[Congressional Record Volume 149, Number 34 (Tuesday, March 4, 2003)]
[Senate]
[Pages S3089-S3091]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Rockefeller, Mr. Jeffords, Ms. 
        Snowe, Mr. Lieberman, Mr. Smith, Mr. Kerry, Mr. Ensign, Mrs. 
        Clinton, Mr. Crapo, Mr. Dorgan, Ms. Collins, and Mr. Chafee):
  S. 505. A bill to amend the Internal Revenue Code of 1986 to 
encourage and accelerate the nationwide production, retail sale, and 
consumer use of new motor vehicles that are powered by fuel cell 
technology, hybrid technology, battery electric technology, alternative 
fuels, or other advanced motor vehicle technologies, and for other 
purposes; to the Committee on Finance.
  Mr. HATCH. Madam President, I rise today to introduce the CLEAR ACT, 
which is short for the Clean Efficient Automobiles Resulting from 
Advanced Car Technologies Act of 2003.
  Joining me in this effort are Senators John Rockefeller and Jim 
Jeffords, who have been my partners in this legislation and its earlier 
versions since the 106th Congress. We are also being joined by an 
impressive and bipartisan lineup of original cosponsors, which includes 
Senators Olympia Snowe, John Kerry, Gordon Smith, Joe Lieberman, John 
Ensign, Hillary Clinton, Mike Crapo, Byron Dorgan, Susan Collins, and 
Lincoln Chafee.
  I believe the CLEAR ACT is the most comprehensive and effective plan 
we have seen in this country to accelerate the transformation of the 
automotive marketplace toward the widespread use of fuel cell vehicles. 
And it does so without any new Federal mandates. Instead, it offers 
powerful market incentives to promote the combination of advances we 
must have in technology, in infrastructure, and in alternative fuels if 
our goal of bringing fuel cell vehicles to the mass market is to become 
a reality.
  As many of my colleagues know, fuel cell vehicles are the most 
promising long-term automotive technology, offering breakthrough fuel 
economy of up to three times today's levels with zero emissions. For a 
variety of reasons, the commercial production of fuel cell vehicles is 
a number of years away. Many things need to change in the automotive 
marketplace before

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widespread use of these vehicles of the future becomes a reality. With 
the CLEAR ACT, we can achieve this goal much faster, while in the 
meantime we can reap the benefits of cleaner air and a reduced 
dependency on foreign oil.
  Bridging the gap between today's conventional vehicles and the day 
when all of us will be driving fuel cell vehicles are alternative fuel 
and advanced technology vehicles, such as hybrid electrics. These 
vehicles are available today, but not yet widely accepted in the 
marketplace.
  Currently, consumers face three basic obstacles to accepting the use 
of these alternative fueled and advanced technology vehicles. These 
obstacles are the higher cost of these vehicles as compared with their 
conventional counterparts, the cost of the alternative fuel, and the 
lack of an adequate infrastructure of alternative fueling stations. Mr. 
President, the CLEAR ACT would lower all three of these barriers.
  First, we provide a tax credit of 50 cents per gasoline-gallon 
equivalent for the purchase of alternative fuel at retail. This would 
bring the price of these cleaner fuels much closer in line with 
conventional automotive fuels. And, to give customers better access to 
alternative fuel, we extend an existing deduction for the capital costs 
of installing alternative fueling stations. We also provide a 50-
percent credit for the installation costs of retail and residential 
refueling stations.

  Finally, we offer CLEAR ACT credits to consumers who purchase 
alternative fuel and advanced technology vehicles. These credits would 
lower the price gap between these cleaner and more efficient vehicles 
and conventionally fueled vehicles of the same type. To make certain 
that the tax benefit we provide translates into a corresponding benefit 
to the environment, we split the vehicle tax credit into two. The 
amount the consumer receives in a CLEAR ACT credit would depend, first, 
on the level of technology used in the vehicle and, second, on the fuel 
efficiency and emissions reduction of the vehicle. In this way, we are 
confident that the CLEAR ACT will create the greatest social benefit 
possible for every tax dollar.
  The transportation sector in the U.S. accounts for nearly two-thirds 
of all oil consumption, and we are 97-percent dependent on petroleum 
for our transportation needs. Is it any wonder that 50 percent of our 
urban smog is caused by mobile sources? If we want to clean our air and 
address our Nation's energy dependency, we must focus on the 
transportation sector. And we must focus first on those technologies 
and alternative fuels that are already available and abundant 
domestically. The CLEAR ACT is the shortest path to achieving these 
goals.
  Air pollution and energy independence are issues of critical concern 
in my home State of Utah. According to a study by Utah's Division of 
Air Quality, on-road vehicles in Utah account for 22 percent of 
particulate matter. This particulate matter can be harmful to citizens 
who suffer from chronic respiratory or heart disease, influenza, or 
asthma. Automobiles also contribute significantly to hydrocarbon and 
nitrogen oxide emissions in my State. These two pollutants react in 
sunlight to form ozone, which in turn reduces lung function in humans 
and hurts our resistance to colds and asthma. In addition, vehicles 
account for as much as 87 percent of carbon monoxide emissions. Carbon 
monoxide can be harmful to persons with heart, respiratory, or 
circulatory ailments.
  While Utah has made important strides in improving air quality, it is 
a fact that each year more vehicular miles are driven in our State. It 
is clear that if we are to have cleaner air, we must encourage the use 
of alternative fuels and technologies to reduce vehicle emissions.
  Another key aim of the CLEAR ACT is greater energy independence. 
Whether during the energy crisis in the 1970s, during the Persian Gulf 
war, or during our current energy challenge, every American has felt 
the sting of our dependence on foreign oil. And I might add that our 
dependency on foreign oil has steadily increased to the point where we 
now depend on foreign sources for about 60 percent of our oil. When 
enacted, the CLEAR ACT will play a key role in helping our Nation 
improve its energy security by increasing the diversity of our fuel 
options and decreasing our dependency on gasoline.
  Our Nation's energy strategy will not be complete without an 
incentive to increase the use of alternative fuels and advanced car 
technologies. In the future we will not use gasoline-fueled vehicles to 
the same extent we do today. The technology is here today to help 
transform us to the benefits of the future much sooner. We just need to 
find a way to lower those barriers to widespread consumer acceptance, 
which will in turn put the power of mass production to work to lower 
the incremental cost of this technology. In short, our legislation 
would bring the benefits of cleaner air and energy independence to our 
citizens sooner.
  I am very proud to offer this groundbreaking and bipartisan 
legislation. It represents the input and hard work of a very powerful 
and effective coalition the CLEAR ACT Coalition. This coalition 
includes the Union of Concerned Scientists, Ford Motor Company, the 
Natural Resource Defense Council, Toyota, Environmental Defense, Honda, 
the Alliance to Save Energy, the Natural Gas Vehicle Coalition, the 
Propane Vehicle Council, the Methanol Institute, and others. The CLEAR 
ACT reflects the untiring effort and expertise of the members of this 
coalition, and for this we owe them our gratitude.
  I urge my colleagues in the Senate to join me, the CLEAR ACT's 
cosponsors, and this coalition in this forward-looking approach to 
cleaner air and increased energy independence.
  I ask unanimous consent that a summary of the CLEAR ACT be inserted 
in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Summary of the CLEAR ACT of 2003 (Clean Efficient Automobiles Resulting 
                    From Advanced Car Technologies)


                                Overview

       The primary purpose of this bill is to enhance national 
     energy security and promote cleaner air by reducing the 
     consumption of petroleum and advancing alternative fuels. 
     Transportation accounts for nearly \2/3\ of all oil 
     consumption and is almost 97 percent dependent on petroleum.
       This legislation will set the stage for a consumer-based 
     and technology-led transformation of the transportation 
     marketplace. All major vehicle manufacturers are introducing 
     new technology and alternative fuel vehicles into the 
     marketplace. These new technologies reduce petroleum 
     consumption and improve air quality as a result of 
     breakthrough improvements in fuel economy or from the use of 
     non-petroleum alternative fuels. Accelerated acceptance by 
     consumers of these new technologies is needed to increase 
     production volumes and make them cost competitive with 
     conventional vehicles.
       Providing tax incentives for a limited time to consumers 
     will help offset the higher costs associated with new 
     technology and alternative fuel vehicles. As the vehicles 
     gain consumer acceptance and production volumes increase, the 
     cost differential between these and conventional vehicles 
     will be reduced or eliminated.


                    Key Components of the CLEAR ACT

       Tax incentives for new technology and alternative fuel 
     vehicles under this legislation go directly to the consumer. 
     These incentives are based both on technology and 
     performance.
       Fuel Cell Vehicles. Fuel cell vehicles are the most 
     promising long-term technology offering breakthrough fuel 
     economy of up to 3 times today's levels with zero emissions. 
     The CLEAR ACT offers a $4,000 base credit ($8,000 for fuel 
     cell vehicles placed in service before 2009) along with an 
     additional credit of up to $4,000 depending on fuel economy 
     performance. These credits are available for ten years.
       Hybrid Electric Vehicles. Electronics that integrate 
     electric drive with an internal combustion engine offer near-
     term improvements in fuel economy. The CLEAR ACT offers a 
     credit of up to $1,000 for the amount of electric drive power 
     along with an additional credit of up to $3,000 depending 
     upon fuel economy performance. These credits are available 
     for 6 years.
       Dedicated Alternative Fuel Vehicles. Vehicles solely 
     capable of running on alternative fuels promote energy 
     diversity and significant emissions reductions. Natural gas, 
     LPG, and LNG are the most commonly used fuels for 
     dedicated alternative fuel vehicles. The CLEAR ACT 
     provides a base credit of up to $2,500 with an additional 
     $1,500 credit for vehicles certified to ``Super Ultra Low 
     Emission'' (SULEV) standards. ``Flex-fuel'' vehicles are 
     not eligible since they can operate on either gasoline or 
     E85 (ethanol) and are available in the market without any 
     incremental cost.
       Battery Electric Vehicles. Vehicles that utilize stored 
     energy from ``plug-in'' rechargeable batteries offer zero 
     emissions and are not dependent upon petroleum-based

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     fuels. The CLEAR ACT offers a base credit of $4,000 and an 
     incremental credit of $2,000 for vehicles with extended range 
     or payload capabilities.
       Medium and Heavy Duty Vehicles. Medium and heavy duty 
     applications of the same vehicle technologies utilized for 
     passenger vehicles offer similar benefits related to energy 
     efficiency, diversity, and emission reductions. The CLEAR ACT 
     offers credits for individual weight categories and amounts 
     vary with the largest vehicles over 26,000 pounds (e.g., 
     large metro busses) receiving up to $40,000 for fuel cell or 
     battery electric, $32,000 for alternative fuel, or $24,000 
     for hybrid applications.
       Alternative Fuel Incentives. Alternative fuels such as 
     natural gas, LNG, LPG, hydrogen, B100 (biomass) and methanol 
     are primarily used in alternative fueled vehicles and fuel 
     cell vehicles. To encourage the installation of distribution 
     points to support these applications, a credit of up to 50 
     cents for every gallon of gas equivalent is provided to the 
     retail distributor,. This credit is available for 6 years.
       Alternative Fuel Infrastructure. Complimentary to the 
     credit for the fuel itself, the CLEAR ACT extends the 
     existing $100,000 tax deduction for 10 years and also 
     provides a 50 percent credit for actual costs of up to 
     $30,000 for the installation of alternative fuel sites 
     available to the public.


                        broad coalition support

       A broad and diverse group that includes representatives 
     from the environmental community, automobile manufacturers, 
     and alternative fuel groups support the CLEAR ACT. 
     Environmental coalition support comes from the Union of 
     Concerned Scientists, Natural Resources Defense Council, 
     Environmental Defense, and the American Council for an Energy 
     Efficient Economy. Ford Motor Company, Honda, and Toyota are 
     among the key automotive industry supporters. Industry 
     coalitions include the Natural Gas Vehicle Coalition, the 
     Propane Vehicle Council, the American Methanol Institute, and 
     the Electric Drive Transportation Association.
                                 ______