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[Senate Report 110-278]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-278
_______________________________________________________________________

                                     

                                                       Calendar No. 630
 
                      TEN-IN-TEN FUEL ECONOMY ACT

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                   on

                                 S. 357

                                     

                 April 7, 2008.--Ordered to be printed

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                       one hundred tenth congress
                             second session

                   DANIEL K. INOUYE, Hawaii, Chairman
                   TED STEVENS, Alaska, Vice-Chairman
JOHN D. ROCKEFELLER IV, West         JOHN McCAIN, Arizona
    Virginia                         KAY BAILEY HUTCHISON, Texas
JOHN F. KERRY, Massachusetts         OLYMPIA J. SNOWE, Maine
BYRON L. DORGAN, North Dakota        GORDON H. SMITH, Oregon
BARBARA BOXER, California            JOHN ENSIGN, Nevada
BILL NELSON, Florida                 JOHN E. SUNUNU, New Hampshire
MARIA CANTWELL, Washington           JIM DeMINT, South Carolina
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
MARK PRYOR, Arkansas                 JOHN THUNE, South Dakota
THOMAS CARPER, Delaware              ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri
AMY KLOBUCHAR, Minnesota
          Margaret Cummisky, Staff Director and Chief Counsel
         Lila Helms, Deputy Staff Director and Policy Director
       Jean Toal Eisen, Senior Advisor and Deputy Policy Director
     Christine Kurth, Republican Staff Director and General Counsel
                Paul J. Nagle, Republican Chief Counsel
             Mimi Braniff, Republican Deputy Chief Counsel

                                                       Calendar No. 630
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-278

======================================================================

                      TEN-IN-TEN FUEL ECONOMY ACT

                                _______
                                

                 April 7, 2008.--Ordered to be printed

                                _______
                                

       Mr. Inouye, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                                 REPORT

                         [To accompany S. 357]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 357) to improve passenger 
automobile fuel economy and safety, reduce greenhouse gas 
emissions, reduce dependence on foreign oil, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment (in the nature of a substitute) and 
recommends that the bill (as amended) do pass.

                          Purpose of the Bill

  S. 357, as amended, would increase fuel economy for passenger 
cars and light, medium, and heavy duty trucks. It also would 
provide civil and criminal penalties for gasoline price gouging 
during an energy emergency period declared by the President. 
Title I of S. 357 would reform and increase fuel economy 
standards for automobiles (passenger cars and light trucks) 
under 10,000 pounds gross vehicle weight ratio (gvwr). The bill 
would change the current Corporate Average Fuel Economy (CAFE) 
program to allow the fuel economy standards of all automobile 
classes (passenger cars and light trucks) covered by S. 357 to 
be combined into one overall national average. The bill also 
would create fuel economy standards for medium duty trucks 
(10,000 pounds through 26,000 pounds gvwr) and heavy duty 
trucks (over 26,000 pounds gvwr) for the first time. Starting 
in model year (MY) 2011, automobiles must ratably achieve an 
overall national fuel economy standard of 35 miles per gallon 
(mpg) by MY 2020. After MY 2020, automobile fuel economy must 
increase by 4 percent over the previous model year until 2030. 
Medium duty and heavy duty (MHD) trucks, after the promulgation 
of the first fuel economy standards for these vehicles, must 
also achieve a 4 percent per annum improvement in fuel economy 
until 2030. The Secretary of Transportation (Secretary) would 
have the discretion to lower the fuel economy standards in any 
given year if certain conditions are met.
    Title II of S. 357 would make it illegal to sell oil, 
gasoline, or petroleum distillates at ``unconscionably 
excessive'' prices when the President declares an energy 
emergency. The bill would prohibit anyone from reporting false 
information to the government about the wholesale prices of 
these products, and the legislation would make the manipulation 
of petroleum markets in violation of Federal Trade Commission 
(FTC) rules illegal.

                          Background and Needs

                            HISTORY OF CAFE

    CAFE refers to the Federal policy that requires automobile 
manufacturers to meet an average fleet-wide fuel economy 
standard on an annual basis. The purpose of the law is to 
reduce fuel consumption, which in turn benefits the United 
States by: (1) protecting the Nation's national security by 
reducing its dependence on foreign oil; (2) reducing gasoline 
costs for consumers; and (3) protecting the environment by 
reducing toxic air emissions and carbon dioxide emissions, 
which contribute to problems such as global warming.
    CAFE standards were first enacted in 1975 as part of the 
Energy Policy and Conservation Act (P.L. 94-163). One of the 
first CAFE bills to be introduced was S. 633 in the 94th 
Congress, which was referred to the Senate Committee on 
Commerce, Science, and Transportation. The provisions of that 
bill were incorporated into a larger conservation bill (S. 622) 
considered by the Interior Committee, which became the measure 
that was enacted into law. The CAFE measure arose out of 
concern for the Nation's energy security following the oil 
crisis of the early 1970s, which was precipitated by the Arab 
oil embargo of 1973-1974. The crisis exposed the economic 
vulnerability of the United States and its heavy dependence on 
foreign oil. As a result, policymakers decided to take action 
to reduce this dependence. Given the large degree of petroleum 
dedicated to transportation fuel use, particularly in passenger 
automobiles, it was determined that priority should be given to 
reducing transportation fuel consumption. Congress was advised 
that by decreasing the amount of fuel use over vehicular miles 
driven, the Nation could achieve substantial savings in oil 
use.

                   STRUCTURE AND REQUIREMENTS OF CAFE

    The Department of Transportation (DOT) via the National 
Highway Traffic Safety Administration (NHTSA) administers the 
CAFE program. The CAFE law required automobile manufacturers, 
with respect to passenger cars and light trucks, for the first 
time, to meet specific fuel economy standards. Passenger cars 
were required to meet specific numerical levels incrementally 
as provided for in the statute. However, the standards for 
light trucks were left to the discretion of the NHTSA. This 
differentiation was due to the fact that light trucks were 
rarely used as passenger vehicles at the time. To illustrate, 
in 1975, light trucks accounted for approximately 15 percent of 
the U.S. automobile market.
    Adherence to CAFE standards is determined by averaging 
separately the fuel economy of a manufacturer's entire car and 
light truck fleets. The passenger car fleet is further 
subdivided into a domestic car and a foreign car fleet. A 
domestic car is one in which 75 percent of its content value is 
from the United States, Canada, or Mexico. If the value of the 
domestic components is less than 75 percent, a car is 
considered a foreign car. The domestic and foreign car fleets 
must independently meet the passenger car CAFE standard. As it 
stands today, the CAFE fleet-wide requirement for passenger 
cars is 27.5 mpg, and 22.2 mpg for light trucks. Manufacturers 
that fail to meet these requirements are subject to civil 
penalties of $5.50 per car in their fleet for every 0.1 mpg 
below the standard. Makers of expensive car lines, such as BMW 
and Porsche, often fail to comply. From 1983 through 1995, more 
than $400 million in fines were collected due to CAFE 
noncompliance.

                    CURRENT PASSENGER CAR STANDARDS

    The 1975 law was directed at passenger cars. Under the 
statute, passenger vehicles were required to meet higher fuel 
economy standards incrementally over a seven year period (1978-
1985). When the law was enacted in 1975, the average mpg for 
passenger cars was between 13 and 14 mpg. It was recognized, 
however, that consumers were demanding smaller and more fuel 
efficient cars in response to gas shortages and high prices and 
that the technologies existed to achieve fuel economy 
improvements over time. With a three year lead time provided 
before the first requirements went into effect, automobile 
manufacturers were required to ensure their passenger car 
fleets complied with the following schedule:

           1978--18.0
           1979--19.0
           1980--20.0
           1981--22.0
           1982--24.0
           1983--26.0
           1984--27.0
           1985--27.5

    Since leveling off in 1985, however, CAFE standards for 
passenger cars have not improved. In fact, during the Reagan 
and first Bush Administrations, the passenger car standards 
were actually decreased by the NHTSA to 26.0 mpg for years 
1986-1988, and slightly increased to 26.5 for 1989. The 
standard returned to 27.5 in 1990 and has remained there to 
present day.

                     CURRENT LIGHT TRUCK STANDARDS

    The CAFE standard for light trucks was 20.7 mpg from 1996 
until 2003. In 2003, the NHTSA issued a final rule which raised 
the CAFE standard for light trucks. The rule set standards at 
21.0 mpg for MY 2005, 21.6 mpg for MY 2006, and 22.2 for MY 
2007.
2006 light truck standard reform
    A new light truck standard was put into place by the NHTSA 
on March 29, 2006. The new standard is based on the 
``footprint'' of the light truck. The footprint is the average 
track width (the distance between the centerline of the tires) 
and wheelbase (the distance between the centers of the axles). 
Each footprint value has a different target, and footprint 
value is the same for all manufacturers, regardless of 
differences in their overall fleet mixes. A target level of 
fuel economy is established for each one-tenth of a square foot 
increment in a vehicle's footprint. This results in what is 
known as the ``continuous curve.'' Each vehicle model will 
essentially have its own CAFE standard. As long as all models 
in a manufacturer's fleet meet the harmonically averaged CAFE 
standard, it will be compliant with the law.
    Manufacturers may comply with CAFE standards established 
under the reformed structure or with standards established by 
the current CAFE rule during the transition period (MYs 2008-
2010). In MY 2011, all manufacturers will be required to comply 
with the reformed CAFE standard.
    If manufacturers choose to follow the current CAFE regime, 
the average light truck fleet standards are as follows:

           MY 2008: 22.5 mpg
           MY 2009: 23.1 mpg
           MY 2010: 23.5 mpg

    The NHTSA estimates that average CAFE levels required for 
all manufacturers will be 24 mpg in MY 2011. The NHTSA claims 
the new fuel economy standards for light trucks will save 10.7 
billion gallons of fuel over the next two decades.
    Several experts noted that the rule does not include trucks 
that weigh between 8,500-10,000 lbs, such as the Hummer H2, 
until 2011. The rule has been criticized for potentially low 
fuel savings. According to the Union of Concerned Scientists, 
the new light truck standard will save less than two weeks of 
gasoline each year over the next two decades.

                             CAFE SUCCESSES

    Between 1975 and 1985, the CAFE program achieved the goals 
for which it was intended. In 1974, the average car sold in 
America achieved 13 mpg. By 1988, fuel economy climbed to a 
peak of almost 29 mpg, a 120 percent increase in fuel economy 
over 14 years. Light truck standards (including SUVs and 
minivans) led to a fuel economy increase of 50 percent, from 
13.7 mpg in 1975 to 20.7 mpg in 1987. Improvements in vehicle 
design between 1975 and 1985 improved fuel economy by an 
average of 62 percent for all vehicles. The National Research 
Council of the National Academy of Sciences (NRC) in its 2002 
report on CAFE estimated that absent fuel economy improvements 
created by the CAFE program, U.S. gasoline use would be 2.8 
million barrels per day (or 43 billion gallons per year) higher 
than it is today. As a result, fuel use by cars and light 
trucks today is roughly one-third lower than it would otherwise 
be and overall oil consumption is 5 percent lower. In addition, 
carbon dioxide emissions would be more than 100 million metric 
tons higher each year than they are now without the CAFE 
program. Because of CAFE, carbon dioxide emissions have been 
cut by seven percent.

       EROSION OF THE CAFE STANDARD AND FUEL ECONOMY PERFORMANCE

    The NRC found that the CAFE program contributed to the 
increased fuel economy of the fleet and has been particularly 
effective in keeping fuel economy above the levels to which it 
might have fallen during times of low real gasoline prices, 
thus shielding consumers from the volatility of oil prices. But 
after doubling fuel economy in the first 15 years of the 
program, the fuel economy of passenger cars has stagnated at 
27.5 mpg. Light truck fuel economy was frozen from 1995 until 
2003 at 20.7 mpg, before a new rule increasing the standards 
began in 2003. In 1987, the combined fuel economy average for 
passenger cars and light trucks was 26.2 mpg. Currently, the 
average is 24.6 mpg. In 1975, light trucks were 15 percent of 
the fleet; today they are over 50 percent of the fleet. In 
addition to the fleet composition, several experts point to the 
diversion of fuel economy technologies to improve comfort and 
power as the key to the eroding fuel economy of the fleet. 
Advanced technologies that could have been used to continue to 
increase fuel economy were used for other attributes instead. 
Thus, fuel economy essentially was held steady after 1985, but 
efficiency technology was used to increase vehicle weight by 20 
percent and make 0-60 acceleration times, on average, 25 
percent faster.

                    CURRENT LEVELS OF OIL DEPENDENCY

    The transportation sector consumes 67 percent of all oil in 
the United States. Automobiles alone account for approximately 
30 percent of U.S. petroleum consumption. Imports of foreign 
oil accounted for over 65 percent of U.S. consumption. In 1975, 
when Congress passed CAFE out of concern about the use of oil 
as a ``political weapon,'' imports accounted for about one-
third of U.S. oil consumption. The growing unrest in regions of 
the world upon which we rely for our oil imports increases the 
risk of future oil shocks that will have substantial adverse 
impacts on the U.S. economy as well as on consumers.

                       STATUS OF THE CAFE PROGRAM

    The CAFE program has faced many political and structural 
hurdles since its creation in 1975, but the last 10 years have 
been especially detrimental to its ability to encourage fuel 
economy in the passenger fleet. The CAFE program was not funded 
from fiscal year (FY) 1996 to FY 2001 because of riders 
included in appropriations bills. CAFE standards for passenger 
cars have stayed the same for more than 20 years. CAFE 
standards for light trucks were not addressed from 1996 to 
2002, and many Members of Congress have strongly criticized the 
increases for light trucks that began in 2003, noting that the 
standards were set too low and did not reflect the technologies 
available for improving fuel economy.
    President George W. Bush requested the authority from 
Congress to reform passenger car CAFE in his 2007 State of the 
Union Address. He also stated that he would make it a goal to 
have CAFE standards increase by four percent annually, but he 
would not mandate the NHTSA to create a standard of that 
magnitude.
    Members are concerned that the President's request to 
reform passenger car CAFE without Congressional guidance would 
lead to an unsatisfactory passenger car CAFE standard, akin to 
the light truck standard. The NHTSA undertook reforms of the 
light truck CAFE program, which are now a part of the light 
truck standard for MY 2008-2011. The NHTSA stated that the 
reformed standard would save 10.7 billion gallons of fuel over 
the useful life of the MY 2008-2011 light trucks. Numerous 
experts have denounced the rule, noting that the standards 
would save less than two weeks of current gasoline consumption 
each year over the next two decades.

                         GASOLINE PRICE GOUGING

    Immediately following Hurricane Katrina in 2005, gas prices 
in some areas reached over $6 per gallon without any perceived 
connections to actual commodity prices at that time. Spurred by 
consumer complaints in the affected markets, State officials 
began to investigate suspicions of gas pump profiteering. These 
State officials used State price gouging laws as the foundation 
for these inquiries and investigations. Most of these laws are 
enforced after the declaration of an emergency, but some are 
enforced at other times. Some States also used their consumer 
protection laws to prosecute price gouging as an unfair and 
deceptive trade practice. Generally, most price gouging laws 
make it illegal to sell goods and services in a designated 
emergency area at prices that exceed the normal prices for 
comparable goods and services in the same area immediately 
before the declaration of an emergency. There are several 
standards of proof States have used to evaluate whether gouging 
has occurred. States have set the burden at a ``gross 
disparity'' between the prices of the good or service before 
the emergency and after the emergency that cannot be accounted 
for in the wholesale price, transportation cost, or other 
externality that a retailer did not control. Some States have 
set a percentage increase as the trigger for an investigation. 
Alabama, for example, set its trigger at an increase of greater 
than 25 percent of the pre-emergency price.
    The FTC currently does not have specific authority to 
prosecute gasoline price gouging. However, the FTC does have 
authority to police the oil and gas industry for anti-
competitive behavior via merger reviews and activities that 
violate the Sherman and Clayton Acts. Many observers have 
raised concerns that oil and gas industry activities have 
artificially increased prices without violating the Sherman and 
the Clayton Acts.
    The FTC undertook a congressionally-mandated examination of 
the post Katrina gasoline markets to find if gasoline price 
gouging had occurred. Senate Amendment 1703 to H.R. 2862, the 
Science, State, Justice, Commerce, and Related Agencies 
Appropriations Act of 2006 required the FTC to conduct an 
immediate investigation into nationwide gasoline prices in the 
aftermath of Hurricane Katrina. The FTC was required to issue 
its investigative report to the Senate Committee on Commerce, 
Science, and Transportation, the House Committee on Energy and 
Commerce, and the House and Senate Appropriations Committees 
within 180 days of enactment. The amendment was accepted by 
unanimous consent, and H.R. 2862 was signed into law by 
President Bush on November 22, 2005 (P.L. 109-108). The report 
was delivered on May 22, 2006.
    In its report, the FTC found no evidence that the oil 
industry manipulated gasoline prices in the wake of hurricanes 
Katrina and Rita and that the 15 instances that fit the 
definition of price gouging created by Congress could be 
explained by market conditions. But in a concurrence by FTC 
Commissioner Jon Liebowitz, he noted that a handful of refiners 
studied by the Commission for the report had ``more than 
doubled their operating margins in ways not attributable to 
increased costs;'' that other refiners' wide margins were 
``equally troubling;'' and that ``the behavior of many market 
participants, on balance, leaves much to be desired.''

                         Summary of Provisions

    S. 357, the Ten-in-Ten Fuel Economy Act of 2007, would 
reform and increase fuel economy standards for automobiles 
(passenger cars and light trucks) under 10,000 pounds gvwr. The 
bill would change the current CAFE program to allow the fuel 
economy standards for all automobile classes covered by S. 357 
to be combined into one overall national average. Beginning in 
MY 2011, the overall automobile fuel economy average would be 
ratably increased in order to achieve a fuel economy standard 
of at least 35 mpg by MY 2020. After MY 2020, the fuel economy 
average would be increased at four percent more than the 
previous model year. This level of increase would continue 
until MY 2030. The Secretary would have the discretion to lower 
the rate of change for automobile fuel economy standards if the 
Secretary finds certain conditions that justify the usage of 
that discretion. From MY 2011 to MY 2020, the Secretary could 
lower the rate of increase for a fuel economy standard for a 
particular year if the maximum feasible fuel economy level is 
lower than the ratable level of change to achieve the 35 mpg 
standard in MY 2020. From MY 2021 to MY 2030, the Secretary 
could lower the rate of increase if it is found that the four 
percent increase is not cost effective for that model year.
    S. 357 also would create and increase fuel economy 
standards for medium duty and heavy duty trucks. After the 
initial baseline fuel economy standard is promulgated for 
medium duty and heavy duty trucks, the fuel economy for these 
trucks shall increase by four percent over the previous model 
year until MY 2030. The Secretary may lower the rate of 
increase if it is found that the 4 percent increase is not cost 
effective for that model year.
    The bill would require the Secretary to initiate a 
rulemaking in 2010 to issue standards to mitigate the 
difference in weight and size between the largest and smallest 
vehicles, and to improve bumper height compatibility between 
vehicles. The final rule must be issued in 2012.
    The Secretary may establish, by regulation, a fuel economy 
credit trading program to allow manufacturers whose automobiles 
exceed the average fuel economy standards to earn credits to be 
sold to manufacturers whose automobiles fail to achieve the 
prescribed standards. Automakers may carry forward or back 
earned fuel economy credits for five years as opposed to the 
three years as currently permitted.
    S. 357 would create two labeling programs to aid consumer 
choice in purchasing vehicles with better fuel economy and 
greenhouse gas emissions. The green label for vehicles are for 
those that meet or exceed the applicable fuel economy standard 
or have the lowest greenhouse gas emissions over the useful 
life of the vehicle. The gold star label would be for 
automobiles that achieve a fuel economy of 50 mpg.
    S. 357 would make it illegal to sell oil, gasoline, or 
petroleum distillates at ``unconscionably excessive'' prices 
when the President declares an energy emergency. Additionally, 
S. 357 would prohibit anyone from reporting false information 
to the government about the wholesale prices of these products 
and would make it illegal to manipulate petroleum markets in 
violation of FTC rules. Those found to have committed market 
manipulation would be subject to civil fines of up to $1 
million, and those who are found to have committed price 
gouging during an energy emergency would be liable for civil 
and criminal penalties up to $5 million and five years 
imprisonment.

                          Legislative History

    On January 22, 2007, Senators Dianne Feinstein and Olympia 
Snowe introduced S. 357, which was referred to the Committee on 
Commerce, Science, and Transportation. Several members of the 
Committee cosponsored the measure, including Chairman Inouye 
and Senators Kerry, Boxer, Bill Nelson, Cantwell, and 
Lautenberg. Vice Chairman Stevens cosponsored S. 357, as 
reported.
    On March 6, 2007, and May 3, 2007, the Committee held 
hearings chaired by Consumer Affairs Subcommittee Chairman 
Pryor and Chairman Inouye, respectively, that examined 
increasing CAFE standards and evaluated pending CAFE 
legislation. Among those that testified before the Committee 
were individual automobile manufacturers and their trade 
associations, environmental groups, vehicle technology experts, 
the United Auto Workers, the NHTSA, and national defense and 
energy experts.
    On May 8, 2007, the Committee met in open executive session 
to consider an amendment in the nature of a substitute to S. 
357 offered by Chairman Inouye and Vice Chairman Stevens that 
made several substantive changes to the bill as introduced. In 
addition to the substitute, the Chairman and the Vice Chairman 
offered a package of technical amendments to clarify and 
correct portions of the substitute. Senator Boxer offered an 
amendment to improve the fuel efficiency of the Federal fleet. 
Senators Cantwell, Dorgan, Klobuchar, and Kerry offered an 
amendment to increase the number of flexible fuel vehicles that 
automobile manufacturers produce. Senator Cantwell offered an 
amendment to have the Environmental Protection Agency (EPA) 
review the accuracy of fuel economy labels every 5 years. 
Senator Cantwell offered an amendment to create a national tire 
fuel efficiency program and a tire fuel efficiency rating 
system. Senator Carper offered an amendment to create an 
Advanced Battery Initiative to support and improve battery 
technology. Senator Carper also offered an amendment to create 
national biodiesel fuel standards. Senator Dorgan offered a 
process to promulgate the initial medium duty and heavy duty 
truck fuel economy standards. Senator Dorgan also offered an 
amendment to end the fuel economy program under S. 357 at MY 
2030 for automobiles and medium and heavy duty trucks. Senator 
Lautenberg offered an amendment to mandate that the Secretary 
report to Congress when fuel economy standards are lowered and 
to outline the steps needed to avoid future decreases. Senators 
Pryor and Thune offered an amendment to use collected CAFE 
fines for vehicle fuel efficiency research and to increase 
alternative fuel infrastructure. All of these amendments to the 
Inouye-Stevens substitute amendment were accepted en bloc. 
Senator Cantwell offered the language of S. 1263, the Petroleum 
Consumer Price Gouging Protection Act, as amendment outside of 
the en bloc amendment package. Senator Cantwell's amendment was 
accepted by voice vote. The Committee adopted the Inouye-
Stevens substitute amendment to the bill by voice vote and 
ordered the bill reported favorably, as amended.

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

S. 357--Ten-in-Ten Fuel Economy Act

    Summary: S. 357 would increase fuel economy standards for 
passenger automobiles and light, medium, and heavy trucks 
starting in 2011, and would require the Department of 
Transportation (DOT) and the Environmental Protection Agency 
(EPA) to promulgate rules and regulations to implement the 
increased standards. The bill also would require those agencies 
to submit several reports to the Congress concerning fuel 
economy. Further, the legislation would authorize 
appropriations for the Department of Energy (DOE) to provide 
grants for the installation of equipment to deliver alternative 
fuels to consumers and would authorize programs to research 
technologies to conserve motor fuel and to increase consumer 
awareness of fuel economy. Based on information from the 
affected agencies and assuming appropriation of the necessary 
amounts, CBO estimates that implementing S. 357 would cost $11 
million in 2008 and $149 million over the 2008-2012 period.
    CBO estimates that enacting S. 357 would lead to reduced 
use of motor fuels starting in 2011, thereby reducing revenues 
from the federal excise taxes on motor fuels. CBO estimates 
that revenues would decline under the bill by $72 million over 
the 2011-2012 period and by about $3.1 billion over the 2011-
2017 period. Enacting S. 357 would not have a significant 
impact on direct spending.
    Pursuant to section 203 of S. Con. Res. 21, the Concurrent 
Resolution on the Budget for Fiscal Year 2008, CBO estimates, 
that under S. 357, revenues would be reduced by at least $5 
billion-and as a result, deficits would be increased by at 
least $5 billion-in at least one of the four 10-year periods 
beginning in 2018 through 2057.
    S. 357 would preempt state and local authority to implement 
their own consumer information laws or regulations on the fuel 
efficiency impact of vehicle tires; that preemption constitutes 
an intergovernmental mandate as defined in the Unfunded 
Mandates Reform Act (UMRA). CBO estimates, however, that the 
preemption would impose insignificant additional costs on 
state, local, or tribal governments that would be well below 
the threshold established in UMRA ($66 million in 2007, 
adjusted annually for inflation).
    S. 357 would impose several private-sector mandates as 
defined in UMRA, on vehicle and tire manufacturers, as well as 
suppliers of crude oil, gas, or petroleum distillates. The bill 
would set new corporate average fuel economy standards for 
automobiles and certain trucks and impose new safety standards 
and labeling requirements on manufacturers of those vehicles. 
The bill also would impose new requirements related to consumer 
information on manufacturers and retailers of motor vehicle 
tires. In addition, the bill would prohibit certain pricing 
practices during a declared energy emergency. The aggregate 
costs of the mandates in the bill is uncertain because such 
costs would depend on regulations to be developed under the 
bill. However, because the cost of the fuel economy standards 
could be large, CBO expects that the aggregate cost of mandates 
would likely exceed the annual threshold established by UMRA 
for private-sector mandates ($131 million in 2007, adjusted 
annually for inflation) in at least one of the first five years 
the mandates are in effect.
    Estimated cost to the Federal Government; The estimated 
budgetary impact of S. 357 is summarized in Table 1. The costs 
of this legislation fall within budget functions 270 (energy), 
300 (natural resources and environment), 400 (transportation), 
and 800 (general government).
    Basis of estimate: For this estimate, CBO assumes that S. 
357 will be enacted by the end of fiscal year 2007 and that the 
necessary amounts will be appropriated each year. Estimates of 
spending are based on historical spending patterns of similar 
and ongoing programs.
    S. 357 would increase fuel economy standards for passenger 
automobiles and light, medium, and heavy trucks starting in 
2011, and would require DOT, DOE, and EPA to promulgate rules, 
regulations, and standards and to submit several reports to the 
Congress concerning fuel economy standards and implementation 
of the fuel-efficiency requirements of the bill. The bill also 
would authorize additional programs to increase the 
availability and consumer awareness of vehicles that operate on 
alternative fuels and of such fuels.

                TABLE 1.--CHANGES IN REVENUES AND SPENDING SUBJECT TO APPROPRIATION UNDER S. 357
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2008     2009     2010     2011     2012
----------------------------------------------------------------------------------------------------------------
                                             Changes In Revenues\1\

Estimated Revenues.................................................        0        0        0      -17      -55

                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Implement CAFE Standards:
    Authorization Level............................................        0       25       25       25       25
    Estimated Outlays..............................................        0       15       21       24       25
Energy Security Fund:
    Estimated Authorization Level..................................        8        6        7        7        2
    Estimated Outlays..............................................        6        6        7        7        3
Public Awareness Programs:
    Estimated Authorization Level..................................        5        5        5        5        5
    Estimated Outlays..............................................        3        5        5        5        5
Grants for Advanced Battery Research:
    Estimated Authorization Level..................................        1        1        1        1        `
    Estimated Outlays..............................................        1        1        1        1        1
Other Programs:
    Authorization Level............................................        2        1        1        1        1
    Estimated Outlays..............................................        1        2        1        1        1
    Total Changes:
        Estimated Authorization Level..............................       16       38       39       39       34
        Estimated Outlays..........................................       11       29       35       39       35
----------------------------------------------------------------------------------------------------------------
NOTE: CAFE = corporate average fuel economy.
\1\Changes in revenues through 2017 are shown in Table 2.

Revenues

    The Secretary of Transportation is currently authorized to 
set corporate average fuel economy (CAFE) standards for 
passenger automobiles and light trucks sold in the United 
States. S. 357 would amend those standards in a number of ways 
designed to increase fuel economy. The Secretary of 
Transportation would set standards for passenger automobiles 
and light trucks beginning in 2011 to achieve a combined fuel 
economy by 2020 of at least 35 miles per gallon, unless it was 
determined that a higher standard was not cost-effective. 
Separate treatment of passenger automobiles and light trucks 
would end, although a system of different standards for 
vehicles with different attributes could be established, such 
as is currently being implemented for light trucks. S. 357 
would include under the new standards those types of light 
trucks currently exempt from CAFE standards. In addition, a 
fuel economy standard would apply to medium- and heavy-duty 
trucks for the first time and would be separate from that 
covering passenger automobiles and light trucks. Among other 
provisions, S. 357 would authorize the Secretary of 
Transportation to establish a program for trading credits 
between firms.
    The estimated changes in revenues under S. 357 are shown in 
Table 2. Combining the effects of the reduced motor fuel 
excises and penalties, CBO expects that total revenues would be 
reduced by $72 million over the period from 2011 to 2012 and by 
about $3.1 billion from 2011 through 2017, net of income and 
payroll tax effects.

                                          TABLE 2.--CHANGES IN REVENUES OVER THE 2008-2017 PERIOD UNDER S. 357
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                          --------------------------------------------------------------------------------------------------------------
                                            2008    2009    2010    2011    2012     2013     2014     2015     2016      2017     2008-2012   2008-2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   CHANGES IN REVENUES
Estimated Revenues.......................       0       0       0     -17     -55     -150     -309     -536     -835      -1,214       -72       -3,116
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Fuel Economy Standards. Based on information provided by 
the National Highway Traffic Safety Administration (NHTSA) 
within the Department of Transportation, CBO assumes that new, 
higher standards would be put in place starting in 2011 without 
a determination that they fail a cost-effectiveness test. S.357 
specifies that the composite standard for passenger automobiles 
and light trucks be adjusted starting in 2011 to the maximum 
feasible level to achieve a fuel economy for the U.S. fleet of 
at least 35 miles per gallon in 2020. To reach 35 miles per 
gallon by 2020, CBO expects that, beginning in 2011, the 
standards would be increased gradually from their levels under 
current law for 2010, which are 27.5 miles per gallon for 
passenger automobiles and about 23.5 miles per gallon for light 
trucks, or a composite of more than 25 miles per gallon. As a 
result, CBO estimates that the composite fuel economy standard 
for passenger automobiles and light trucks would rise by more 
than 3 percent per year and, by 2017, would reach about 32 
miles per gallon--between 6 and 7 miles per gallon higher than 
the composite standard in 2017 expected under current law. (By 
2020, the composite fuel economy standard would be almost 10 
miles per gallon higher.)
    CBO also assumes that new standards for medium- and heavy-
duty trucks would begin in 2013, following a required study and 
an implementation period set by the bill. Those standards would 
increase by 4 percent per year under S. 357. In addition, CBO 
expects that a system of trading of credits would be 
established, allowing fines whose fleets are above the standard 
to sell credits they earn to firms whose fleets are below the 
standard and would otherwise be subject to monetary penalties. 
(Under current law, such credits can only be used by a 
manufacturer to offset its own potential penalties in other 
years.) Considerable uncertainty exists, however, about how 
such a system would be structured and how the market would 
function.
    In estimating the effects of S. 357, CBO assumes that the 
baseline against which the policy is measured does not 
incorporate any future changes to the program by the Secretary 
of Transportation. Potential changes to the system that can be 
accomplished without legislative action--such as are currently 
being studied as a part of an Executive Order to study ways to 
reduce greenhouse gas emissions from motor vehicles--are too 
indefinite to incorporate into the baseline.
    CBO expects that the new CAFE standards brought about by S. 
357 would reduce use of motor fuels, which in turn would reduce 
revenues from excise taxes on motor fuels. Under current law, 
gasoline is taxed by the federal government at a rate of 18.4 
cents per gallon and diesel fuel is taxed at a rate of 24.4 
cents per gallon. Blends of gasoline and ethanol effectively 
are taxed at lower rates through 2010. CBO estimates that 
enacting S. 357 would cause excise tax revenues to decline by 
$17 million in 2011, about $46 million in 2012, and by amounts 
increasing to about $1.2 billion by 2017, net of income and 
payroll tax effects. In 2017, CBO expects savings in motor fuel 
use of roughly 8 billion gallons--or between 3.5 percent and 4 
percent of total motor fuel use expected under the current-law 
baseline.
    The estimated revenue losses would rise rapidly between 
2011 and 2017 for several reasons. First, the new standards 
would be continually increased over a period of time, starting 
in 2011 for passenger automobiles and light trucks and later 
for medium- and heavy-duty trucks. Second, the vehicle fleet is 
replaced over a period of years as individuals gradually retire 
old vehicles and purchase new ones. Over time, an increasing 
share of the vehicle stock would be produced under the new 
standards, and motor fuel savings would accumulate. Third, some 
firms would not find the higher standards to be binding 
immediately because their fleets would already exceed those 
standards under current law. Some firms already produce fleets 
with fuel economy several miles per gallon above the current 
standards. Because of recent price increases for motor fuels, 
other firms that until recently produced vehicles with fuel 
economy at or just above the standards are expected under 
current law to produce vehicles with higher fuel economy. As 
the standards steadily rise under S. 357, an increasing share 
of manufacturers would find the standards to be binding. 
Finally, firms with fleet fuel economy above the new standard 
would initially earn credits that they could sell to firms with 
higher costs of complying with the new standard, which would 
hold down increases in fuel economy by those who purchase the 
credits. However, fewer firms would generate credits over time 
as the standard increases.
    Credit Trading Program and CAFE Penalties. CBO also expects 
that the establishment of a credit trading program would reduce 
penalties currently collected for violations of the CAFE 
standards. CBO expects that penalties under current law would 
be between $10 million and $20 million per year through 2017. 
With a credit trading program projected to start around 2011, 
CBO expects that enough credits would be generated and sold to 
noncompliant firms such that penalties would be reduced 
substantially in 2012 and become negligible from 2013 through 
2017. As a result, revenues from penalties would decline by $9 
million in 2012 and $73 million over the 2012-2017 period, net 
of income and payroll tax effects, CBO estimates.
    Civil and Criminal Penalties. S. 357 would expand the scope 
of the FTC's enforcement authorities by treating price gouging 
for petroleum products as a violation of rules regarding unfair 
or deceptive acts or practices. The FTC would be authorized to 
enforce new standards that would be subject to both criminal 
and civil penalties for any violations. Collections of criminal 
penalties are recorded in the budget as revenues, deposited in 
the Crime Victims Fund, and later spent. CBO estimates that any 
additional revenues and direct spending that would result from 
enacting the bill would not be significant because of the 
relatively small number of cases likely to be involved.
    Further, the bill would establish new civil penalties for 
tire manufacturers that do not comply with certain regulations 
established by DOT. Thus, the federal government might collect 
additional fines if the bill is enacted. Collections of civil 
fines are recorded as revenues and deposited in the Treasury; 
however, CBO expects that any increase in revenues related to 
those penalties would not be significant.

Spending subject to appropriation

    CBO estimates that implementing S. 357 would cost $149 
million over the 2008-2012 period, subject to appropriation of 
the necessary amounts.
    Implementation of CAFE Standards. S. 357 would expand the 
authority of DOT to set CAFE standards starting in 2011. The 
bill would authorize the appropriation of $25 million annually, 
starting in 2009, to implement fuel economy standards. The 
authorization of appropriations includes funds to expand the 
CAFE program to medium- and heavy-duty trucks, to issue rules 
and regulations regarding the expanded program, to institute a 
program that would allow companies to obtain credits for 
exceeding CAFE standards, and to trade such credits with other 
companies that do not meet the annual standards. The 
authorization also would allow DOT to complete studies required 
by the bill relating to fuel economy standards.
    Based on information from DOT and assuming appropriation of 
the specified amounts, CBO estimates that implementing those 
provisions would cost $15 million in 2009 and $85 million over 
the 2009-2012 period.
    Energy Security Fund. Under S. 357, one-half of the 
penalties collected each year for automakers' violations of 
CAFE standards would be authorized to be appropriated to DOE 
for a grant program to support the installation of equipment at 
gas stations to deliver alternative motor fuels. Based on 
historical spending patterns for similar grant programs 
administered by DOE, CBO estimates that this provision would 
cost $6 million in 2008 and $29 million over the 2008-2012 
period. Those estimates are based on CBO's projections of CAFE 
penalties that would result under S. 357. After 2012, CBO 
estimates such penalties would not be significant because of 
the opportunity that firms would have under the bill to 
purchase CAFE credits and avoid paying federal penalties.
    Public Awareness Programs. Based on rules promulgated by 
DOT, the bill would require manufacturers of automobiles and 
tires to provide consumers with information about the fuel 
efficiency of their products and, in the case of automobile 
manufacturers, to provide information about the use of 
alternative fuels in their vehicles. The bill also would 
require NHTSA to create a fuel-efficiency rating system for 
tires and set uniform testing procedures for tire manufacturers 
to rate the fuel efficiency of their products. Further, through 
a labeling and consumer education program, the bill would 
require DOT and EPA to increase the public's awareness of the 
fuel efficiency and the greenhouse gas emissions of individual 
vehicles. Based on information from those agencies and assuming 
appropriation of the necessary amounts, CBO estimates that 
these activities would cost $3 million in 2008 and $23 million 
over the 2008-2012 period.
    Grants for Advanced Battery Research. The bill would 
require DOT to administer a grant program to support research, 
development, demonstration, and commercial application of 
electric battery technologies and to establish a council of 
industry advisors. Under current law, DOE administers a similar 
program that costs about $10 million annually. CBO expects that 
the grants authorized in the bill would likely augment the 
program as administered by DOE. Assuming appropriation of the 
necessary amounts, CBO estimates that the grant program would 
cost $1 million annually.
    Other Provisions. The bill would require DOT to establish 
rules mandating that at least 50 percent of vehicles sold in 
2012 and 80 percent sold in 2015 be able to operate on both 
gasoline and another fuel, such as diesel. The bill also would 
require the General Services Administration (GSA) to submit a 
report to the Congress about the fuel efficiency of automobiles 
purchased by federal agencies and would require the executive 
branch to establish and enforce standards for biodiesel fuel 
sold in the United States. Title II would require the FTC to 
develop and enforce rules that would prohibit suppliers from 
selling oil, gas, or other petroleum distillates at excessively 
high prices during certain emergencies declared by the 
President. Based on information from the agencies involved, CBO 
estimates that those provisions would cost $1 million in 2008 
and $6 million over the 2008-2012 period.
    Mileage Improvement for the Federal Vehicle Fleet. The 
General Services Administration purchases around 60,000 new 
vehicles annually for most government agencies for the federal 
government's use. By increasing CAFE standards starting in 
2011, the federal government could realize some cost savings 
under the bill from reducing gasoline purchases if the vehicles 
it purchases achieve greater gasoline mileage. Vehicles with 
improved fuel efficiency are likely to be more expensive to 
purchase. Consequently, CBO expects that any net savings or 
costs in vehicle acquisition and operating costs would not be 
significant over the next five years.
    Estimated impact on state, local, and tribal governments: 
S. 357 would preempt state and local authority to implement 
their own consumer information laws or regulations on the fuel 
efficiency of tires; that preemption constitutes an 
intergovernmental mandate as defined in UMRA. CBO estimates, 
however, that the preemption would impose insignificant 
additional costs on state, local, or tribal governments that 
would be well below the threshold established in UMRA ($66 
million in 2007, adjusted annually for inflation). The bill 
could also benefit public institutions of higher education 
through a grant program for research on the commercial 
application of batteries. States also would be authorized to 
take civil action based on a provision of the bill that 
prohibits price gouging during an energy emergency. Any costs 
public entities might incur as a result of those provisions 
would be incurred voluntarily.
    Estimated impact on the private sector: S. 357 contains 
several private-sector mandates as defined in UMRA on vehicle 
and tire manufacturers, as well as suppliers of crude oil, gas, 
or petroleum distillates. The bill would set new corporate 
average fuel economy standards for automobiles and certain 
trucks and impose new safety standards and labeling 
requirements on manufacturers of those vehicles; impose new 
requirements related to consumer information on manufacturers 
and retailers of motor vehicle tires; and prohibit certain 
pricing practices during a declared energy emergency. The 
aggregate cost of the mandates in the bill is uncertain because 
that cost would depend on regulations to be developed under the 
bill. However, because the cost of new fuel economy standards 
could be large, CBO expects that the aggregate cost would 
likely exceed the annual threshold established by UMRA for 
private-sector mandates ($131 million in 2007, adjusted 
annually for inflation) in at least one of the first five years 
the mandates are in effect.

Fuel economy standards

    Section 102 would require the Secretary of Transportation 
to prescribe average fuel economy standards for automobiles, 
medium-duty and heavy-duty trucks beginning with model year 
2011. CBO cannot estimate the cost of the mandates in this 
section of the bill because the scope and timing of the 
requirements would depend on regulations to be developed by 
DOT. However, the cost of the mandate on car manufacturers 
would only have to average around $12 per vehicle for it to 
exceed UMRA's annual threshold. According to studies by the 
National Research Council and the Department of Energy on 
various policies that would increase the CAFE standards, the 
average cost per vehicle would likely be greater than that 
amount. Consequently, the cost of these mandates would likely 
exceed the threshold in at least one of the first five years 
that the mandates are in effect.

Additional requirements on manufacturers of motor vehicles

    The bill would impose numerous mandates on automobile 
manufacturers addressing motor vehicle safety, fuel-use 
capabilities, and labeling. The costs of most of those mandates 
cannot be determined because they would depend on future 
rulemaking. The bill would:
           Direct the Secretary of Transportation to 
        issue a motor vehicle safety standard to reduce vehicle 
        incompatibility and aggressivity between passenger 
        vehicles and nonpassenger vehicles;
           Require each automobile manufacturer to 
        produce a certain number of flexible fuel vehicles each 
        year;
           Require that the fuel economy label attached 
        to passenger automobiles also include information about 
        the environmental consequences of greenhouse gas and 
        other emissions; and
           Direct the Secretary of Transportation to 
        prescribe regulations that would require automobile 
        manufacturers to provide certain information about 
        their vehicles' capability of operating on alternative 
        fuel and to display a permanent badge or emblem on the 
        tailgate of each vehicle that indicates that the 
        vehicle is capable of operating on alternative fuel.

Consumer information on tire fuel efficiency

    The bill would require the Secretary of Transportation to 
develop rules establishing a national program for consumer 
information on the effect of tires on the fuel efficiency of 
motor vehicles. Some of the rules would include requirements 
for providing information to customers at the point of sale and 
on the internet and specifications for test methods for 
manufacturers to use in assessing and rating tires. Based on 
information from industry sources, the cost of this mandate 
would not be substantial relative to the UMRA's annual 
threshold for private-sector mandates.

Additional requirements on certain oil and gas suppliers

    The bill would prohibit certain oil and gas suppliers from 
selling or offering to sell crude oil, gasoline, or other fuel 
derived from petroleum for an excessive price (as defined in 
the bill) in a geographic location where the President has 
declared an energy emergency. CBO cannot estimate the cost of 
this mandate for several reasons. First, there is uncertainty 
about the conditions under which the President would declare an 
energy emergency. Second, there are uncertainties about how the 
FTC and a state attorney general would interpret the bill's 
definition of an excessive price. Finally, it is not clear to 
what extent suppliers would forgo business opportunities under 
the bill or what the value of those lost opportunities would 
be.
    Estimate prepared by: Federal spending: Sarah Puro (for 
DOT), Megan Carroll (for DOE), Susan Willie (for FTC), and 
Matthew Pickford (for government-owned vehicles); Federal 
revenues: Mark Booth and Emily Schlect; Impact on state, local, 
and tribal governments: Elizabeth Cove; Impact on the private 
sector: Fatimot Ladipo.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

    The fuel economy standards in title I of the legislation 
would apply to each automobile and medium and heavy duty truck 
manufacturer that sells automobiles and trucks in the United 
States. The Price Gouging Protection Act in title II would 
apply to every person engaged in the trade or business of 
distributing, selling, or reselling, at the retail or wholesale 
level, crude oil, gasoline, or petroleum distillates within FTC 
enforcement jurisdiction.

                            ECONOMIC IMPACT

    Title I of S. 357 would require covered manufacturers to 
improve fuel economy to the prescribed levels or incur CAFE 
fines. To improve fuel economy, it would be expected that the 
manufacturers would have to integrate new fuel economy 
technologies and in some instances redesign product lines to 
assure compliance. Title II would deter suppliers from charging 
unconscionably excessive prices during declared energy 
emergencies, but normal levels of profit taking, in line with 
the delineated costs to the suppliers, would not be impacted.

                                PRIVACY

    S. 357 would have no anticipated impact on the privacy of 
individuals.

                               PAPERWORK

    The legislation would increase paperwork requirements for 
the impacted private industries that have to work with the 
Secretary to prove compliance with title I. In general, there 
will not be an increase in paperwork for suppliers impacted by 
title II. The FTC or a State Attorney General may require 
increased paperwork as a result of an enforcement action.

                      Section-by-Section Analysis

           TITLE I--CORPORATE AVERAGE FUEL ECONOMY STANDARDS

Section 101. Short title; Table of contents

    This section would provide the title. Title I may be cited 
as the ``Ten-in-Ten Fuel Economy Act.''

Section 102. Average fuel economy standards for automobiles, medium 
        duty trucks, and heavy duty trucks

    This section would set forth the process to increase fuel 
economy standards for passenger cars and light trucks up to 
10,000 pounds gvwr (defined together as automobiles), along 
with medium duty and heavy duty (MHD) trucks. Medium duty 
trucks would be trucks between 10,000 pounds and 26,000 pounds 
gvwr, and heavy duty trucks would be over 26,000 pounds gvwr. 
In addition, the section would prescribe the fuel economy 
targets and the span of years the standards would encompass. 
Two distinct periods of time would be delineated during which 
the Secretary would promulgate standards for automobiles. The 
first 10-year period would begin in MY 2011 and end in MY 2020. 
The second 10-year period would begin in MY 2021 and end in MY 
2030. MHD trucks would follow a separate and distinct path from 
the automobiles due to the need to create an entirely new fuel 
economy program for these types of vehicles and the expectation 
that entirely new vehicle attributes would have to be 
identified to promulgate standards.
    Baseline Average Fuel Economy Standards for Medium and 
Heavy Duty Trucks.--The Committee recognizes the need for peer 
reviewed scientific and engineering analysis to aid in the 
creation of the MHD truck fuel economy program. The bill, as 
reported, would mandate the Secretary to commission a National 
Academy of Sciences (NAS) study to review automobile and MHD 
truck fuel economy technologies. The MHD truck fuel economy 
program would not be initiated until the initial NAS report is 
completed. The Committee expects that the NAS study would 
provide the initial research foundation for DOT and EPA. The 
EPA has the responsibility to test automobile fuel economy for 
DOT. Currently, the EPA does not have a test cycle for MHD 
trucks and would need to create one in order to provide DOT the 
data needed to enforce the standards. Therefore, the creation 
of initial baseline standards would not occur until 2 model 
years after the NAS report would be issued.
    Medium and Heavy Duty Truck Fuel Economy Average After 
Baseline Model Year.--In the two-year period preceeding 
baseline standards, the Committee intends that DOT and EPA 
would work collaboratively to establish the test cycle and the 
vehicle attributes to establish standards for the MHD truck 
fuel economy program. After that two-year period has run and 
the agencies have created a MHD truck fuel economy program, the 
Committee expects that the first baseline standard would be 
based on the MHD truck model year in which the NAS report was 
issued. In the succeeding years after the initial baseline 
standard, the average fuel economy for the MHD truck fleet 
would increase by four percent over the previous model year, 
unless the Secretary amends the standard based on conditions 
set forth in Section 103. The four percent annual rate of 
increase would remain in force for 20 years after the initial 
baseline standard was issued.
    Baseline Fuel Economy Standards for Automobiles.--The fuel 
economy program for automobiles begins with the 10-year period 
beginning with MY 2011 and ending in MY 2020. As opposed to a 
corporate fuel economy average where each individual 
manufacturer would have to meet a prescribed mpg target, the 
fuel economy target is a national average that measures the 
entire U.S. fleet. The Committee chose a national average in 
order to protect manufacturers with widely variant fleet 
configurations from having to immediately alter their fleet mix 
because of the new regulations. The Committee would expect the 
NHTSA to assign fuel economy targets to each manufacturer that 
would reach the overall national fuel economy target for that 
model year. The Committee would expect that the NHTSA will 
assign the fuel economy responsibilities in an equitable manner 
which will allow each manufacturer the flexibility to follow 
its individual product plans while improving fuel economy 
throughout its fleet. The Committee also would expect that the 
NHTSA would increase fuel economy standards each year within 
the first 10-year period in a ratable fashion so as to best 
position the manufacturers to meet the overall goal of 35 mpg 
by MY 2020.
    The Committee notes in its decision to prescribe the 
average fuel economy of 35 mpg by MY 2020 that the rate of 
change is consistent with the recommendations from the NRC's 
2002 study, Effectiveness and Impact of Corporate Average Fuel 
Economy (CAFE) Standards, as a level that is achievable by the 
automobile industry and would garner fuel savings over the life 
of the vehicle that would pay for the fuel saving technologies. 
The Committee on Commerce, Science, and Transportation also 
recognizes the need of having the NHTSA provide its expertise 
to ensure that the rate of change is balanced with other 
important goals, including safety and the stability of the 
automobile industry. During the first 10-year period, if the 
NHTSA finds maximum feasible level for fuel economy for a 
certain model year is less than the ratable fuel economy level 
to achieve 35 mpg by MY 2020, the agency would be able to lower 
the rate of change and prescribe the maximum feasible level 
fuel economy as defined in Section 103. The Committee expects 
that the Secretary would lower the standard in very limited 
circumstances where there is clear and convincing evidence that 
the result of increasing standards to the ratable level would 
produce a significant outcome that would outweigh the benefits 
of the mandated fuel economy level for that year.
    Automobile Fuel Economy Average for Model Years 2021 
through 2030.--The second 10-year period for the automobile 
fuel economy program begins in MY 2021 and ends in MY 2030. In 
this period, the average fuel economy for a model year would be 
at least four percent greater than the previous model year. The 
Committee recognizes that a mandated increase of fuel economy 
this far into the future must take into account circumstances 
that cannot be contemplated at the present time. Therefore, the 
bill would provide discretion to the NHTSA to analyze the 
technology and market conditions. If the NHTSA finds that a 
four percent increase does not comport with current technology 
or has unintended consequences, the agency could amend the 
standards in accordance with Section 103 so as to achieve the 
highest fuel economy levels balanced with the other values 
delineated in that section.
    Vehicle Attributes.--In oversight of the CAFE program and 
in testimony received from the March 2007 and May 2007 hearings 
on automobile fuel economy, all of the panelists commented on 
the CAFE reforms undertaken by the NHTSA in promulgating light 
truck fuel economy rules for MY 2008 through MY 2011. All 
parties involved in the fuel economy debate that testified 
spoke to the positive aspects to the vehicle attribute system 
created by the NHTSA. The expert commentators noted that using 
the vehicle attribute of footprint size expressed as a 
continuous curve would have the effect of guaranteeing fuel 
economy improvements throughout the light truck fleet by 
integrating technologies as opposed to relying only on reducing 
vehicle weight. In addition, the new system would assure 
improvement by every manufacturer regardless of the mix of 
types and sizes of light trucks manufactured.
    In light of the testimony and the reformed CAFE program, 
the Committee decided to provide the NHTSA the authority to 
reform passenger car fuel economy standards. The Secretary 
would have the authority to use vehicle attributes to prescribe 
the standards in the form of a mathematical function, in a 
similar fashion as was done under the reformed light truck 
rule. The Committee understands that there may be different 
attributes that could be used for passenger cars and for MHD 
trucks than what was selected for light trucks. The Secretary 
also could issue standards using this authority for a group of 
years as well as on a single year basis. In using this 
authority, the Secretary could not issue standards that are 
expressed as a uniform percentage increase per manufacturer. 
The Committee understands that a uniform percentage increase 
would unfairly increase the burden on automakers that have made 
the largest investments in improving fuel economy. Therefore, 
the usage of such a system is prohibited.

Section 103. Amending fuel economy standards

    Prior to the reporting of S. 357, passenger fuel economy 
standards have not been addressed in over 20 years. Light truck 
fuel economy did not increase from 1996 to 2003. MHD truck fuel 
economy had never been addressed in the history of the fuel 
economy program. Because of the difficulty of addressing fuel 
economy standards consistently, the Committee felt that the 
next fuel economy program should be in place over a significant 
period to avoid potential stagnation of the standards which 
have led to lost oil savings and increased the dependence on 
imported oil. S. 357, as reported, would create a 20-year fuel 
economy program for automobiles and light trucks. While a 20-
year program guarantees consistent progress over a long period 
of time, it is impossible to foresee every contingency that 
could affect decisions related to increasing fuel economy. 
Therefore, the Committee felt that the NHTSA should be 
positioned to exercise its discretion if situations arose where 
the prescribed standards would be unattainable and a lower fuel 
economy level would be the prudent path. Section 103 would 
provide the guidelines to allow the Secretary to lower the 
standard.
    The Committee's intent is that the discretion provided to 
the Secretary should be used in the most limited circumstances 
when the evidence warrants amending the standard. The 
prescribed fuel economy levels are not goals that can be 
avoided without consequence and should be interpreted as the 
fuel economy level for that model year unless the Secretary's 
careful analysis based on all the requisite factors proves 
otherwise.
  The Secretary would have the discretion to increase the 
standard to a level that is more than required for a particular 
model year, as well as the discretion to lower the standard. If 
the Secretary finds that the maximum feasible level fuel 
economy is lower than the prescribed fuel economy for a 
particular model year, the Secretary could lower the standard. 
In order to lower the standard, the Secretary would have to 
prove by clear and convincing evidence that the fuel economy 
standard for a particular model year is not cost effective.
  Requirements for Lower Standard.--If the Secretary decides to 
lower the standard, a notice of proposed rulemaking would be 
issued at least 30 months before the model year in which the 
prescribed standard would apply. This requirement would not 
apply to MY 2011 because it is expected that there will be less 
than 30 months before the 2011 model year during which the Act 
would be in force. The notice would include a detailed analysis 
that was the foundation for the determination to lower the 
standard. The Secretary would issue the final rule at least 18 
months before the model year in which the fuel economy standard 
would apply. In addition, the Secretary must submit a report to 
Congress that would outline the steps to be taken to avoid 
further reductions in average fuel economy standards.
  Maximum Feasible Standard and Decisions on Maximum Feasible 
Fuel Economy.--In deciding the average fuel standard prescribed 
for automobiles and MHD trucks if the Secretary decides that 
the fleet cannot achieve the standard prescribed by the Act, 
the Secretary would set the fuel economy standard at the 
maximum feasible level. There are 2 sets of determinations that 
would be required in setting the maximum feasible level. In 
order for the Secretary to decide the maximum feasible average 
fuel economy, the Secretary would consider the economic 
practicability, the effect of other motor vehicle standards of 
the Government on fuel economy, environmental impacts, and the 
need of the United States to conserve energy. After undertaking 
the evaluation of these criteria, the Secretary would ensure 
that the fuel economy standard is the highest standard that is 
technologically achievable; can be achieved without materially 
reducing the overall safety of automobiles and MHD trucks; is 
not less than the standard for the applicable types of vehicles 
from any prior year; and is cost effective.
  Defining and Determining Cost Effectiveness.--A fuel economy 
standard would be considered cost effective when the total 
value of reduced fuel use from a proposed fuel economy standard 
is greater than or equal to the total cost of such a standard. 
The total value would include the monetary value of fuel use 
over the life of the vehicle. In making the total cost 
determination, the Secretary would not include the cost of fuel 
economy technologies whose cost is substantially more than the 
value of the reduction of fuel attributable to that technology. 
In a total cost analysis, the Committee intends that the cost 
of fuel economy technologies only should be included if they 
can be justified in the cost of the fuel savings. There are 
operative technologies, such as hydrogen fuel cells, which will 
have significant fuel savings, but are too expensive to be 
reasonably used as a means to improve fuel economy. The 
Committee does not intend for these types of technologies to be 
included in the total cost analysis.
    As part of the total value/total cost analysis to determine 
cost effectiveness, the Secretary would consider the following 
additional factors in the calculation:
           Economic security;
           The impact of oil or energy intensity of the 
        U.S. economy on the sensitivity of the economy to oil 
        and other fuel price changes, including the magnitude 
        of gross domestic product losses in response to short 
        term price shocks or long term price increases;
           National security, including the impact of 
        U.S. payments for oil and other fuel imports on 
        political, economic, and military developments in 
        unstable or unfriendly oil-exporting countries;
           The uninternalized costs of pipeline and 
        storage oil seepage, and the risk of oil spills from 
        production, handling, and transport, along with related 
        landscape damage;
           The emissions of pollutants including 
        greenhouse gases over the lifecycle of the fuel and the 
        resulting costs to human health, the economy, and the 
        environment; and
           Such additional factors as the Secretary 
        deems relevant.
    The Committee understands that the NHTSA, in undertaking 
economic analyses to increase fuel economy standards, relies on 
peer reviewed literature to help quantify such factors. The 
Committee encourages that the NHTSA not deviate from that 
practice and encourages the agency to quantify the terms in a 
fashion consistent with cost benefit practices. However, the 
Committee strongly encourages the NHTSA to quantify terms at a 
value greater than zero if there is significant deviation in 
the professional literature. If NHTSA finds that there is no 
pertinent peer reviewed professional literature to guide the 
agency in assigning a value, the Committee encourages the 
Secretary to commission peer reviewed literature from an entity 
such as the NAS to aid in the proper valuation of the factors.
    Minimum Valuation.--The Secretary, in considering the value 
of a gallon of gasoline to be saved by a proposed fuel economy 
standard, would use the gasoline prices projected by the Energy 
Information Administration (EIA) for the period covered by the 
standard. The Committee understands that the EIA promulgates 
20-year projections for gasoline prices. The Committee intends 
that the Secretary would use the span of years and gasoline 
prices that covers the proposed fuel economy standards from the 
20-year projection.
    Consultation Requirement.--Before the Secretary would issue 
a notice to prescribe or amend a proposed average fuel economy 
standard, the Secretary would provide the Secretary of Energy 
and the Administrator of the EPA at least 10 days after 
receiving the notice so as to allow them to comment if they 
find the proposed standard would adversely affect the 
conservation goals of either agency. To the extent the 
Secretary of Transportation does not revise the proposed 
standard to take into account the comments from the Energy 
Department or the EPA on any adverse impact of the standard, 
the Secretary of Transportation would include those comments in 
the notice.

Section 104. Definitions

    This section would define 3 major terms used throughout the 
bill which have specific contextual meaning in the statutory 
regime created by S. 357. The terms would be:
    Automobile: As defined the term would mean a 4-wheeled 
vehicle that is propelled by fuel, or by alternative fuel, 
manufactured primarily for use on public streets, roads, and 
highways (except a vehicle operated only on a rail line), and 
rated at not more than 10,000 pounds gvwr. ``Automobile'' as 
operative in the bill would include passenger cars and light 
trucks (such as SUVs and minivans). The definition captures 
light trucks that weigh between 8,500 pounds gvwr and 10,000 
pounds gvwr, which were previously exempt from CAFE.
    Medium Duty Truck: As defined, the term would mean a truck 
as defined in 49 U.S.C. 30127 with a gvwr between 10,000 pounds 
and 26,000 pounds.
    Heavy Duty Truck: As defined, the term would mean a truck 
as defined in 49 U.S.C. 30127 with a gvwr in excess of 26,000 
pounds.
    Deadline for Regulations: The regulations to implement the 
fuel economy program created in S. 357 would have to be 
proposed no later than one year after the date of enactment of 
this Act, and final regulations would have to be issued no 
later than 18 months after the date of enactment.

Section 105. Ensuring safety of automobiles

    An ongoing issue that is impacting the safety of the 
automobile fleet is the interaction of passenger cars and light 
trucks. The significant differences in size and weight between 
cars and light trucks have placed the drivers of passenger cars 
at a safety disadvantage in light truck/passenger car 
collisions. These types of collisions have increased due to the 
increase of light trucks being used in passenger duty. To 
address this ongoing safety concern, the Act would require the 
NHTSA to initiate a rulemaking in 2010 to issue standards to 
mitigate the difference in weight and size between the largest 
and smallest vehicles, and to improve bumper height 
compatibility between vehicles. The final rule would have to be 
issued before 2013.

Section 106. Credit trading program

    The Committee recognizes the need to create flexibility for 
automobile manufacturers in creating a new regulatory regime to 
improve fuel economy. To aid manufacturers that may need more 
transition assistance to meet the new standards, the Secretary 
would be permitted to establish, by regulation, a fuel economy 
credit trading program to allow manufacturers whose automobiles 
exceed the average fuel economy standards to earn credits to be 
sold to manufacturers whose automobiles fail to achieve the 
prescribed standards. Automakers may carry forward and carry 
back earned fuel economy credits for five years as opposed to 
the three years as currently permitted.

Section 107. Labels for fuel economy and greenhouse gas emissions

    To aid in consumer education and awareness of the best 
performing automobiles with respect to fuel economy and 
greenhouse gas emissions, S. 357 would create a labeling 
program to help consumers identify vehicles that significantly 
exceed the standards created by the average fuel economy 
program. The labeling regime would only apply to automobiles, 
not to MHD trucks. S. 357 would create 2 labeling programs--the 
green label for vehicles that meet or exceed the applicable 
fuel economy standard or have the lowest greenhouse gas 
emissions over the useful life of the vehicle, and the gold 
star label for automobiles that achieve a fuel economy of at 
least 50 mpg.

Section 108. Continued applicability of existing standards

    There is a period during which the new national average 
fuel economy program will be implemented, and there will be no 
standards applied because of the repeal of the current 
operative sections of 49 U.S.C. 32902. In order to maintain 
fuel economy standards in this period, nothing in S. 357 would 
be construed to affect the application of the current CAFE 
statutes until 2011.

Section 109. National Academy of Sciences studies

    The NHTSA and several experts on automobile fuel economy 
noted that the work done by the NRC in its 2002 CAFE study was 
essential in providing explanations and guidance for 
identifying and integrating potential fuel economy technologies 
to use in proposed fuel economy standards. The NHTSA and those 
experts also stated that the study is now 5 years old, and it 
would be of great utility to have it updated. After receiving 
this testimony, the Committee decided the Secretary should 
commission a NAS study to update the NRC fuel economy 
technology study from 2002 and to evaluate how the technologies 
could be integrated to meet the reformed fuel economy attribute 
system. The study would be be commissioned as soon as 
practicable after the date of enactment, and the NAS would 
report its findings within 18 months of the study being 
commissioned. The study would be updated every 5 years.

Section 110. Standards for executive agency automobiles

    To ensure the Federal executive agency fleet improves its 
fuel economy, Federal agencies would have to ensure that new 
automobile purchases are as fuel efficient as practicable. 
Combat related vehicles, law enforcement vehicles, and 
emergency rescue vehicles would be excluded from this section. 
The General Services Administration would submit a report to 
Congress on the first year's progress.

Section 111. Ensuring availability of flexible fuel automobiles

    This section would mandate an increase in the number of 
flexible fuel vehicles as part of the new automobile fleet. The 
percentage of flexible fuel vehicles compared to all 
automobiles manufactured would comply with the following 
schedule:
                  by 2012 ..................................... 
                50 percent
                  by 2013 ..................................... 
                60 percent
                  by 2014 ..................................... 
                70 percent
                  by 2015 ..................................... 
                80 percent.
    An economic hardship exemption could be granted for those 
manufacturers that cannot comply with the manufacturing 
schedule.

Section 112. Increasing consumer awareness of flexible fuel automobiles

    In order to improve consumer awareness about the 
availability and utility of flexible fuel automobiles, the 
Secretary would implement a program to have automobile 
manufacturers prominently display a permanent badge or emblem 
on the quarter panel or tailgate of each flexible fuel 
automobile. Each flexible fuel automobile would also have a 
fuel tank cap that is labeled to indicate that the automobile 
can be operated using flexible fuel. In addition, the 
manufacturer would include information in the owner's manual of 
each flexible fuel automobile that describes the capability of 
the automobile to operate using alternative fuel and the 
benefits of using alternative fuel, including its renewable 
nature and environmental benefits.

Section 113. Periodic review of accuracy of fuel economy labeling 
        procedures

    The EPA reformed the test procedures to improve the 
accuracy of fuel economy labels that are placed on new 
automobiles and issued the final rule on December 27, 2006. To 
ensure that the labels better reflect the actual mileage being 
achieved by automobiles, the EPA would review labeling 
procedures and report to Congress on whether the procedures 
warrant revision beginning in 2009.

Section 114. Tire fuel efficiency consumer information

    One component that would improve the fuel economy of 
automobiles is the rolling resistance of replacement tires. To 
improve consumer awareness and to aid consumers in making 
choices to improve automobile fuel economy, the Secretary would 
be mandated to issue a rule to create a national tire fuel 
efficiency information program efficiency rating system.

Section 115. Advanced battery initiative

    Electric hybrid engines and plug-in hybrids are limited by 
current battery technologies. Automakers are researching the 
capability of lithium ion battery technology, which could 
provide more energy storage and ultimately significant 
reductions in fuel usage. To support this endeavor, in 
conjunction with ongoing work at the Department of Energy, the 
Secretary would establish an initiative to support research, 
development, demonstration, and the commercial application of 
batteries. The initiative would support all types of battery 
research, not just for automotive applications.

Section 116. Biodiesel standards

    With the increasing number of sources of biodiesel fuel 
providing product to the marketplace, there are concerns from 
consumers that varying purity and composition may damage 
engines. To address these concerns, the Secretary, in 
consultation with the EPA and the Department of Energy would 
promulgate standards for biodiesel blends.

Section 117. Use of civil penalties for research and development

    The Department of Transportation collects fines from 
manufacturers that are not in compliance with the CAFE 
standards and remits the funds collected to the Department of 
the Treasury. This section would allow the Secretary to keep 50 
percent of the fines collected to be used to develop a research 
program to improve fuel economy performance and technologies 
and aid in rulemaking activities in relation to fuel economy, 
including the commissioning of peer reviewed research to assist 
in cost benefit analysis.

Section 118. Energy security fund and alternative fuel grant program

    Under this section, the Secretary would allocate 50 percent 
of the fines collected from manufacturers that are not in 
compliance with fuel economy standards to a fund managed by the 
Secretary of Energy through the Clean Cities Program. The Fund 
would provide grants of up to $30,000 to gasoline retailers to 
install alternative fuel dispensing infrastructure. No one gas 
station could receive more than $90,000 in one fiscal year.

                        TITLE II--PRICE GOUGING

Section 201. Short title

    This section would provide that this title may be cited as 
the ``Petroleum Consumer Price Gouging Protection Act.''

Section 202. Definitions

    Section 202 would provide for a number of notable 
definitions, as follows:
    Affected Area: An area covered by a Presidential 
declaration of energy emergency.
    Supplier: Any person engaged in the trade or business of 
selling or reselling, or distributing crude oil, gasoline, or 
petroleum distillates.
    Price Gouging: The charging of an unconscionably excessive 
price by a supplier in an affected area.
    Unconscionably Excessive Price: A price changed in an 
affected area for crude, gasoline, or petroleum distillates 
that (i) constitutes a gross disparity between the average 
price 30 days prior to an energy emergency is declared by the 
President, (ii) grossly exceeds the price for the same or 
similar commodity that is obtainable by purchasers from other 
suppliers in the same relevant geographic market within the 
affected area, or (iii) represents an exercise of unfair 
leverage or unconscionable means by a supplier during an energy 
emergency, unless such price is attributable to increased 
wholesale or operational costs, including replacement costs, 
outside the control of the supplier and is not attributable to 
local, regional, national, or international market conditions.

Section 203. Prohibition on price gouging during energy emergencies

    Section 203 would make it unlawful for any supplier to sell 
crude oil, gasoline, or petroleum distillates at an 
unconscionably excessive price in an area subject to an energy 
emergency declared by the President. In determining whether an 
unlawful act occurred under this section, the price which would 
otherwise exist in a competitive and freely functioning market 
shall be considered, among other factors.

Section 204. Prohibition on market manipulation

    Section 204 would make it unlawful for any person to use a 
manipulative or deceptive device of contrivance in connection 
with the purchase or sale of crude oil, gasoline, or petroleum 
distillates at wholesale. The FTC may prescribe rules and 
regulations as necessary.

Section 205. Prohibition on false information

    Section 205 would make it unlawful for any person to report 
required information to any federal agency related to the 
wholesale price of crude oil, gasoline, or petroleum 
distillates that the person knows, or reasonably should have 
known, is false or misleading and the person intended the 
information to affect data compiled by the federal government 
for statistical or analytical purposes.

Section 206. Presidential declaration of energy emergency

    Section 206 would authorize the President to declare that a 
Federal energy emergency exists, if the President finds that 
the health, safety, welfare, or economic well-being of the 
citizens of the United States is at risk because of a shortage 
or imminent shortage of adequate supplies of crude oil, 
gasoline, or petroleum distillates due to a disruption caused 
by a major disaster or significant pricing anomalies in the 
national energy market.
    The energy emergency declaration would specify the period, 
not to exceed 30 days, for which the declaration applies, the 
circumstances necessitating the declaration, and the area to 
which it applies. The President could extend a declaration 
multiple times but not more than 30 days at one time, and 
discontinue a declaration before its expiration.

Section 207. Enforcement by the Federal Trade Commission

    Section 207 would authorize the FTC to enforce the Act and 
would direct the Commission to prioritize enforcement 
concerning companies with sales of crude oil, gasoline, and 
petroleum distillates in excess of $500,000,000. Violations of 
any provision of the Act would be treated as an unfair or 
deceptive act or practice under a rule issued under section 
18(a)(1)(B) of the Federal Trade Commission Act (15 USC 
57a(a)(1)(b)).
    The section would require the FTC, following the 
declaration of an energy emergency, to establish within the 
Commission a toll-free consumer hotline and a program to 
develop and distribute public information to assist residents 
in an affected area. The FTC further would be required to 
consult with the attorney general and United States Attorney 
for the districts affected by the declaration as well as State 
and local law enforcement to determine whether any supplier is 
charging or has charged an unconscionably excessive price and 
conduct an investigation to determine whether any supplier has 
violated section 203 of the title.

Section 208. Enforcement by state attorney general

    Section 208 would authorize a State to bring a civil action 
in an appropriate district court of the United States to 
enforce section 203 of this title whenever the attorney general 
has reason to believe that residents of the State have been 
harmed by a violation of Section 203.
    The section further would require the State to provide 
written notice to the FTC of any civil action brought pursuant 
to this title and authorize the FTC to intervene in such civil 
action. If the FTC institutes an action for a violation of this 
title, no State attorney general, or official or agency of the 
State, would be permitted to bring an action during the 
pendency of that action against any defendant named in the 
complaint. Nothing in this section would prevent the attorney 
general of a State from exercising the powers conferred on the 
attorney general by the laws of such State with respect to the 
conducting of investigations, compelling of witnesses, and 
production of evidence.
    This section would not prohibit an authorized State 
official from enforcing a civil or criminal statute of that 
State.

Section 209. Penalties

    Section 209 would create a civil penalty of not more than 
$1,000,000 for violations of section 204 or 205 of this title 
and a civil penalty of not more than $500,000 for independent 
small business marketers and $5,000,000 in the case of any 
other suppliers for violations of section 203, in addition to 
any other penalty available under the Federal Trade Commission 
Act (15 USC 41 et seq.). In assessing penalties, each day of a 
continuing violation would be considered a separate violation, 
and the FTC should consider the seriousness of the violation 
and any remedial efforts of the violator.
    The section further would make a violation of Section 203 a 
crime punishable by a fine of not more than $5,000,000, 
imprisonment for not more than 5 years, or both.

Section 210. Effect on other laws

    Section 210 would establish that nothing in this title 
shall be construed to limit or affect in any way the FTC's 
authority under the Federal Trade Commission Act (15 USC 41 et 
seq.) or any other provision of law. This title would not 
preempt any State law.

                        Changes in Existing Law

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new material is printed 
in italic, existing law in which no change is proposed is shown 
in roman):

                        TITLE 49. TRANSPORTATION

             SUBTITLE VI. MOTOR VEHICLE AND DRIVER PROGRAMS

                            PART A. GENERAL

                   CHAPTER 301. MOTOR VEHICLE SAFETY

        SUBCHAPTER II. INFORMATION, STANDARDS, AND REQUIREMENTS

Sec. 30123A. Tire fuel efficiency consumer information

  (a) Rulemaking.--
          (1) In general.--Not later than 18 months after the 
        date of enactment of the Ten-in-Ten Fuel Economy Act, 
        the Secretary of Transportation shall, after notice and 
        opportunity for comment, promulgate rules establishing 
        a national tire fuel efficiency consumer information 
        program for tires designed for use on motor vehicles to 
        educate consumers about the effect of tires on 
        automobile fuel efficiency.
          (2) Items included in rule.--The rulemaking shall 
        include--
                  (A) a national tire fuel efficiency rating 
                system for motor vehicle tires to assist 
                consumers in making more educated tire 
                purchasing decisions;
                  (B) requirements for providing information to 
                consumers, including information at the point 
                of sale and other potential information 
                dissemination methods, including the Internet;
                  (C) specifications for test methods for 
                manufacturers to use in assessing and rating 
                tires to avoid variation among test equipment 
                and manufacturers; and
                  (D) a national tire maintenance consumer 
                education program including, information on 
                tire inflation pressure, alignment, rotation, 
                and tread wear to maximize fuel efficiency.
          (3) Applicability.--This section shall not apply to 
        tires excluded from coverage under section 
        575.104(c)(2) of title 49, Code of Federal Regulations, 
        as in effect on date of enactment of the Ten-in-Ten 
        Fuel Economy Act.
  (b) Consultation.--The Secretary shall consult with the 
Secretary of Energy and the Administrator of the Environmental 
Protection Agency on the means of conveying tire fuel 
efficiency consumer information.
  (c) Report to Congress.--The Secretary shall conduct periodic 
assessments of the rules promulgated under this section to 
determine the utility of such rules to consumers, the level of 
cooperation by industry, and the contribution to national goals 
pertaining to energy consumption. The Secretary shall transmit 
periodic reports detailing the findings of such assessments to 
the Senate Committee on Commerce, Science, and Transportation 
and the House of Representatives Committee on Energy and 
Commerce.
  (d) Tire Marking.--The Secretary shall not require permanent 
labeling of any kind on a tire for the purpose of tire fuel 
efficiency information.
  (e) Preemption.--When a requirement under this section is in 
effect, a State or political subdivision of a State may adopt 
or enforce a law or regulation on tire fuel efficiency consumer 
information only if the law or regulation is identical to that 
requirement. Nothing in this section shall be construed to 
preempt a State or political subdivision of a State from 
regulating the fuel efficiency of tires not otherwise preempted 
under this chapter.

           *       *       *       *       *       *       *

Sec. 30129. Vehicle compatibility and aggressivity reduction standard

  (a) Standards.--The Secretary of Transportation shall issue a 
motor vehicle safety standard to reduce automobile 
incompatibility and aggressivity. The standard shall address 
characteristics necessary to ensure better management of crash 
forces in multiple vehicle frontal and side impact crashes 
between different types, sizes, and weights of automobiles with 
a gross vehicle weight of 10,000 pounds or less in order to 
decrease occupant deaths and injuries.
  (b) Consumer Information.--The Secretary shall develop and 
implement a public information side and frontal compatibility 
crash test program with vehicle ratings based on risks to 
occupants, risks to other motorists, and combined risks by 
vehicle make and model.

           *       *       *       *       *       *       *

             SUBCHAPTER IV. ENFORCEMENT AND ADMINISTRATIVE

Sec. 30165. Civil penalty

  (a) Civil Penalties.--
          (1) In general.--A person that violates any of 
        section 30112, 30115, 30117 through 30122, 30123(d), 
        30125(c), 30127, or 30141 through 30147, or a 
        regulation prescribed thereunder, is liable to the 
        United States Government for a civil penalty of not 
        more than $5,000 for each violation. A separate 
        violation occurs for each motor vehicle or item of 
        motor vehicle equipment and for each failure or refusal 
        to allow or perform an act required by any of those 
        sections. The maximum penalty under this subsection for 
        a related series of violations is $15,000,000.
          (2) School buses.--
                  (A) In general.--Notwithstanding paragraph 
                (1), the maximum amount of a civil penalty 
                under this paragraph shall be $10,000 in the 
                case of--
                          (i) the manufacture, sale, offer for 
                        sale, introduction or delivery for 
                        introduction into interstate commerce, 
                        or importation of a school bus or 
                        school bus equipment (as those terms 
                        are defined in section 30125(a) of this 
                        title) in violation of section 
                        30112(a)(1) of this title; or
                          (ii) a violation of section 
                        30112(a)(2) of this title.
                  (B) Related series of violations.--A separate 
                violation occurs for each motor vehicle or item 
                of motor vehicle equipment and for each failure 
                or refusal to allow or perform an act required 
                by that section. The maximum penalty under this 
                paragraph for a related series of violations is 
                $15,000,000.
          (3) Section 30166.--A person who violates section 
        30166 or a regulation prescribed under that section is 
        liable to the United States Government for a civil 
        penalty for failing or refusing to allow or perform an 
        act required under that section or regulation. The 
        maximum penalty under this paragraph is $5,000 per 
        violation per day. The maximum penalty under this 
        paragraph for a related series of daily violations is 
        $15,000,000.
          (4) Section 30123a.--Any person who fails to comply 
        with the national tire fuel efficiency consumer 
        information program under section 30123A is liable to 
        the United States Government for a civil penalty of not 
        more than $50,000 for each violation.
  (b) Compromise and Setoff.--
          (1) The Secretary of Transportation may compromise 
        the amount of a civil penalty imposed under this 
        section.
          (2) The Government may deduct the amount of a civil 
        penalty imposed or compromised under this section from 
        amounts it owes the person liable for the penalty.
  (c) Considerations.--In determining the amount of a civil 
penalty or compromise, the appropriateness of the penalty or 
compromise to the size of the business of the person charged 
and the gravity of the violation shall be considered.
  (d) Subpenas for Witnesses.--In a civil action brought under 
this section, a subpena for a witness may be served in any 
judicial district.

           *       *       *       *       *       *       *

            PART C. INFORMATION, STANDARDS, AND REQUIREMENTS

                  CHAPTER 329. AUTOMOBILE FUEL ECONOMY

Sec. 32901. Definitions

  (a) General.--In this chapter--
          (1) ``alternative fuel'' means--
                  (A) methanol;
                  (B) denatured ethanol;
                  (C) other alcohols;
                  (D) except as provided in subsection (b) of 
                this section, a mixture containing at least 85 
                percent of methanol, denatured ethanol, and 
                other alcohols by volume with gasoline or other 
                fuels;
                  (E) natural gas;
                  (F) liquefied petroleum gas;
                  (G) hydrogen;
                  (H) coal derived liquid fuels;
                  (I) fuels (except alcohol) derived from 
                biological materials;
                  (J) electricity (including electricity from 
                solar energy); and
                  (K) any other fuel the Secretary of 
                Transportation prescribes by regulation that is 
                not substantially petroleum and that would 
                yield substantial energy security and 
                environmental benefits.
          (2) ``alternative fueled automobile'' means an 
        automobile that is a--
                  (A) dedicated automobile; or
                  (B) dual fueled automobile.
          [(3) except as provided in section 32908 of this 
        title, ``automobile'' means a 4-wheeled vehicle that is 
        propelled by fuel, or by alternative fuel, manufactured 
        primarily for use on public streets, roads, and 
        highways (except a vehicle operated only on a rail 
        line), and rated at--
                  [(A) not more than 6,000 pounds gross vehicle 
                weight; or
                  [(B) more than 6,000, but less than 10,000, 
                pounds gross vehicle weight, if the Secretary 
                decides by regulation that--
                          [(i) an average fuel economy standard 
                        under this chapter for the vehicle is 
                        feasible; and
                          [(ii) an average fuel economy 
                        standard under this chapter for the 
                        vehicle will result in significant 
                        energy conservation or the vehicle is 
                        substantially used for the same 
                        purposes as a vehicle rated at not more 
                        than 6,000 pounds gross vehicle 
                        weight.]
          (3) except as provided in section 32908 of this 
        title, ``automobile'' means a 4-wheeled vehicle that is 
        propelled by fuel, or by alternative fuel, manufactured 
        primarily for use on public streets, roads, and 
        highways (except a vehicle operated only on a rail 
        line), and rated at not more than 10,000 pounds gross 
        vehicle weight.
          (4) ``automobile manufactured by a manufacturer'' 
        includes every automobile manufactured by a person that 
        controls, is controlled by, or is under common control 
        with the manufacturer, but does not include an 
        automobile manufactured by the person that is exported 
        not later than 30 days after the end of the model year 
        in which the automobile is manufactured.
          (5) ``average fuel economy'' means average fuel 
        economy determined under section 32904 of this title.
          (6) ``average fuel economy standard'' means a 
        performance standard specifying a minimum level of 
        average fuel economy applicable to a manufacturer in a 
        model year.
          (7) ``dedicated automobile'' means an automobile that 
        operates only on alternative fuel.
          (8) ``dual fueled automobile'' means an automobile 
        that--
                  (A) is capable of operating on alternative 
                fuel and on gasoline or diesel fuel;
                  (B) provides equal or superior energy 
                efficiency, as calculated for the applicable 
                model year during fuel economy testing for the 
                United States Government, when operating on 
                alternative fuel as when operating on gasoline 
                or diesel fuel;
                  (C) for model years 1993-1995 for an 
                automobile capable of operating on a mixture of 
                an alternative fuel and gasoline or diesel fuel 
                and if the Administrator of the Environmental 
                Protection Agency decides to extend the 
                application of this subclause, for an 
                additional period ending not later than the end 
                of the last model year to which section 
                32905(b) and (d) of this title applies, 
                provides equal or superior energy efficiency, 
                as calculated for the applicable model year 
                during fuel economy testing for the Government, 
                when operating on a mixture of alternative fuel 
                and gasoline or diesel fuel containing exactly 
                50 percent gasoline or diesel fuel as when 
                operating on gasoline or diesel fuel; and
                  (D) for a passenger automobile, meets or 
                exceeds the minimum driving range prescribed 
                under subsection (c) of this section.
          (8A) ``flexible fuel automobile'' means an automobile 
        described in paragraph (8)(A).
          (9) ``fuel'' means--
                  (A) gasoline;
                  (B) diesel oil; or
                  (C) other liquid or gaseous fuel that the 
                Secretary decides by regulation to include in 
                this definition as consistent with the need of 
                the United States to conserve energy.
          (10) ``fuel economy'' means the average number of 
        miles traveled by an automobile for each gallon of 
        gasoline (or equivalent amount of other fuel) used, as 
        determined by the Administrator under section 32904(c) 
        of this title.
          (10A) ``heavy-duty truck'' means a truck (as defined 
        in section 30127) with a gross vehicle weight in excess 
        of 26,000 pounds.
          (11) ``import'' means to import into the customs 
        territory of the United States.
          (12) ``manufacture'' (except under section 32902(d) 
        of this title) means to produce or assemble in the 
        customs territory of the United States or to import.
          (13) ``manufacturer'' means--
                  (A) a person engaged in the business of 
                manufacturing automobiles, including a 
                predecessor or successor of the person to the 
                extent provided under regulations prescribed by 
                the Secretary; and
                  (B) if more than 1 person is the manufacturer 
                of an automobile, the person specified under 
                regulations prescribed by the Secretary.
          (13A) ``medium-duty truck'' means a truck (as defined 
        in section 30127) with a gross vehicle weight of at 
        least 10,000 pounds but not more than 26,000 pounds.
          (14) ``model'' means a class of automobiles as 
        decided by regulation by the Administrator after 
        consulting and coordinating with the Secretary.
          (15) ``model year'', when referring to a specific 
        calendar year, means--
                  (A) the annual production period of a 
                manufacturer, as decided by the Administrator, 
                that includes January 1 of that calendar year; 
                or
                  (B) that calendar year if the manufacturer 
                does not have an annual production period.
          [(16) ``passenger automobile'' means an automobile 
        that the Secretary decides by regulation is 
        manufactured primarily for transporting not more than 
        10 individuals, but does not include an automobile 
        capable of off-highway operation that the Secretary 
        decides by regulation--
                  [(A) has a significant feature (except 4-
                wheel drive) designed for off-highway 
                operation; and
                  [(B) is a 4-wheel drive automobile or is 
                rated at more than 6,000 pounds gross vehicle 
                weight.]
  (b) Authority To Change Percentage.--The Secretary may 
prescribe regulations changing the percentage referred to in 
subsection (a)(1)(D) of this section to not less than 70 
percent because of requirements relating to cold start, safety, 
or vehicle functions.
  (c) Minimum Driving Ranges for Dual Fueled Passenger 
Automobiles.--(1) The Secretary shall prescribe by regulation 
the minimum driving range that dual fueled automobiles that are 
passenger automobiles must meet when operating on alternative 
fuel to be dual fueled automobiles under sections 32905 and 
32906 of this title. A determination whether a dual fueled 
automobile meets the minimum driving range requirement under 
this paragraph shall be based on the combined Agency city/
highway fuel economy as determined for average fuel economy 
purposes for those automobiles.
  (2)(A) The Secretary may prescribe a lower range for a 
specific model than that prescribed under paragraph (1) of this 
subsection. A manufacturer may petition for a lower range than 
that prescribed under paragraph (1) for a specific model.
  (B) The minimum driving range prescribed for dual fueled 
automobiles (except electric automobiles) under subparagraph 
(A) of this paragraph or paragraph (1) of this subsection must 
be at least 200 miles.
  (C) If the Secretary prescribes a minimum driving range of 
200 miles for dual fueled automobiles (except electric 
automobiles) under paragraph (1) of this subsection, 
subparagraph (A) of this paragraph does not apply to dual 
fueled automobiles (except electric automobiles).
  (3) In prescribing a minimum driving range under paragraph 
(1) of this subsection and in taking an action under paragraph 
(2) of this subsection, the Secretary shall consider the 
purpose set forth in section 3 of the Alternative Motor Fuels 
Act of 1988 (Public Law 100-494, 102 Stat. 2442), consumer 
acceptability, economic practicability, technology, 
environmental impact, safety, drivability, performance, and 
other factors the Secretary considers relevant.

Sec. 32902. Average fuel economy standards

  (a) [Non-passenger Automobiles.--] Prescription of Standards 
by Regulation.--At least 18 months before the beginning of each 
model year, the Secretary of Transportation shall prescribe by 
regulation average fuel economy standards for [automobiles 
(except passenger automobiles)] automobiles, medium-duty 
trucks, and heavy-duty trucks 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 
automobiles.
  [(b) Passenger Automobiles.--Except as provided in this 
section, the average fuel economy standard for passenger 
automobiles manufactured by a manufacturer in a model year 
after model year 1984 shall be 27.5 miles a gallon.]
  (b) Standards for Automobiles, Medium-duty Trucks, and Heavy-
duty Trucks.--
          (1) In general.--The Secretary of Transportation, 
        after consultation with the Administrator of the 
        Environmental Protection Agency, shall prescribe 
        average fuel economy standards for automobiles, medium-
        duty trucks, and heavy-duty trucks manufactured by a 
        manufacturer in each model year beginning with model 
        year 2011 in accordance with subsection (c).
          (2) Annual increases in fuel economy standards.--
                  (A) Baseline average fuel economy standards 
                for medium- and heavy-duty trucks.--For the 
                first 2 model years beginning after the 
                submission to Congress of the initial report by 
                the National Academy of Sciences required by 
                section 10 of the Ten-in-Ten Act, the average 
                fuel economy required to be attained for each 
                attribute class of medium-duty trucks and 
                heavy-duty trucks shall be the average combined 
                highway and city miles-per-gallon performance 
                of all vehicles within that class in the model 
                year immediately preceding the first of those 2 
                model years (rounded to the nearest \1/10\ mile 
                per gallon).
                  (B) Medium- and heavy-duty truck fuel economy 
                average after baseline model year.--For each 
                model year beginning after the 2 model years 
                specified in subparagraph (A), the average fuel 
                economy required to be attained by the fleet of 
                medium-duty trucks and heavy-duty trucks 
                manufactured in the United States shall be at 
                least 4 percent greater than the average fuel 
                economy required to be attained for the fleet 
                in the previous model year (rounded to the 
                nearest \1/10\ mile per gallon). Standards 
                shall be issued for medium-duty trucks and 
                heavy-duty trucks for 20 model years.
          (3) Fuel economy target for automobiles.--
                  (A) Baseline average fuel economy standards 
                for automobiles.--The Secretary shall prescribe 
                average fuel economy standards for automobiles 
                in each model year beginning with model year 
                2011 to achieve a combined fuel economy 
                standard for model year 2020 of at least 35 
                miles per gallon for the fleet of automobiles 
                manufactured or sold in the United States. The 
                average fuel economy standards prescribed by 
                the Secretary shall be the maximum feasible 
                average fuel economy standards for model years 
                2011 through 2019.
                  (B) Automobile fuel economy average for model 
                years 2021 through 2030.--For model years 2021 
                through 2030, the average fuel economy required 
                to be attained by the fleet of automobiles 
                manufactured or sold in the United States shall 
                be at least 4 percent greater than the average 
                fuel economy standard required to be attained 
                for the fleet in the previous model year 
                (rounded to the nearest \1/10\ mile per 
                gallon).
  [(c) Amending Passenger Automobile Standards.--(1) Subject to 
paragraph (2) of this subsection, the Secretary of 
Transportation may prescribe regulations amending the standard 
under subsection (b) of this section for a model year to a 
level that the Secretary decides is the maximum feasible 
average fuel economy level for that model year. Section 553 of 
title 5 applies to a proceeding to amend the standard. However, 
any interested person may make an oral presentation and a 
transcript shall be taken of that presentation.
  [(2) If an amendment increases the standard above 27.5 miles 
a gallon or decreases the standard below 26.0 miles a gallon, 
the Secretary of Transportation shall submit the amendment to 
Congress. The procedures of section 551 of the Energy Policy 
and Conservation Act (42 U.S.C. 6421) apply to an amendment, 
except that the 15 calendar days referred to in section 551(c) 
and (d) of the Act (42 U.S.C. 6421(c), (d)) are deemed to be 60 
calendar days, and the 5 calendar days referred to in section 
551(f)(4)(A) of the Act (42 U.S.C. 6421(f)(4)(A)) are deemed to 
be 20 calendar days. If either House of Congress disapproves 
the amendment under those procedures, the amendment does not 
take effect.]
  (c) Amending Fuel Economy Standards.--
          (1) In general.--Notwithstanding subsections (a) and 
        (b), the Secretary of Transportation--
                  (A) may prescribe a standard higher than that 
                required under subsection (b); or
                  (B) may prescribe an average fuel economy 
                standard for a class of automobiles, medium-
                duty trucks, or heavy-duty trucks that is the 
                maximum feasible level for the model year, 
                despite being lower than the standard required 
                under subsection (b), if the Secretary, based 
                on clear and convincing evidence, that the 
                average fuel economy standard prescribed in 
                accordance with subsections (a) and (b) for 
                that class of vehicles in that model year is 
                shown not to be cost-effective.
          (2) Requirements for lower standard.--Before adopting 
        an average fuel economy standard for a class of 
        automobiles, medium-duty trucks, or heavy-duty trucks 
        in a model year under paragraph (1)(B), the Secretary 
        of Transportation shall do the following:
                  (A) Notice of proposed rule.--Except for 
                standards to be promulgated by 2011, at least 
                30 months before the model year for which the 
                standard is to apply, the Secretary shall post 
                a notice of proposed rulemaking for the 
                proposed standard. The notice shall include a 
                detailed analysis of the basis for the 
                Secretary's determination under paragraph 
                (1)(B).
                  (B) Final rule.--At least 18 months before 
                the model year for which the standard is to 
                apply, the Secretary shall promulgate a final 
                rule establishing the standard.
                  (C) Report.--The Secretary shall submit a 
                report to Congress that outlines the steps that 
                need to be taken to avoid further reductions in 
                average fuel economy standards.
          (3) Maximum feasible standard.--An average fuel 
        economy standard prescribed for a class of automobiles, 
        medium-duty trucks, or heavy-duty trucks in a model 
        year under paragraph (1) shall be the maximum feasible 
        standard.
  (d) Exemptions.--(1) Except as provided in paragraph (3) of 
this subsection, on application of a manufacturer that 
manufactured (whether in the United States or not) fewer than 
10,000 [passenger] automobiles in the model year 2 years before 
the model year for which the application is made, the Secretary 
of Transportation may exempt by regulation the manufacturer 
from a standard under subsection (b) or (c) of this section. An 
exemption for a model year applies only if the manufacturer 
manufactures (whether in the United States or not) fewer than 
10,000 [passenger] automobiles in the model year. The Secretary 
may exempt a manufacturer only if the Secretary--
          (A) finds that the applicable standard under those 
        subsections is more stringent than the maximum feasible 
        average fuel economy level that the manufacturer can 
        achieve; and
          (B) prescribes by regulation an alternative average 
        fuel economy standard for the [passenger] automobiles 
        manufactured by the exempted manufacturer that the 
        Secretary decides is the maximum feasible average fuel 
        economy level for the manufacturers to which the 
        alternative standard applies.
  (2) An alternative average fuel economy standard the 
Secretary of Transportation prescribes under paragraph (1)(B) 
of this subsection may apply to an individually exempted 
manufacturer, to all automobiles to which this subsection 
applies, or to classes of [passenger] automobiles, as defined 
under regulations of the Secretary, manufactured by exempted 
manufacturers.
  (3) Notwithstanding paragraph (1) of this subsection, an 
importer registered under section 30141(c) of this title may 
not be exempted as a manufacturer under paragraph (1) for a 
motor vehicle that the importer--
          (A) imports; or
          (B) brings into compliance with applicable motor 
        vehicle safety standards prescribed under chapter 301 
        of this title for an individual under section 30142 of 
        this title 30142.
  (4) The Secretary of Transportation may prescribe the 
contents of an application for an exemption.
  (e) Emergency Vehicles.--(1) In this subsection, ``emergency 
vehicle'' means an automobile manufactured primarily for use--
          (A) as an ambulance or combination ambulance-hearse;
          (B) by the United States Government or a State or 
        local government for law enforcement; or
          (C) for other emergency uses prescribed by regulation 
        by the Secretary of Transportation.
  (2) A manufacturer may elect to have the fuel economy of an 
emergency vehicle excluded in applying a fuel economy standard 
under subsection (a), (b), (c), or (d) of this section. The 
election is made by providing written notice to the Secretary 
of Transportation and to the Administrator of the Environmental 
Protection Agency.
  [(f) Considerations on Decisions on Maximum Feasible Average 
Fuel Economy.--When deciding maximum feasible average fuel 
economy under this section, the Secretary of Transportation 
shall consider technological feasibility, economic 
practicability, the effect of other motor vehicle standards of 
the Government on fuel economy, and the need of the United 
States to conserve energy.]
  (f) Decisions on Maximum Feasible Average Fuel Economy.--
          (1) In general.--When deciding maximum feasible 
        average fuel economy under this section, the Secretary 
        shall consider--
                  (A) economic practicability;
                  (B) the effect of other motor vehicle 
                standards of the Government on fuel economy;
                  (C) environmental impacts; and
                  (D) the need of the United States to conserve 
                energy.
          (2) Limitations.--In setting any standard under 
        subsection (b), (c), or (d), the Secretary shall ensure 
        that each standard is the highest standard that--
                  (A) is technologically achievable;
                  (B) can be achieved without materially 
                reducing the overall safety of automobiles, 
                medium-duty trucks, and heavy-duty trucks 
                manufactured or sold in the United States;
                  (C) is not less than the standard for that 
                class of vehicles from any prior year; and
                  (D) is cost-effective.
          (3) Determining cost-effectiveness.--
                  (A) In general.--In determining cost 
                effectiveness under paragraph (2)(D), the 
                Secretary shall take into account the total 
                value to the United States of reduced fuel use, 
                including the monetary value of the reduced 
                fuel use over the life of the vehicle.
                  (B) Additional factors for consideration by 
                secretary.--The Secretary shall consider in the 
                analysis the following factors:
                          (i) Economic security.
                          (ii) The impact of the oil or energy 
                        intensity of the United States economy 
                        on the sensitivity of the economy to 
                        oil and other fuel price changes, 
                        including the magnitude of gross 
                        domestic product losses in response to 
                        short term price shocks or long term 
                        price increases.
                          (iii) National security, including 
                        the impact of United States payments 
                        for oil and other fuel imports on 
                        political, economic, and military 
                        developments in unstable or unfriendly 
                        oil-exporting countries.
                          (iv) The uninternalized costs of 
                        pipeline and storage oil seepage, and 
                        for risk of oil spills from production, 
                        handling, and transport, and related 
                        landscape damage.
                          (v) The emissions of pollutants 
                        including greenhouse gases over the 
                        lifecycle of the fuel and the resulting 
                        costs to human health, the economy, and 
                        the environment.
                          (vi) Such additional factors as the 
                        Secretary deems relevant.
          (4) Minimum valuation.--When considering the value to 
        consumers of a gallon of gasoline saved, the Secretary 
        of Transportation shall use as a minimum value the 
        value of the gasoline prices projected by the Energy 
        Information Administration for the period covered by 
        the standard beginning in the year following the year 
        in which the standards are established.
          (5) Cost-effective defined.--In this subsection, the 
        term ``cost-effective'' means that the total value to 
        the United States of reduced fuel use from a proposed 
        fuel economy standard is greater than or equal to the 
        total cost to the United States of such standard. 
        Notwithstanding this definition, the Secretary shall 
        not base the level of any standard on any technology 
        whose cost to the United States is substantially more 
        than the value to the United States of the reduction in 
        fuel use attributable to that technology.
  (g) Requirements for Other Amendments.--(1) The Secretary of 
Transportation may prescribe regulations amending an average 
fuel economy standard prescribed under [subsection (a) or (d)] 
subsection (b), (c), or (d) of this section if the amended 
standard meets the requirements of subsection [(a) or (d),] 
subsection (b), (c), or (d), as appropriate.
  (2) When the Secretary of Transportation prescribes an 
amendment under this section that makes an average fuel economy 
standard more stringent, the Secretary shall prescribe the 
amendment [(and submit the amendment to Congress when required 
under subsection (c)(2) of this section)] at least 18 months 
before the beginning of the model year to which the amendment 
applies.
  (h) Limitations.--In carrying out subsections (c), (f), and 
(g) of this section, the Secretary of Transportation--
          (1) may not consider the fuel economy of dedicated 
        automobiles; and
          (2) shall consider dual fueled automobiles to be 
        operated only on gasoline or diesel fuel.
  (i) Consultation.--The Secretary of Transportation shall 
consult with the Secretary of Energy and the Administrator of 
the Environmental Protection Agency in carrying out this 
section and section 32903 of this title.
  (j) Secretary of Energy Comments.--[(1) Before issuing a 
notice proposing to prescribe or amend an average fuel economy 
standard under subsection (a), (c), or (g) of this section, the 
Secretary of Transportation shall give the Secretary of Energy 
at least 10 days from the receipt of the notice during which 
the Secretary of Energy may, if the Secretary of Energy 
concludes that the proposed standard would adversely affect the 
conservation goals of the Secretary of Energy, provide written 
comments to the Secretary of Transportation about the impact of 
the standard on those goals. To the extent the Secretary of 
Transportation does not revise a proposed standard to take into 
account comments of the Secretary of Energy on any adverse 
impact of the standard, the Secretary of Transportation shall 
include those comments in the notice.] (1) Before issuing a 
notice proposing to prescribe or amend an average fuel economy 
standard under subsection (b), (c), or (g) of this section, the 
Secretary of Transportation shall give the Secretary of Energy 
and Administrator of the Environmental Protection Agency at 
least 10 days after the receipt of the notice during which the 
Secretary of Energy and Administrator may, if the Secretary of 
Energy or Administrator concludes that the proposed standard 
would adversely affect the conservation goals of the Secretary 
of Energy or environmental protection goals of the 
Administrator, provide written comments to the Secretary of 
Transportation about the impact of the standard on those goals. 
To the extent the Secretary of Transportation does not revise a 
proposed standard to take into account comments of the 
Secretary of Energy or Administrator on any adverse impact of 
the standard, the Secretary of Transportation shall include 
those comments in the notice.
  (2) 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 and provide the Secretary of Energy and the 
Administrator a reasonable time to comment.
  (k) Authority of the Secretary.--
          (1) Vehicle attributes.--The authority of the 
        Secretary to prescribe by regulation average fuel 
        economy standards for automobiles, medium-duty trucks, 
        and heavy-duty trucks under this section includes the 
        authority--
                  (A) to prescribe standards based on vehicle 
                attributes and to express the standards in the 
                form of a mathematical function; and
                  (B) to issue regulations under this title 
                prescribing average fuel economy standards for 
                1 or more model years.
          (2) Prohibition of uniform percentage increase.--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 attribute classes or categories already achieved in 
        a model year by a manufacturer.

Sec. 32902A. Requirement to manufacture flexible fuel automobiles

  (a) In General.--For each model year, each manufacturer of 
new automobiles described in subsection (b) shall ensure that 
the percentage of such automobiles manufactured in a particular 
model year that are flexible fuel vehicles shall be not less 
than the percentage set forth for that model year in the 
following table:

             ``If the model year is:                    The percentage of flexible fuel automobiles shall be:

  ``2012..........................................  50 percent
  ``2013..........................................  60 percent
  ``2014..........................................  70 percent
  ``2015..........................................  80 percent''

  (b) Automobiles to Which Section Applies..--An automobile is 
described in this subsection if it--
          (1) is capable of operating on gasoline or diesel 
        fuel;
          (2) is distributed in interstate commerce for sale in 
        the United States; and
          (3) does not contain certain engines that the 
        Secretary of Transportation, in consultation with the 
        Administrator of the Environmental Protection Agency 
        and the Secretary of Energy, may temporarily exclude 
        from the definition because it is technologically 
        infeasible for the engines to have flexible fuel 
        capability at any time during a period that the 
        Secretaries and the Administrator are engaged in an 
        active research program with the vehicle manufacturers 
        to develop that capability for the engines.

Sec. 32903. Credits for exceeding average fuel economy standards

  (a) Earning and Period for Applying Credits.--When the 
average fuel economy of [passenger] automobiles manufactured by 
a manufacturer in a particular model year exceeds an applicable 
average fuel economy standard under [section 32902(b)-(d) of 
this title] subsection (a), (c), or (d) of section 32902 
(determined by the Secretary of Transportation without regard 
to credits under this section), the manufacturer earns credits. 
The credits may be applied to--
          (1) any of the [3 consecutive model years] 5 
        consecutive model years immediately before the model 
        year for which the credits are earned; and
          (2) to the extent not used under [clause (1) of this 
        subsection,] paragraph (1), any of the [3 consecutive 
        model years] 5 consecutive model years immediately 
        after the model year for which the credits are earned.
  (b) Period of Availability and Plan for Future Credits.--(1) 
Except as provided in paragraph (2) of this subsection, credits 
under this section are available to a manufacturer at the end 
of the model year in which earned.
  (2)(A) Before the end of a model year, if a manufacturer has 
reason to believe that its average fuel economy for [passenger] 
automobiles will be less than the applicable standard for that 
model year, the manufacturer may submit a plan to the Secretary 
of Transportation demonstrating that the manufacturer will earn 
sufficient credits under this section within the next 3 model 
years to allow the manufacturer to meet that standard for the 
model year involved. Unless the Secretary finds that the 
manufacturer is unlikely to earn sufficient credits under the 
plan, the Secretary shall approve the plan. Those credits are 
available for the model year involved if--
          (i) the Secretary approves the plan; and
          (ii) the manufacturer earns those credits as provided 
        by the plan.
  (B) If the average fuel economy of a manufacturer is less 
than the applicable standard under [section 32902(b)-(d) of 
this title] subsection (a), (c), or (d) of section 32902 after 
applying credits under subsection (a)(1) of this section, the 
Secretary of Transportation shall notify the manufacturer and 
give the manufacturer a reasonable time (of at least 60 days) 
to submit a plan.
  (c) Determining number of credits. The number of credits a 
manufacturer earns under this section equals the product of--
          (1) the number of tenths of a mile a gallon by which 
        the average fuel economy of the [passenger] automobiles 
        manufactured by the manufacturer in the model year in 
        which the credits are earned exceeds the applicable 
        average fuel economy standard under [section 32902(b)-
        (d) of this title] subsection (a), (c), or (d) of 
        section 32902; times
          (2) the number of [passenger] automobiles 
        manufactured by the manufacturer during that model 
        year.
  (d) Applying Credits for [Passenger] Automobiles.--The 
Secretary of Transportation shall apply credits to a model year 
on the basis of the number of tenths of a mile a gallon by 
which the manufacturer involved was below the applicable 
average fuel economy standard for that model year and the 
number of [passenger] automobiles manufactured that model year 
by the manufacturer. Credits applied to a model year are no 
longer available for another model year. Before applying 
credits, the Secretary shall give the manufacturer written 
notice and reasonable opportunity to comment.
  [(e) Applying Credits for Non-passenger Automobiles.--Credits 
for a manufacturer of automobiles that are not passenger 
automobiles are earned and applied to a model year in which the 
average fuel economy of that class of automobiles is below the 
applicable average fuel economy standard under section 32902(a) 
of this title, to the same extent and in the same way as 
provided in this section for passenger automobiles.]
  (e) Credit Trading Among Manufacturers.--The Secretary of 
Transportation may establish, by regulation, a corporate 
average fuel economy credit trading program to allow 
manufacturers whose automobiles exceed the average fuel economy 
standards prescribed under section 32902 to earn credits to be 
sold to manufacturers whose automobiles fail to achieve the 
prescribed standards.
  (f) Refund of Collected Penalty.--When a civil penalty has 
been collected under this chapter from a manufacturer that has 
earned credits under this section, the Secretary of the 
Treasury shall refund to the manufacturer the amount of the 
penalty to the extent the penalty is attributable to credits 
available under this section.

           *       *       *       *       *       *       *

Sec. 32908. Fuel economy information

  (a) Definitions.--In this section--
          (1) ``automobile'' includes an automobile rated at 
        not more than 8,500 pounds gross vehicle weight 
        regardless of whether the Secretary of Transportation 
        has applied this chapter to the automobile under 
        section 32901(a)(3)(B) of this title.
          (2) ``dealer'' means a person residing or located in 
        a State, the District of Columbia, or a territory or 
        possession of the United States, and engaged in the 
        sale or distribution of new automobiles to the first 
        person (except a dealer buying as a dealer) that buys 
        the automobile in good faith other than for resale.
  (b) Labeling Requirements and Contents.--(1) Under 
regulations of the Administrator of the Environmental 
Protection Agency, a manufacturer of automobiles shall attach a 
label to a prominent place on each automobile manufactured in a 
model year. The dealer shall maintain the label on the 
automobile. The label shall contain the following information:
          (A) the fuel economy of the automobile.
          (B) the estimated annual fuel cost of operating the 
        automobile.
          (C) the range of fuel economy of comparable 
        automobiles of all manufacturers.
          (D) a statement that a booklet is available from the 
        dealer to assist in making a comparison of fuel economy 
        of other automobiles manufactured by all manufacturers 
        in that model year.
          (E) the amount of the automobile fuel efficiency tax 
        imposed on the sale of the automobile under section 
        4064 of the Internal Revenue Code of 1986 (26 U.S.C. 
        4064).
          (F) a label (or a logo imprinted on a label required 
        by this paragraph) that--
                  (i) reflects an automobile's performance on 
                the basis of criteria developed by the 
                Administrator to reflect the fuel economy and 
                greenhouse gas and other emissions consequences 
                of operating the automobile over its likely 
                useful life;
                  (ii) permits consumers to compare performance 
                results under clause (i) among all automobiles; 
                and
                  (iii) is designed to encourage the 
                manufacture and sale of automobiles that meet 
                or exceed applicable fuel economy standards 
                under section 32902.
          (G) a fuelstar under paragraph (5).
          [(F)] (H) other information required or authorized by 
        the Administrator that is related to the information 
        required by clauses (A)-(D) of this paragraph.
  (2) The Administrator may allow a manufacturer to comply with 
this subsection by--
          (A) disclosing the information on the label required 
        under section 3 of the Automobile Information 
        Disclosure Act (15 U.S.C. 1232); and
          (B) including the statement required by paragraph 
        (1)(E) of this subsection at a time and in a way that 
        takes into account special circumstances or 
        characteristics.
  (3) For dedicated automobiles manufactured after model year 
1992, the fuel economy of those automobiles under paragraph 
(1)(A) of this subsection is the fuel economy for those 
automobiles when operated on alternative fuel, measured under 
section 32905(a) or (c) of this title, multiplied by .15. Each 
label required under paragraph (1) of this subsection for dual 
fueled automobiles shall--
          (A) indicate the fuel economy of the automobile when 
        operated on gasoline or diesel fuel;
          (B) clearly identify the automobile as a dual fueled 
        automobile;
          (C) clearly identify the fuels on which the 
        automobile may be operated; and
          (D) contain a statement informing the consumer that 
        the additional information required by subsection 
        (c)(2) of this section is published and distributed by 
        the Secretary of Energy.
  (4) Green label program.--
          (A) Marketing analysis.--Not later than 2 years after 
        the date of the enactment of the Ten-in-Ten Fuel 
        Economy Act, the Administrator shall implement a 
        consumer education program and execute marketing 
        strategies to improve consumer understanding of 
        automobile performance described in paragraph (1)(F).
          (B) Eligibility.--Not later than 3 years after the 
        date described in subparagraph (A), the Administrator 
        shall issue requirements for the label or logo required 
        under paragraph (1)(F) to ensure that an automobile is 
        not eligible for the label or logo unless it--
                  (i) meets or exceeds the applicable fuel 
                economy standard; or
                  (ii) will have the lowest greenhouse gas 
                emissions over the useful life of the vehicle 
                of all vehicles in the vehicle attribute class 
                to which it belongs in that model year.
  (5) Fuelstar program.--
          (A) In general.--The Secretary shall establish a 
        program, to be known as the ``Fuelstar Program'', under 
        which stars shall be imprinted on or attached to the 
        label required by paragraph (1).
          (B) Green stars.--Under the Fuelstar Program, a 
        manufacturer may include on the label maintained on an 
        automobile under paragraph (1)--
                  (i) 1 green star for any automobile that 
                meets the average fuel economy standard for the 
                model year under section 32902; and
                  (ii) 1 additional green star for each 2 miles 
                per gallon by which the automobile exceeds such 
                standard.
          (C) Gold stars.--Under the Fuelstar Program, a 
        manufacturer may include a gold star on the label 
        maintained on an automobile under paragraph (1) if the 
        automobile attains a fuel economy of at least 50 miles 
        per gallon.
  (c) Fuel Economy Information Booklet.--(1) The Administrator 
shall prepare the booklet referred to in subsection (b)(1)(D) 
of this section. The booklet--
          (A) shall be simple and readily understandable;
          (B) shall contain information on fuel economy and 
        estimated annual fuel costs of operating automobiles 
        manufactured in each model year; and
          (C) may contain information on geographical or other 
        differences in estimated annual fuel costs.
  (2)(A) For dual fueled automobiles manufactured after model 
year 1992, the booklet published under paragraph (1) shall 
contain additional information on--
          (i) the energy efficiency and cost of operation of 
        those automobiles when operated on gasoline or diesel 
        fuel as compared to those automobiles when operated on 
        alternative fuel; and
          (ii) the driving range of those automobiles when 
        operated on gasoline or diesel fuel as compared to 
        those automobiles when operated on alternative fuel.
  (B) For dual fueled automobiles, the booklet published under 
paragraph (1) also shall contain--
          (i) information on the miles a gallon achieved by the 
        automobiles when operated on alternative fuel; and
          (ii) a statement explaining how the information made 
        available under this paragraph can be expected to 
        change when the automobile is operated on mixtures of 
        alternative fuel and gasoline or diesel fuel.
  (3) The Secretary of Energy shall publish and distribute the 
booklet. The Administrator shall prescribe regulations 
requiring dealers to make the booklet available to prospective 
buyers.
  (d) Disclosure.--A disclosure about fuel economy or estimated 
annual fuel costs under this section does not establish a 
warranty under a law of the United States or a State.
  (e) Violations.--A violation of subsection (b) of this 
section is--
          (1) a violation of section 3 of the Automobile 
        Information Disclosure Act (15 U.S.C. 1232); and
          (2) an unfair or deceptive act or practice in or 
        affecting commerce under the Federal Trade Commission 
        Act (15 U.S.C. 41 et seq.), except sections 5(m) and 18 
        (15 U.S.C. 45(m), 57a).
  (f) Consultation.--The Administrator shall consult with the 
Federal Trade Commission and the Secretaries of Transportation 
and Energy in carrying out this section.
  (g) Increasing Consumer Awareness of Flexible Fuel 
Automobiles.--(1) The Secretary of Transportation shall 
prescribe regulations that require the manufacturer of 
automobiles distributed in interstate commerce for sale in the 
United States--
          (A) to prominently display a permanent badge or 
        emblem on the quarter panel or tailgate of each such 
        automobile that indicates such vehicle is capable of 
        operating on alternative fuel; and
          (B) to include information in the owner's manual of 
        each such automobile information that describes--
                  (i) the capability of the automobile to 
                operate using alternative fuel;
                  (ii) the benefits of using alternative fuel, 
                including the renewable nature, and the 
                environmental benefits of using alternative 
                fuel; and
          (C) to contain a fuel tank cap that is clearly 
        labeled to inform consumers that the automobile is 
        capable of operating on alternative fuel.
  (2) The Secretary of Transportation shall collaborate with 
autombile retailers to develop voluntary methods for providing 
prospective purchasers of automobiles with information 
regarding the benefits of using alternative fuel in 
automobiles, including--
          (A) the renewable nature of alternative fuel; and
          (B) the environmental benefits of using alternative 
        fuel.

           *       *       *       *       *       *       *

Sec. 32912. Civil penalties

  (a) General Penalty.--A person that violates section 32911(a) 
of this title is liable to the United States Government for a 
civil penalty of not more than $ 10,000 for each violation. A 
separate violation occurs for each day the violation continues.
  (b) Penalty for Manufacturer Violations of Fuel Economy 
Standards.--Except as provided in subsection (c) of this 
section, a manufacturer that violates a standard prescribed for 
a model year under section 32902 of this title is liable to the 
Government for a civil penalty of $5 multiplied by each .1 of a 
mile a gallon by which the applicable average fuel economy 
standard under that section exceeds the average fuel economy--
          (1) calculated under section 32904(a)(1)(A) or (B) of 
        this title for automobiles to which the standard 
        applies manufactured by the manufacturer during the 
        model year;
          (2) multiplied by the number of those automobiles; 
        and
          (3) reduced by the credits available to the 
        manufacturer under section 32903 of this title for the 
        model year.
  (c) Higher Penalty Amounts.--(1)(A) The Secretary of 
Transportation shall prescribe by regulation a higher amount 
for each .1 of a mile a gallon to be used in calculating a 
civil penalty under subsection (b) of this section, if the 
Secretary decides that the increase in the penalty--
          (i) will result in, or substantially further, 
        substantial energy conservation for automobiles in 
        model years in which the increased penalty may be 
        imposed; and
          (ii) will not have a substantial deleterious impact 
        on the economy of the United States, a State, or a 
        region of a State.
  (B) The amount prescribed under subparagraph (A) of this 
paragraph may not be more than $ 10 for each .1 of a mile a 
gallon.
  (C) The Secretary may make a decision under subparagraph 
(A)(ii) of this paragraph only when the Secretary decides that 
it is likely that the increase in the penalty will not--
          (i) cause a significant increase in unemployment in a 
        State or a region of a State;
          (ii) adversely affect competition; or
          (iii) cause a significant increase in automobile 
        imports.
  (D) A higher amount prescribed under subparagraph (A) of this 
paragraph is effective for the model year beginning at least 18 
months after the regulation stating the higher amount becomes 
final.
  (2) The Secretary shall publish in the Federal Register a 
proposed regulation under this subsection and a statement of 
the basis for the regulation and provide each manufacturer of 
automobiles a copy of the proposed regulation and the 
statement. The Secretary shall provide a period of at least 45 
days for written public comments on the proposed regulation. 
The Secretary shall submit a copy of the proposed regulation to 
the Federal Trade Commission and request the Commission to 
comment on the proposed regulation within that period. After 
that period, the Secretary shall give interested persons and 
the Commission an opportunity at a public hearing to present 
oral information, views, and arguments and to direct questions 
about disputed issues of material fact to--
          (A) other interested persons making oral 
        presentations;
          (B) employees and contractors of the Government that 
        made written comments or an oral presentation or 
        participated in the development or consideration of the 
        proposed regulation; and
          (C) experts and consultants that provided information 
        to a person that the person includes, or refers to, in 
        an oral presentation.
  (3) The Secretary may restrict the questions of an interested 
person and the Commission when the Secretary decides that the 
questions are duplicative or not likely to result in a timely 
and effective resolution of the issues. A transcript shall be 
kept of a public hearing under this subsection. A copy of the 
transcript and written comments shall be available to the 
public at the cost of reproduction.
  (4) The Secretary shall publish a regulation prescribed under 
this subsection in the Federal Register with the decisions 
required under paragraph (1) of this subsection.
  (5) An officer or employee of a department, agency, or 
instrumentality of the Government violates section 1905 of 
title 18 by disclosing, except in an in camera proceeding by 
the Secretary or a court, information--
          (A) provided to the Secretary or the court during 
        consideration or review of a regulation prescribed 
        under this subsection; and
          (B) decided by the Secretary to be confidential under 
        section 11(d) of the Energy Supply and Environmental 
        Coordination Act of 1974 (15 U.S.C. 796(d)).
  (d) Written Notice Requirement.--The Secretary shall impose a 
penalty under this section by written notice.
  (e) Use of Civil Penalties.--For fiscal year 2008 and each 
fiscal year thereafter, from the total amount deposited in the 
general fund of the Treasury during the preceding fiscal year 
from fines, penalties, and other funds obtained through 
enforcement actions conducted pursuant to this section 
(including funds obtained under consent decrees), the Secretary 
of the Treasury, subject to the availability of appropriations, 
shall--
          (1) transfer 50 percent of such total amount to the 
        account providing appropriations to the Secretary of 
        Transportation for the administration of this chapter, 
        which shall be used by the Secretary to carry out a 
        program of research and development into fuel saving 
        automotive technologies and to support rulemaking under 
        this chapter; and
          (2) transfer 50 percent of such total amount to the 
        Energy Security Fund established by section 118(a) of 
        the Ten-in-Ten Fuel Economy Act.

           *       *       *       *       *       *       *

[Sec. 32917. Standards for executive agency automobiles

  [(a) Definition.--In this section, ``executive agency'' has 
the same meaning given that term in section 105 of title 5.
  [(b) Fleet Average Fuel Economy.--(1) The President shall 
prescribe regulations that require passenger automobiles leased 
for at least 60 consecutive days or bought by executive 
agencies in a fiscal year to achieve a fleet average fuel 
economy (determined under paragraph (2) of this subsection) for 
that year of at least the greater of--
          [(A) 18 miles a gallon; or
          [(B) the applicable average fuel economy standard 
        under section 32902(b) or (c) of this title for the 
        model year that includes January 1 of that fiscal year.
  [(2) Fleet average fuel economy is--
          [(A) the total number of passenger automobiles leased 
        for at least 60 consecutive days or bought by executive 
        agencies in a fiscal year (except automobiles designed 
        for combat-related missions, law enforcement work, or 
        emergency rescue work); divided by
          [(B) the sum of the fractions obtained by dividing 
        the number of automobiles of each model leased or 
        bought by the fuel economy of that model.]

Sec. 32917. Standards for executive agency automobiles

  (a) Fuel Efficiency.--The head of an Executive agency shall 
ensure that each new automobile procured by the Executive 
agency is as fuel efficient as practicable.
  (b) Definitions.--In this section:
          (1) Executive agency.--The term ``Executive agency'' 
        has the meaning given that term in section 105 of title 
        5.
          (2) New automobile.--The term ``new automobile'', 
        with respect to the fleet of automobiles of an 
        executive agency, means an automobile that is leased 
        for at least 60 consecutive days or bought, by or for 
        the Executive agency, after September 30, 2008. The 
        term does not include any vehicle designed for combat-
        related missions, law enforcement work, or emergency 
        rescue work.

                                  
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