(a) After September 1, 1993, the secretary may purchase or lease alternative fuel vehicles for use by any state agency.

(b) The secretary may acquire or be provided with equipment or refueling facilities necessary to operate alternative fuel vehicles by any of the following methods:

(1) Purchase or lease as authorized by law;

(2) Gift or loan of the equipment or facilities; or

(3) Gift or loan of the equipment or facilities or other arrangement pursuant to a service contract for the supply of alternative fuels.

(c) If such 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.

(d) Of the total number of vehicles acquired or caused to be acquired by the secretary for use by any state agency vehicle fleet:

(1) Twenty percent in fiscal year 1995;

(2) Thirty percent in fiscal year 1996;

(3) Fifty percent in fiscal year 1997, shall be alternative fuel vehicles.

(e) The secretary shall review this alternative fuel use program on or before December 31, 1997, and if the secretary determines that the program is effective in reducing costs to the state, taking into consideration the cost of operating alternative fuel vehicles over the expected useful life of the vehicles, the secretary shall, of the total number of vehicles acquired in each fiscal year, acquire at least seventy-five percent alternative fuel vehicles for state agency fleets beginning September 1, 1998, and thereafter.

(f) The secretary shall, in the annual fiscal report to the Legislature, show the progress in achieving these percentage requirements by itemizing purchases, leases and conversions of motor vehicles and usage of alternative fuels.

(g) The secretary, in the development of the alternative fuel use program, shall consult with state 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 state, the secretary shall attempt to the extent possible to convert first those vehicles that are used the most often for the most miles. The secretary 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.

(h) The secretary may reduce any percentage specified or waive the requirements of subsection (d) of this section for any state agency upon a determination by the secretary 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.

(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 supplied.

(i) The provisions of this section do not apply to:

(1) Vehicles operated by law-enforcement agencies;

(2) Emergency vehicles;

(3) Vehicles operated by public transit authorities;

(4) School buses;

(5) Vehicles operated by the state rail authority; or

(6) Nonroad vehicles, including farm and construction vehicles.