2012, 75%. 
5. Limitation; carry-over. No more than one tax credit may be granted under this 
section for any individual motor vehicle. The credit provided by this section may not 
reduce the tax otherwise due under this Part to less than zero. Unused credit under this 
section may be carried forward for the next 5 years. 
6. Repeal. This section is repealed January 1, 2013. 
Sec. 2. 36 MRSA §5219-CC is enacted to read: 
§5219-CC. Alternative fuel vehicle rebate 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Qualified entity" means: 
(1) The State, any county, municipality or other political subdivision of the State 
and any agency ofthe State and of any political subdivision of the State; or 
(2) A person that is exempt from federal taxation under the Code. 
2. Rebate authorized. The assessor shall provide a rebate to a qualified entity in the 
same amount as the credit that would be allowed under section 5219-BB if the qualified 
entity were subject to taxation under this Part. 
3. Partial use. If a motor vehicle is not used solely and exclusively for the business 
or official activities of the qualified entity, the amount of the rebate must be prorated in 
proportion to the percentage of time during the calendar year that the motor vehicle is 
used for the business or official activities of the qualified entity. 
4. Application; payment. An application for a rebate must be filed within 12 
months of the end of the month in which the cost is incurred by the qualified entity. The 
assessor shall grant rebates in the order in which applications are received. A rebate may 
not be granted more than 24 months after the date the cost is incurred. 
5. Limitation. The aggregate of all rebates granted to a qualified entity may not 
exceed $350,000 in any year. 
6. Repeal. This section is repealed January 1, 2013. 
SUMMARY 
This bill provides an income tax credit for persons who purchase an alternative fuel 
vehicle or convert a motor vehicle to use an alternative fuel that makes reductions in 
carbon monoxide emissions and other pollutants as determined by the Department of 
Environmental Protection. It also provides a similar rebate to governmental entities and 
nonprofit entities that would qualifY for a credit if they were subject to the income tax.