(a) After September 1, 1993, a political subdivision may purchase or lease alternative fuel vehicles for use by any agency of the political subdivision as follows:

(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 1995;

(2) Thirty percent in fiscal year 1996; and

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

(c) The governing authority of each political subdivision shall review this alternative fuel use program on or before December 31, 1997, 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 September 1, 1998, 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.