The bill proposes an amendment to Chapter 44-30 of the General Laws, specifically adding a new section titled "44-30-28. Tax credit for alternative fuel motor vehicle conversion." This new section introduces a tax credit for individual taxpayers who incur expenses for equipment and labor to convert a motor vehicle licensed in Rhode Island to operate on alternative fuel. However, sellers of alternative fuel are not eligible for this credit if they are converting their own vehicles to the alternative fuel that they sell.

The tax credit is capped at 50% of the conversion costs, with a maximum of $2,000 for vehicles weighing 10,000 pounds or less, and $3,000 for vehicles over that weight. Alternative fuels are defined to include natural gas, liquified petroleum gas, liquified natural gas, hydrogen, electricity, or any fuel that is at least 85% methanol, ethanol, or other alcohol, ether, or a combination of these. The credit cannot exceed the taxpayer's income tax liability for the year, is not subject to carryback or carryforward, and must be applied in the year the conversion is made. The act will take effect upon passage.