(a) "Alternative fuels" include compressed natural gas, liquified natural gas, liquified petroleum gas, methanol, ethanol, fuel mixtures containing eighty-five percent or more by volume of methanol, ethanol and other alcohols with gasoline or other fuels, coal-derived liquid fuels and electricity (including electricity from solar energy).
(b) "Alternative fuel vehicle" means a motor vehicle that operates solely on one alternative fuel, a motor vehicle that is capable of operating on one or more alternative fuels or a motor vehicle that is capable of operating on an alternative fuel and is capable of operating on gasoline or diesel fuel.
(c) "Fleet" means fifteen or more motor vehicles that are centrally fueled or capable of being centrally fueled and are owned, operated, leased or otherwise controlled by or assigned to an agency of a political subdivision.
(d) "Political subdivision" means a county, municipality and any other unit of local government authorized by law to perform governmental functions, but does not include school boards or school districts.
(1) Any agency of a political subdivision may acquire or be provided with equipment or refueling facilities necessary to operate alternative fuel vehicles by any of the following methods:
(A) Purchase or lease as authorized by law;
(B) Gift or loan of the equipment or facilities; or
(C) Gift or loan of the equipment or facilities or other arrangement pursuant to a service contract for the supply of alternative fuels.
(2) If the equipment or facilities are donated, loaned or provided through other arrangement with the supplier of alternative fuels, the supplier shall be entitled to recoup its actual cost of donating, loaning or providing the equipment or facilities through its fuel charges under the fuel supply contract.
(b) Of the total number of fleet vehicles acquired by each political subdivision for use by any agency of each political subdivision:
(1) Twenty percent in fiscal year one thousand nine hundred ninety-five;
(2) Thirty percent in fiscal year one thousand nine hundred ninety-six; and
(3) Fifty percent in fiscal year one thousand nine hundred ninety-seven shall be alternative fuel vehicles.
(c) The governing authority of each political subdivision shall review this alternative fuel use program on or before the thirty-first day of December, one thousand nine hundred ninety-seven, and if the governing authority determines that the program is effective in reducing costs to the political subdivision, taking into consideration the cost of operating alternative fuel vehicles over the expected useful life of the vehicles, the governing authority shall, of the total number of vehicles acquired in each fiscal year, acquire at least seventy-five percent alternative fuel vehicles for fleets of the agencies of the political subdivision beginning the first day of September, one thousand nine hundred ninety-eight, and thereafter.
(d) The governing authority of each political subdivision, in the development of the alternative fuel use program, shall consult with agency fleet operators, vehicle manufacturers and converters, fuel distributors and others to delineate the vehicles to be covered, taking into consideration range, specialty uses, fuel availability, vehicle manufacturing and conversion capability, safety, resale values and other relevant factors. In order to maximize the savings to the political subdivision, the governing authority of each political subdivision shall attempt to the extent possible to convert first those vehicles that are used the most often for the most miles. The governing authority may meet the percentage requirements of this section through purchase or lease of new vehicles, purchase or lease of used alternative fuel vehicles or the conversion of existing vehicles, in accordance with federal and state requirements and applicable safety laws and standards, to use alternative fuels.
(e) The governing authority of each political subdivision may reduce any percentage specified or waive the requirements of subsection (b) of this section for any agency upon a determination by the governing authority, in its sole discretion, that either of the following situations apply:
(1) The agency's vehicles will be operating primarily in an area in which neither the agency nor a supplier has or can reasonably be expected to establish a central refueling station for alternative fuels; or
(2) The agency is unable to acquire or be provided equipment or refueling facilities necessary to operate alternative fuel vehicles at a projected cost that is reasonably expected to result in no greater net costs than the continued use of traditional gasoline or diesel fuels measured over the expected useful life of the equipment or facilities supplies.
(f) The provisions of this section shall not apply to:
(1) Vehicles operated by law-enforcement agencies;
(2) Emergency vehicles;
(3) Vehicles operated by public transit authorities;
(4) School buses; or
(5) Nonroad vehicles, including farm and construction vehicles.