II 

109TH CONGRESS 

2D SESSION S. 2830 

To amend the automobile fuel economy provisions of title 49, United States 

Code, to reform the setting and calculation of fuel economy standards 

for passenger automobiles, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 18, 2006 

Mr. LOTT (for himself and Mr. PRYOR) introduced the following bill; which 

was read twice and referred to the Committee on Commerce, Science, and 

Transportation 

A BILL 

To amend the automobile fuel economy provisions of title 

49, United States Code, to reform the setting and calculation of fuel economy standards for passenger automobiles, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Corporate Average 

5 Fuel Economy Reform Act of 2006’’. 


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1 SEC. 2. CAFE STANDARDS FOR PASSENGER AUTOMOBILES. 

2 (a) AVERAGE FUEL ECONOMY STANDARDS FOR

3 AUTOMOBILES.—Section 32902 of title 49, United States 

4 Code, is amended— 

5 (1) by striking subsections (b) and (c) and in6 serting the following: 

7 ‘‘(b) PASSENGER AUTOMOBILES.— 

8 ‘‘(1) IN GENERAL.—At least 18 months before 

9 the beginning of each model year, the Secretary of 

10 Transportation shall prescribe by regulation average 

11 fuel economy standards for passenger automobiles 

12 manufactured by a manufacturer in that model year. 

13 Each standard shall be the maximum feasible aver14 age fuel economy level that the Secretary decides the 

15 manufacturers can achieve in that model year. The 

16 Secretary may prescribe separate standards for dif17 ferent classes of passenger automobiles. 

18 ‘‘(2) MINIMUM STANDARD.—In prescribing a 

19 standard under paragraph (1), the Secretary shall 

20 ensure that no manufacturer’s standard for a par21 ticular model year is less than the greater of— 

22 ‘‘(A) the standard in effect on the date of 

23 enactment of the Corporate Average Fuel Econ24 omy Reform Act of 2006; or 


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1 ‘‘(B) a standard established in accordance 

2 with the requirement of section 5(c)(2) of that 

3 Act. 

4 ‘‘(c) FLEXIBILITY OF AUTHORITY.— 

5 ‘‘(1) IN GENERAL.—The authority of the Sec6 retary to prescribe by regulation average fuel econ7 omy standards for automobiles under this section in8 cludes the authority to prescribe standards based on 

9 one or more vehicle attributes that relate to fuel 

10 economy, and to express the standards in the form 

11 of a mathematical function. The Secretary may issue 

12 a regulation prescribing standards for one or more 

13 model years. 

14 ‘‘(2) REQUIRED LEAD-TIME.—When the Sec15 retary prescribes an amendment to a standard under 

16 this section that makes an average fuel economy 

17 standard more stringent, the Secretary shall pre18 scribe the amendment at least 18 months before the 

19 beginning of the model year to which the amend20 ment applies. 

21 ‘‘(3) NO ACROSS-THE-BOARD INCREASES.— 

22 When the Secretary prescribes a standard, or pre23 scribes an amendment under this section that 

24 changes a standard, the standard may not be ex25 pressed as a uniform percentage increase from the 


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1 fuel-economy performance of automobile classes or 

2 categories already achieved in a model year by a 

3 manufacturer.’’; 

4 (2) by inserting ‘‘motor vehicle safety, emis5 sions,’’ in subsection (f) after ‘‘economy,’’; 

6 (3) by striking ‘‘energy.’’ in subsection (f) and 

7 inserting ‘‘energy and reduce its dependence on oil 

8 for transportation.’’; 

9 (4) by striking subsection (j) and inserting the 

10 following: 

11 ‘‘(j) COMMENTS FROM DOE AND EPA.— 

12 ‘‘(1) NOTICE OF PROPOSED RULEMAKING.—Be13 fore issuing a notice proposing to prescribe or 

14 amend an average fuel economy standard under sub15 section (a), (b), or (g), the Secretary of Transpor16 tation shall give the Secretary of Energy and the 

17 Administrator of the Environmental Protection 

18 Agency at least 10 days to comment on the proposed 

19 standard or amendment. If the Secretary of Energy 

20 or the Administrator concludes that the proposed 

21 standard or amendment would adversely affect the 

22 conservation goals of the Department of Energy or 

23 the environmental protection goals of the Environ24 mental Protection Agency, respectively, the Sec25 retary or the Administrator may provide written 


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1 comments to the Secretary of Transportation about 

2 the impact of the proposed standard or amendment 

3 on those goals. To the extent that the Secretary of 

4 Transportation does not revise a proposed standard 

5 or amendment to take into account the comments, if 

6 any, the Secretary shall include the comments in the 

7 notice. 

8 ‘‘(2) NOTICE OF FINAL RULE.—Before taking 

9 final action on a standard or an exemption from a 

10 standard under this section, the Secretary of Trans11 portation shall notify the Secretary of Energy and 

12 the Administrator of the Environmental Protection 

13 Agency and provide them a reasonable time to com14 ment on the standard or exemption.’’; and 

15 (5) by adding at the end thereof the following: 

16 ‘‘(k) COSTS–BENEFITS.—The Secretary of Transpor17 tation may not prescribe an average fuel economy stand18 ard under this section that imposes marginal costs that 

19 exceed marginal benefits, as determined at the time any 

20 change in the standard is promulgated.’’. 

21 (b) EXEMPTION CRITERIA.—The first sentence of 

22 section 32904(b)(6)(B) of title 49, United States Code, 

23 is amended— 


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1 (1) by striking ‘‘exemption would result in re2 duced’’ and inserting ‘‘manufacturer requesting the 

3 exemption will transfer’’; 

4 (2) by striking ‘‘in the United States’’ and in5 serting ‘‘from the United States’’; and 

6 (3) by inserting ‘‘because of the grant of the ex7 emption’’ after ‘‘manufacturing’’. 

8 (c) CONFORMING AMENDMENTS.— 

9 (1) Section 32902 of title 49, United States 

10 Code, is amended— 

11 (A) by striking ‘‘or (c)’’ in subsection 

12 (d)(1); 

13 (B) by striking ‘‘(c),’’ in subsection (e)(2); 

14 (C) by striking ‘‘subsection (a) or (d)’’ 

15 each place it appears in subsection (g)(1) and 

16 inserting ‘‘subsection (a), (b), or (d)’’; 

17 (D) by striking ‘‘(1) The’’ in subsection 

18 (g)(1) and inserting ‘‘The’’; 

19 (E) by striking subsection (g)(2); and 

20 (F) by striking ‘‘(c),’’ in subsection (h) 

21 and inserting ‘‘(b),’’. 

22 (2) Section 32903 of such title is amended by 

23 striking ‘‘section 32902(b)–(d)’’ each place it ap24 pears and inserting ‘‘subsection (b) or (d) of section 

25 32902’’. 


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1 (3) Section 32904(a)(1)(B) of such title is 

2 amended by striking ‘‘section 32902(b)–(d)’’ and in3 serting ‘‘subsection (b) or (d) of section 32902’’. 

4 (4) The first sentence of section 32909(b) of 

5 such title is amended to read ‘‘The petition must be 

6 filed not later than 59 days after the regulation is 

7 prescribed.’’. 

8 (5) Section 32917(b)(1)(B) of such title is 

9 amended by striking ‘‘or (c)’’. 

10 SEC. 3. USE OF EARNED CREDITS. 

11 Section 32903 of title 49, United States Code, is 

12 amended— 

13 (1) by striking ‘‘3 consecutive model years’’ in 

14 subsection (a)(1) and subsection (a)(2) and inserting 

15 ‘‘5 consecutive model years’’; 

16 (2) by striking ‘‘3 model years’’ in subsection 

17 (b)(2) and inserting ‘‘5 model years’’; 

18 (3) by redesignating subsection (f) as sub19 section (g); and 

20 (4) by inserting after subsection (e) the fol21 lowing: 

22 ‘‘(f) CREDIT TRANSFERS.—The Secretary of Trans23 portation may permit by regulation, on such terms and 

24 conditions as the Secretary may specify, a manufacturer 

25 of automobiles that earns credits to transfer such credits 


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1 attributable to one of the following production segments 

2 in a model year to apply those credits in that model year 

3 to the other production segment: 

4 ‘‘(1) Passenger-automobile production. 

5 ‘‘(2) Non-passenger-automobile production. 

6 In promulgating such a regulation, the Secretary shall 

7 take into consideration the potential effect of such trans8 fers on creating incentives for manufacturers to produce 

9 more efficient vehicles and domestic automotive employ10 ment.’’. 

11 SEC. 4. USE OF CIVIL PENALTIES FOR RESEARCH AND DE12 VELOPMENT. 

13 Section 32912 of title 49, United States Code, is 

14 amended by adding at the end thereof the following: 

15 ‘‘(e) RESEARCH AND DEVELOPMENT AND USE OF

16 CIVIL PENALTIES.— 

17 ‘‘(1) All civil penalties assessed by the Secretary 

18 or by a Court shall be credited to an account at the 

19 Department of Transportation and shall be available 

20 to the Secretary to carry out the research program 

21 described in paragraph (2). 

22 ‘‘(2) The Secretary shall carry out a program 

23 of research and development into fuel saving auto24 motive technologies and to support rulemaking reVerDate Aug 31 2005 04:40 May 20, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2830.IS S2830

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1 lated to the corporate average fuel economy pro2 gram.’’. 

3 SEC. 5. EFFECTIVE DATE. 

4 (a) IN GENERAL.—Except as provided in subsection 

5 (b), this Act, and the amendments made by this Act, take 

6 effect on the date of enactment of this Act. 

7 (b) TRANSITION FOR PASSENGER AUTOMOBILE

8 STANDARD.—Notwithstanding subsection (a), and except 

9 as provided in subsection (c)(2), until the effective date 

10 of a standard for passenger automobiles that is issued 

11 under the authority of section 32902(b) of title 49, United 

12 States Code, as amended by this Act, the standard or 

13 standards in place for passenger automobiles under the 

14 authority of section 32902 of that title, as that section 

15 was in effect on the day before the date of enactment of 

16 this Act, shall remain in effect. 

17 (c) RULEMAKING.— 

18 (1) INITIATION OF RULEMAKING UNDER

19 AMENDED LAW.—Within 60 days after the date of 

20 enactment of this Act, the Secretary of Transpor21 tation shall initiate a rulemaking for passenger auto22 mobiles under section 32902(b) of title 49, United 

23 States Code, as amended by this Act. 

24 (2) AMENDMENT OF EXISTING STANDARD.— 

25 Until the Secretary issues a final rule pursuant to 


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1 the rulemaking initiated in accordance with para2 graph (1), the Secretary shall amend the average 

3 fuel economy standard prescribed pursuant to sec4 tion 32092(b) of title 49, United States Code, with 

5 respect to passenger automobiles in model years to 

6 which the standard adopted by such final rule does 

7 not apply. 

Æ 


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