Clean Energy, Green Jobs

REDUCING TRANSPORTATION EMISSIONS

Goal #1: Help accelerate the transition to all-electric vehicles

Proposal: Sen. Phil Rockefeller will introduce legislation to:

• Continue the existing sales tax exemption for hybrid vehicles through June 30.
• Extend the existing electric vehicle sales tax exemption beyond the current December 2010 sunset out to June 2013, and provide a partial tax exemption thereafter until 2020.
• Provide public transit agencies a sales tax break for purchases of vehicles in order to achieve "green fleet" certification. The exemption also applies to the costs of retrofitting vehicles to electric traction power.

Proposal: Sen. Fred Jarrett has sponsored SB 5418 to:

• Provide tax breaks and incentives for electric cars, batteries and infrastructure
• Direct state agencies to install charging stations along state-owned highways and park-and-ride lots
• Set a target for the state motor pools to become fully electric or biofuel powered by 2016

The result: These incentives will help spur purchases and provide demand-side market signals to help accelerate the development of the batteries and associated technology to make electric vehicles a more cost-competitive alternative to the internal combustion engine. This could help electric vehicles make up a third of cars on the road by 2020.

The details: The existing 24-month tax exemption for hybrid and clean cars is estimated to cost $58 million over that period, almost entirely from the sale of hybrids. All-electric vehicles already enjoy this 24-month tax break.

The added impact of including plug-in electrics and retrofit to electric is likely to be small in the upcoming biennium. The impacts will be greater in the out biennia when electric vehicle sales will increase greatly. The tax exemptions in SB 5418 include a sales and use tax exemption for purchase of electric vehicles (including plug-in electrics and plug-in hybrid electrics); a B&O tax exemption for the costs of electric vehicles, batteries and the installation and use of charging infrastructure; and an exemption from leasehold excise tax for charging infrastructure by tenants on public lands.

Goal #2: Customizing car insurance to match miles traveled

Proposal: Sen. Tracey Eide will introduce legislation to:

• Modify the Insurance Commissioner’s process to help speed “pay-as-you-drive” auto insurance policies into the market

The result: At least one insurer will offer a pay-as-you-go option in Washington’s auto insurance market by mid-2010, with other companies to follow suit after that.

The details: Representatives from the insurance industry and the Office of the Insurance Commissioner are meeting with Sen. Eide to identify any barriers to speedy introduction of pay-as-you-drive products. Legislation might include providing protection to insurers to safeguard their intellectual property (for instance, their proprietary algorithms) and authorizing the Insurance Commissioner to use an expedited process for approving pay-as-you-drive insurance products.