A BILL TO BE ENTITLED
AN ACT to gain energy independence and improve air quality by establishing goals for ALTERNATIVE fuel and advanced technology vehicle use by motor vehicles in the state fleet and by establishing a banking and selling program for credits issued under the federal energy policy act in order to generate funds to be used toward the purchase of alternative fuels and alternative fueled vehicles and for infrastructure development by state departments, institutions, and agencies.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 3 of Chapter 143 of the General Statutes is amended by adding three new sections to read:
"§ 143‑58.4.  Alternative fuel use credits program. 
(a)	Goal. – The State fleet shall accrue a total of 2,000,000 alternative fuel use credits during each calendar year 2006 and 2007. The State fleet shall accrue a total of 5,000,000 alternative fuel use credits during each calendar year 2008 and 2009. The State fleet shall accrue a total of 10,000,000 alternative fuel use credits during the calendar year 2010 and each calendar year thereafter.
(b)	Planning. – The State Energy Office, the Division of Motor Fleet Management of the Department of Administration, the Department of Transportation, and representatives of each State department, institution, and agency that has a State fleet shall meet annually to develop a plan for meeting the alternative fuel use credit requirements under subsection (a) of this section. The State Energy Office shall set the dates of these annual meetings and may allocate alternative fuel use requirements among State departments, institutions, and agencies. 
(c)	Report. – No later than March 1 of each year, the State Energy Office shall submit an annual status report to the General Assembly covering participation in and compliance with the goals under subsection (a) of this section by each State department, institution, and agency.
(d)	Monitoring. – In 2010, the General Assembly shall examine the program under this section for cost and effectiveness. At such time that the State Energy Office determines that the prices of alternative fuels exceed the cost of gasoline and diesel fuel to a degree that renders the program under this section impracticable and unreasonable, the requirements of this section shall be suspended until such time that the State Energy Office determines that the prices of alternative fuels no longer render the program impracticable and unreasonable.
(e)	Formulas for Calculating Credits. – Alternative fuel use credits are calculated as follows:
(1)	Subject to subdivision (2) of this subsection, one alternative fuel credit accrues for each one gallon of one hundred percent (100%) alternative fuel utilized by a State fleet vehicle. When alternative fuel is blended with petroleum‑based fuel, the alternative fuel credit accrues for each one gallon of alternative fuel utilized by a State vehicle at a rate that is based on the percentage of alternative fuel that is utilized by a State fleet vehicle. (For example, one alternative fuel use credit accrues for every five gallons of B20 that is utilized by a State fleet vehicle.)
(2)	One and one‑half alternative fuel credits accrue for each one gallon of alternative fuel produced in North Carolina that is utilized by a State fleet vehicle.
(3)	Six thousand alternative fuel credits accrue for each advanced technology vehicle that is purchased for a State fleet.
(f)	The Department of Administration may adopt rules necessary to implement the program under this section.
(g)	Definitions. – The following definitions apply to this section:
(1)	'Alternative fuel' means any of the following:
a.	Biodiesel (B100).
b.	B20, which is a blend of twenty percent (20%) biodiesel with eighty percent (80%) petroleum diesel fuel.
c.	Ethanol (E100).
d.	E10, which is a blend of ten percent (10%) ethanol with ninety percent (90%) unleaded gasoline.
e.	E85, which is a blend of eighty‑five percent (85%) ethanol with fifteen percent (15%) gasoline.
f.	Compressed natural gas.
g.	Propane.
h.	Hydrogen.
(2)	'Advanced technology vehicle' means:
a.	A hybrid electric vehicle operating on gasoline or another alternative fuel that has an emissions certification level of Ultra Low Emission Vehicle (ULEV) or greater.
b.	A low speed electric vehicle that replaces a gasoline powered vehicle and that is legal to operate on streets rated for vehicular traffic less than 30 MPH.
(3)	'State fleet' means those motor vehicles that are operated by a State department, institution, or agency that purchases fuel for these vehicles under a State purchasing contract.
"§ 143‑58.5.  Energy credit banking and selling program.
(a)	Establish Program. – The State Energy Office of the Department of Administration, in cooperation with State departments, institutions, and agencies, shall establish and administer an energy credit banking and selling program to allow State departments, institutions, and agencies to use moneys generated by the sale of EPAct credits to purchase alternative fuel, develop alternative fuel refueling infrastructure, and purchase AFVs for use by State departments, institutions, and agencies. Each State department, institution, and agency shall provide the State Energy Office with all vehicle fleet information necessary to determine the number of EPAct credits generated annually by the State. The State Energy Office may sell credits in any manner that is in accordance with the provisions of the Energy Policy Act.
(b)	Adopt Rules. – The Department shall adopt rules as necessary to implement this section and G.S. 143‑58.6.
(c)	Definitions. – The following definitions apply to this section and G.S. 143‑58.6:
(1)	'AFV' means a hybrid electric vehicle that derives its transportation energy from gasoline and electricity. AFV also means an original equipment manufactured vehicle that operates on compressed natural gas, propane, or electricity.
(2)	'Alternative fuel' means biodiesel, ethanol, compressed natural gas, hydrogen, propane, and electricity used as a transportation fuel in blends or in a manner as defined by the Energy Policy Act.
(3)	'Energy Policy Act' means the federal Energy Policy Act, 42 U.S.C. § 13201, et seq.
(4)	'EPAct credit' means a credit issued pursuant to the Energy Policy Act.
(5)	'Incremental cost' means the difference in cost between an alternative fuel and conventional petroleum fuel at the time the fuel is purchased. Incremental cost also means the difference in cost between an AFV and conventional vehicle of the same make and model. For vehicles with no comparable conventional model, incremental costs means the incremental cost that the industry accepts as the incremental cost.
"§ 143‑58.6.  Alternative Fuel Revolving Fund.
(a)	The Alternative Fuel Revolving Fund is created and shall be held by the State Treasurer. The Fund shall consist of moneys received from the sale of EPAct credits under G.S. 143‑58.5, any moneys appropriated to the Fund by the General Assembly, and any moneys obtained or accepted by the Department for deposit into the Fund. The Fund shall be managed to maximize benefits to the State for the purchase of alternative fuel, related refueling infrastructure, and AFV purchases. To the extent possible, benefits from the sale of EPAct credits shall be distributed to State departments, institutions, and agencies in proportion to the number of EPAct credits generated by each. No portion of the Fund shall be transferred to the General Fund, and any appropriation made to the Fund shall not revert. The State Treasurer shall invest moneys in the Fund in the same manner as other funds are invested. Interest and moneys earned on such investments shall be credited to the Fund.
(b)	The Fund shall be used to pay for the incremental cost of biodiesel fuel with a minimum biodiesel concentration of B20 for use in State vehicles, for the purchase of ethanol fuel with a minimum ethanol concentration of E85 for use in State vehicles, the incremental cost of purchasing AFVs, for the development of related refueling infrastructure, and for the costs of administering the Fund.
(c)	No later than January 31 of each year, the Department shall submit an annual report to the General Assembly on the expenditures from the Fund during the preceding fiscal year."
SECTION 2.  Article 2 of Chapter 136 of the General Statutes is amended by adding two new sections to read:
"§ 136‑28.13.  Participation in alternative fuel use credits program. 
The Department of Transportation shall participate in the alternative fuel use credits program under G.S. 143‑58.4. The Department of Transportation may adopt rules to implement this section.
"§ 136‑28.14.  Participation in the energy credit banking and selling program.
The Department of Transportation shall participate in the energy credit banking and selling program under G.S. 143‑58.5 and is eligible to receive proceeds from the Alternative Fuel Revolving Fund under G.S. 143‑58.6 to purchase alternative fuel, develop alternative fuel refueling infrastructure, or purchase AFVs as defined in G.S. 143‑58.5."
SECTION 3.  G.S. 143‑341(8)i. reads as rewritten:
"i.	To establish and operate a central motor pool and such subsidiary related facilities as the Secretary may deem necessary, and to that end:
1.	To establish and operate central facilities for the maintenance, repair, and storage of state‑owned passenger motor vehicles for the use of State agencies; to utilize any available State facilities for that purpose; and to establish such subsidiary facilities as the Secretary may deem necessary.
2.	To acquire passenger motor vehicles by transfer from other State agencies and by purchase. All motor vehicles transferred to or purchased by the Department shall become part of a central motor pool.
2a.	To participate in the alternative fuel use credits program under G.S. 143‑58.4.
2b.	To participate in the energy credit banking and selling program under G.S. 143‑58.5. The Department of Administration, Division of Motor Fleet Management, is eligible to receive proceeds from the Alternative Fuel Revolving Fund under G.S. 143‑58.6 to purchase alternative fuel, develop alternative fuel refueling infrastructure, or purchase AFVs as defined in G.S. 143‑58.5.
…."
SECTION 4.  This act becomes effective January 1, 2006.