Archive for Wednesday, February 7, 2007

Hybrid vehicles may fuel tax credit

Some Kansans could get $2,500 refund for buying gasoline-saving cars

February 7, 2007


— With six children and a job in construction, state Rep. Anthony Brown, R-Eudora, said Tuesday that he hasn't found a hybrid vehicle to fit his lifestyle.

But that doesn't mean he won't some day.

Brown and state Rep. Tom Hawk, D-Manhattan, are pushing legislation that would give Kansans a $2,500 refundable state income tax credit if they purchase a hybrid vehicle.

The two legislators told the House Energy and Utilities Committee that the tax refund would prompt car manufacturers to increase production of fuel-efficient hybrid vehicles, such as cars that use gas and electricity, and help to clean the environment.

"This also would be a good way to curb our use of foreign oil," Brown said.

Dr. Peter Bock, a family physician from Eudora who has a 3,000-watt wind generator in his yard, testified in support of the bill, saying it would promote alternative fuel technology.

"This technology currently exists. It's just a mater of economics, imagination and government incentives to keep the ball rolling," Bock said.

Ford Motor Co.and General Motors Corp., which are producing hybrid cars in the area, the Sierra Club and the Kansas Automobile Dealers Association also support the bill.

A state tax incentive, along with a current federal tax break, would close the gap between the cost of hybrid vehicles and regular ones, auto industry officials said.

But the Kansas Department of Revenue said the proposed state bill was expensive and could produce some disgruntled taxpayers.

Under House Bill 2222, the tax credit would be capped at $2.5 million, which means 1,000 people would be eligible. There were about 1,500 hybrid vehicles sold in Kansas in 2005, the agency said.

Potentially hundreds of hybrid-car buyers would not be able to get the tax credit, which would be handed out on a first-come, first-serve basis.

In addition, the agency would have to spend more than $200,000 to programthe tax credit, which under the bill would last only two years.

"Are there more efficient uses of $2.5 million in state funding?" asked Richard Cram, a revenue department spokesman.

Brown said he didn't think it would be a hassle to establish the hybrid tax credit. The state already provides a $750 tax credit for alternative fuel vehicles, but few people know about it, Brown said. He said only 20 people last year applied for the credit.

The committee took no action on the bill, but several committee members were intrigued by the legislation and thought maybe it should be narrowed.

For instance, state Rep. Tom Sloan, R-Lawrence, said it might be better to restrict the tax credit to vehicles assembled in the United States. And state Rep. Forrest Knox, R-Altoona, questioned providing a tax credit for hybrid pickup trucks and SUVs because their fuel efficiency wasn't much better than that of standard pickup trucks and SUVs.


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