Sec. 1. 36 MRSA §1760, sub-§79, as enacted by PL 1997, c. 791, Pt. A, §2, is repealed.

Sec. 2. 36 MRSA §1760, sub-§79-A is enacted to read:

79-A.__Exemption for clean fuel vehicles.__An amount of the sales or lease price or conversion cost of a clean fuel vehicle, as specified in this subsection:

A.__For a new hybrid gasoline-electric, fuel-cell or hydrogen-fueled vehicle, 100% of the sales or lease price; and

B.__For a converted gasoline-fueled or diesel-fueled motor vehicle, 100% of the cost allocated to the cost of conversion.

Sec. 3. 36 MRSA §1817 is enacted to read:

§1817.__Low-mileage vehicle surcharge; dedication of revenue

In addition to taxes imposed under this Title, every low- mileage vehicle that is purchased or leased for more than one year in this State is subject to an additional surcharge of 5% of the sales or lease price.__For purposes of this section, a "low-mileage vehicle" is a motor vehicle that does not meet or exceed the Corporate Average Fuel Economy standard of 27.5 miles per gallon or any subsequent standard.__This section does not apply to a commercial motor vehicle, as defined in Title 29-A, section 101, subsection 17.

All revenue collected pursuant to this section accrues to a dedicated revenue account for use by the Department of Environmental Protection, Bureau of Air Quality.

SUMMARY

Current law provides a sales tax exemption for clean fuel vehicles, defined as vehicles that may be propelled by a clean fuel or a fuel-cell electric vehicle that uses any fuel, but only up to the amount that the clean fuel vehicle price exceeds the price of a gasoline or diesel internal combustion vehicle.

This bill exempts from the sales tax 100% of the sale or lease price of a new hybrid gasoline-electric, fuel-cell or hydrogen-fueled vehicle and 100% of the cost allocated to the cost of conversion of a converted gasoline or diesel-fueled motor vehicle.