To require that an increasing percentage of new automobiles be dual fueled automobiles, to revise the method for calculating corporate average fuel economy for such vehicles, and for other purposes.

Summary: Fuel Security and Consumer Choice Act - Amends federal transportation law to require manufacturers of new automobiles that can operate on gasoline or diesel fuel (dual fueled automobiles) to manufacture such automobiles by increasing percentages for 10 model years and beyond. Allows manufacturers to earn credits which may be applied to any three consecutive model years after the year in which they were earned if the manufacturer exceeds the number of dual fueled automobiles required to be manufactured in a particular year. Authorizes a manufacturer to sell credits to another manufacturer to enable the purchaser to meet the percentage requirements under this Act.

Requires the Administrator of the Environmental Protection Agency (EPA) to measure the fuel economy for each model of dual fueled automobile based on certain formulas.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fuel Security and Consumer Choice 
Act''.

SEC. 2. REQUIREMENT TO MANUFACTURER DUAL FUELED AUTOMOBILES.

    (a) Requirement.--
            (1) In general.--Chapter 329 of title 49, United States 
        Code, is amended by inserting after section 32902 the 
        following:
``Sec. 32902A. Requirement to manufacture dual fueled automobiles
    ``(a) Requirement.--
            ``(1) In general.--Each manufacturer of new automobiles 
        that are capable of operating on gasoline or diesel fuel shall 
        ensure that the percentage of such automobiles, manufactured in 
        any model year beginning not less than 18 months after the date 
        of enactment of this section and distributed in commerce for 
        sale in the United States, which are dual fueled automobiles is 
        equal to not less than the applicable percentage set forth in 
        the following table:

                                                      The percentage of
                                                      dual fueled auto-
``For each of the following                        mobiles manufactured
  model years:                                  shall be not less than:
    year 1........................................                  10 
    year 2........................................                  20 
    year 3........................................                  30 
    year 4........................................                  40 
    year 5........................................                  50 
    year 6........................................                  60 
    year 7........................................                  70 
    year 8........................................                  80 
    year 9........................................                  90 
    year 10 and beyond............................                 100.
            ``(2) Model years.--For purposes of the table under 
        paragraph (1)--
                    ``(A) the term `year 1' means the first model year 
                beginning not less than 18 months after the date of 
                enactment of this section;
                    ``(B) the term `year 2' means the model year 
                immediately following the model year described in 
                subparagraph (A);
                    ``(C) the term `year 3' means the model year 
                immediately following the model year described in 
                subparagraph (B);
                    ``(D) the term `year 4' means the model year 
                immediately following the model year described in 
                subparagraph (C);
                    ``(E) the term `year 5' means the model year 
                immediately following the model year described in 
                subparagraph (D);
                    ``(F) the term `year 6' means the model year 
                immediately following the model year described in 
                subparagraph (E);
                    ``(G) the term `year 7' means the model year 
                immediately following the model year described in 
                subparagraph (F);
                    ``(H) the term `year 8' means the model year 
                immediately following the model year described in 
                subparagraph (G);
                    ``(I) the term `year 9' means the model year 
                immediately following the model year described in 
                subparagraph (H); and
                    ``(J) the term `year 10' means the model year 
                immediately following the model year described in 
                subparagraph (I).
    ``(b) Production Credits for Exceeding Flexible Fuel Automobile 
Production Requirement.--
            ``(1) Earning and period for applying credits.--If the 
        number of dual fueled automobiles manufactured by a 
        manufacturer in a particular model year exceeds the number 
        required under subsection (a), the manufacturer earns credits 
        under this section, which may be applied to any of the 3 
        consecutive model years immediately after the model year for 
        which the credits are earned.
            ``(2) Trading credits.--A manufacturer that has earned 
        credits under paragraph (1) may sell credits to another 
        manufacturer to enable the purchaser to meet the requirement 
        under subsection (a).''.
            (2) Technical amendment.--The table of sections for chapter 
        329 of title 49, United States Code, is amended by inserting 
        after the item relating to section 32902 the following:

``32902A. Requirement to manufacture dual fueled automobiles.''.
    (b) Activities to Promote the Use of Certain Alternative Fuels.--
The Secretary of Transportation shall carry out activities to promote 
the use of fuel mixtures containing gasoline or diesel fuel and 1 or 
more alternative fuels, including a mixture containing at least 85 
percent of methanol, denatured ethanol, and other alcohols by volume 
with gasoline or other fuels, to power automobiles in the United 
States.

SEC. 3. MANUFACTURING INCENTIVES FOR DUAL FUELED AUTOMOBILES.

    Section 32905(b) of title 49, United States Code, is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' before ``Except'';
            (3) by striking ``model years 1993-2010'' and inserting 
        ``model year 1993 through the first model year beginning not 
        less than 18 months after the date of enactment of the Fuel 
        Security and Consumer Choice Act''; and
            (4) by adding at the end the following:
            ``(2) Except as provided in paragraph (5) of this 
        subsection, subsection (d) of this section, or section 
        32904(a)(2) of this title, the Administrator shall measure the 
        fuel economy for each model of dual fueled automobiles 
        manufactured by a manufacturer in the first model year 
        beginning not less than 30 months after the date of enactment 
        of the Fuel Security and Consumer Choice Act by dividing 1.0 by 
        the sum of--
                    ``(A) 0.7 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.3 divided by the fuel economy measured 
                under subsection (a) when operating the model on 
                alternative fuel.
            ``(3) Except as provided in paragraph (5) of this 
        subsection, subsection (d) of this section, or section 
        32904(a)(2) of this title, the Administrator shall measure the 
        fuel economy for each model of dual fueled automobiles 
        manufactured by a manufacturer in the first model year 
        beginning not less than 42 months after the date of enactment 
        of the Fuel Security and Consumer Choice Act by dividing 1.0 by 
        the sum of--
                    ``(A) 0.9 divided by the fuel economy measured 
                under section 32904(c) of this title when operating the 
                model on gasoline or diesel fuel; and
                    ``(B) 0.1 divided by the fuel economy measured 
                under subsection (a) when operating the model on 
                alternative fuel.
            ``(4) Except as provided in subsection (d) of this section, 
        or section 32904(a)(2) of this title, the Administrator shall 
        measure the fuel economy for each model of dual fueled 
        automobiles manufactured by a manufacturer in each model year 
        beginning not less than 54 months after the date of enactment 
        of the Fuel Security and Consumer Choice Act in accordance with 
        section 32904(c) of this title.
            ``(5) Notwithstanding paragraphs (2) through (4) of this 
        subsection, the fuel economy for all dual fueled automobiles 
        manufactured to comply with the requirements under section 
        32902A(a) of this title, including automobiles for which dual 
        fueled automobile credits have been used or traded under 
        section 32902A(b) of this title, shall be measured in 
        accordance with section 32904(c) of this title.''.