II 111th CONGRESS 1st Session S. 1093 IN THE SENATE OF THE UNITED STATES May 20, 2009 Mr. Wyden 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 tax incentives for increasing motor vehicle fuel efficiency, and for other purposes.

1.

Short title; amendment of 1986 Code

(a)

Short title

This Act may be cited as the Oil Independence, Limiting Subsidies, and Accelerating Vehicle Efficiency Act or the OILSAVE Act. (b)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

2.

Tax credit for fuel-efficient motor vehicles

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 (relating to other credits) is amended by inserting after section 30D the following new section:

30E.

Fuel-efficient motor vehicle credit

(a)

Allowance of credit

(1)

In general

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the amount determined under paragraph (2) with respect to any new qualified fuel-efficient motor vehicle placed in service by the taxpayer during the taxable year. (2)

Credit amount

With respect to each new qualified fuel-efficient motor vehicle, the amount determined under this paragraph shall be equal to— (A)in the case of any vehicle manufactured in model year 2011, the applicable amount determined in accordance with the table contained in paragraph (3), and (B)in the case of any passenger automobile or non-passenger automobile manufactured in a model year after 2011, the lesser of— (i)the sum of— (I)$900, plus (II)$100 for each whole mile per gallon in excess of 110 percent of the respective industry-wide average fuel economy standard for such model year for all passenger automobiles and all non-passenger automobiles, or (ii)$2,500. (3)

Applicable amount

For purposes of paragraph (2)(A), the applicable amount shall be determined as follows: (A)In the case of a passenger automobile which achieves: The fuel economy of:The applicable amount is: At least 33.2 but less than 34.2$900 At least 34.2 but less than 35.2$1,000 At least 35.2 but less than 36.2$1,100 At least 36.2 but less than 37.2$1,200 At least 37.2 but less than 38.2$1,300 At least 38.2 but less than 39.2 $1,400 At least 39.2 but less than 40.2$1,500 At least 40.2 but less than 41.2$1,600 At least 41.2 but less than 42.2$1,700 At least 42.2 but less than 43.2$1,800 At least 43.2 but less than 44.2$1,900 At least 44.2 but less than 45.2$2,000 At least 45.2 but less than 46.2$2,100 At least 46.2 but less than 47.2$2,200 At least 47.2 but less than 48.2$2,300 At least 48.2 but less than 49.2$2,400 At least 49.2$2,500. (B)In the case of a non-passenger automobile which achieves: The fuel economy of:The applicable amount is: At least 26.5 but less than 27.5$900 At least 27.5 but less than 28.5$1,000 At least 28.5 but less than 29.5$1,100 At least 29.5 but less than 30.5$1,200 At least 30.5 but less than 31.5$1,300 At least 31.5 but less than 32.5$1,400 At least 32.5 but less than 33.5$1,500 At least 33.5 but less than 34.5$1,600 At least 34.5 but less than 35.5$1,700 At least 35.5 but less than 36.5$1,800 At least 36.5 but less than 37.5$1,900 At least 37.5 but less than 38.5$2,000 At least 38.5 but less than 39.5$2,100 At least 39.5 but less than 40.5$2,200 At least 40.5 but less than 41.5$2,300 At least 41.5 but less than 42.5$2,400 At least 42.5$2,500. (b)

New qualified fuel-efficient motor vehicle

For purposes of this section, the term new qualified fuel-efficient motor vehicle means a passenger automobile or non-passenger automobile— (1)which is treated as a motor vehicle for purposes of title II of the Clean Air Act, (2)which— (A)in the case of a passenger automobile, achieves a fuel economy of not less than 110 percent of the industry-wide average fuel economy standard for the model year for all passenger automobiles, and (B)in the case of a non-passenger automobile, achieves a fuel economy of not less than 110 percent of the industry-wide average fuel economy standard for the model year for all non-passenger automobiles, (3)which has a gross vehicle weight rating of less than 14,000 pounds, (4)the original use of which commences with the taxpayer, (5)which is acquired for use or lease by the taxpayer and not for resale, and (6)which is made by a manufacturer during the period beginning with model year 2011 and ending with model year 2020. (c)

Application with other credits

(1)

Business credit treated as part of general business credit

So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)). (2)

Personal credit

(A)

In general

For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year. (B)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of— (i)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (ii)the sum of the credits allowable under subpart A (other than this section and sections 23, 25D, 30, and 30D) and section 27 for the taxable year. (d)

Other definitions

For purposes of this section— (1)

Manufacturer

The term manufacturer has the meaning given such term in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.). (2)

Model year

The term model year has the meaning given such term under section 32901(a) of such title 49. (3)

Motor vehicle

The term motor vehicle means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels. (4)

Fuel economy; average fuel economy standard

The terms fuel economy and average fuel economy standard have the meanings given such terms under section 32901 of such title 49. (e)

Special rules

(1)

Basis reduction

For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed. (2)

No double benefit

The amount of any deduction or other credit allowable under this chapter for a new qualified fuel-efficient motor vehicle shall be reduced by the amount of credit allowed under subsection (a) for such vehicle. (3)

Credit May Be Transferred

(A)

In general

A taxpayer may, in connection with the purchase of a new qualified fuel-efficient motor vehicle, transfer any credit allowable under subsection (a) to any person who is in the trade or business of selling new qualified fuel-efficient motor vehicles, but only if such person clearly discloses to such taxpayer, through the use of a window sticker attached to the new qualified fuel-efficient vehicle— (i)the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (c)), and (ii)a notification that the taxpayer will not be eligible for any credit under section 30, 30B, or 30D with respect to such vehicle unless the taxpayer elects not to have this section apply with respect to such vehicle. (B)

Consent required for revocation

Any transfer under subparagraph (A) may be revoked only with the consent of the Secretary. (C)

Regulations

The Secretary may prescribe such regulations as necessary to ensure that any credit described in subparagraph (A) is claimed once and not retransferred by a transferee. (4)

Property used outside United States not qualified

No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1). (5)

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. (6)

Election not to 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. (7)

Interaction with air quality and motor vehicle safety standards

A motor vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with— (A)the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and (B)the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code. (f)

Termination

This section shall not apply to property placed in service after December 31, 2020.

. (b)

Credit allowed against alternative minimum tax

(1)

Business credit

Section 38(c)(4)(B) is amended by redesignating clauses (i) through (viii) as clauses (ii) through (ix), respectively, and by inserting before clause (ii) (as so redesignated) the following new clause: (i)the credit determined under section 30E, . (2)

Personal credit

(A)Section 24(b)(3)(B) is amended by striking and 30D and inserting 30D, and 30E. (B)Section 25(e)(1)(C)(ii) is amended by inserting 30E, after 30D,. (C)Section 25B(g)(2) is amended by striking and 30D and inserting 30D, and 30E. (D)Section 26(a)(1) is amended by striking and 30D and inserting 30D, and 30E. (E)Section 904(i) is amended by striking and 30D and inserting 30D, and 30E. (c)

Conforming amendments

(1)Section 38(a) is amended by striking plus at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting , plus, and by adding at the end the following new paragraph: (36)the portion of the new qualified fuel-efficient motor vehicle credit to which section 30E(c)(1) applies. . (2)Section 1016(a) is amended by striking and at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting , and, and by adding at the end the following new paragraph: (38)to the extent provided in section 30E(e)(1). . (3)Section 6501(m) is amended by inserting 30E(e)(6), after 30D(e)(4),. (4)The table of section for subpart C of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 30D the following new item: Sec. 30E. Fuel-efficient motor vehicle credit. . (d)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2009.

3.

Credit for fuel savings components for certain vehicles

(a)

In General

Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section:

45R.

Credit for fuel savings components for certain vehicles

(a)

General Rule

For purposes of section 38, the fuel savings tax credit determined under this section for the taxable year is an amount equal to the applicable percentage of the amount paid or incurred for 1 or more qualifying fuel savings components placed in service on a qualifying vehicle by the taxpayer during the taxable year. (b)

Applicable percentage

For purposes of subsection (a), the applicable percentage is equal to the sum of— (1)5 percent, plus (2)5 percentage points (not to exceed 45 percentage points), for each percent in excess of 2 percent by which the fuel economy achieved by the qualifying vehicle with 1 or more qualifying fuel savings components exceeds such qualifying vehicle without such component or components. (c)

Definitions

For purposes of this section— (1)

Qualifying fuel savings component

The term qualifying fuel savings component means any device or system of devices that— (A)is installed on a qualifying vehicle, (B)is designed to increase the fuel economy of such vehicle by at least 2 percent, the amount of such increase to be verified by the Administrator of the Environmental Protection Agency under the SmartWay Transport Partnership, (C)the original use of which commences with the taxpayer, (D)is acquired for use by the taxpayer and not for resale, and (E)has not been taken into account for purposes of determining the credit under this section for any preceding taxable year with respect to such qualifying vehicle. (2)

Qualifying vehicle

The term qualifying vehicle means any vehicle subject to transportation fuels regulations under the Clean Air Act. (3)

Fuel economy

The term fuel economy has the meaning given such term under section 32901 of such title 49. (d)

Special rules

(1)

No double benefit

(A)

Reduction in basis

If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (a), the basis of such property shall be reduced by the amount of the credit so determined. (B)

Other deductions and credits

The amount of any deduction or other credit allowable under this chapter for a qualifying vehicle shall be reduced by the amount of credit allowed under subsection (a) with respect to such vehicle. (2)

Credit May Be Transferred

(A)

In general

A taxpayer may, in connection with the purchase of a qualifying fuel savings component, transfer any credit allowable under subsection (a) to any person who is in the trade or business of selling such components, but only if such person clearly discloses to such taxpayer, through the use of a sticker attached to the qualifying fuel savings component, the amount of any credit allowable under subsection (a) with respect to such component. (B)

Consent required for revocation

Any transfer under subparagraph (A) may be revoked only with the consent of the Secretary. (C)

Regulations

The Secretary may prescribe such regulations as necessary to ensure that any credit described in subparagraph (A) is claimed once and not retransferred by a transferee. (3)

Election not to claim credit

No credit shall be allowed under subsection (a) for any component if the taxpayer elects to not have this section apply to such component. (e)

Termination

This section shall not apply to property placed in service after December 31, 2020.

. (b)

Credit To be part of general business credit

Subsection (b) of section 38 (relating to general business credit), as amended by this Act, is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus , and by adding at the end the following new paragraph: (37)the fuel savings tax credit determined under section 45R(a). . (c)

Conforming Amendments

(1)The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 45Q the following new item: Sec. 45R. Credit for fuel savings components for certain vehicles and engines. . (2)Section 1016(a), as amended by this Act, is amended by striking and at the end of paragraph (37), by striking the period at the end of paragraph (38) and inserting , and, and by adding at the end the following: (39)in the case of a component with respect to which a credit was allowed under section 45R, to the extent provided in section 45R(d)(1)(A). . (3)Section 6501(m), as amended by this Act, is amended by inserting 45R(d)(3) after 45H(g). (d)

Effective Date

The amendments made by this section shall apply to property placed in service after December 31, 2009, in taxable years ending after such date.

4.

Increase in gas guzzler tax

(a)

In general

Subsection (a) of section 4064 (relating to gas guzzler tax) is amended to read as follows: (a)

Imposition of tax

(1)

In general

There is hereby imposed on the sale by the manufacturer of each automobile a tax equal to— (A)in the case of any automobile manufactured in model year 2011, the applicable tax amount determined in accordance with the table contained in paragraph (2), and (B)in the case of any automobile manufactured in a model year after 2011, if the fuel economy of the model type in which such automobile falls is less than 80 percent of the industry-wide average fuel economy standard for such model year for all automobiles, an amount equal to the lesser of— (i)an amount based on each mile per gallon reduction below such 80 percent equal to_ (I)$1,000 for the first mile per gallon reduction, or (II)an aggregate amount equal to 125 percent of the previous dollar amount for each additional mile per gallon reduction, or (ii)$22,737. For purposes of subparagraph (B), any fraction of a mile per gallon shall be rounded to the nearest mile per gallon and any fraction of a dollar shall be rounded to the nearest dollar.(2)

Applicable tax amount

For purposes of paragraph (1)(A), the applicable tax amount shall be determined as follows: If the fuel economy of the model type in which the automobile falls is:The applicable tax amount is: At least 24.2$0 At least 23.2 but less than 24.2$1,000 At least 22.2 but less than 23.2$1,250 At least 21.2 but less than 22.2$1,563 At least 20.2 but less than 21.2$1,953 At least 19.2 but less than 20.2$2,441 At least 18.2 but less than 19.2$3,052 At least 17.2 but less than 18.2$3,815 At least 16.2 but less than 17.2$4,768 At least 15.2 but less than 16.2$5,960 At least 14.2 but less than 15.2$7,451 At least 13.2 but less than 14.2$9,313 At least 12.2 but less than 13.2$11,642 At least 11.2 but less than 12.2$14,552 At least 10.2 but less than 11.2$18,190 Less than 10.2$22,737. . (b)

Definition

Section 4064(b) (relating to definitions) is amended by adding at the end the following new paragraph: (8)

Average fuel economy standard

The term average fuel economy standard has the meaning given such term under section 32901 of title 49, United States Code. . (c)

Effective date

The amendments made by this section shall apply to sales after December 31, 2009.

5.

Increase in manufacturer CAFE penalties

(a)

In general

Section 32912 of title 49, United States Code, is amended— (1)by striking $5 in subsection (b) and inserting $50, and (2)by striking $10 in subsection (c)(1)(B) and inserting $100. (b)

Effective date

The amendments made by this section shall apply to model years beginning after the date of the enactment of this Act.

6.

Deployment of low-greenhouse gas and fuel-saving technologies

Section 756 of the Energy Policy Act of 2005 (42 U.S.C. 16104) is amended— (1)by striking the section heading and all that follows through the end of subsection (b) and inserting the following:

756.

Deployment of low-greenhouse gas and fuel-saving technologies

(a)

Definitions

In this section: (1)

Administrator

The term Administrator means the Administrator of the Environmental Protection Agency. (2)

Advanced truck stop electrification system

The term advanced truck stop electrification system means a stationary system that delivers heat, air conditioning, electricity, or communications, and is capable of providing verifiable and auditable evidence of use of those services, to a heavy-duty vehicle and any occupants of the heavy-duty vehicle with, or for delivery, of those services. (3)

Auxiliary power unit

The term auxiliary power unit means an integrated system that— (A)provides heat, air conditioning, engine warming, or electricity to components on a heavy-duty vehicle; and (B)is certified by the Administrator under part 89 of title 40, Code of Federal Regulations (or any successor regulation), as meeting applicable emission standards. (4)

Heavy-duty vehicle

The term heavy-duty vehicle means a vehicle that has a gross vehicle weight rating greater than 8,500 pounds. (5)

Idle reduction technology

The term idle reduction technology means an advanced truck stop electrification system, auxiliary power unit, or other technology that— (A)is used to reduce idling; and (B)allows for the main drive engine or auxiliary refrigeration engine to be shut down. (6)

Long-duration idling

(A)

In general

The term long-duration idling means the operation of a main drive engine or auxiliary refrigeration engine, for a period greater than 15 consecutive minutes, at a time at which the main drive engine is not engaged in gear. (B)

Exclusions

The term long-duration idling does not include the operation of a main drive engine or auxiliary refrigeration engine during a routine stoppage associated with traffic movement or congestion. (7)

Low-greenhouse gas and fuel-saving technology

The term low-greenhouse gas and fuel-saving technology means any device, system of devices, strategies, or equipment that— (A)reduces greenhouse gas emissions; or (B)improves fuel efficiency. (b)

Low-greenhouse gas and fuel-saving technology deployment program

(1)

Establishment

(A)

In general

Not later than 90 days after the date of enactment of the OILSAVE Act, the Administrator, in consultation with the Secretary of Energy, shall implement, through the SmartWay Transport Partnership of the Environmental Protection Agency, a program to support deployment of low-greenhouse gas and fuel-saving technologies. (B)

Priority

The Administrator shall give priority to the deployment of low-greenhouse gas and fuel-saving technologies that meet SmartWay performance thresholds developed under paragraph (2)(B). (2)

Technology designation and deployment

The Administrator shall— (A)develop measurement protocols to evaluate the fuel consumption and greenhouse gas performance of transportation technologies, including technologies for passenger transport and goods movement; (B)develop SmartWay performance thresholds that can be used to certify, verify, or designate low-greenhouse gas and fuel-saving technologies that provide superior environmental performance for each mode of passenger transportation and goods movement; and (C)(i)publish a list of low-greenhouse gas and fuel-saving technologies; (ii)identify the greenhouse gas and fuel efficiency performance of each technology; and (iii)identify those technologies that meet the SmartWay performance thresholds developed under subparagraph (B). (3)

Promotion and deployment of technologies

The Administrator shall— (A)implement partnership and recognition programs to promote best practices and drive demand for fuel-efficient, low-greenhouse gas transportation performance; (B)promote the availability of and encourage the adoption of technologies that meet the SmartWay performance thresholds developed under paragraph (2)(B); (C)publicize the availability of financial incentives (such as Federal tax incentives, grants, and low-cost loans) for the deployment of low-greenhouse gas and fuel-saving technologies; and (D)deploy low-greenhouse gas and fuel-saving technologies through grant and loan programs. (4)

Stakeholder consultation

(A)

In general

The Administrator shall solicit the comments of interested parties prior to establishing a new or revising an existing SmartWay technology category, measurement protocol, or performance threshold. (B)

Notice

On adoption of a new or revised technology category, measurement protocol, or performance threshold, the Administrator shall publish a notice and explanation of any changes and, if appropriate, responses to comments submitted by interested parties. (5)

Freight partnership

(A)

In general

The Administrator shall implement, through the SmartWay Transport Partnership, a program with shippers and carriers of goods to promote fuel-efficient, low-greenhouse gas transportation. (B)

Administration

The Administrator shall— (i)verify the greenhouse gas performance and fuel efficiency of participating freight carriers, including carriers involved in rail, trucking, marine, and other goods movement operations; (ii)publish a comprehensive greenhouse gas and fuel efficiency performance index of freight modes (including rail, trucking, marine, and other modes of transporting goods) and individual freight companies so that shippers can choose to deliver the goods of the shippers most efficiently with minimum greenhouse gas emissions; (iii)develop tools for— (I)freight carriers to calculate and improve the fuel efficiency and greenhouse gas performance of the carriers; and (II)shippers— (aa)to calculate the fuel and greenhouse gas impacts of moving the products of the shippers; and (bb)to evaluate the relative impacts from transporting the goods of the shippers by different modes and carriers; and (iv)recognize participating shipper and carrier companies that demonstrate advanced practices and achieve superior levels of fuel efficiency and greenhouse gas performance. (6)

Authorization of appropriations

There is authorized to be appropriated to the Administrator to carry out this subsection $19,500,000 for each of fiscal years 2010 through 2020.

; and (2)by striking subsection (d) and inserting the following: (d)

Improving freight greenhouse gas performance databases

The Secretary of Commerce, in consultation with the Administrator, shall— (1)(A)define and collect data on the physical and operational characteristics of the truck fleet of the United States, with special emphasis on data relating to fuel efficiency and greenhouse gas performance to provide data for the performance index published under subsection (b)(5)(B)(ii); and (B)publish the data described in subparagraph (A) through the Vehicle Inventory and Use Survey as soon as practicable after the date of enactment of the OILSAVE Act, and at least every 5 years thereafter, as part of the economic census required under title 13, United States Code; and (2)define, collect, and publish data for other modes of goods transport (including rail and marine), as necessary. (e)

Report

Not later than 18 months after the date on which funds are initially awarded under this section and on a biennial basis thereafter, the Administrator shall submit to Congress a report containing a description of— (1)actions taken to implement the low-greenhouse gas and fuel-saving technology deployment program established under subsection (b), including— (A)the measurement protocols; (B)the SmartWay performance thresholds; and (C)a list of low-greenhouse gas and fuel-saving technologies; and (2)estimated greenhouse gas emissions and fuel savings from the program. .