[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 183 Introduced in Senate (IS)]

  1st Session
                                 S. 183

   To require the establishment of a corporate average fuel economy 
standard for passenger automobiles of 40 miles per gallon by 2017, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 4, 2007

  Mr. Stevens introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
   To require the establishment of a corporate average fuel economy 
standard for passenger automobiles of 40 miles per gallon by 2017, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Improved Passenger 
Automobile Fuel Economy Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--40 MPG STANDARD BY 2017

Sec. 101. Cafe standards for passenger automobiles.
Sec. 102. Fuel economy standard credits.
Sec. 103. Authorization of appropriations.
Sec. 104. Effective date.
    TITLE II--MARKET-BASED INITIATIVES FOR GREENHOUSE GAS REDUCTION

Sec. 201. Market-based initiatives. 
Sec. 202. Implementing panel.
Sec. 203. Definitions.

                    TITLE I--40 MPG STANDARD BY 2017

SEC. 101. CAFE STANDARDS FOR PASSENGER AUTOMOBILES.

    (a) Average Fuel Economy Standards for Automobiles.--Section 32902 
of title 49, United States Code, is amended--
            (1) by striking subsections (b) and (c) and inserting the 
        following:
    ``(b) Passenger Automobiles.--
            ``(1) In general.--At least 18 months before the beginning 
        of each model year, the Secretary of Transportation shall 
        prescribe by regulation average fuel economy standards for 
        passenger automobiles manufactured by a manufacturer in that 
        model year. Each standard shall be the maximum feasible average 
        fuel economy level that the Secretary decides the manufacturers 
        can achieve in that model year. The Secretary may prescribe 
        separate standards for different classes of passenger 
        automobiles.
            ``(2) Minimum standard.--Except as provided in paragraph 
        (3), in prescribing a standard under paragraph (1), the 
        Secretary shall ensure that no manufacturer's standard for a 
        particular model year is less than the greater of--
                    ``(A) the standard in effect on the date of 
                enactment of the Improved Passenger Automobile Fuel 
                Economy Act of 2007; or
                    ``(B) a standard established in accordance with the 
                requirement of section 104(c)(2) of that Act.
            ``(3) 40 miles per gallon standard for model year 2017.--
        The Secretary shall prescribe an average fuel economy standard 
        for passenger automobiles manufactured by a manufacturer in 
        model year 2017 of 40 miles per gallon. If the Secretary 
        determines that more than 1 manufacturer is not reasonably 
        expected to achieve that standard, the Secretary shall notify 
        the Senate Committee on Commerce, Science, and Transportation 
        and the House of Representatives Committee on Energy and 
        Commerce of that determination.
    ``(c) Flexibility of Authority.--
            ``(1) In general.--The authority of the Secretary to 
        prescribe by regulation average fuel economy standards for 
        automobiles under this section includes the authority to 
        prescribe standards based on one or more vehicle attributes 
        that relate to fuel economy, and to express the standards in 
        the form of a mathematical function. The Secretary may issue a 
        regulation prescribing standards for one or more model years.
            ``(2) Required lead-time.--When the Secretary prescribes an 
        amendment to a standard under this section that makes an 
        average fuel economy standard more stringent, the Secretary 
        shall prescribe the amendment at least 18 months before the 
        beginning of the model year to which the amendment applies.
            ``(3) No across-the-board increases.--When the Secretary 
        prescribes a standard, or prescribes an amendment under this 
        section that changes a standard, the standard may not be 
        expressed as a uniform percentage increase from the fuel-
        economy performance of automobile classes or categories already 
        achieved in a model year by a manufacturer.'';
            (2) by inserting ``motor vehicle safety, emissions,'' in 
        subsection (f) after ``economy,'';
            (3) by striking ``energy.'' in subsection (f) and inserting 
        ``energy and reduce its dependence on oil for 
        transportation.'';
            (4) by striking subsection (j) and inserting the following:
    ``(j) Notice of Final Rule.--Before taking final action on a 
standard or an exemption from a standard under this section, the 
Secretary of Transportation shall notify the Secretary of Energy and 
the Administrator of the Environmental Protection Agency and provide 
them a reasonable time to comment on the standard or exemption.''; and
            (5) by adding at the end thereof the following:
    ``(k) Costs-Benefits.--The Secretary of Transportation may not 
prescribe an average fuel economy standard under this section that 
imposes marginal costs that exceed marginal benefits, as determined at 
the time any change in the standard is promulgated.''.
    (b) Exemption Criteria.--The first sentence of section 
32904(b)(6)(B) of title 49, United States Code, is amended--
            (1) by striking ``exemption would result in reduced'' and 
        inserting ``manufacturer requesting the exemption will 
        transfer'';
            (2) by striking ``in the United States'' and inserting 
        ``from the United States''; and
            (3) by inserting ``because of the grant of the exemption'' 
        after ``manufacturing''.
    (c) Conforming Amendments.--
            (1) Section 32902 of title 49, United States Code, is 
        amended--
                    (A) by striking ``or (c)'' in subsection (d)(1);
                    (B) by striking ``(c),'' in subsection (e)(2);
                    (C) by striking ``subsection (a) or (d)'' each 
                place it appears in subsection (g)(1) and inserting 
                ``subsection (a), (b), or (d)'';
                    (D) by striking ``(1) The'' in subsection (g)(1) 
                and inserting ``The'';
                    (E) by striking subsection (g)(2); and
                    (F) by striking ``(c),'' in subsection (h) and 
                inserting ``(b),''.
            (2) Section 32903 of such title is amended by striking 
        ``section 32902(b)-(d)'' each place it appears and inserting 
        ``subsection (b) or (d) of section 32902''.
            (3) Section 32904(a)(1)(B) of such title is amended by 
        striking ``section 32902(b)-(d)'' and inserting ``subsection 
        (b) or (d) of section 32902''.
            (4) The first sentence of section 32909(b) of such title is 
        amended to read ``The petition must be filed not later than 59 
        days after the regulation is prescribed.''.
            (5) Section 32917(b)(1)(B) of such title is amended by 
        striking ``or (c)''.

SEC. 102. FUEL ECONOMY STANDARD CREDITS.

    (a) In General.--Section 32903 of title 49, United States Code, is 
amended by striking the second sentence of subsection (a) and inserting 
``The credits--
            ``(1) may be applied to any of the 3 model years 
        immediately following the model year for which the credits are 
        earned; or
            ``(2) transferred to the registry established under section 
        201 of the Improved Passenger Automobile Fuel Economy Act of 
        2007.''.
    (b) Greenhouse Gas Credits Applied to CAFE Standards.--Section 
32903 of title 49, United States Code, is amended by adding at the end 
the following:
    ``(g) Greenhouse Gas Credits.--
            ``(1) In general.--A manufacturer may apply credits 
        purchased through the registry established by section 201 of 
        the Improved Passenger Automobile Fuel Economy Act of 2007 
        toward any model year after model year 2010 under subsection 
        (d), subsection (e), or both.
            ``(2) Limitation.--A manufacturer may not use credits 
        purchased through the registry to offset more than 10 percent 
        of the fuel economy standard applicable to any model year.''.

SEC. 103. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of 
Transportation such sums as may be necessary to carry out this title 
and chapter 329 of title 49, United States Code, as amended by this 
title.

SEC. 104. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this title, 
and the amendments made by this title, take effect on the date of 
enactment of this Act.
    (b) Transition for Passenger Automobile Standard.--Notwithstanding 
subsection (a), and except as provided in subsection (c)(2), until the 
effective date of a standard for passenger automobiles that is issued 
under the authority of section 32902(b) of title 49, United States 
Code, as amended by this Act, the standard or standards in place for 
passenger automobiles under the authority of section 32902 of that 
title, as that section was in effect on the day before the date of 
enactment of this Act, shall remain in effect.
    (c) Rulemaking.--
            (1) Initiation of rulemaking under amended law.--Within 60 
        days after the date of enactment of this Act, the Secretary of 
        Transportation shall initiate a rulemaking for passenger 
        automobiles under section 32902(b) of title 49, United States 
        Code, as amended by this Act.
            (2) Amendment of existing standard.--Until the Secretary 
        issues a final rule pursuant to the rulemaking initiated in 
        accordance with paragraph (1), the Secretary shall amend the 
        average fuel economy standard prescribed pursuant to section 
        32092(b) of title 49, United States Code, with respect to 
        passenger automobiles in model years to which the standard 
        adopted by such final rule does not apply.

    TITLE II--MARKET-BASED INITIATIVES FOR GREENHOUSE GAS REDUCTION

SEC. 201. MARKET-BASED INITIATIVES.

    (a) Establishment of Registry for Voluntary Trading Systems.--The 
Secretary of Commerce shall establish a national registry system for 
greenhouse gas trading among industry under which emission reductions 
from the applicable baseline are assigned unique identifying numerical 
codes by the registry. Participation in the registry is voluntary. Any 
entity conducting business in the United States may register its 
emission results, including emissions generated outside of the United 
States, on an entity-wide basis with the registry, and may utilize the 
services of the registry.
    (b) Purposes.--The purposes of the national registry are--
            (1) to encourage voluntary actions to reduce greenhouse gas 
        emissions and increase energy efficiency, including increasing 
        the fuel economy of passenger automobiles and light trucks and 
        reducing the reliance by United States markets on petroleum 
        produced outside the United States used to provide vehicular 
        fuel;
            (2) to enable participating entities to record voluntary 
        greenhouse gas emissions reductions; in a consistent format 
        that is supported by third party verification;
            (3) to encourage participants involved in existing 
        partnerships to be able to trade emissions reductions among 
        partnerships;
            (4) to further recognize, publicize, and promote 
        registrants making voluntary and mandatory reductions;
            (5) to recruit more participants in the program; and
            (6) to help various entities in the nation establish 
        emissions baselines.
    (c) Functions.--The national registry shall carry out the following 
functions:
            (1) Referrals.--Provide referrals to approved providers for 
        advice on--
                    (A) designing programs to establish emissions 
                baselines and to monitor and track greenhouse gas 
                emissions; and
                    (B) establishing emissions reduction goals based on 
                international best practices for specific industries 
                and economic sectors.
            (2) Uniform reporting format.--Adopt a uniform format for 
        reporting emissions baselines and reductions established 
        through--
                    (A) the Director of the National Institute of 
                Standards and Technology for greenhouse gas baselines 
                and reductions generally; and
                    (B) the Secretary of Transportation for credits 
                under section 32903 of title 49, United States Code.
            (3) Record maintenance.--Maintain a record of all emission 
        baselines and reductions verified by qualified independent 
        auditors.
            (4) Encourage participation.--Encourage organizations from 
        various sectors to monitor emissions, establish baselines and 
        reduction targets, and implement efficiency improvement and 
        renewable energy programs to achieve those targets.
            (5) Public awareness.--Recognize, publicize, and promote 
        participants that--
                    (A) commit to monitor their emissions and set 
                reduction targets;
                    (B) establish emission baselines; and
                    (C) report on the amount of progress made on their 
                annual emissions.
    (d) Transfer of Reductions.--The registry shall--
            (1) allow for the transfer of ownership of any reductions 
        realized in accordance with the program; and
            (2) require that the registry be notified of any such 
        transfer within 30 days after the transfer is effected.
    (e) Future Considerations.--Any reductions achieved under this 
program shall be credited against any future mandatory greenhouse gas 
reductions required by the government. Final approval of the amount and 
value of credits shall be determined by the agency responsible for the 
implementation of the mandatory greenhouse gas emission reduction 
program, except that credits under section 32903 of title 49, United 
States Code, shall be determined by the Secretary of Transportation. 
The Secretary of Commerce shall by rule establish an appeals process, 
that may incorporate an arbitration option, for resolving any dispute 
arising out of such a determination made by that agency.
    (f) CAFE Standards Credits.--The Secretary of Transportation shall 
work with the Secretary of Commerce and the implementing panel 
established by section 202 to determine the equivalency of credits 
earned under section 32903 of title 49, United States Code, for 
inclusion in the registry. The Secretary shall by rule establish an 
appeals process, that may incorporate an arbitration option, for 
resolving any dispute arising out of such a determination.

SEC. 202. IMPLEMENTING PANEL.

    (a) Establishment.--There is established within the Department of 
Commerce an implementing panel.
    (b) Composition.--The panel shall consist of--
            (1) the Secretary of Commerce or the Secretary's designee, 
        who shall serve as Chairperson;
            (2) the Secretary of Transportation or the Secretary's 
        designee; and
            (3) 1 expert in the field of greenhouse gas emissions 
        reduction, certification, or trading from each of the following 
        agencies--
                    (A) the Department of Energy;
                    (B) the Environmental Protection Agency;
                    (C) the Department of Agriculture;
                    (D) the National Aeronautics and Space 
                Administration;
                    (E) the Department of Commerce; and
                    (F) the Department of Transportation.
    (c) Experts and Consultants.--Any member of the panel may secure 
the services of experts and consultants in accordance with the 
provisions of section 3109 of title 5, United States Code, for 
greenhouse gas reduction, certification, and trading experts in the 
private and non-profit sectors and may also utilize any grant, 
contract, cooperative agreement, or other arrangement authorized by law 
to carry out its activities under this subsection.
    (d) Duties.--The panel shall--
            (1) implement and oversee the implementation of this 
        section;
            (2) promulgate--
                    (A) standards for certification of registries and 
                operation of certified registries; and
                    (B) standards for measurement, verification, and 
                recording of greenhouse gas emissions and greenhouse 
                gas emission reductions by certified registries;
            (3) maintain, and make available to the public, a list of 
        certified registries; and
            (4) issue rulemakings on standards for measuring, 
        verifying, and recording greenhouse gas emissions and 
        greenhouse gas emission reductions proposed to the panel by 
        certified registries, through a standard process of issuing a 
        proposed rule, taking public comment for no less than 30 days, 
        then finalizing regulations to implement this act, which will 
        provide for recognizing new forms of acceptable greenhouse gas 
        reduction certification procedures.
    (e) Certification and Operation Standards.--The standards 
promulgated by the panel shall include--
            (1) standards for ensuring that certified registries do not 
        have any conflicts of interest, including standards that 
        prohibit a certified registry from--
                    (A) owning greenhouse gas emission reductions 
                recorded in any certified registry; or
                    (B) receiving compensation in the form of a 
                commission where sources receive money for the total 
                number of tons certified;
            (2) standards for authorizing certified registries to enter 
        into agreements with for-profit persons engaged in trading of 
        greenhouse gas emission reductions, subject to paragraph (1); 
        and
            (3) such other standards for certification of registries 
        and operation of certified registries as the panel determines 
        to be appropriate.
    (f) Measurement, Verification, and Recording Standards.--The 
standards promulgated by the panel shall provide for, in the case of 
certified registries--
            (1) ensuring that certified registries accurately measure, 
        verify, and record