PETITION OF:

SECTION 1. Terms used throughout this act shall have the meanings assigned to them in section 3 of chapter 25A of the General Laws, unless otherwise noted.

SECTION 1A. To provide for supplementing certain items in the general appropriation act and other appropriation acts for fiscal year 2006, the sum set forth in section 2A is hereby appropriated from the General Fund unless specifically designated otherwise in this act or in said appropriation acts, for the several purposes and subject to the conditions specified in this act or in said appropriation acts, and subject to the laws regulating the disbursement of public funds for the fiscal year ending June 30, 2006. The sum appropriated in said section 2A shall be in addition to any amounts previously appropriated and made available for the purposes of that item.

SECTION 2A.
2030-1001 For the purchase and repair of office of environmental law enforcement motor vehicles; provided, that not less than 20 percent of new motor vehicle purchases shall be hybrid or alternative fuel vehicles; prior appropriation continued.......................$2,500,000.

SECTION 2B. To provide funding for the Energy Independence Grant Fund, for the purpose of encouraging the purchase, lease, aftermarket conversion and use of hybrid and alternative energy vehicles, including heavy, medium and light duty vehicles that utilize either a single fuel or dual fuel, by cities and towns, school districts and regional transit authorities. The sums set forth in section 3 shall be distributed pursuant to a grant program developed and administered by the division of energy resources. The development of the plan shall be conducted in consultation with regional transit authorities established pursuant to chapter 161B of the General Laws. The grant program shall facilitate the development of an alternative fuel infrastructure. The sums set forth in section 3, for the several purposes and subject to the conditions specified in this act, are hereby made available subject to the laws regulating the disbursement of public funds and approval thereof.

SECTION 3.

7006-1003 For the planning, design and construction of alternative fuel refueling stations on the site of land owned or controlled by the commonwealth or a regional transit authority with a minimum useful life of 5 years, and for financial assistance to cities and towns, school districts and regional transit authorities for the acquisition of alternative fuel vehicles and hybrids with a minimum useful life of 3 years; provided, that the commonwealth or a regional transit authority may enter into agreements or contracts with providers and distributors of alternative fuels necessary to carry out the
purposes of this act . ………………………………..10,000,000.

SECTION 4. To meet a portion of the expenditures necessary in carrying out section 3, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time, but not exceeding in the aggregate the sum of $10,000,000. All bonds issued by the commonwealth as aforesaid shall be designated on their face, Alternative Energy, Energy Independence Act of 2005, and shall be issued for such maximum term of years, not exceeding 20 years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Constitution of the commonwealth; provided, however, that all such bonds shall be payable not later than June 30, 2030. All interest and payments on account of principal of such obligations shall be payable from the General Fund. Bonds and interest thereon issued under this section shall be general obligations of the commonwealth; provided, however, that any bonds issued by the state treasurer under this section shall, upon the request of the governor, be issued as special obligation bonds pursuant to section 2O of chapter 29 of the General Laws; provided further, that in deciding whether to request the issuance of particular bonds as special obligations the governor shall take into account: (i) generally prevailing financial market conditions; (ii) the impact of each approach on the overall capital financing plans and needs of the commonwealth; (iii) any ratings assigned to outstanding bonds of the commonwealth and any ratings expected to be assigned by any nationally-recognized credit rating agency to the bonds proposed to be issued; and (iv) any applicable provisions of a trust agreement or credit enhancement agreement entered into pursuant to said section 2O of said chapter 29.

SECTION 5. Chapter 7, as so appearing, is hereby amended by adding the following new section:-
Section 22N. Notwithstanding the provisions of section 22 of this chapter, when purchasing new motor vehicles, the commonwealth shall purchase hybrid or alternative fuel vehicles to the maximum feasible extent at a rate of not less than 5 percent annually for all new motor vehicle purchases in order that, taking into account the existing number of such vehicles owned and operated by the commonwealth, not less than 50 percent of the motor vehicles owned and operated by the commonwealth are hybrid or alternative fuel vehicles by the year 2010.
The division of operational services shall forward to the division of energy resources all requests for motor vehicle acquisitions by agencies of the commonwealth. The division shall thereafter report to the division of operational services regarding the availability of a hybrid or alternative fuel vehicle that will feasibly achieve the intended use designated by the requesting agency.
The division shall develop a system of protocols for reporting to the division of operational services for the acquisition of alternative fuel vehicles and hybrids, including identifying the potential for acquisition of heavy, medium and light-duty vehicles, based on the anticipated mileage and usage of such vehicles, and the effectiveness of single fuel or dual fuel alternative fuel vehicles for the particular purpose identified.
The division shall submit in writing to the secretary of administration and finance, the clerks of the senate and house of representatives and the joint committee on state administration and regulatory oversight an annual statement detailing the progress, as well as any additional information relevant to the acquisition of hybrid or alternative fuel vehicles by the commonwealth.

SECTION 6. Section 43F1/2 of chapter 7 of the General Laws, as so appearing the 2004 Official Edition, is hereby amended by striking out the first paragraph and inserting in place thereof the following:-

“The division of capital asset management and maintenance shall evaluate the potential for increasing the energy efficiency and reducing emissions in each building owned by an authority or state agency, or leased by such authority or agency for at least a ten year period. The division shall report on its findings biannually to the legislature beginning January 1, 2008. Energy efficiency and emissions reduction measures, as used by this section shall include, but not limited to, heating, air-conditioning, lighting, water, and electric systems powered by coal, electricity, natural gas, and oil. Where energy cost savings resulting from the implementation of energy saving improvements would exceed the cost of installing said improvements within five years of installation, the agencies and authorities shall install such improvements no later than the July first of that year; provided however, that all buildings owned by an authority or state agency, or leased by such authority or agency for a period of at least ten years, and heated by a petroleum heating-oil boiler shall use a minimum fuel blend of five percent biodiesel and 95 percent petroleum heating-oil by December 31, 2009.”

SECTION 7. Section 3 of chapter 25A of the General Laws, as so appearing, is hereby amended by inserting in their appropriate alphabetical sequence the following definitions:
"Aftermarket conversion", a converted vehicle originally designed to operate on gasoline that has been altered to run on an alternative fuel exclusively or in combination with gasoline.
"Alternative fuel refueling station", any platform that provides for the delivery of alternative fuels.
"Alternative fuel vehicle", a vehicle powered by alternative fuel. An alternative fuel vehicle shall have the following attributes:
(1) the capability of operating only on an alternative fuel;
(2) original use commencing with the taxpayer; and
(3) acquisition by the taxpayer for use or lease, but not for resale.
"Alternative fuels", biodiesel, electricity, ethanol, hydrogen, methanol, natural gas and propane.
"Biodiesel", renewable fuel that can be manufactured from vegetable oils, animal fats, or recycled restaurant greases, including both biodiesel blends and pure forms, including B20 20 percent neat biodiesel and 80 percent petroleum diesel.
"Electricity", transportation fuel to power battery electric and fuel cell vehicles.
"Ethanol", an alcohol-based alternative fuel produced by fermenting and distilling starch crops that have been converted into simple sugars. Specifically, blends such as 85 percent ethanol and 15 percent gasoline, E85, shall be considered an alternative.
"Heavy duty vehicle", a vehicle with a gross vehicle weight rating, GVWR, equal to or greater than 40,001 pounds GVWR.
"Hybrid vehicle", (1) a vehicle which draws propulsion energy from onboard sources of stored energy which are both: (i) an internal combustion or heat engine using combustible fuel; and (ii) a rechargeable energy storage system; (2) a vehicle which, in the case of a passenger automobile, medium duty passenger vehicle or light truck: (i) for 2002 and later model vehicles, has received a certificate of conformity under the Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model year; (ii) for 2004 and later model vehicles, has received a certificate that the vehicle meets or exceeds the Bin 5 Tier II emission level established in regulations prescribed by the administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle; and (iii) and achieves an increase of 10 percent fuel efficiency as compared to the average vehicle of its class as defined by the federal Environmental Protection Agency.
"Hydrogen", a fuel which is in a gaseous state at atmospheric pressure and ambient temperatures containing low levels of carbon monoxide and carbon dioxide for use in combustion engines and fuel cell electric vehicles. “Incremental new hydroelectric generation”, the percentage increase in average annual electricity production attributable to efficiency improvements or additions to capacity placed in service at a hydroelectric facility after December 31, 2000, as certified by the division relative to the historical generation for each eligible hydroelectric facility; provided, however, that historical generation for each eligible hydroelectric facility shall be calculated by the division based on the average electricity generated annually at the facility during the 10 years prior to the capacity addition or efficiency improvements, or the life of the facility, whichever is shorter. In no event shall an energy generation which would have existed in the absence of efficiency improvements or additions to capacity be considered incremental new hydroelectric generation for the purpose of this chapter.
"Light duty vehicle", a vehicle with a gross vehicle weight rating, GVWR, of 0 to 10,000 pounds.
"Medium duty vehicle," a vehicle with a gross vehicle weight rating, GVWR, of 10,001 to 40,000 pounds.
"Methanol", a wood alcohol used as an alternative fuel in flexible fuel vehicles that run on M85, a blend of 85 percent methanol and 15 percent gasoline.
"Natural gas", applications as stored onboard a vehicle as compressed natural gas, CNG, at 3,000 or 3,600 pounds per square inch or as liquefied natural gas, LNG, at typically 20 to 150 pounds per square inch.
"Propane" liquefied petroleum gas, LPG.
"Regional transit authority", as established pursuant to chapter 161 and chapter 161B.

SECTION 8. Chapter 21A of the General Laws, as so appearing, is hereby amended by adding the following section:-
Section 3F. The commissioner shall annually, on or before November 15, publish a list of vehicles sold within the commonwealth which are eligible to receive an exemption from certain percentages of the sales tax and the percentage reduction in the sales tax assessed under section 2 of chapter 64H to which they shall be entitled in the following taxable year.
The commissioner shall establish a list and provide a schedule of sales tax exemptions for vehicles based upon their fuel mileage ratings as determined by the United States Environmental Protection Agency, based on a formula annually updated which reflects: (a) a vehicle's mileage relative to other vehicles within its passenger seating class; and

(b) the percentage of the vehicle that is American-made.
The commissioner shall provide exemptions for the following classes of vehicles: 2 and 4-passenger vehicles, 5-passenger vehicles and vehicles that seat 6 or more passengers.
The commissioner shall design the list so that no vehicle which is less than 60 percent as efficient, for 2 to 4 and 5-passenger vehicles, and 70 percent as efficient, for 6-passenger and more vehicles, as the best vehicle in its respective class receives the sales tax exemption. The commissioner may, after issuing a draft determination and holding a public hearing, raise the level below which a vehicle shall not qualify for benefits.
The list shall be made available for public comment not later than November 1 of each year and the commissioner shall determine what shall be included on the final list. The final list shall be distributed to boards of assessors and tax collectors within each municipality.

SECTION 9. Section 11F of said chapter 25A, as so appearing, is hereby amended by striking out in lines 15 through 17, inclusive, the words “and (iii) an additional 1 percent of sales every year thereof until a date determined by the division of energy resources: and inserting in place thereof the following: -

“(iii) an additional 1 percent of sales every year thereof until December 31, 2011; (iv) an additional 2 percent of sales every year thereof until December 31, 2016; and (v) an additional 3 percent of sales every year thereof until December 31, 2019. Beginning January 1, 2008 the division of energy resources shall submit to the clerk of the senate and the house of representatives an annual report regarding the status of the renewable energy portfolio standard outlining the division’s legislative recommendations needed to advance the production of renewable energy generating sources in the commonwealth. The division of energy resources shall increase the scheduled minimum percentage of kilowatt-hours sales to end-use customers, outlined in clauses (i) through (v), inclusive, if it is determined by the division that such percentages are easily obtained and may be increased without an increased cost to the end-use customers of the commonwealth.”

SECTION 10. Section 11F of said chapter 25A, as so appearing, is hereby amended in lines 33 by inserting after the words “clauses (vi) and (vii) herein”, the following: -

“, but shall include incremental new hydroelectric generation which does not involve pumped storage of water or any new impoundment or diversion of water, and where such facility meets the requirements for classification as low impact hydropower as certified by the Low Impact Hydropower Institute or as certified by the division in accordance with comparable environmental certification standards.”

SECTION 11. Said chapter 25A, as so appearing, is hereby amended by inserting after section 11F the following new section:-

Section 11F1/2. (a) The division of energy resources shall establish a renewable fuel standard for all fuel distributors, as defined by section 1 of chapter 64A, selling fuel in the commonwealth. By December 31, 2007, the division shall determine the actual percentage of fuel sales in the commonwealth which contains alternative fuels. Every distributor shall provide a minimum percentage of alternative fuels to retail suppliers in the commonwealth, according to the following schedule: (i) an additional two percent of sales by December 31, 2009, or one calendar year from the final day of the first month in which the average cost of any alternative fuel is found to be within five percent of the overall spot-market price per gallon for fuel sold in the commonwealth, whichever is sooner; (ii) an additional one percent of all sales each year thereafter until December 31, 2013; (iii) an additional two percent of all sales each year thereafter until December 31, 2017, (iv) an additional two percent of all sales each year thereafter until December 31, 2019, and (v) beginning January 1, 2020, an additional percentage to be determined by the division for each subsequent year.

(b) Beginning January 1, 2008 the division of energy resources shall submit to the clerk of the senate and the house of representatives an annual report regarding the status of the renewable fuel standard outlining the division’s legislative recommendations needed to advance the production of alternative fuel in the commonwealth. The division shall increase the scheduled minimum percentage of alternative fuel sales, outlined in clauses (i) through (v), inclusive, if it is determined by the division that such percentages are easily obtained and may be increased without an increased cost to the end-use customers of the commonwealth.”

SECTION 12. Said chapter 25A, as so appearing, is hereby further amended by inserting after section 11I the following 2 sections:-
Section 11J. There shall be established and set up on the books of the commonwealth an Energy Independence Grant Fund to be used, subject to appropriation for the purpose of encouraging the purchase, lease, aftermarket conversion and use of hybrid and alternative fuel vehicles, including heavy, medium and light duty vehicles that use either a single fuel or dual fuels, by cities and towns, school districts and regional transit authorities. The grants may be used for the purpose of matching federal grants. In addition, the grants may be expended pursuant to cooperative purchasing agreements with other entities. Funds expended shall, to the extent possible, maximize reimbursement from federal or other sources. The fund shall consist of any appropriations, bond proceeds or other monies authorized by the general court and specifically designated to be credited to it. The fund shall encourage, support and foster the development of hybrid and alternative fuel vehicles in order to promote increased autonomy from fossil fuels, to mitigate the fiscal impact of the high cost of fuel on cities and towns and to provide environmental benefits through the reduction of carbon dioxide and carbon monoxide emissions.
Section 11K. (a) The division shall receive applications for grants from the fund from cities and towns, school districts and regional transit authorities and award grants to assist any of them in the purchase or lease of hybrid and alternative fuel vehicles or for the aftermarket conversion of conventional fuel vehicles for municipal or regional transit purposes. The division shall develop a scoring system to serve as the basis for the evaluation and the determination of awarding grants pursuant to this section. The scoring system shall determine the maximum grant amount available for a specific application. The scoring system shall be based upon the type of vehicle being acquired or retrofitted, the cost, the type of use anticipated, fuel economy, range and the anticipated useful life of a vehicle and shall employ the federal standards set forth in the Corporate Average Fuel Economy provision of the Energy Policy Conservation Act of 1975 and any other applicable federal standards. The scoring system shall designate the amount of assistance available to a municipality, school district or regional transit authority based upon those factors and the division may award grants up to that amount commensurate with said factors. In awarding grants, the division shall give consideration to applications from cities and towns, school districts and regional transit authorities from diverse geographic regions. A city or town, school district or regional transit authority which is awarded a grant under this program shall submit an annual report to the division identifying and detailing: (1) the type of the hybrid or alternative fuel vehicle purchased, leased or converted; (2) the usage and any cost savings to the city or town, school district or regional transit authority associated with the reduction of use of standard gasoline from the use of the vehicle; and (3) any environmental benefits from, but not limited to, the reduction in emissions.
(b) A city or town, school district or regional transit authority shall apply for a fund grant in the manner specified by the commissioner.
(c) The division shall promulgate policies, rules and regulations to implement this section. The commissioner shall file the policies, rules and regulations with the joint committee on state administration and regulatory oversight for review and comment not later than 30 days before the effective date of any policies, rules and regulations.
(d) Not less than $100,000 shall be expended from the fund for the Massachusetts Maritime Academy for a pilot program to utilize wind energy technology to create on-site, hydrogen-based electricity to reduce the high cost of energy at public institutions of higher education. The academy shall use the funds to develop a hydrogen-based, fuel cell powered tug boat.

SECTION 13. The General Laws, as so appearing, are hereby amended by inserting after chapter 21I the following new chapter:-

CHAPTER 21L.

Section 1. For the purposes of this chapter, the following terms have the following meanings:

“Department”, the department of environmental protection.

"Consumer information requirement", point-of-sale information or signs that are conspicuously displayed, readily accessible, and written in a manner that can be easily understood by the consumer. "Consumer information requirement" shall not include mandatory labeling, imprinting, or other marking, on an individual tire by the tire manufacturer or the tire retailer.

"Cost effective", the cost savings to the consumer resulting from a replacement tire subject to an energy efficiency standard that equals or exceeds the additional cost to the consumer resulting from the standard, taking into account the expected fuel cost savings over the expected life of the replacement tire.

"Replacement tire", a tire sold in the state that is designed to replace a tire sold with a new passenger car or light-duty truck. "Replacement tire" shall not include any of the following tires:

(1) A tire or group of tires with the same SKU, plant, and year, for which the volume of tires produced or imported is less than 15,000 annually.

(2) A deep tread, winter-type snow tire, a space-saver tire, or a temporary use spare tire.

(3) A tire with a nominal rim diameter of 12 inches or less.

(4) A motorcycle tire.

(5) A tire manufactured specifically for use in an off-road motorized recreational vehicle.

Section 2. On or before July 1, 2008, the department shall develop and adopt all of the following:

(a) A database of the energy efficiency of a representative sample of replacement tires sold in the state, based on test procedures adopted by the department.

(b) Based on the data collected pursuant to subdivision (a), a rating system for the energy efficiency of replacement tires sold in the state that will enable consumers to make more informed decisions when purchasing tires for their vehicles.

(c) Based on the test procedures adopted pursuant to subdivision (a) and the rating system established pursuant to subdivision (b), requirements for tire manufacturers to report to the department the energy efficiency of replacement tires sold in the state.

(d) If another state has created identical programs, the department may work with that state to adopt those programs for Massachusetts.

Section 3. On or before July 1, 2010, the department shall, after appropriate notice and workshops, adopt and implement, on or before July 1, 2011, a tire energy efficiency program of statewide applicability for replacement tires, designed to ensure that all replacement tires sold in the state are at least as energy efficient as tires sold in the state as original equipment on new passenger cars and light-duty trucks.

Section 4. (a) The program described in Section 3 shall include all of the following:

(1) The development and adoption of minimum energy efficiency standards for replacement tires, except to the extent that the department determines that it is unable to do so in a manner that complies with subparagraphs (A) to (D), inclusive. Energy efficiency standards adopted pursuant to this paragraph shall meet all of the following conditions:

(A) Be technically feasible and cost effective.

(B) Not adversely affect tire safety.

(D) Not adversely affect the management of scrap ties in the commonwealth.

(2) The development and adoption of consumer information requirements for replacement tires for which standards have been adopted pursuant to paragraph (1).

(b) The energy efficiency standards established pursuant to paragraph (1) of subdivision (a) shall be based on the results of laboratory testing and, to the extent it is available and deemed appropriate by the department, an on road fleet testing program developed by tire manufacturers in consultation with the department, conducted by tire manufacturers, and submitted to the department on or before January 1, 2009.

(c) If the department finds that tires used to equip an authorized emergency vehicle are unable to meet the standards established pursuant to paragraph (1) of subdivision (a), the department shall authorize an operator of an authorized emergency vehicle fleet to purchase for those vehicles tires that do not meet those standards.

(d) The department shall review and revise the program including any standards adopted pursuant to the program, as necessary, but not less than once every three years. The department may not revise the program or standards in a way that reduces the average efficiency of replacement tires.

SECTION 14. Section 36 of chapter 30 of the General Laws, as so appearing, is hereby amended by adding after the first paragraph the following new paragraph:-

“Such regulations shall include the use of alternative fuels, as defined by section 3 of chapter 25A, by appropriate state-owned motor vehicles. The commissioner shall also establish regulations determining the appropriate alternative fuel for each vehicle according to the following schedule: (i) a minimum fuel blend of five percent biodiesel and 95 percent petroleum diesel shall be used by all diesel-powered vehicles owned by the state by fiscal year 2008; and (ii) a minimum fuel blend of 20 percent biodiesel and 80 percent petroleum diesel shall be used by all diesel-powered vehicles and a minimum fuel blend of 85 percent ethanol and 15 percent gasoline be shall be used by all gasoline-powered or flex-fuel vehicles owned by the commonwealth by fiscal year 2010; provided however, that an office, department, board, commission or institution may apply for a waiver during the winter months exempting the vehicle from fuel requirements if it can be proven that the required fuel blend will alter the performance of the vehicle. For the purpose of this section, “appropriate state-owned vehicles” shall mean any vehicle owned by the commonwealth that may be fueled by an alternative fuel or alternative fuel blend, without altering the performance of the vehicle.”

SECTION 15. Section 5 of chapter 59 of the General Laws, as so appearing, is hereby amended by striking out clause forty-fifth, and inserting in place thereof the following clause:-

“Forty-fifth, Any renewable energy source, as defined by subsection (b) of section 11F of chapter 25A, which is being utilized as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs of property taxable under this chapter; provided however, that the exemption under this clause shall be allowed only for a period of twenty years from the date of the installation of such source.”

SECTION 16. Section 5 of chapter 59 of the General Laws, as so appearing, is hereby further amended by adding after clause Forty-fifth A, the following new clause:-

“Forty-fifth B, In determining the valuation, for city and town tax purposes, of any property taxable under this section, the value of improvements on or to the property due to the installation of a biofuel blending or storage tank shall not be included; provided however, that the exemption under this clause shall be allowed only for a period of twenty years from the date of the installation of such blending or storage tanks and that such biofuel blended or stored in such tanks shall not be available for resale. The division of local services, in consultation with the division of energy resources, shall promulgate regulations regarding the implementation of this clause, including the definitions for qualifying biofuel blending and storage tanks.”

SECTION 17. Paragraph (a) of Part B of section 3 of chapter 62 of the General Laws, as so appearing, is hereby amended by inserting after subparagraph 9 the following subparagraph:-
(91/2) For taxable years beginning on or after January 1, 2007, in the case of an individual who purchases a hybrid or alternative fuel vehicle, as those terms are defined in section 3 of chapter 25A, there shall be a deduction in the amount of $2,000 for a single person, for a person who qualifies as a head of household under section 2(b) of the Code or for a husband and wife in the taxable year in which the purchase is made. The department of revenue may require a proof of purchase to be submitted with a return in order to be eligible for the deduction.

SECTION 18. Section 31A of chapter 63 of the General Laws, as so appearing, is hereby amended by inserting after the word "fishing", in lines 4 and 24, the following words:- or a corporation primarily engaged in the development, construction or operation of an alternative fuel refueling station, and the development of alternative fuels, as those terms are defined in section 3 of chapter 25A.

SECTION 19. Said chapter 63, as so appearing, is hereby further amended by inserting after section 31C the following 2 sections:-
Section 31C1/2. A corporation which maintains a motor vehicle fleet equal to or in excess of 50 vehicles, including those of carriers licensed pursuant to chapter 159B, and purchases, leases or performs an aftermarket conversion, as that term is defined in section 3 of chapter 25A, of a conventional fuel vehicle to an alternative fuel vehicle, as that term is defined in said section 3 of said chapter 25A, and maintains the alternative fuel vehicle, and which corporation is a domestic or foreign corporation under subparagraph 1 or 2 of section 30, may receive a credit against its excise due under this chapter. The amount of the credit shall be equal to 50 percent of the difference between the purchase price or the cost of the aftermarket conversion of the alternative fuel vehicle and the listed purchase price of a gasoline-powered vehicle of like quality during the taxable year of the purchase. A corporation which does not maintain at least 10 percent of its fleet as alternative fuel vehicles or hybrid vehicles, as those terms are defined in said section 3 of said chapter 25A, shall not be eligible for the credit.
Section 31C3/4. A corporation, licensed as a common carrier of passengers under chapter 159A, which maintains a motor vehicle fleet equal to or in excess of 25 vehicles and purchases, leases or performs an aftermarket conversion, as that term is defined in section 3 of chapter 25A, of a conventional fuel vehicle to an alternative fuel vehicle, as that term is defined in section 3 of chapter 25A, and maintains the alternative fuel vehicle, and which corporation is a domestic or foreign corporation under subparagraph 1 or 2 of section 30, may receive a credit against its excise due under this chapter. The amount of the credit shall be equal to fifty percent of the difference between the purchase price or the cost of the aftermarket conversion of the alternative fuel vehicle and the listed purchase price of a gasoline-powered vehicle of like quality during the taxable year of the purchase, as hereinafter provided. A corporation which does not maintain at least 10 percent of its fleet as alternative fuel vehicles or hybrid vehicles, as those terms are defined in said section 3 of said chapter 25A, shall not be eligible for the credit.

SECTION 20. Section 6 of chapter 64H of the General Laws, as so appearing, is hereby amended by striking out subsection (dd) in its entirety and inserting in place thereof the following:- “Sales of equipment directly relating to the construction of any renewable energy source, as defined by subsection (b) of section 11F of chapter 25A; or heat pump system, which is being utilized as a primary or auxiliary power system for the purpose of heating or otherwise supplying the energy needs of an individual’s principal residence in the commonwealth.”

SECTION 21. Section 6 of chapter 64H, as most recently amended by chapter 260 of the acts of 2006, is hereby further amended by adding at the end thereof the following new paragraph:-

“(xx) Sales of any ENERGY STAR product. For the purpose of this paragraph, “ENERGY STAR product” shall mean a product that is clearly labeled as such and rated for energy efficiency under the ENERGY STAR program established in section 324A of the Energy Policy and Conservation Act, as it may be amended from time to time, and regulated by the Environmental Protection Agency.”

SECTION 22. Section 6 of chapter 64H, as so appearing, is hereby further amended by adding at the end thereof the following new subsection:-

“(yy) Sales of all alternative fuel vehicles, as defined by section 3 of chapter 25A.”

SECTION 23. Section 4 of chapter 64E of the General Laws, as so appearing, is hereby amended by striking out, in lines 9 and 10, the words "19.1 percent of the average price computed to the nearest tenth of one percent per gallon" and inserting in place thereof the following words:- 25 percent less than the rate on fuel set forth in chapter 64A.

SECTION 24. Section 2 of chapter 90 of the General Laws, as so appearing, is hereby amended by inserting after the tenth paragraph the following paragraph:-
Upon application, the registrar shall furnish an energy independence placard or sticker bearing a designation to be determined by the registrar to any person who is the title or lease holder of a qualified hybrid or alternative fuel vehicle, as those terms are defined in section 3 of chapter 25A, and who meets the requirements of this paragraph. The placard or sticker shall be of a size and design to be determined by the registrar and shall be numbered and contain identifying features and specifications as the registrar considers appropriate. The authorized user shall permanently affix the placard or sticker to the vehicle so as to be readily visible in accordance with instructions provided by the registrar from time to time. The registrar may impose a reasonable fee for the costs associated with the processing of applications and the issuance of placards or stickers.
The Massachusetts Turnpike Authority shall make available to all holders of placards Fast Lane toll transponders and shall waive the initial application fee associated with the acquisition of the transponder. A city or town may, by by-law or ordinance, grant municipal parking at a reduced rate or without charge to holders of the energy independence placard or sticker.

SECTION 25. Section 7A of said chapter 90, as so appearing, is hereby amended by inserting after the fifth paragraph the following paragraph:-
The emissions and maintenance inspection programs provided for in this section shall not apply to a qualified hybrid or alternative fuel vehicle or clean alternative fuel if the vehicle obtains a rating from the United States Environmental Protection Agency of at least 50 miles per gallon during city fuel economy tests unless remote sensing devices indicate the hybrid or alternative fuel vehicle may not meet current emissions standards. The commissioner shall promulgate such regulations as may be required to implement this exemption.

SECTION 26. Section 142M of chapter 111 of the General Laws, as so appearing, is hereby amended by inserting before the definition of "Commissioner" the following definition:-
"Clean alternative fuel vehicle" shall mean natural gas, hydrogen or electricity when used as a motor vehicle fuel or propane when used as a motor vehicle fuel if such a vehicle meets the federal fleet emissions standards under the federal Clean Air Act or any emissions standards adopted by the commissioner of environmental protection as part of the commonwealth's implementation plan under the Clean Air Act.

SECTION 27. (a) There shall be established at the University of Massachusetts, the Commonwealth Alternative Fuels Institute, for the purpose of researching and developing hybrid and alternative fuel vehicles and alternative fuels and any related technology and components involved in the production, conversion, operation and maintenance of hybrid and alternative fuel vehicles and hybrids.
(b) The Institute shall have among its primary goals the development and commercialization of the vehicles, fuels, equipment and technology for the purposes of deriving environmental benefits, reducing dependence on conventional fossil fuels and facilitating economic growth.
(c) The Institute shall be governed by policies and operating procedures developed and maintained by the president of the university and its board of trustees, together with the governing bodies of each subdivision of the university assigned to engage in the operations of the Institute.
(d) Subject to appropriation, the Institute shall engage in projects as determined to be feasible by its advisory board, and may issue requests for proposals and enter into cooperative research agreements in carrying out this act.
(e) There shall be an advisory board of the Institute, comprised of: the president of the University of Massachusetts or his designee, who shall also serve as the chairperson; the secretary of environmental affairs or his designee; the secretary of economic affairs or his designee; the secretary of transportation or his designee; the general manager of the Massachusetts Bay Transportation Authority or his designee; a representative of the regional transit authorities; 3 members to be appointed by the governor, 1 of whom shall represent the business community, 1 of whom shall have expertise in environmental issues and 1 of whom shall represent consumers; 2 members appointed by the president of the university, each having expertise in relevant science and technology; 1 member of the senate and 1 member of the house of representatives. Each appointed member shall serve for a term of 3 years, and shall be eligible to be appointed for consecutive terms.
(f) The Institute shall undertake a comprehensive industry needs assessment, in consultation with the advisory board, of businesses engaged in the research, development or production of alternative fuel vehicles and hybrids, alternative fuels and related components and technologies. The assessment, which shall be completed not later than 6 months after the effective date of this act, shall include, but not be limited to the following:
(1) the identities of industry participants and a characterization of their business activities involving hybrid and alternative fuel vehicles and related technologies and components;
(2) current or projected impediments to the growth and development of industry participants;
(3) feasible means by which state government, including the commonwealth's institutions of higher education, may assist industry participants;
(4) potential collaborative efforts between the commonwealth and industry participants, including industry-sponsored research and development and the securing of public and private research funds;
(5) potential sources and uses of federal government funding for research and development including, but not limited to, funding opportunities contained in any federal renewable or alternative energy legislation.

SECTION 28. The Massachusetts Turnpike Authority shall develop a plan, in consultation with the executive office of transportation, for the availability of alternative fuel at each fueling facility or service terminal on the Massachusetts Turnpike. The plan shall provide for availability not later than January 1, 2012. Should the authority determine that facilitating the availability is not feasible, it shall report the findings, together with the reasons therefor, to the house and senate committees on ways and means and the joint committee on transportation not later than January 31, 2006.

SECTION 29. (a) The commissioner of energy resources, in consultation with the secretary of administration and finance, the secretary of transportation, the general manager of the Massachusetts Bay Transportation Authority, a representative of the regional transit authorities, the secretary of economic affairs, the secretary of environmental affairs, and the operation services division, shall develop a statewide master plan for the advancement of hybrid and alternative fuel vehicles and related technology.
(b) The plan shall encompass a 10-year period beginning in 2007, and shall be divisible in increments of not less than 5 years. The plan shall take into account the geographic diversity of the commonwealth, its present and projected demographics, present and projected transportation needs and infrastructure, and current, emerging and foreseeable alternative fuel and vehicle technologies.
(c) The plan may establish goals for areas such as the purchase and use of hybrid and alternative fuel vehicles and hybrids by the commonwealth, its political subdivisions, private commercial fleets and citizens, the development of fueling facilities, and technologies, and the production, import action or distribution of alternative fuels.
(d) In addition, the plan shall identify strategies and corresponding methods of achieving its identified goals together with necessary administration and legislative actions. The plan shall be reported to the clerks of the senate and house of representatives not later than 18 months following the effective date of this act.

SECTION 30. The secretary of administration and finance through the division of operational services, in consultation with the commissioner of energy resources, shall enter into contracts and agreements with the manufacturers or providers of hybrid or alternative fuel vehicles as may be necessary for the purchase or lease of the vehicles, or aftermarket conversion equipment or technologies in order to comply with this act.

SECTION 31. The commissioner of energy resources shall annually develop a directory of alternative fuel vehicles, equipment and services available for purchase by public entities.
The directory shall include vehicles available for heavy, medium and light duty usage, as well as the spectrum of alternative fuels available, as defined in section 3 of chapter 25A of the General Laws, and the appropriate applications, estimated costs, and positive and negative aspects of each vehicle and fuel. To the extent possible, the directory shall contain photographs of the available vehicles.
The directory shall be produced and promulgated in a manner reasonably devised to assist in promoting awareness and the utilization of alternative fuel vehicles by the commonwealth and its political subdivisions and shall be made available to municipalities and agencies of the commonwealth to assist in the identification and acquisition of hybrid and alternative fuel vehicles. The catalog shall be made available to nongovernment entities but the commissioner may impose a reasonable fee consistent with the cost of reproducing the catalog.

SECTION 32. The secretary of economic affairs, in consultation with the executive office of transportation and the division of energy resources, shall evaluate the feasibility and desirability of any methods which could be utilized by the commonwealth in order to provide incentive for or incubate the production of alternative fuel vehicles and equipment within its borders. The evaluation shall include, but not be limited to, the potential economic benefits of the production, including job growth, and the potential environmental benefits associated with the production and increased distribution of alternative fuel vehicles and equipment in the commonwealth.
The secretary shall report the findings of the evaluation, and its recommendations, if any, together with drafts of legislation necessary to carry such recommendations into effect, to the clerks of the senate and house of representatives not later than 1 year after the effective date of this act.

SECTION 33. Not later than December 31 of each year, the Massachusetts Bay Transportation Authority shall file with the clerks of the senate and house of representatives and the joint committee on economic development and emerging technologies a report indicating its utilization of hybrid and alternative fuel vehicles and related technologies. The report shall include, but not be limited to, the increased costs or savings, if any, associated with the use of the vehicles, the amount of fuel used and conserved by the use of the vehicles, the emissions rates for the vehicles and other vehicles in the fleet and the positive and negative factors, if any, associated with their use.
The report shall identify any impediments to the use of the vehicles and technologies and shall include any legislative recommendations to address those impediments.

SECTION 34. The operational services division, in consultation with the executive office of transportation, the secretary of administration and finance, the division of energy resources, the Massachusetts Bay Transportation Authority and regional transit authorities, shall study the feasibility of developing and implementing a system to facilitate the mass purchase of alternative fuel vehicles by the commonwealth and its political subdivisions. The study shall include, but not be limited to, the potential cost savings to be derived from the system, the cost of its administration, appropriate purchasers to participate in the system and the probability of its utilization by those purchasers.
The operational services division shall report the findings of the study, and its recommendations if any, together with drafts of legislation necessary to carry such recommendations into effect, by filing the same with the clerks of the senate and house of representatives not later then 1 year after the effective date of this act.

SECTION 35. There shall be a special commission to report on the expanded use of biodiesel fuel in the commonwealth. The commission shall consist of 1 member to be appointed by the department of environmental protection; 1 member to be appointed by the department of telecommunications and energy; 1 member to be appointed by the division of energy resources; 2 members to be appointed by the senate president; 1 member to be appointed by the senate minority leader; 2 members to be appointed by the speaker of the house of representatives; 1 member to be appointed by the minority leader of the house of representatives; and members to be appointed by the governor to provide appropriate consumer, environmental, and industry representation. The commission shall submit a report and recommendations to the secretary of environmental affairs; office of commonwealth development; the joint committee on telecommunications, utilities, and energy; the joint committee on environment, natural resources and agriculture; the joint committee on state administration and regulatory oversight; and the house and senate clerks by June 30, 2006. The commission shall conduct a study of the current impediments in state and federal law and regulation to the certification, licensure and availability for sale in the commonwealth of highly efficient diesel passenger vehicles under the California LEV II standards and potential methods to address such impediments. It shall also examine barriers and opportunities for widespread use of biodiesel and low-sulfur biodiesel fuels for motor vehicles, heating, and other appropriate uses in the commonwealth. From this study the commission shall submit a plan for the expanded use of biodiesel and low-sulfur biodiesel fuels in the commonwealth and proposals for new regulations and laws to expand the use of biodiesel where feasible and appropriate.

SECTION 36. Hybrid and alternative fuel vehicles which display a special identifying placard issued under section 12 may travel in high occupancy vehicle or HOV lanes. This section shall expire 3 years following the effective date of this act.

SECTION 37. Section 10 shall take effect as of December 31, 2009.

SECTION 38. Section 19 shall be in effect for taxable years 2007 to 2017, inclusive.

SECTION 39. Section 23 shall be in effect for taxable years 2007 to 2012, inclusive.