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California green vehicle rebates in jeopardy

An unexpectedly large participation rate drained the fund 10 days before the fiscal year ends. And for the new fiscal year, smaller rebates have been proposed.

Nissan's all-electric Leaf is one of the vehicles that qualifies for the maximum rebate under the California Clean Vehicle Rebate Project. Nissan

California's rebate program for electric and hybrid cars has run out of money for this fiscal year.

The Clean Vehicle Rebate Project has been offering California residents who purchase an electric or hybrid vehicle a rebate of $1,500 to $5,000, depending on the type of vehicle purchased.

The state budget had allocated $5 million for the program for the 2010-2011 fiscal year with an additional $2 million coming from the state's Energy Commission. However, as with the federal Cash for Clunkers program, citizens responded much more enthusiastically than anticipated.

The state program's fund was depleted as of June 20--10 days before the fiscal year ends. But renewed funding is at the mercy of the state budget, which has yet to be approved, according to the California Air Resources Board.

The Clean Vehicle Rebate Project is asking the state to allocate $12 million to $17 million for the 2011-2012 fiscal year. Until the budget is approved, rebate applicants will be processed but placed on a waiting list.

However, even if the new amount is approved, those who've shown up late to the green love drive-in will not get as good a deal.

In lieu of the state's fiscal problems the Clean Vehicle Rebate Project has, as part of its budget proposal, offered to reduce rebates to between $900 and $2,500 to accommodate more applicants.

That would allow the program to offer about 6,000 rebates, which is roughly four times the amount of people who applied in 2010, according to the Air Resources Board.

The program in the meantime is encouraging people who've already purchased an eligible vehicle to still send in their rebate paperwork as soon as possible, as it will remain a first-come, first-served program.

"Even with proposed reductions in the rebate amount for next fiscal year, California consumers will still have access to $10,000 in clean vehicle incentives through the combined California rebate and federal tax credit," Air Resources Board spokeswoman Karen Caesar told The Los Angeles Times, referring to the U.S. government's $7,500 tax credit on zero-emissions vehicles.