[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2685 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2685

 To amend the Internal Revenue Code of 1986 to provide incentives for 
   the production, sale, and use of highly fuel-efficient, advanced-
technology motor vehicles and to amend the Energy Policy Act of 1992 to 
 undertake an assessment of the relative effectiveness of current and 
potential methods to further encourage the development of the most fuel 
efficient vehicles for use in interstate commerce in the United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 June 7 (legislative day, June 6), 2000

 Mr. Levin (for himself, Mr. Ashcroft, and Mr. Abraham) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
   the production, sale, and use of highly fuel-efficient, advanced-
technology motor vehicles and to amend the Energy Policy Act of 1992 to 
 undertake an assessment of the relative effectiveness of current and 
potential methods to further encourage the development of the most fuel 
efficient vehicles for use in interstate commerce in the United States.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Advanced Technology Motor Vehicle 
Fuel Economy Act of 2000''.

        TITLE I--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

SEC. 101. CREDIT FOR CERTAIN ENERGY EFFICIENT MOTOR VEHICLES.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 30B. CREDIT FOR HYBRID VEHICLES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of the credit amounts for each qualified hybrid 
vehicle placed in service during the taxable year.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount for each qualified 
        hybrid vehicle with a rechargeable energy storage system that 
        provides the applicable percentage of the maximum available 
        power shall be the amount specified in the following table:

  ``Applicable percentage                                 Credit amount
        Greater than or equal to 5 percent but less than 10       $500 
            percent.
        Greater than or equal to 10 percent but less than 20    $1,000 
            percent---.
        Greater than or equal to 20 percent but less than 30    $1,500 
            percent---.
        Greater than or equal to 30 percent.................... $2,000.
            ``(2) Increase in credit amount for regenerative braking 
        system.--In the case of a qualified hybrid vehicle that 
        actively employs a regenerative braking system which supplies 
        to the rechargeable energy storage system the applicable 
        percentage of the energy available from braking in a typical 60 
        miles per hour to 0 miles per hour braking event, the credit 
        amount determined under this section shall be increased by the 
        amount specified in the following table:

  ``Applicable percentage                                 Credit amount
        Greater than or equal to 20 percent but less than 40      $250 
            percent.
        Greater than or equal to 40 percent but less than 60      $500 
            percent.
        Greater than or equal to 60 percent.................... $1,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified hybrid vehicle.--The term `qualified hybrid 
        vehicle' means an automobile that meets all applicable 
        regulatory requirements and that can draw propulsion energy 
        from both of the following onboard sources of stored energy:
                    ``(A) A consumable fuel.
                    ``(B) A rechargeable energy storage system.
            ``(2) Maximum available power.--The term `maximum available 
        power' means the maximum value of the sum of the heat engine 
        and electric drive system power or other nonheat energy 
        conversion devices available for a driver's command for maximum 
        acceleration at vehicle speeds under 75 miles per hour.
            ``(3) Automobile.--The term `automobile' has the meaning 
        given such term by section 4064(b)(1) (without regard to 
        subparagraphs (B) and (C) thereof). A vehicle shall not fail to 
        be treated as an automobile solely by reason of weight if such 
        vehicle is rated at 8,500 pounds gross vehicle weight rating or 
        less.
    ``(d) Application With Other Credits.--The credit allowed by 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and the preceding 
        sections of this subpart, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        subsection (d)).
            ``(2) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(3) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under this section with 
        respect to--
                    ``(A) any property for which a credit is allowed 
                under section 30,
                    ``(B) any property referred to in section 50(b), or
                    ``(C) any property taken into account under section 
                179 or 179A.
            ``(4) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
    ``(f) Regulations.--
            ``(1) Treasury.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this section.
            ``(2) Environmental protection agency.--The Administrator 
        of the Environmental Protection Agency, in coordination with 
        the Secretary of Transportation and consistent with the laws 
        administered by such agency for automobiles, shall timely 
        prescribe such regulations as may be necessary or appropriate 
        solely for the purpose of specifying the testing and 
        calculation procedures to determine whether a vehicle meets the 
        qualifications for a credit under this section.
    ``(g) Application of Section.--This section shall apply to any 
qualified hybrid vehicles placed in service after December 31, 1999, 
and before January 1, 2009.''
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (26), by striking 
        the period at the end of paragraph (27) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(28) to the extent provided in section 30B(e)(1).''
            (2) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 30B. Credit for hybrid vehicles.''

SEC. 102. EXTENSION OF CREDIT FOR CERTAIN QUALIFIED ELECTRIC VEHICLES.

    (a) Extension of Credit for Qualified Electric Vehicles.--
Subsection (e) of section 30 of the Internal Revenue Code of 1986 
(relating to termination) is amended by striking ``December 31, 2004'' 
and inserting ``December 31, 2008''.
    (b) Repeal of Phaseout.--Subsection (b) of section 30 of such Code 
(relating to limitations) is amended by striking paragraph (2) and by 
redesignating paragraph (3) as paragraph (2).

SEC. 103. EFFECTIVE DATE.

    The amendments made by this title shall apply to vehicles placed in 
service after the date of the enactment of this Act.

         TITLE II--AMENDMENTS TO THE ENERGY POLICY ACT OF 1992

SEC. 201. STUDY OF CURRENT AND FUTURE ENERGY CONSERVATION REGARDING 
              MOTOR VEHICLE AND RELATED TRANSPORTATION IN INTERSTATE 
              COMMERCE IN THE UNITED STATES.

    (a) In General.--Subtitle G of title I of the Energy Policy Act of 
1992 (42 U.S.C. 13451 note) is amended by adding the following new 
sections:

``SEC. 174. TRANSPORTATION ENERGY CONSERVATION STUDY.

    ``(a) Study Agreement.--The Secretary of Transportation (with the 
participation of the Secretary of Energy) shall, within 90 days after 
the date of enactment of this section, enter into an agreement with the 
National Academy of Sciences to conduct a comprehensive study of 
voluntary, mandatory, and other means and measures used by private and 
public sectors for the purposes of conserving energy in transportation 
of people and goods in interstate commerce in the United States, and 
for the provision of services by motor vehicles and other modes of 
transportation, and identify and examine potential voluntary, 
mandatory, and other approaches to such conservation. Such study shall 
also examine the use, acceptance, effectiveness, costs, impact on 
mobility, and other relevant factors concerning such current and 
potential means and measures for energy conservation and shall consider 
the ubiquitous nature of such transportation and its importance in the 
economy. The study shall also take into consideration such factors as 
current and future energy supplies available to the United States, the 
availability in the United States of adequate, reliable, convenient, 
consumer-friendly transportation locally, regionally, and nationally, 
the geographic size and population of the United States, and the 
availability and impact of technologies and fuels that affect energy 
conservation. The study shall also compare existing and planned energy 
conservation approaches in other economically developed countries and 
integrated economic regions, taking into consideration similar factors.
    ``(b) Requirements.--The study shall be comprised of the following 
aspects:
            ``(1) An overview of the United States energy supply 
        situation, including an assessment of current and projected 
        fuel supplies.
            ``(2) The impact of current and projected fuel supplies on 
        national security and trade.
            ``(3) An assessment of energy use by the transportation and 
        several other sectors of the economy.
            ``(4) An assessment of the relative effectiveness of past 
        and current motor vehicle energy conservation programs for 
        motor vehicles and other modes of transportation, policies, and 
        proposals in the United States, including consideration of, 
        among others--
                    ``(A) regulatory requirements, direct and indirect;
                    ``(B) corporate average fuel economy mandate;
                    ``(C) dispersal of authority over the provision and 
                regulation of transportation;
                    ``(D) gas guzzler tax;
                    ``(E) alternative fuel vehicles and the 
                availability of alternative fuels;
                    ``(F) tax credits for electric vehicles;
                    ``(G) fiscal measures, including taxation, 
                incentives and subsidies;
                    ``(H) higher fuel taxes;
                    ``(I) fuel economy labeling and reporting;
                    ``(J) integration of transportation and land use 
                planning;
                    ``(K) speed limits;
                    ``(L) carpooling requirements;
                    ``(M) high occupancy vehicle (HOV) restrictions;
                    ``(N) altering driving behavior;
                    ``(O) incentives for mass transit;
                    ``(P) development, use, and adequacy of modeling 
                for energy efficiency of motor vehicle and other 
                transportation modes;
                    ``(Q) congestion mitigation measures; and
                    ``(R) strategic and other measures and incentives, 
                including communications and outreach strategies.
            ``(5) An assessment of the effectiveness of motor vehicle 
        transportation energy conservation efforts in economically 
        developed countries and integrated economic regions other than 
        the United States, including consideration of, among others--
                    ``(A) regulatory measures and mandates;
                    ``(B) fiscal measures;
                    ``(C) higher fuel taxes;
                    ``(D) vehicle taxation by engine size;
                    ``(E) tolls;
                    ``(F) alternative fuel vehicles and the 
                availability of alternative fuels;
                    ``(G) voluntary commitments in lieu of mandates;
                    ``(H) gas rationing and mobility restrictions 
                (e.g., no-drive days);
                    ``(I) monitoring; and
                    ``(J) other fuel economy programs.
            ``(6)(A) The identification of potential future approaches 
        to motor vehicle and other transportation energy conservation 
        efforts in the United States, including consideration of, among 
        others--
                    ``(i) voluntary approaches by industry versus 
                regulatory mandates;
                    ``(ii) use of incentives to encourage market 
                penetration;
                    ``(iii) cooperative government/industry 
                arrangements such as Smart Growth, Clean Cities, Energy 
                Star, Partnership for a New Generation of Vehicles, 
                European Automobile Cooperative Research program, and 
                Japanese Cooperative Automobile Research program;
                    ``(iv) efforts to encourage and accelerate lean 
                burn, clean diesel hybrids, fuel cells and other 
                advanced technologies, and alternative fuels;
                    ``(v) congestion mitigation measures;
                    ``(vi) intelligent transportation systems (ITS); 
                and
                    ``(vii) other potential approaches.
            ``(B) In making such identification, the study should 
        assess, to the extent applicable, the marketability, risks, 
        benefits, practicability, acceptability, and costs of such 
        approaches as well as any legal or market barriers to the 
        introduction of such approaches, such as cost of energy, public 
        awareness, fueling infrastructure, fuel quality, and other 
        existing regulations (e.g., Environmental Protection Agency 
        Tier 2 regulations, California emissions standards, Federal 
        Motor Vehicle Safety Standards).
            ``(7) An assessment of the effects on personal mobility and 
        the United States economy that have resulted from the 
        implementation of current conservation policies and measures 
        and that likely would result from the implementation of future 
        approaches.
            ``(8) Conclusions that appropriately follow from the 
        foregoing study, including--
                    ``(A) the effectiveness of prior and existing 
                transportation policies in fostering increased energy 
                conservation;
                    ``(B) the need for and timing of energy 
                conservation measures for motor vehicles; and
                    ``(C) other potential future approaches and 
                policies that recommend themselves for further 
                consideration.
    ``(c) Report.--The Secretary of Transportation shall submit to 
Congress, not later than 18 months after the date of enactment of this 
Act, a report describing the results of the study under this section, 
including any appropriate recommendations, together with the basis for 
them and their estimated costs and benefits.

``SEC. 175. STUDY OF LEAN BURN TECHNOLOGY.

    ``(a) Scope of Study.--The Secretary of Transportation (with the 
participation of the Secretary of Energy) shall, within 60 days after 
the date of enactment of this Act, commission a study regarding lean 
burn technology in increasing fuel efficiency, to include consideration 
of, among other things:
            ``(1) Potential benefits.--The potential benefits of 
        introducing lean burn technology, including--
                    ``(A) its impact on fuel consumption; and
                    ``(B) the cost effectiveness (i.e., value) of 
                implementing lean burn technology as a bridge to longer 
                term advanced technologies for fuel economy 
                improvement.
            ``(2) Potential barriers.--The potential barriers to 
        introduction of lean burn technology, including--
                    ``(A) emissions control technology for lean burn 
                technology;
                    ``(B) the compatibility of existing fuels to 
                advanced technologies;
                    ``(C) the conflict between lean burn technology and 
                stringent emissions limits; and
                    ``(D) any legal and market barriers to the 
                introduction of lean burn technologies, such as cost of 
                energy, public awareness, fueling infrastructure, fuel 
                quality, and other existing regulations (e.g., 
                Environmental Protection Agency Tier 2 regulations, 
                California emissions standards, Federal Motor Vehicle 
                Safety Standards);
            ``(3) Recommendations.--Recommendations for removing or 
        addressing any potential barriers, including--
                    ``(A) the implementation of new technologies with 
                the least disruption to the economy; and
                    ``(B) the incremental cost of increasing fuel 
                efficiency.
            ``(4) Overall recommendations on the value of pursuing lean 
        burn technology as a means of improving fuel efficiency.
    ``(b) Report.--The Secretary shall submit to Congress, not later 
than 12 months after the date of enactment of this Act, a report 
describing the results of the study under this section, including any 
appropriate recommendations, together with the basis for them and their 
estimated costs and benefits.''.

SEC. 202. EXTENSION OF CREDITS FOR FLEXIBLE FUEL VEHICLES.

    (a) Purpose.--The purpose of this section is to extend the 
manufacturing incentives for dual fuel vehicles, as set forth in 
subsections (b) and (d) of section 32905 of title 49, United States 
Code, from the 2004 model year through the 2008 model year, and to 
extend in like manner the maximum fuel economy increase, as set forth 
in subsection (a)(1) of section 32906 of title 49, United States Code.
    (b) Amendments.--
            (1) Section 32905 of title 49, United States Code, is 
        amended as follows:
                    (A) Subsections (b) and (d) are each amended by 
                striking ``model years 1993-2004'' and inserting 
                ``model years 1993-2008''.
                    (B) Subsection (f) is amended by striking `Not 
                later than December 31, 2001, the Secretary' and 
                inserting ``Not later than December 31, 2005, the 
                Secretary shall''.
                    (C) Subsection (f)(1) is amended by striking 
                ``model year 2004'' and inserting ``model year 2008''.
                    (D) Subsection (g) is amended by striking ``Not 
                later than September 30, 2000'' and inserting ``Not 
                later than September 30, 2004''.
            (2) Subsection (a)(1) of section 32906 of title 49, United 
        States Code, is amended as follows:
                    (A) Subsection (a)(1)(A) is amended by striking 
                ``the model years 1993-2004'' and inserting ``model 
                years 1993-2008''.
                    (B) Subsection (a)(1)(B) is amended by striking 
                ``the model years 2005-2008'' and inserting ``2009-
                2012''.
                                 <all>