[Congressional Record Volume 142, Number 137 (Saturday, September 28, 1996)]
[Senate]
[Page S11717]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CLEAN FUEL VEHICLE ACT OF 1996

  Mrs. BOXER. Mr. President, in June of this year, along with my 
colleagues Senators Inouye, Feinstein, Kennedy, Kerry, and Jeffords, I 
introduced legislation (S. 1848) to provide temporary tax incentives to 
spur the market for clean fuel vehicles, including natural gas and 
electric vehicles. While this Congress has no time remaining to 
consider this proposal, I intend to introduce the legislation in the 
105th Congress, and I urge my colleagues to then consider the measure 
and join me and others in promoting the transformation of our 
transportation system to cleaner forms of energy.
  This proposal calls for targeted tax incentives that would, first, 
remove clean fuel vehicles from the luxury automobile classification 
for luxury excise tax and depreciation purposes; second, remove the 
limitations on the availability of credits and deductions for use of 
electric vehicles by governmental units; third, provide deductions for 
large electric vans and buses; fourth, adopt a straight, rather than 
graduated, tax credit for electric vehicles; and fifth, exempt 
liquefied natural gas from certain taxes.
  Recently, the Joint Committee on Taxation provided a revenue estimate 
of those provisions of the bill that provide tax incentives for clean 
fuel vehicles. The committee previously reported to me that my 
provision to levy the same rate of excise tax on liquified natural gas 
as already is levied on compressed natural gas would result in a 
revenue loss of only $4 million from 1997 to 2002. I urge my colleagues 
to note, significantly, the committee estimated that for the other 
provisions, items one through four above, for the 5-year period between 
1997 and 2001 the total revenue impacts would equate to no more than 
$15 million. Even more important, for this modest cost, we can spur the 
development of vehicles that produce no tailpipe emissions.
  Zero emission vehicles are not a pipeless dream so to speak. Many are 
in use today, and they are scheduled to be in Saturn dealer showrooms 
later this fall and soon on the lots of other automakers. Again, let me 
state that we are not describing some far out in time technology; the 
world's largest automobile manufacturer--General Motors--intends to 
market an electric vehicle in the showrooms of one of its most 
successful product lines.
  General Motor's Saturn dealerships in southern California and 
Phoenix/Tucson, AZ will begin selling electric vehicles this fall. Next 
year, General Motors will offer, through Chevrolet dealers, an electric 
light duty truck; Toyota and Honda will begin selling EV's; and 
Chrysler has proposed to sell electric minivans to the U.S. Government. 
In 1998, Ford Motor Co. will introduce a vehicle for the U.S. market, 
as will Chrysler and Nissan. Many other companies in California and 
throughout the United States also are actively involved in clean fuel 
vehicle development.

  Even with this degree of very promising activity, the market is 
uncertain because the number of first-time buyers is uncertain. The 
short-term tax incentives in my proposal will go far toward helping to 
encourage the initial market. All of the tax provisions will sunset at 
the end of the year 2004. Most important, we have an opportunity to 
assist in creating new forms of personal transportation--ones that 
produce little or no tailpipe emissions and that rely upon domestically 
produced fuels. And, ones that use advanced computer-based technologies 
that position U.S. industries to lead the transportation sector into 
the next century.
  This legislaton has been endorsed by the Union of Concerned 
Scientists, the Electric Transportation Coalition, the Natural Gas 
Vehicle Coalition of the USA, the city of Los Angeles and Potomac 
Electric Power Co. I urge my colleagues to join me in this effort for a 
clean-fuel 21st century and support my legislation next year.
  I ask unanimous consent that a copy of the letter from the Joint 
Taxation Committee be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    Congress of the United States,


                                  Joint Committee on Taxation,

                               Washington, DC, September 24, 1996.
     Hon. Barbara Boxer,
     U.S. Senate,
     Washington, DC.
       Dear Senator Boxer: This completes our response to your 
     request for a revenue estimate corresponding to a draft bill 
     to provide certain tax incentives for electric vehicles and 
     other clean-fuel vehicles (the ``Clean Fuel Vehicle Stimulus 
     Act of 1996'').
       In our letter of June 24, 1996, we provided you with a 
     revenue estimate for section 6 of your draft bill, which 
     would exempt liquified natural gas (``LNG'') from the Highway 
     Trust Fund component of the special motor fuels excise tax.
       This letter contains a revenue estimate for sections 2 
     through 5 of your draft bill. These sections of the bill 
     would (a) remove clean-fuel vehicles from the luxury 
     automobile classification for luxury excise tax purposes and 
     exempt such vehicles from depreciation limitations, (b) 
     remove current restrictions on the availability of credits 
     and deductions for electric vehicles used by governmental 
     units, (c) provide certain deductions for large electric 
     trucks, vans, and buses in lieu of the credit for electric 
     vehicles, and (d) modify the credit for electric vehicles and 
     allow the credit to be applied against the alternative 
     minimum tax. The modifications to the electric vehicle credit 
     and the alternative minimum tax would be effective for 
     taxable years beginning after December 31, 1996. In general, 
     the remaining provisions would be effective for property 
     placed in service after the date of enactment.
       For the purpose of preparing a revenue estimate for 
     sections 2 through 5 of your draft bill, we have assumed that 
     the bill will be enacted on October 1, 1996. The following is 
     a revenue estimate for sections 2 through 5 of the bill:

                                                  FISCAL YEARS                                                  
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                      Item                         1997   1998   1999   2000   2001   2002  1997-2001  1997-2006
----------------------------------------------------------------------------------------------------------------
Sections 2 through 5 of the Clean Fuel Vehicle                                                                  
 Stimulus Act...................................     -2     -3     -3     -4     -4     -3      -15        -22  
----------------------------------------------------------------------------------------------------------------
Note: Details may not add to totals due to rounding.                                                            

       I hope this information is helpful to you. If we can be of 
     further assistance in this matter, please let me know.
           Sincerely,
     Kenneth J. Kies.

                          ____________________