First Regular Session

Sixty-first General Assembly

LLS NO. 97­0375.01 GWF HOUSE BILL 97­1265

STATE OF COLORADO

BY REPRESENTATIVES Agler, Grampsas, Tucker, and Snyder;

also SENATOR Ament.

ENGROSSED

FINANCE

A BILL FOR AN ACT

CONCERNING THE PROMOTION OF ALTERNATIVE FUEL USE FOR TRANSPORTATION PURPOSES, AND, IN CONNECTION THEREWITH, ELIMINATING THE AUTOMATIC REPEAL DATE FOR THE ALTERNATIVE FUELS INCOME TAX CREDIT, MODIFYING THE PROVISIONS OF SAID TAX CREDIT, ADDING AN INCOME TAX CREDIT FOR ALTERNATIVE FUEL REFUELING FACILITIES, ESTABLISHING A REBATE PROGRAM FOR GOVERNMENTAL AND TAX­EXEMPT ENTITIES THAT USE ALTERNATIVE FUEL VEHICLES, AND MAKING AN APPROPRIATION THEREFOR.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Modifies the formula for calculating the amount of the income tax credit allowed for purchasing a motor vehicle that uses an alternative fuel or for converting the fuel system in a vehicle to a fuel system that uses an alternative fuel. Expands the credit to allow a credit for taxpayers who replace the power source in a vehicle that uses a traditional fuel with a power source that uses an alternative fuel. Conforms the definition of "alternative fuel" to be the same as used in the clean vehicle fleet program. Allows the credit only for vehicles that are used for business purposes. Doubles the credit for any motor vehicle purchase or power source replacement that permanently displaces a motor vehicle or power source that is 8 years old or older. Extends the period of time that the income tax credit can be carried forward. Eliminates the existing July 1, 1998, repeal date on the credit.

Provides an income tax credit for a portion of the cost of constructing, reconstructing, or acquiring an alternative fuel refueling facility that is directly attributable to the storage, compressing, or dispensing of alternative fuels for motor vehicles. Provides that the credit may be carried forward for a specified period.

Establishes a program to provide cash rebates to state and local governmental entities and to tax­exempt entities that purchase or convert to alternative fuel motor vehicles or that replace the power source in a vehicle that uses traditional fuel with a power source that uses an alternative fuel. Specifies the formula for calculating the maximum amount of the rebate. Allows a rebate only to the extent that a vehicle is used for the business or official activities of the entity. Doubles the rebate for any motor vehicle purchase or power source replacement that permanently displaces a motor vehicle or power source that is 8 years old or older. Authorizes the executive director of the department of revenue to grant the rebates. Authorizes the executive director to promulgate rules for granting rebates. Establishes the alternative fuels rebate fund from which rebates are made.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  39­22­516, Colorado Revised Statutes, 1994 Repl. Vol., is amended to read:

39­22­516.  Tax credit for business vehicles using alternative fuels and alternative fuel refueling facilities.

(1)  Repealed.

(2)  With respect to taxable years commencing on or after July 1, 1994, BUT PRIOR TO JULY 1, 1997, there shall be allowed to any person a credit against the tax imposed by this article in the amount of five percent of the purchase price of each car or truck licensed in Colorado which THAT uses or is converted within one hundred twenty days of the date of delivery to use clean­burning alternative fuel purchased by such person during the taxable year; except that such credit shall not exceed fifty percent of the actual cost of such conversion or of an original equipment manufacturer's fuel system option which THAT results in the conversion of such vehicle to use clean­burning alternative fuel. The number of cars or trucks on which the tax credit may be claimed shall be limited to a total of fifty cars or trucks for each taxable year. For the purposes of this subsection (2), "clean­burning alternative fuel" means natural gas, liquefied petroleum gas, a fuel mixture containing not less than eighty­five percent ethanol or methanol, electricity, or any other alternative fuel approved by the air quality control commission pursuant to section 25­7­106.9 (1), C.R.S.

(2.5) (a)  AS USED IN THIS SUBSECTION (2.5), UNLESS THE CONTEXT OTHERWISE REQUIRES:

(I)  "ALTERNATIVE FUEL" MEANS AN ALTERNATIVE FUEL AS DEFINED IN SECTION 25­7­106.8 (1) (a), C.R.S.

(II)  "CLEAN FUEL FLEET PROGRAM" MEANS THE COLORADO CLEAN VEHICLE FLEET PROGRAM SET FORTH IN SECTION 25­7­106.8, C.R.S., AND THE CLEAN FUEL FLEET PROGRAM SET FORTH IN THE REGULATIONS OF THE COLORADO AIR QUALITY CONTROL COMMISSION.

(III)  "MOTOR VEHICLE" MEANS ANY SELF­PROPELLED VEHICLE REQUIRED TO BE LICENSED OR SUBJECT TO LICENSING FOR OPERATION UPON THE HIGHWAYS OF THIS STATE.

(IV)  "POWER SOURCE" MEANS THE ENGINE OR MOTOR AND ASSOCIATED WIRING, FUEL LINES, ENGINE COOLANT SYSTEM, FUEL STORAGE CONTAINERS, AND MISCELLANEOUS COMPONENTS.

(V)  "TRADITIONAL FUEL" MEANS A PETROLEUM­BASED MOTOR FUEL COMMONLY USED ON THE HIGHWAYS OF THIS STATE IN THE YEAR 1994.

(VI)  "USES AN ALTERNATIVE FUEL" AND "TO USE AN ALTERNATIVE FUEL" MEAN OPERATES SOLELY ON AN ALTERNATIVE FUEL, OPERATES ON BOTH AN ALTERNATIVE FUEL AND A TRADITIONAL FUEL, OR OPERATES ALTERNATELY ON A TRADITIONAL FUEL AND AN ALTERNATIVE FUEL.

(b)  WITH RESPECT TO TAX YEARS COMMENCING ON OR AFTER JULY 1, 1997, THERE SHALL BE ALLOWED TO ANY PERSON A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR EACH MOTOR VEHICLE OWNED BY SUCH PERSON THAT:

(I)  IS TITLED AND REGISTERED IN THE STATE OF COLORADO;

(II)  IS USED IN CONNECTION WITH A BUSINESS; AND

(III)  USES OR IS CONVERTED TO USE AN ALTERNATIVE FUEL OR HAS ITS POWER SOURCE REPLACED WITH A POWER SOURCE THAT USES AN ALTERNATIVE FUEL.

(c)  THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION (2.5) SHALL BE AN AMOUNT EQUAL TO THE PERCENTAGE, AS SET FORTH IN PARAGRAPH (d) OF THIS SUBSECTION (2.5), OF THE FOLLOWING:

(I)  THE DIFFERENCE BETWEEN THE ACTUAL COST INCURRED BY SUCH PERSON DURING THE TAX YEAR IN PURCHASING A MOTOR VEHICLE THAT USES AN ALTERNATIVE FUEL AND THE COST OF THE SAME MOTOR 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;

(II)  THE DIFFERENCE BETWEEN THE ACTUAL COST INCURRED BY SUCH PERSON DURING THE TAX 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 A TRADITIONAL FUEL; OR

(III)  THE ACTUAL COST INCURRED BY SUCH PERSON DURING THE TAX YEAR IN CONVERTING THE MOTOR VEHICLE TO A FUEL SYSTEM THAT USES AN ALTERNATIVE FUEL.

(d) (I)  FOR PURPOSES OF PARAGRAPH (c) OF THIS SUBSECTION (2.5), EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (d), THE PERCENTAGE OF THE DIFFERENCE IN ACTUAL COST INCURRED OR THE PERCENTAGE OF THE ACTUAL COST INCURRED, THAT MAY BE CLAIMED AS A CREDIT PURSUANT TO PARAGRAPH (b) OF THIS SUBSECTION (2.5) SHALL BE AS FOLLOWS:

Certification level:	Tax years commencing July 1, 1997, and ending prior to July 1, 1999	Tax years commencing July 1, 1999, through tax years ending prior to July 1, 2002	Tax years commencing July 1, 2002, and thereafter
Current EPA emission standards	25%	0%	0%
Low emitting vehicles	50%	25%	0%
Ultra­low emitting vehicles and
Inherently low emitting vehicles	75%	50%	25%
Zero emitting vehicles	90%	75%	50%

(II) FOR A MOTOR VEHICLE PURCHASE OR POWER SOURCE REPLACEMENT WHICH PERMANENTLY DISPLACES A MOTOR VEHICLE OR POWER SOURCE EIGHT YEARS OR OLDER, THE PERCENTAGE CLAIMED IN THIS PARAGRAPH (d) SHALL BE MULTIPLIED BY TWO.

(e)  THE CURRENT EPA EMISSIONS STANDARDS SET FORTH IN PARAGRAPH (d) OF THIS SUBSECTION (2.5) ARE THE EPA CERTIFICATION EMISSION STANDARDS APPLICABLE TO THE MOTOR VEHICLE AT THE DATE OF ITS MANUFACTURE PURSUANT TO FEDERAL LAW OR THE COLORADO CERTIFICATION REQUIREMENTS FOR ALTERNATIVE FUEL CONVERSIONS APPLICABLE TO THE MOTOR VEHICLE. THE REMAINING CERTIFICATION LEVELS SET FORTH IN PARAGRAPH (d) OF THIS SUBSECTION (2.5) SHALL HAVE THE SAME MEANING AS SET FORTH IN THE REGULATIONS OF THE COLORADO AIR QUALITY CONTROL COMMISSION GOVERNING THE CLEAN FUEL FLEET PROGRAM.

(f)  FOR A MOTOR VEHICLE THAT WAS NOT USED SOLELY AND EXCLUSIVELY FOR BUSINESS PURPOSES DURING THE TAX YEAR FOR WHICH A CREDIT IS CLAIMED, THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION (2.5) SHALL BE PRORATED IN PROPORTION TO THE PERCENTAGE OF TIME DURING THE TAX YEAR THAT THE MOTOR VEHICLE WAS USED FOR BUSINESS PURPOSES.

(g) NO MORE THAN ONE TAX CREDIT SHALL BE TAKEN PURSUANT TO PARAGRAPH (d) OF THIS SUBSECTION (2.5) FOR ANY INDIVIDUAL MOTOR VEHICLE.

(2.7)  WITH RESPECT TO TAX YEARS COMMENCING ON OR AFTER JULY 1, 1997, THERE SHALL BE ALLOWED TO ANY PERSON A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE IN AN AMOUNT EQUAL TO FIFTY PERCENT OF THE ACTUAL COST INCURRED BY THE PERSON DURING THE TAX YEAR IN CONSTRUCTING, RECONSTRUCTING, OR ACQUIRING AN ALTERNATIVE FUEL REFUELING FACILITY AND THAT IS DIRECTLY ATTRIBUTABLE TO THE STORAGE, COMPRESSION, OR DISPENSING OF ALTERNATIVE FUELS TO MOTOR VEHICLES. FOR THE PURPOSES OF THIS SUBSECTION (2.7), "ALTERNATIVE FUEL" SHALL HAVE THE SAME MEANING AS SET FORTH IN TITLE III OF THE FEDERAL "ENERGY POLICY ACT OF 1992", PUBLIC LAW 102­486, AS AMENDED. THE AGGREGATE AMOUNT OF CREDIT CLAIMED BY A PERSON FOR ANY ONE ALTERNATIVE FUEL REFUELING FACILITY PURSUANT TO THIS SECTION SHALL NOT EXCEED FOUR HUNDRED THOUSAND DOLLARS DURING ANY PERIOD OF FIVE CONSECUTIVE TAX YEARS. IN NO EVENT SHALL ANY PERSON CLAIM A CREDIT FOR ALL OR ANY PORTION OF THE COST OF CONSTRUCTING, RECONSTRUCTING, OR ACQUIRING AN ALTERNATIVE FUEL REFUELING FACILITY, OR ANY EQUIPMENT USED IN CONNECTION WITH SUCH FACILITY, FOR WHICH THE PERSON OR ANY OTHER PERSON HAS PREVIOUSLY CLAIMED A CREDIT PURSUANT TO THIS SUBSECTION (2.7).

(3)  The credit CREDITS allowed by this section for any income tax year shall not exceed the taxpayer's actual tax liability for such taxable year. If the amount of the A credit allowed by this section exceeds the taxpayer's actual tax liability for any income tax year in which the car or truck investment credit is claimed, referred to in this subsection (3) as the "unused credit year", such excess shall be an investment tax credit carryover to each of the three FIVE income tax years following the unused credit year and shall be applied first to the earliest income tax years possible.

(4)  This section is repealed, effective July 1, 1998.

SECTION 2.  Title 39, Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended BY THE ADDITION OF A NEW ARTICLE to read:

ARTICLE 32

Alternative Fuels Rebate

39­32­101.  Definitions.  AS USED IN THIS ARTICLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1)  "ALTERNATIVE FUEL" MEANS AN ALTERNATIVE FUEL AS DEFINED IN SECTION 25­7­106.8 (1) (a), C.R.S.

(2)  "EXECUTIVE DIRECTOR" MEANS THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE.

(3)  "MOTOR VEHICLE" MEANS ANY SELF­PROPELLED VEHICLE REQUIRED TO BE LICENSED OR SUBJECT TO LICENSING FOR OPERATION UPON THE HIGHWAYS OF THIS STATE.

(4)  "POWER SOURCE" MEANS THE ENGINE OR MOTOR AND ASSOCIATED WIRING, FUEL LINES, ENGINE COOLANT SYSTEM, FUEL STORAGE CONTAINERS, AND MISCELLANEOUS COMPONENTS.

(5)  "QUALIFIED ENTITY" MEANS:

(a)  THE STATE, ANY COUNTY, MUNICIPALITY, CITY AND COUNTY, DISTRICT, OR OTHER POLITICAL SUBDIVISION OF THE STATE OF COLORADO AND ANY INSTITUTION, DEPARTMENT, AGENCY, OR AUTHORITY THEREOF;

(b)  A PERSON, ORGANIZATION, OR OTHER NONGOVERNMENTAL ENTITY THAT IS EXEMPT FROM FEDERAL INCOME TAXATION UNDER THE PROVISIONS OF THE FEDERAL "INTERNAL REVENUE CODE OF 1986", AS AMENDED.

(6)  "TRADITIONAL FUEL" MEANS A PETROLEUM­BASED MOTOR FUEL COMMONLY USED ON THE HIGHWAYS OF THIS STATE IN THE YEAR 1994.

(7)  "USES AN ALTERNATIVE FUEL" AND "TO USE AN ALTERNATIVE FUEL" MEAN TO OPERATE SOLELY ON AN ALTERNATIVE FUEL, TO OPERATE ON BOTH AN ALTERNATIVE FUEL AND A TRADITIONAL FUEL, OR TO OPERATE ALTERNATELY ON A TRADITIONAL FUEL AND AN ALTERNATIVE FUEL.

39­32­102.  Rebate for motor vehicles using alternative fuels. (1)  ON AND AFTER JANUARY 1, 1998, THE EXECUTIVE DIRECTOR SHALL BE AUTHORIZED TO GRANT A REBATE TO A QUALIFIED ENTITY FOR EACH MOTOR VEHICLE OWNED BY SUCH ENTITY THAT:

(a)  IS TITLED AND REGISTERED IN THE STATE OF COLORADO;

(b)  IS USED IN CONNECTION WITH THE BUSINESS OR OFFICIAL ACTIVITIES OF THE ENTITY; AND

(c)  USES OR IS CONVERTED TO USE AN ALTERNATIVE FUEL OR HAS ITS POWER SOURCE REPLACED WITH A POWER SOURCE THAT USES AN ALTERNATIVE FUEL.

39­32­103.  Amount of rebate.  (1)  THE REBATE GRANTED TO A QUALIFIED ENTITY FOR EACH MOTOR VEHICLE PURSUANT TO THIS ARTICLE SHALL NOT BE AN AMOUNT THAT EXCEEDS THE PERCENTAGE, AS SET FORTH IN PARAGRAPH (b) OF THIS SUBSECTION (1), OF THE FOLLOWING:

(a)  THE DIFFERENCE BETWEEN THE ACTUAL COST INCURRED BY SUCH ENTITY DURING A GIVEN CALENDAR YEAR IN PURCHASING A MOTOR VEHICLE THAT USES AN ALTERNATIVE FUEL AND THE COST OF THE SAME MOTOR 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 MODEL, MAKE, ENGINE SIZE, AND OPTIONS, THAT USES A TRADITIONAL FUEL;

(b)  THE DIFFERENCE BETWEEN THE ACTUAL COST INCURRED BY SUCH ENTITY DURING A GIVEN CALENDAR 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 A TRADITIONAL FUEL; OR

(c)  THE ACTUAL COST INCURRED BY SUCH ENTITY DURING A GIVEN CALENDAR YEAR IN CONVERTING A MOTOR VEHICLE TO A FUEL SYSTEM THAT USES AN ALTERNATIVE FUEL.

(2) (a) (I)   FOR THE PURPOSES OF SUBSECTION (1) OF THIS SECTION, EXCEPT AS OTHERWISE PROVIDED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH (a), THE PERCENTAGE OF THE DIFFERENCE IN COST INCURRED OR THE PERCENTAGE OF THE ACTUAL COST INCURRED BY A QUALIFIED ENTITY FOR WHICH A REBATE MAY BE GRANTED PURSUANT TO THIS ARTICLE SHALL BE AS FOLLOWS:

Certification level:	Calendar years 1998 and 1999	Calendar years 2000 and 2001	Calendar years 2002 and thereafter
Current EPA emission standards	25%	0%	0%
Low­emitting vehicles	50%	25%	0%
Ultra­low emitting vehicles and inherently low emitting vehicles	75%	50%	25%
Zero emitting vehicles	90%	75%	50%

(II)  FOR A MOTOR VEHICLE PURCHASE OR POWER SOURCE REPLACEMENT WHICH PERMANENTLY DISPLACES A MOTOR VEHICLE OR POWER SOURCE EIGHT YEARS OR OLDER, THE PERCENTAGE THAT MAY BE GRANTED PURSUANT TO THIS PARAGRAPH (a) SHALL BE MULTIPLIED BY TWO.

(b)  THE CURRENT EPA EMISSION STANDARDS SET FORTH IN PARAGRAPH (a) OF THIS SUBSECTION (2) ARE THE EPA CERTIFICATION EMISSION STANDARDS APPLICABLE TO THE MOTOR VEHICLE AT THE DATE OF ITS MANUFACTURE PURSUANT TO FEDERAL LAW OR THE COLORADO CERTIFICATION REQUIREMENTS FOR ALTERNATIVE FUEL CONVERSIONS APPLICABLE TO THE MOTOR VEHICLE. THE REMAINING CERTIFICATION LEVELS SET FORTH IN PARAGRAPH (a) OF THIS SUBSECTION (2) SHALL HAVE THE SAME MEANING AS SET FORTH IN THE REGULATIONS OF THE COLORADO AIR QUALITY CONTROL COMMISSION GOVERNING THE CLEAN FUEL FLEET PROGRAM.

(c)  FOR A MOTOR VEHICLE THAT IS NOT USED SOLELY AND EXCLUSIVELY FOR THE BUSINESS OR OFFICIAL ACTIVITIES OF THE QUALIFIED ENTITY, THE AMOUNT OF THE REBATE ALLOWED PURSUANT TO THIS SECTION SHALL 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 ENTITY.

(d)  NO MORE THAN ONE REBATE SHALL BE GRANTED PURSUANT TO THIS SECTION FOR ANY INDIVIDUAL VEHICLE.

(3)  ANY APPLICATION FOR A REBATE SHALL BE FILED WITHIN TWELVE MONTHS OF THE END OF THE MONTH IN WHICH THE COST IS INCURRED BY THE QUALIFIED ENTITY. THE EXECUTIVE DIRECTOR SHALL GRANT REBATES IN THE ORDER IN WHICH APPLICATIONS ARE RECEIVED AS MONEYS ARE MADE AVAILABLE. THE EXECUTIVE DIRECTOR SHALL GRANT REBATES TO QUALIFIED ENTITIES ONLY FOR COSTS INCURRED ON AND AFTER JANUARY 1, 1998. NO REBATE SHALL BE GRANTED MORE THAN TWENTY­FOUR MONTHS AFTER THE DATE UPON WHICH THE COST IS INCURRED. REBATES SHALL BE GRANTED ONLY FROM AVAILABLE MONEYS IN THE ALTERNATIVE FUELS REBATE FUND CREATED IN SECTION 39­32­105 AND IN NO EVENT SHALL THE STATE HAVE ANY OBLIGATION TO PROVIDE REBATES FROM ANY SOURCE OTHER THAN THE FUND.

39­32­104.  Rules.  THE EXECUTIVE DIRECTOR SHALL PROMULGATE RULES FOR GRANTING REBATES CONSISTENT WITH THE PROVISIONS OF THIS ARTICLE. SUCH RULES SHALL BE PROMULGATED IN ACCORDANCE WITH ARTICLE 4 OF TITLE 24, C.R.S.

39­32­105.  Alternative fuels rebate fund.  (1)  THE FOLLOWING, TOGETHER WITH ANY OTHER MONEYS APPROPRIATED BY THE GENERAL ASSEMBLY, SHALL BE CREDITED TO THE ALTERNATIVE FUELS REBATE FUND, WHICH FUND IS HEREBY CREATED IN THE STATE TREASURY:

(a)  ANY BEQUESTS, GIFTS, AND GRANTS, INCLUDING GRANTS FROM OTHER GOVERNMENTAL AGENCIES OR ENTITIES ACCEPTED BY THE EXECUTIVE DIRECTOR TO BE USED FOR THE PURPOSES OF THIS ARTICLE;

(b)  ANY ADDITIONAL INCREMENT OF STATE SALES OR USE TAX REVENUES, AS ESTIMATED BY THE EXECUTIVE DIRECTOR, THAT ARE GENERATED BY THE ADDITIONAL SALES OF ALTERNATIVE FUEL VEHICLES AND FUELING FACILITIES EQUIPMENT AFTER THE EFFECTIVE DATE OF THIS ARTICLE IN EXCESS OF THE AMOUNT OF REVENUES GENERATED THROUGH THE STATE SALES AND USE TAXES UPON THE ALTERNATIVE FUEL VEHICLES AND FUELING FACILITIES EQUIPMENT DURING THE 1996­97 STATE FISCAL YEAR;

(c)  NOTWITHSTANDING ANY PROVISION OF LAW RESTRICTING THE USE OF FUNDS WITHIN THE SPECIAL ACCOUNT WITHIN THE HIGHWAY USERS TAX FUND KNOWN AS THE AIR ACCOUNT, ANY MONEYS IN EXCESS OF THE SUM OF FIVE HUNDRED THOUSAND DOLLARS THAT HAVE NOT BEEN EXPENDED AS OF THE END OF EACH FISCAL YEAR IN THE AIR ACCOUNT; EXCEPT THAT IN NO EVENT SHALL MORE THAN FIVE HUNDRED THOUSAND DOLLARS BE CREDITED FROM THE AIR ACCOUNT TO THE ALTERNATIVE FUELS REBATE FUND IN ANY FISCAL YEAR. THE AIR ACCOUNT CREDIT SHALL FIRST OCCUR ON JUNE 30, 1997. IF ON JULY 1, 1998, AND EACH YEAR THEREAFTER, THE ALTERNATIVE FUELS REBATE FUND HAS A BALANCE EXCEEDING TWO MILLION DOLLARS, THEN AN AMOUNT EQUAL TO THE LESSER OF THE FOLLOWING SHALL BE CREDITED BACK TO THE AIR ACCOUNT:

(I)  THE AMOUNT CREDITED TO THE ALTERNATIVE FUELS REBATE FUND FROM THE AIR ACCOUNT IN THE PREVIOUS FISCAL YEAR PURSUANT TO THIS PARAGRAPH (c), OR

(II)  THE DIFFERENCE BETWEEN TWO MILLION DOLLARS AND THE BALANCE OF THE ALTERNATIVE FUELS REBATE FUND.

(2)  THE MONEYS IN SAID FUND SHALL BE SUBJECT TO ANNUAL APPROPRIATION BY THE GENERAL ASSEMBLY TO THE EXECUTIVE DIRECTOR FOR THE PURPOSES SET FORTH IN THIS ARTICLE. ALL INTEREST DERIVED FROM THE DEPOSIT AND INVESTMENT OF MONEYS IN THE FUND SHALL BE CREDITED TO THE FUND. ANY MONEYS NOT APPROPRIATED SHALL REMAIN IN THE FUND AND SHALL NOT BE TRANSFERRED OR REVERT TO THE GENERAL FUND OF THE STATE AT THE END OF ANY FISCAL YEAR.

SECTION 3.  Appropriation.  In addition to any other appropriation, there is hereby appropriated, out of any moneys in the alternative fuels rebate fund created pursuant to section 39­32­105, Colorado Revised Statutes, to the department of revenue, for the fiscal year beginning July 1, 1997, the amount of seven hundred forty thousand one hundred seventy-nine dollars ($740,179). Of such amount, thirty-six thousand dollars ($36,000), or so much thereof as may be necessary, is allocated for the initial costs incurred by the department in implementing this article. Any remaining funds shall be used for the purpose of making grants to qualified entities pursuant to article 32 of title 39, Colorado Revised Statutes.

SECTION 4.  Safety clause.  The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.