[Congressional Record Volume 155, Number 122 (Thursday, August 6, 2009)]
[Senate]
[Pages S9018-S9020]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Ms. Snowe, Mr. Kerry, and Mr. 
        Lugar):
  S. 1620. A bill to amend the Internal Revenue Code of 1986 to provide 
tax incentives and fees for increasing motor vehicle fuel economy, and 
for other purposes; to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, as the success of the Cash for Clunkers 
Program that we are working to extend today makes clear, there is 
substantial interest among consumers in upgrading the fuel efficiency 
of their vehicles. In fact, maybe the most surprising thing about the 
program thus far has been the higher-than-expected appetite by 
consumers for the most fuel-efficient vehicles.
  It is an encouraging sign, but it remains surprising because it is 
extraordinarily difficult for a consumer to take into account the real 
benefits, or costs, of fuel economy. The value of fuel efficiency 
depends on the unknowable fact of what the price of gasoline is likely 
to be in future years as well as requiring a calculation to make and 
apples-to-apples comparison of the costs of ownership at different 
efficiency levels. This explains why study after study demonstrates 
that consumers don't fully account for the fuel costs of ownership when 
they make buying decisions. Decisions that many people regretted making 
only a few years earlier as gas prices climbed near $4 per gallon last 
fall.
  This isn't only a problem for consumers. Improving the fuel economy 
of a vehicle requires significant engineering and new technologies, 
often adding hundreds or thousands to the manufacturer price of a 
vehicle; costs consumers have proved unwilling to bear. Faced with this 
reality, and the uncertainty of recovering their costs from consumers 
who are unsure of the value of fuel efficiency, car makers have 
generally thought it is in their best business interests to meet the 
fuel economy requirements of CAFE but go no further. Even when 
manufacturers want to go further than the CAFE requirements and produce 
more efficient vehicles, they are faced with giving up a cost advantage 
to their competitors by putting on expensive new technologies. For this 
reason, and to attempt to take into account the very real costs in oil 
and climate insecurity by our undervaluation of efficiency, Congress 
has put in a series of incentives for specific technologies such as 
hybrids, electric-drive, and hydrogen fuel cell vehicles. We have also 
recently made significant investments in battery manufacturing and 
vehicle electrification to try and close the significant gap with our 
global competitors in these technologies.
  Although I support those investments to increase our competitiveness 
in the clean energy technology manufacturing race, unless the domestic 
marketplace will support them over the long term, they simply won't be 
enough. I believe the best path to both support our climate and energy 
goals and enhance our economic competitiveness is to create a set of 
clear, technology-neutral incentives that can achieve our goals and 
then let the market and consumers sort out the best technologies.
  The Efficient Vehicle Leadership Act of 2009 that I am introducing 
today with Senators Snowe, Kerry, and Lugar provides a long-term 
pathway forward that will allow consumers to afford the most fuel 
efficient vehicles and a clear signal to the manufacturers that they 
can succeed in the marketplace by incorporating the most advanced fuel 
efficiency technologies into their new offerings. The bill would 
provide for fuel performance rebates that would decrease the cost of 
efficient cars and pay for it by assessing a fuel performance fee to 
manufacturers for inefficient vehicles to pay for the program.
  The rebates and fees would be calculated based on how much more or

[[Page S9019]]

less fuel-efficient a vehicle is relative to the CAFE standard. The 
CAFE standard is based on the size, or ``footprint''--the interior 
dimensions of the four wheels of the motor vehicle, so each vehicle 
would compete with other vehicles of a similar size. The CAFE standard 
itself becomes more stringent over time, based on the ``maximum 
feasible'' fuel efficiency as determined by NHTSA, so the incentives 
are recast yearly against a higher target. Calculating the rebates and 
fees based on the CAFE standard allows them to net out, making the 
overall system revenue neutral and providing a continuing incentive 
each subsequent year. Thus, the purchasers of fuel efficiency laggards 
for each size pay to make the most fuel-efficient equivalent vehicles 
more affordable. The rebate amount must appear on the fuel efficiency 
sticker and consumers can choose if they want to receive their rebate 
directly in their tax returns or they can transfer the credit to 
dealer, as long as the dealer certifies they have given the rebate to 
the consumer at the point of purchase.
  In sum, this bill provides a long-term structure for the automotive 
sector that provides certainty to manufacturers that the technologies 
that they must employ to meet the new fuel efficiency requirements will 
be valued by consumers and, beyond that, rewards and incentivizes 
innovation in vehicle efficiency to go beyond the CAFE requirements. 
The technological acumen of the auto industry will be harnessed, with 
no net impact on safety or comfort, and without distorting the 
marketplace. Consumers would benefit for years to come from a smaller 
hit on their wallet at the pump. The United States would benefit 
overall as we began to curb our appetite for oil.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1620

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Efficient 
     Vehicle Leadership Act of 2009''.
       (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.

     SEC. 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:

     ``SEC. 30E. FUEL PERFORMANCE REBATE.

       ``(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 the product of--
       ``(A) the absolute value of the difference between the 
     fuel-economy rating and the reference fuel-economy rating for 
     such motor vehicle for the model year, and
       ``(B) 100, and
       ``(C) the applicable amount.
       ``(3) Applicable amount.--For purposes of paragraph (2)(C), 
     the applicable amount is equal to--
       ``(A) in the case of model year 2011--
       ``(i) $1,000, or
       ``(ii) $2,000, if the fuel-economy rating for such motor 
     vehicle is at least 50 percent more efficient than the 
     reference fuel-economy rating for such motor vehicle as 
     determined under paragraph (2)(A), and
       ``(B) in the case of any succeeding model year--
       ``(i) $1,500, or
       ``(ii) $2,500, if the fuel-economy rating for such motor 
     vehicle is at least 50 percent more efficient than the 
     reference fuel-economy rating for such motor vehicle as 
     determined under paragraph (2)(A), or
       ``(iii) $3,500, if the fuel-economy rating for such motor 
     vehicle is at least 75 percent more efficient than the 
     reference fuel-economy rating for such motor vehicle as 
     determined under paragraph (2)(A).
       ``(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 
     light truck--
       ``(1) which is treated as a motor vehicle for purposes of 
     title II of the Clean Air Act,
       ``(2) which achieves a fuel-economy rating that is more 
     efficient than the reference fuel-economy rating for such 
     motor vehicle for the model year,
       ``(3) for which standards are prescribed pursuant to 
     section 32902 of title 49, United States Code,
       ``(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,
       ``(6) the purchase price of which, less the amount 
     allowable under subsection (a) with respect to such vehicle, 
     does not exceed $50,000, and
       ``(7) which is made by a manufacturer beginning with model 
     year 2011.
       ``(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) Refundable 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 C for such taxable year (and 
     not allowed under subsection (a)).
       ``(B) Refundable credit may be transferred.--
       ``(i) In general.--A taxpayer may, in connection with the 
     purchase of a new qualified fuel-efficient motor vehicle, 
     transfer any refundable credit described in subparagraph (A) 
     to any person who is in the trade or business of selling new 
     qualified fuel-efficient motor vehicles and who sold such 
     vehicle to the taxpayer, 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 the refundable credit described in 
     subparagraph (A) with respect to such vehicle, 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.

       ``(ii) Certification.--A transferee of a refundable credit 
     described in subparagraph (A) may not claim such credit 
     unless such claim is accompanied by a certification to the 
     Secretary that the transferee reduced the price the taxpayer 
     paid for the new qualified fuel-efficient motor vehicle by 
     the entire amount of such refundable credit.
       ``(iii) Consent required for revocation.--Any transfer 
     under clause (i) may be revoked only with the consent of the 
     Secretary.
       ``(iv) Regulations.--The Secretary may prescribe such 
     regulations as necessary to ensure that any refundable credit 
     described in clause (i) is claimed once and not retransferred 
     by a transferee.
       ``(d) Other Definitions.--For purposes of this section--
       ``(1) Fuel-economy rating.--The term `fuel-economy rating' 
     means, with respect to any motor vehicle, the combined fuel-
     economy rating for such motor vehicle, expressed in gallons 
     per mile, determined in accordance with section 32904 of 
     title 49, United States Code.
       ``(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) Reference fuel-economy rating.--The term `reference 
     fuel-economy rating' means, with respect to any motor 
     vehicle, the fuel economy standard for such motor vehicle, 
     expressed in gallons per mile, calculated by applying the 
     relevant vehicle attributes to the mathematical function 
     published pursuant to section 32902(b)(3)(A) of title 49, 
     United States Code.
       ``(5) Other terms.--The terms `automobile', `passenger 
     automobile', `light truck', and `manufacturer' have the 
     meanings given such terms 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.).
       ``(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 (determined without regard to subsection (c)).
       ``(2) No double benefit.--No other credit shall be 
     allowable under this chapter for a new qualified fuel-
     efficient motor vehicle with respect to which a credit is 
     allowed under this section.
       ``(3) Property used by tax-exempt entity.--In the case of a 
     vehicle whose use is described in paragraph (3) or (4) of 
     section 50(b) and which is not subject to a lease, the person 
     who sold such vehicle to the person or entity using such 
     vehicle shall be treated as the taxpayer that placed such 
     vehicle in service, but only if such person clearly discloses 
     to such person or entity in a document the amount of any 
     credit allowable

[[Page S9020]]

     under subsection (a) with respect to such vehicle (determined 
     without regard to subsection (c)). For purposes of subsection 
     (c), property to which this paragraph applies shall be 
     treated as of a character subject to an allowance for 
     depreciation.
       ``(4) Property used outside united states, etc., not 
     qualified.--No credit shall be allowable under subsection (a) 
     with respect to any property referred to in section 50(b)(1) 
     or with respect to the portion of the cost of any property 
     taken into account under section 179.
       ``(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 (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(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 provisions 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.
       ``(8) Inflation adjustment.--In the case of any model year 
     beginning in a calendar year after 2010, each dollar amount 
     in subsection (a)(3)(B) shall be increased by an amount equal 
     to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the model year 
     begins, determined by substituting `2009' for `1992' in 
     subparagraph (B) thereof.
     Any increase determined under the preceding sentence shall be 
     rounded to the nearest multiple of $100.
       ``(f) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.''.
       (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) Display of Credit.--Section 32908(b)(1) of title 49, 
     United States Code, is amended--
       (1) by redesignating subparagraphs (E) and (F) as 
     subparagraphs (F) and (G), nad
       (2) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) the amount of the fuel-efficient motor vehicle credit 
     allowable with respect to the sale of the automobile under 
     section 30E of the Internal Revenue Code of 1986 (26 U.S.C. 
     30E).''.
       (d) 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 fuel performance rebate 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 performance rebate.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 3. FUEL PERFORMANCE FEE.

       (a) In General.--Section 4064 is amended to read as 
     follows:

     ``SEC. 4064. FUEL PERFORMANCE FEE.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed on the sale by 
     the manufacturer of each fuel guzzler motor vehicle a tax 
     equal to the product of--
       ``(A) the absolute value of the difference between the 
     fuel-economy rating and the reference fuel-economy rating for 
     such motor vehicle for the model year, and
       ``(B) 100, and
       ``(C) the applicable amount.
       ``(2) Applicable amount.--For purposes of paragraph (1)(C), 
     the applicable amount is equal to--
       ``(A) $1,500, or
       ``(B) $2,500, if the fuel-economy rating for such motor 
     vehicle is more than 50 percent less efficient than the 
     reference fuel-economy rating for such motor vehicle as 
     determined under paragraph (1)(A), or
       ``(C) $3,500, if the fuel-economy rating for such motor 
     vehicle is more than 75 percent less efficient than the 
     reference fuel-economy rating for such motor vehicle as 
     determined under paragraph (1)(A).
       ``(b) Fuel Guzzler Motor Vehicle.--For purposes of this 
     section--
       ``(1) In general.--The term `fuel guzzler motor vehicle' 
     means a passenger automobile or light truck--
       ``(A) which is treated as a motor vehicle for purposes of 
     title II of the Clean Air Act,
       ``(B) which achieves a fuel-economy rating that is less 
     efficient than the reference fuel-economy rating for such 
     motor vehicle for the model year,
       ``(C) which has a gross vehicle weight rating of not more 
     than 8,500 pounds, and
       ``(D) which is made by a manufacturer beginning with model 
     year 2013.
       ``(2) Exception for emergency vehicles.--The term `fuel 
     guzzler motor vehicle' does not include any vehicle sold for 
     use and used--
       ``(A) as an ambulance or combination ambulance-hearse,
       ``(B) by the United States or by a State or local 
     government for police or other law enforcement purposes, or
       ``(C) for other emergency uses prescribed by the Secretary 
     by regulations.
       ``(c) Other Definitions.--For purposes of this section--
       ``(1) Fuel-economy rating.--The term `fuel-economy rating' 
     means, with respect to any motor vehicle, the combined fuel-
     economy rating for such motor vehicle, expressed in gallons 
     per mile, determined in accordance with section 32904 of 
     title 49, United States Code.
       ``(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) Reference fuel-economy rating.--The term `reference 
     fuel-economy rating' means, with respect to any motor 
     vehicle, the fuel economy standard for such motor vehicle, 
     expressed in gallons per mile, calculated by applying the 
     relevant vehicle attributes to the mathematical function 
     published pursuant to section 32902(b)(3)(A) of title 49, 
     United States Code.
       ``(5) Other terms.--The terms `automobile', `passenger 
     automobile', `light truck', and `manufacturer' have the 
     meanings given such terms 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.).
       ``(d) Inflation Adjustment.--In the case of any model year 
     beginning in a calendar year after 2010, each dollar amount 
     in subsection (a)(2) shall be increased by an amount equal 
     to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the model year 
     begins, determined by substituting `2009' for `1992' in 
     subparagraph (B) thereof.

     Any increase determined under the preceding sentence shall be 
     rounded to the nearest multiple of $100.''.
       (b) Conforming Amendments.--
       (1) The heading for part I of subchapter A of chapter 32 is 
     amended by striking ``GAS'' and inserting ``FUEL''.
       (2) The table of parts for subchapter A of chapter 32 is 
     amended by striking ``Gas'' in the item relating to part I 
     and inserting ``Fuel''.
       (3) The table of sections for part I of subchapter A of 
     chapter 32 is amended by striking ``Gas'' in the item 
     relating to section 4064 and inserting ``Fuel''.
       (4) The heading for subsection (d) of section 1016 is 
     amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel 
     Performance Fee''.
       (5) The heading for subsection (e) of section 4217 is 
     amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel 
     Performance Fee''.
       (6) The heading for subparagraph (B) of section 4217(e)(3) 
     is amended by striking ``gas guzzler tax'' and inserting 
     ``fuel performance fee''.
       (7) Section 4217(e) is amended by striking ``gas guzzler 
     tax'' each place it appears and inserting ``fuel performance 
     fee''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales of vehicles beginning with model year 
     2013.
                                 ______