[Congressional Record Volume 153, Number 1 (Thursday, January 4, 2007)]
[Senate]
[Pages S168-S171]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. STEVENS:
  S. 183. A bill to require the establishment of a corporate average 
fuel economy standard for passenger automobiles of 40 miles per gallon 
2017, and for other purpose; to the Committee on Commerce, Science, and 
Transportation.
  Mr. STEVENS. Mr. President, the bill that I introduce today features 
language that would remove the legal ambiguity that for years has 
inhibited the Secretary of Transportation from raising fuel economy 
standards for passenger cars, and the measure would mandate that a fuel 
economy standard for passenger cars be set at 40 miles per gallon by 
model year 2017. By providing authority to increase standards for 
passenger cars, and requiring a specific fuel economy standard target, 
this bill would provide consumers with fuel savings at the pump, limit 
the Nation's dependence on foreign oil, and significantly reduce 
greenhouse gas emissions.
  The bill would remove from the current Corporate Average Fuel Economy 
(CAFE) statute the requirement that the Secretary of Transportation 
submit to Congress any proposal to increase or decrease fuel economy 
standards. This requirement has been deemed unconstitutional by the 
U.S. Supreme Court. This legal hurdle, coupled with years of Federal 
funding legislation precluding the Secretary from reviewing CAFE, has 
prevented increases in fuel economy in the domestic passenger vehicle 
fleet.

[[Page S169]]

  The Secretary recently completed a dramatic reform of the fuel 
economy standards for the light-truck fleet, and he might have made 
similar reforms to the passenger fleet but for the statutory ambiguity 
of the current CAFE statute. I applaud the Secretary for his recent 
CAFE increases for light trucks, and I commend the administration for 
its seven light truck CAFE increases in the last six years. But the 
time has come for the Secretary to increase fuel economy standards for 
passenger cars as well.
  In 2000, the National Academy of Sciences (NAS) issued a report that 
concluded that the benefits resulting from CAFE since its 
implementation in 1978 clearly warrant Government intervention to 
ensure fuel economy levels beyond what may result from market forces 
alone. The NAS panel found that CAFE has led to marked improvements in 
reducing greenhouse gas emissions, fuel consumption, and dependence on 
foreign oil.
  Mr. President, the United States imports almost 11 million barrels of 
crude oil every day, compared with only five million produced here at 
home. And over two million imported barrels hail from the Persian Gulf 
region. The terrorist attacks waged on this country on September 11, 
2001, and the ongoing turmoil in the Middle East has brought into focus 
the need to reduce our dependence on all foreign oil. The savings 
achieved by increasing fuel economy standards for the entire U.S. 
passenger vehicle fleet is essential if we are to increase our energy 
independence and national security.
  This bill also would require the Secretary of Commerce to create a 
national registry system that, for the first time, would enable the 
automobile industry to trade fuel economy credits with other industries 
that generate greenhouse gas emissions. Participation in the registry 
would be voluntary, and any entity conducting business in the United 
States would be eligible to utilize the services of the registry. 
Therefore, automobile manufacturers would be able to contribute or 
purchase emissions credits with other industries that generate 
greenhouse gases in order to achieve compliance with CAFE and emissions 
standards.
  Mr. President, any change to fuel economy standards requires the 
careful balance of many factors, including national security, consumer 
preference, domestic employment, as well as the need for powerful and 
durable vehicles in rural America, including my home State of Alaska. 
The amendment would provide the Secretary the authority to balance 
these considerations, and to make the appropriate and necessary fuel 
economy increases. I urge my colleagues to support this legislation.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 183

       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

[[Page S170]]

     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 greenhouse gas emissions and greenhouse 
     gas emission reductions, taking into account--
       (A) boundary issues such as leakage and shifted 
     utilization; and
       (B) such other factors as the panel determines to be 
     appropriate;
       (2) ensuring that--
       (A) certified registries do not double-count greenhouse gas 
     emission reductions; and
       (B) if greenhouse gas emission reductions are recorded in 
     more than 1 certified registry, such double-recording is 
     clearly indicated;
       (3) determining the ownership of greenhouse gas emission 
     reductions and recording and tracking the transfer of 
     greenhouse gas emission reductions among entities (such as

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     through assignment of serial numbers to greenhouse gas 
     emission reductions);
       (4) measuring the results of the use of carbon 
     sequestration and carbon recapture technologies;
       (5) measuring greenhouse gas emission reductions resulting 
     from improvements in--
       (A) power plants;
       (B) automobiles (including types of passenger automobiles 
     and light trucks, as defined in section 32901(a)(16) and (17) 
     respectively, produced in the same model year);
       (C) carbon re-capture, storage and sequestration, including 
     organic sequestration and manufactured emissions injection, 
     and or storage.
       (D) other sources;
       (6) measuring prevented greenhouse gas emissions through 
     the rulemaking process and based on the latest scientific 
     data, sampling, expert analysis related to measurement and 
     projections for prevented greenhouse gas emissions in tons 
     including--
       (A) organic soil carbon sequestration practices;
       (B) forest preservation and re-forestation activities which 
     adequately address the issues of permanence, leakage and 
     verification; and
       (7) such other measurement, verification, and recording 
     standards as the panel determines to be appropriate.
       (g) Certification of Registries.--Except as provided in 
     subsection (h), a registrant that desires to be a certified 
     registry shall submit to the panel an application that--
       (1) demonstrates that the registrant meets each of the 
     certification standards established by the panel under 
     subsections (d) and (e); and
       (2) meets such other requirements as the panel may 
     establish.
       (h) Automobile Industry.--The Secretary of Transportation 
     is deemed to be the certified registrant for credits earned 
     under section 32903 of title 49, United States Code.
       (i) Annual Report.--Within 1 year after the date after the 
     date of enactment of this Act and biennially thereafter, the 
     panel shall report to the Congress on the status of the 
     program established under this section. The report shall 
     include an assessment of the level of participation in the 
     program and amount of progress being made on emission 
     reduction targets.

     SEC. 203. DEFINITIONS.

       In this title:
       (1) Greenhouse Gas.--The term ``greenhouse gas'' includes--
       (A) carbon dioxide;
       (B) methane;
       (C) hydro fluorocarbons;
       (D) perfluorocarbons;
       (E) nitrous oxide; and
       (F) sulfur hexafluoride.
       (2) Baseline.--The term ``baseline'' means--
       (A) the greenhouse gas emissions, determined on an entity-
     wide basis for the participant's most recent previous 3-year 
     annual average of greenhouse gas emissions prior to the date 
     of enactment of this Act; or
       (B) if data is unavailable for that 3-year period, the 
     greenhouse gas emissions as of September 30, 2004, (or as 
     close to that date as such emission levels can reasonably be 
     determined). In promulgating regulations under this title, 
     the panel shall take into account greenhouse gas emission 
     reductions or off-setting actions taken by any entity before 
     the date on which the registry is established.
       (3) Certified registry.--The term ``certified registry'' 
     means a registry that has been certified by the panel as 
     meeting the standards promulgated under section 202(e) and 
     (f) and, for the automobile industry, the Secretary of 
     Transportation.
       (4) Greenhouse gas emissions.--The term ``greenhouse gas 
     emissions'' means the quantity of greenhouse gases emitted by 
     a source during a period, measured in tons of greenhouse 
     gases.
       (5) Greenhouse gas emission reduction.--The term 
     ``greenhouse gas emission reduction'' means a quantity equal 
     to the difference between--
       (A) the greenhouse gas emissions of a source during a 
     period; and
       (B) the greenhouse gas emissions of the source during a 
     baseline period of the same duration as determined by 
     registries and entities defined as owners of emission 
     sources.
       (6) Kyoto protocol.--The term ``Kyoto protocol'' means the 
     Kyoto Protocol to the United Nations Framework Convention on 
     Climate Change (including the Montreal Protocol to the 
     Convention on Substances that Deplete the Ozone Layer).
       (7) Panel.--The term ``panel'' means the implementing panel 
     established by section 202(a).
       (8) Registrant.--The term ``registrant'' means a private 
     person that operates a database recording quantified and 
     verified greenhouse gas emissions and emissions reductions of 
     sources owned by other entities.
       (9) Source.--The term ``source'' means a source of 
     greenhouse gas emissions.
                                 ______