ALJDEC

01-12132-AFR · Office of Alternative Fuel Recovery · 2001-06-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 17, 2001. APPEARANCES: The Appellant appeared personally. The Office of Alternative Fuel Recover was represented by Assistant Attorney General Patrick Irvine. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. This matter came on for hearing the Appellant’s appeal of the Office of Alternative Fuel Recovery’s denial of his application for reimbursement payment under Sections 31 and 32 of Laws 2000, 7th S.S., Ch. 1 (“SB 1004”). 2. In 1999, Appellant purchased a new 1999 gasoline powered Chevrolet truck. 3. In April, 2000, the Arizona Legislature enacted a subsidy program for alternative fuel vehicles and related devices. Laws 2000, Ch. 405 (“SB 1504”). That program offered grants or tax credits to eligible purchasers of alternative fuel vehicles or owners of vehicles converted to run on an alternative fuel. 4. On August 2, 2000, Appellant had his 1999 Chevrolet truck converted to operate as a bi-fuel vehicle using either gasoline or propane gas. 5. When Appellant converted his truck to run on an alternative fuel, he did so in a good faith reliance on the State of Arizona’s then-existing alternative fuel vehicle subsidy program, which was governed by the provisions of SB 1504. 6. On or about October 20, 2000, the Arizona Legislature, in response to the overwhelming number of participants and potential participants in the subsidy program, enacted a moratorium on subsidies for any purchases of alternative fuel vehicles or conversion of vehicles to run on an alternative fuel completed pursuant to contracts entered into after October 19, 2000. Laws 2000, 6th S.S., Ch. 1. 7. The Arizona Legislature subsequently met in another special session to address the potential costs to the State of the popular alternative fuel program. That special session concluded on December 4, 2000, along with the passage of Laws 2000, 7th S.S., Ch. 1 (SB 1004). 8. SB 1004 significantly modified the eligibility requirements for subsidies originally set forth in SB 1504. SB 1004 provided that subsidies would only be available under the program if the participant was in possession of the vehicle before December 1, 2000 or if the buyer had paid in full for the vehicle before that date. 9. The Office of Alternative Fuel Recovery was created by Governor Jane Dee Hull’s Executive Order No. 0021to administer the Alternative Fuel Recovery program. 10. Appellant’s converted vehicle is deemed “used” for the purposes of SB 1004. 11. Appellant applied for reimbursement for the cost of converting his vehicle. The Office of Alternative Fuel Recovery issued Appellant an affidavit for a tax credit in the amount of $4,500.00 for his actual conversion costs. Appellant may attach that affidavit to his 2000 Arizona income tax return to claim a refundable tax credit in that amount. 12. On or about March 6, 2001, Appellant filed another Alternative Fuel Loss Reimbursement Application seeking reimbursement in the amount of $6,909.60 in addition to the previously issued tax credit. 13. On or about March 15, 2001, the Office of Alternative Fuel Recovery denied Appellant’s claim for reimbursement in the amount of $6,909.60. 14. Appellant has appealed the denial of his claim for reimbursement by the Office of Alternative Fuel Recovery. In addition to the tax credit of $4,500.00, he now seeks an additional grant or tax credit in the amount of $8,139.90[1], which is itemized as follows:

a) 30%of his vehicle pre-tax sales price of $27,133.00; b) plus $4,500.00 incremental conversion costs; c) plus the credit for the incremental conversion cost of $4,500.00 for a total credit of $13,989.90; and d) minus the $4,500.00 credit received for total amount of $9,489.90, for which Appellant is willing to reduce to the sum of $8,139.90.[2]

Appellant contends that he is entitled to the additional grant or tax credit according to SB 1504. 15. Appellant claims that the tax credit of $4,500.00 for the cost of the installation of the conversion equipment on his vehicle does not represent all costs directly associated with the cost of conversion. Appellant contends that he is entitled to compensation under the subsidy program for the following:

a) The cost of conversion; b) Interest on the cost of the conversion for approximately one year from conversion until credit is received; c) Value of a three year warranty from Chevrolet which Appellant waived upon conversion; d) Increased fuel cost to run propane for 50% of the time for three years duration; e) Rental car expense during conversion process; f) Partial loss of use of vehicle (truck bed space) due to added conversion equipment and fuel tank, and associated depreciated value of the vehicle; g) Performance loss in vehicle due to conversion equipment (loss even when running on gasoline), and associated depreciated value of vehicle; h) Inconvenience of finding locations to fill up with propane and costs associated with extra distance traveled to limited locations; i) Inability to sell vehicle for three years regardless of incidental vehicle repairs (sic); j) Potential repairs to conversion equipment; and k) Potential difficulty in selling vehicle in the future for fair market value due to poor public perception of Alternative Fuels Program.[3]

16. Appellant’s claim is not based on any forfeited down payment or deposit, value of a traded in vehicle or any financial penalty imposed by a conversion company. 17. Appellant is found eligible for the reimbursable cost of his conversion cost, which has been established to be in the amount of $4,500.00 and for which he has received a tax credit in that amount. 18. Appellant’s additional claims for reimbursement are deemed outside the scope of the Alternative Fuel Recovery program pursuant to the provisions of SB 1004. However, this finding does not preclude the Appellant from seeking any other appropriate administrative or judicial relief for those claims.

CONCLUSIONS OF LAW

1. In this proceeding, Appellant bears the burden to prove, by a preponderance of the evidence, that the Office of Alternative Fuel Recovery improperly denied his application for alternative fuel loss reimbursement application. A.A.C. R2-19-119. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true that not”. Morris K. Udall, Arizona Law of Evidence § 5 (1960). 2. The provisions of SB 1004 superseded the eligibility requirements for the Alternative Fuel Recovery program set up by SB 1504. Appellant filed his application for reimbursement after SB 1004 became effective. SB 1004 sets forth the law governing Appellant’s claim for reimbursement from the Alternative Fuel Recovery program. 3. Appellant did not establish that his claim in the amount of $6,909.60 was eligible for reimbursement under SB 1004, therefore he did not establish that the Office of Alternative Fuel Recovery improperly denied his application for alternative fuel loss reimbursement. 4. Appellant’s claim in the amount of $6,909.60 was properly denied by the Office of Alternative Fuel Recovery because that claim does not qualify for reimbursement under the terms of SB 1004. Pursuant to the provisions of SB 1004, Appellant is eligible for reimbursement for the actual cost of converting his vehicle to run on an alternative fuel. He has already received a tax credit for the actual costs to convert his vehicle. 5. Appellant’s appeal in this matter should be dismissed. 6. The denial of Appellant’s claim in the amount of $6,909.60 by the Office of Alternative Fuel Recovery should be affirmed. …

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Appellant’s appeal in this matter be dismissed, and that the Office of Alternative Fuel Recovery’s prior denial of Appellant’s alternative fuel loss reimbursement in the amount of $6,909.60 should be affirmed.

Done this day, June 6, 2001.

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, to:

Office of Alternative Fuel Recovery Kathy Peckardt, Executive Director 1700 W. Washington, Suite 103 Phoenix, AZ 85007 ATTN: Lorinda Goodman

By ___________________________

----------------------- [1] See Appellant’s Exhibit 1, Attachment E. [2] Appellant’s Exhibit 1, Attachment E, entitled “Notice of Claim Against the State of Arizona dated March 19, 2001. [3] Appellant’s Exhibit 1, Attachment A.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826