[Congressional Record Volume 153, Number 96 (Thursday, June 14, 2007)]
[Senate]
[Pages S7733-S7734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Ms. Cantwell, Mr. Obama, Mr. Kerry, 
        Ms. Stabenow, and Mr. Salazar):
  S. 1617. A bill to amend the Internal Revenue Code of 1986 to provide 
incentives for plug-in electric drive motor vehicles; to the Committee 
on Finance.
  Mr. HATCH. Mr. President, I rise to introduce the Fuel Reduction 
using Electrons to End Our Dependence on the Mideast Act of 2007, or 
the FREEDOM Act. Senators Maria Cantwell, Barack Obama, and I have been 
working closely together since the beginning of the year to author this 
very important legislation. We believe the FREEDOM Act will begin a 
dramatic shift in the transportation sector away from liquid fuels and 
toward the greater use of electrons.
  For years I worked hard to pass a strong tax incentive package for 
alternative fuel and hybrid electric vehicles in the form of the CLEAR 
Act, which was passed into law as part of the Energy Policy Act of 
2005. When I first introduced the CLEAR Act, more than 7 years ago, 
there were only two hybrid vehicles available commercially. Today there 
are dozens of models of hybrids from which consumers can choose.
  Already, the move toward hybrid-electric vehicles has helped to 
reduce the demand for liquid fuel in this country. It has also set the 
stage for the next technological step, the plug-in hybrid electric 
vehicle. This vehicle would have an extra battery pack, recharged from 
the electricity grid, giving the vehicle all the benefits of a plug-in 
battery electric vehicle but also the freedom and fuel efficiency of a 
hybrid electric vehicle once the battery has used up its charge.
  With today's advanced plug-in electric and the coming plug-in hybrid 
electric vehicles, most commuters will be able to make the round trip 
from home to work and back using very little or no fuel, relying 
instead on cheap, clean, and abundant electricity.
  As you and many of our colleagues know, per mile, electricity can be 
much cheaper and cleaner than petroleum, and electrons are generated 
domestically and independent of the global oil market.
  It is difficult to overstate the potential the change to plug-in 
electric vehicles could make in terms of our energy dependence on 
liquid fuels. R. James Woolsey, who is a member of the National 
Commission on Energy Policy, testified before the Finance Committee 
this spring. In his testimony, he cited a Department of Energy study 
that estimated that adopting plug-in vehicles would not create a need 
for new base load electricity generation plants until plug-ins 
constitute over 84 percent of the country's 220 million passenger 
vehicles. In other words, we already have the power we need to fuel the 
vast majority of the cars in this country right now, and it exists in 
the excess capacity of our existing powerplants. Because plug-in 
vehicles could mostly be charged at night, during the off-peak hours 
for electric utilities, this technology represents an elegant solution.
  In terms of technology and industry focus, the United States is 
positioned to lead the world into the future with plug-in electric 
drive motor vehicles. The FREEDOM Act would help our Nation to take up 
that position by helping to develop the market, the technology, and the 
domestic production capacity needed to fulfill this role.
  The FREEDOM Act's goals would be achieved through four strong tax 
incentives: First, a tax credit for consumers who purchase plug-in 
electric or plug-in hybrid electric vehicles; second, for a limited 
time, a tax credit for consumers who convert their hybrid vehicles to 
high quality plug-in hybrid vehicles; third, a strong tax incentive for 
the U.S. manufacture of plug-in vehicles and of major components of 
plug-in vehicles, such as batteries, electric motors, and electronic 
controllers; and finally, a tax credit for electric utilities that 
provide rebates to customers who purchase plug-in electric drive 
vehicles.
  Freedom plug-in credits would cover the consumer purchase of vehicles 
that use batteries and that plug into the electric grid for at least 
part of their power. This would include plug-in electrics, plug-in 
hybrids, and others. The amount of the credit would be based on the 
kilowatt hours of the vehicle's battery pack, with a cap of $7,500 for 
passenger vehicles. The same is true for heavier duty vehicles, except 
that the caps are scaled up for each vehicle weight class.
  Freedom conversion credits would go to hybrid-electric vehicle owners 
who choose to convert their existing hybrid vehicle to a high quality 
plug-in hybrid electric vehicle. These credits would also be scaled to 
the kilowatt-hours of the new battery installed in their vehicle. Only 
high quality conversion kits, which are certified to meet all highway 
safety and emissions standards would qualify for a freedom conversion 
credit, and the credits would be available until the market transitions 
to commercially available plug-in hybrid vehicles.
  The FREEDOM Act also offers first-year expensing for companies 
setting up production capacity in the United States for plug-in 
electric drive vehicles and for major components of those vehicles.
  Finally, in the case that an electric utility in the U.S. chooses to 
offer rebates to customers who purchase plug-in electric drive 
vehicles, the FREEDOM Act would reimburse the utility for part of that 
rebate in the form of a freedom utility credit. The amount of the 
Government reimbursement would be based on the rate of greenhouse gas 
emissions for each utility.
  I want to emphasize that like the tax credits available under current 
law for hybrid electric vehicles, the tax incentives in the FREEDOM Act 
are temporary. They are needed in order to help get these products over 
the initial stage of production, when they are quite a bit more 
expensive than older technology vehicles, to the mass production stage, 
where economies of scale will drive costs down and the credits will no 
longer be necessary. Consumer acceptance of this exciting new 
technology is vital, and these credits will make it easier and more 
economical for consumers to choose vehicles that will move us away from 
dependence on less clean and more expensive transportation fuel 
produced by other nations.
  The consumer acceptance of the hybrid electric vehicle has already 
proven a benefit to our Nation's energy security, and the plug-in 
hybrid will lead to an even more dramatic reduction in fuel use in this 
country. Years ago, I argued that the technologies developed to make 
hybrids possible would eventually lead us to a commercially available 
hydrogen fuel cell vehicle. I stand by that argument, and I believe 
that by the time plug-in hybrid electric vehicles become mass produced 
in this country, we will be ready to use hydrogen fuel cells to 
disconnect these vehicles from the grid and begin a new age in 
transportation with much greater freedom of movement and freedom from 
dependence of foreign oil.

[[Page S7734]]

  Mr. President, I urge my colleagues to throw their full support for 
the FREEDOM Act.
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