II

106TH CONGRESS

2D SESSION S. 2685

To amend the Internal Revenue Code of 1986 to provide incentives for

the production, sale, and use of highly fuel-efficient, advanced-technology

motor vehicles and to amend the Energy Policy Act of 1992 to undertake

an assessment of the relative effectiveness of current and potential methods to further encourage the development of the most fuel efficient

vehicles for use in interstate commerce in the United States.

IN THE SENATE OF THE UNITED STATES

JUNE 7 (legislative day, JUNE 6), 2000

Mr. LEVIN (for himself, Mr. ASHCROFT, and Mr. ABRAHAM) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

incentives for the production, sale, and use of highly

fuel-efficient, advanced-technology motor vehicles and to

amend the Energy Policy Act of 1992 to undertake an

assessment of the relative effectiveness of current and

potential methods to further encourage the development

of the most fuel efficient vehicles for use in interstate

commerce in the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•S 2685 IS

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Advanced Technology

3 Motor Vehicle Fuel Economy Act of 2000’’.

4 TITLE I—AMENDMENTS TO THE

5 INTERNAL REVENUE CODE

6 OF 1986

7 SEC. 101. CREDIT FOR CERTAIN ENERGY EFFICIENT

8 MOTOR VEHICLES.

9 (a) IN GENERAL.—Subpart B of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of

11 1986 is amended by adding at the end the following new

12 section:

13 ‘‘SEC. 30B. CREDIT FOR HYBRID VEHICLES.

14 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al15 lowed as a credit against the tax imposed by this chapter

16 for the taxable year an amount equal to the sum of the

17 credit amounts for each qualified hybrid vehicle placed in

18 service during the taxable year.

19 ‘‘(b) CREDIT AMOUNT.—For purposes of this

20 section—

21 ‘‘(1) IN GENERAL.—The credit amount for each

22 qualified hybrid vehicle with a rechargeable energy

23 storage system that provides the applicable percent24 age of the maximum available power shall be the

25 amount specified in the following table:
3

•S 2685 IS

‘‘Applicable percentage Credit amount

Greater than or equal to 5 percent but less than 10 percent ............ $500

Greater than or equal to 10 percent but less than 20 percent––– $1,000

Greater than or equal to 20 percent but less than 30 percent––– $1,500

Greater than or equal to 30 percent .................................................. $2,000.

1 ‘‘(2) INCREASE IN CREDIT AMOUNT FOR RE2 GENERATIVE BRAKING SYSTEM.—In the case of a

3 qualified hybrid vehicle that actively employs a re4 generative braking system which supplies to the re5 chargeable energy storage system the applicable per6 centage of the energy available from braking in a

7 typical 60 miles per hour to 0 miles per hour brak8 ing event, the credit amount determined under this

9 section shall be increased by the amount specified in

10 the following table:

‘‘Applicable percentage Credit amount

Greater than or equal to 20 percent but less than 40 percent .......... $250

Greater than or equal to 40 percent but less than 60 percent .......... $500

Greater than or equal to 60 percent .................................................. $1,000.

11 ‘‘(c) DEFINITIONS.—For purposes of this section—

12 ‘‘(1) QUALIFIED HYBRID VEHICLE.—The term

13 ‘qualified hybrid vehicle’ means an automobile that

14 meets all applicable regulatory requirements and

15 that can draw propulsion energy from both of the

16 following onboard sources of stored energy:

17 ‘‘(A) A consumable fuel.

18 ‘‘(B) A rechargeable energy storage sys19 tem.

20 ‘‘(2) MAXIMUM AVAILABLE POWER.—The term

21 ‘maximum available power’ means the maximum
4

•S 2685 IS

1 value of the sum of the heat engine and electric

2 drive system power or other nonheat energy conver3 sion devices available for a driver’s command for

4 maximum acceleration at vehicle speeds under 75

5 miles per hour.

6 ‘‘(3) AUTOMOBILE.—The term ‘automobile’ has

7 the meaning given such term by section 4064(b)(1)

8 (without regard to subparagraphs (B) and (C) there9 of). A vehicle shall not fail to be treated as an auto10 mobile solely by reason of weight if such vehicle is

11 rated at 8,500 pounds gross vehicle weight rating or

12 less.

13 ‘‘(d) APPLICATION WITH OTHER CREDITS.—The

14 credit allowed by subsection (a) for any taxable year shall

15 not exceed the excess (if any) of—

16 ‘‘(1) the regular tax for the taxable year re17 duced by the sum of the credits allowable under sub18 part A and the preceding sections of this subpart,

19 over

20 ‘‘(2) the tentative minimum tax for the taxable

21 year.

22 ‘‘(e) SPECIAL RULES.—

23 ‘‘(1) BASIS REDUCTION.—The basis of any

24 property for which a credit is allowable under sub-
5

•S 2685 IS

1 section (a) shall be reduced by the amount of such

2 credit (determined without regard to subsection (d)).

3 ‘‘(2) RECAPTURE.—The Secretary shall, by reg4 ulations, provide for recapturing the benefit of any

5 credit allowable under subsection (a) with respect to

6 any property which ceases to be property eligible for

7 such credit.

8 ‘‘(3) PROPERTY USED OUTSIDE UNITED

9 STATES, ETC., NOT QUALIFIED.—No credit shall be

10 allowed under this section with respect to—

11 ‘‘(A) any property for which a credit is al12 lowed under section 30,

13 ‘‘(B) any property referred to in section

14 50(b), or

15 ‘‘(C) any property taken into account

16 under section 179 or 179A.

17 ‘‘(4) ELECTION TO NOT TAKE CREDIT.—No

18 credit shall be allowed under subsection (a) for any

19 vehicle if the taxpayer elects to not have this section

20 apply to such vehicle.

21 ‘‘(f) REGULATIONS.—

22 ‘‘(1) TREASURY.—The Secretary shall prescribe

23 such regulations as may be necessary or appropriate

24 to carry out the purposes of this section.
6

•S 2685 IS

1 ‘‘(2) ENVIRONMENTAL PROTECTION AGENCY.—

2 The Administrator of the Environmental Protection

3 Agency, in coordination with the Secretary of Trans4 portation and consistent with the laws administered

5 by such agency for automobiles, shall timely pre6 scribe such regulations as may be necessary or ap7 propriate solely for the purpose of specifying the

8 testing and calculation procedures to determine

9 whether a vehicle meets the qualifications for a cred10 it under this section.

11 ‘‘(g) APPLICATION OF SECTION.—This section shall

12 apply to any qualified hybrid vehicles placed in service

13 after December 31, 1999, and before January 1, 2009.’’

14 (b) CONFORMING AMENDMENTS.—

15 (1) Subsection (a) of section 1016 of such Code

16 is amended by striking ‘‘and’’ at the end of para17 graph (26), by striking the period at the end of

18 paragraph (27) and inserting ‘‘, and’’, and by add19 ing at the end the following new paragraph:

20 ‘‘(28) to the extent provided in section

21 30B(e)(1).’’

22 (2) The table of sections for subpart B of part

23 IV of subchapter A of chapter 1 of such Code is

24 amended by adding at the end the following new

25 item:

‘‘Sec. 30B. Credit for hybrid vehicles.’’
7

•S 2685 IS

1 SEC. 102. EXTENSION OF CREDIT FOR CERTAIN QUALIFIED

2 ELECTRIC VEHICLES.

3 (a) EXTENSION OF CREDIT FOR QUALIFIED ELEC4 TRIC VEHICLES.—Subsection (e) of section 30 of the In5 ternal Revenue Code of 1986 (relating to termination) is

6 amended by striking ‘‘December 31, 2004’’ and inserting

7 ‘‘December 31, 2008’’.

8 (b) REPEAL OF PHASEOUT.—Subsection (b) of sec9 tion 30 of such Code (relating to limitations) is amended

10 by striking paragraph (2) and by redesignating paragraph

11 (3) as paragraph (2).

12 SEC. 103. EFFECTIVE DATE.

13 The amendments made by this title shall apply to ve14 hicles placed in service after the date of the enactment

15 of this Act.

16 TITLE II—AMENDMENTS TO THE

17 ENERGY POLICY ACT OF 1992

18 SEC. 201. STUDY OF CURRENT AND FUTURE ENERGY CON19 SERVATION REGARDING MOTOR VEHICLE

20 AND RELATED TRANSPORTATION IN INTER21 STATE COMMERCE IN THE UNITED STATES.

22 (a) IN GENERAL.—Subtitle G of title I of the Energy

23 Policy Act of 1992 (42 U.S.C. 13451 note) is amended

24 by adding the following new sections:
8

•S 2685 IS

1 ‘‘SEC. 174. TRANSPORTATION ENERGY CONSERVATION

2 STUDY.

3 ‘‘(a) STUDY AGREEMENT.—The Secretary of Trans4 portation (with the participation of the Secretary of En5 ergy) shall, within 90 days after the date of enactment

6 of this section, enter into an agreement with the National

7 Academy of Sciences to conduct a comprehensive study of

8 voluntary, mandatory, and other means and measures

9 used by private and public sectors for the purposes of con10 serving energy in transportation of people and goods in

11 interstate commerce in the United States, and for the pro12 vision of services by motor vehicles and other modes of

13 transportation, and identify and examine potential vol14 untary, mandatory, and other approaches to such con15 servation. Such study shall also examine the use, accept16 ance, effectiveness, costs, impact on mobility, and other

17 relevant factors concerning such current and potential

18 means and measures for energy conservation and shall

19 consider the ubiquitous nature of such transportation and

20 its importance in the economy. The study shall also take

21 into consideration such factors as current and future en22 ergy supplies available to the United States, the avail23 ability in the United States of adequate, reliable, conven24 ient, consumer-friendly transportation locally, regionally,

25 and nationally, the geographic size and population of the

26 United States, and the availability and impact of tech-
9

•S 2685 IS

1 nologies and fuels that affect energy conservation. The

2 study shall also compare existing and planned energy con3 servation approaches in other economically developed

4 countries and integrated economic regions, taking into

5 consideration similar factors.

6 ‘‘(b) REQUIREMENTS.—The study shall be comprised

7 of the following aspects:

8 ‘‘(1) An overview of the United States energy

9 supply situation, including an assessment of current

10 and projected fuel supplies.

11 ‘‘(2) The impact of current and projected fuel

12 supplies on national security and trade.

13 ‘‘(3) An assessment of energy use by the trans14 portation and several other sectors of the economy.

15 ‘‘(4) An assessment of the relative effectiveness

16 of past and current motor vehicle energy conserva17 tion programs for motor vehicles and other modes of

18 transportation, policies, and proposals in the United

19 States, including consideration of, among others—

20 ‘‘(A) regulatory requirements, direct and

21 indirect;

22 ‘‘(B) corporate average fuel economy man23 date;

24 ‘‘(C) dispersal of authority over the provi25 sion and regulation of transportation;
10

•S 2685 IS

1 ‘‘(D) gas guzzler tax;

2 ‘‘(E) alternative fuel vehicles and the avail3 ability of alternative fuels;

4 ‘‘(F) tax credits for electric vehicles;

5 ‘‘(G) fiscal measures, including taxation,

6 incentives and subsidies;

7 ‘‘(H) higher fuel taxes;

8 ‘‘(I) fuel economy labeling and reporting;

9 ‘‘(J) integration of transportation and land

10 use planning;

11 ‘‘(K) speed limits;

12 ‘‘(L) carpooling requirements;

13 ‘‘(M) high occupancy vehicle (HOV) re14 strictions;

15 ‘‘(N) altering driving behavior;

16 ‘‘(O) incentives for mass transit;

17 ‘‘(P) development, use, and adequacy of

18 modeling for energy efficiency of motor vehicle

19 and other transportation modes;

20 ‘‘(Q) congestion mitigation measures; and

21 ‘‘(R) strategic and other measures and in22 centives, including communications and out23 reach strategies.

24 ‘‘(5) An assessment of the effectiveness of

25 motor vehicle transportation energy conservation ef-
11

•S 2685 IS

1 forts in economically developed countries and inte2 grated economic regions other than the United

3 States, including consideration of, among others—

4 ‘‘(A) regulatory measures and mandates;

5 ‘‘(B) fiscal measures;

6 ‘‘(C) higher fuel taxes;

7 ‘‘(D) vehicle taxation by engine size;

8 ‘‘(E) tolls;

9 ‘‘(F) alternative fuel vehicles and the avail10 ability of alternative fuels;

11 ‘‘(G) voluntary commitments in lieu of

12 mandates;

13 ‘‘(H) gas rationing and mobility restric14 tions (e.g., no-drive days);

15 ‘‘(I) monitoring; and

16 ‘‘(J) other fuel economy programs.

17 ‘‘(6)(A) The identification of potential future

18 approaches to motor vehicle and other transpor19 tation energy conservation efforts in the United

20 States, including consideration of, among others—

21 ‘‘(i) voluntary approaches by industry

22 versus regulatory mandates;

23 ‘‘(ii) use of incentives to encourage market

24 penetration;
12

•S 2685 IS

1 ‘‘(iii) cooperative government/industry ar2 rangements such as Smart Growth, Clean Cit3 ies, Energy Star, Partnership for a New Gen4 eration of Vehicles, European Automobile Coop5 erative Research program, and Japanese Coop6 erative Automobile Research program;

7 ‘‘(iv) efforts to encourage and accelerate

8 lean burn, clean diesel hybrids, fuel cells and

9 other advanced technologies, and alternative

10 fuels;

11 ‘‘(v) congestion mitigation measures;

12 ‘‘(vi) intelligent transportation systems

13 (ITS); and

14 ‘‘(vii) other potential approaches.

15 ‘‘(B) In making such identification, the study

16 should assess, to the extent applicable, the market17 ability, risks, benefits, practicability, acceptability,

18 and costs of such approaches as well as any legal or

19 market barriers to the introduction of such ap20 proaches, such as cost of energy, public awareness,

21 fueling infrastructure, fuel quality, and other exist22 ing regulations (e.g., Environmental Protection

23 Agency Tier 2 regulations, California emissions

24 standards, Federal Motor Vehicle Safety Standards).
13

•S 2685 IS

1 ‘‘(7) An assessment of the effects on personal

2 mobility and the United States economy that have

3 resulted from the implementation of current con4 servation policies and measures and that likely

5 would result from the implementation of future ap6 proaches.

7 ‘‘(8) Conclusions that appropriately follow from

8 the foregoing study, including—

9 ‘‘(A) the effectiveness of prior and existing

10 transportation policies in fostering increased en11 ergy conservation;

12 ‘‘(B) the need for and timing of energy

13 conservation measures for motor vehicles; and

14 ‘‘(C) other potential future approaches and

15 policies that recommend themselves for further

16 consideration.

17 ‘‘(c) REPORT.—The Secretary of Transportation

18 shall submit to Congress, not later than 18 months after

19 the date of enactment of this Act, a report describing the

20 results of the study under this section, including any ap21 propriate recommendations, together with the basis for

22 them and their estimated costs and benefits.

23 ‘‘SEC. 175. STUDY OF LEAN BURN TECHNOLOGY.

24 ‘‘(a) SCOPE OF STUDY.—The Secretary of Transpor25 tation (with the participation of the Secretary of Energy)
14

•S 2685 IS

1 shall, within 60 days after the date of enactment of this

2 Act, commission a study regarding lean burn technology

3 in increasing fuel efficiency, to include consideration of,

4 among other things:

5 ‘‘(1) POTENTIAL BENEFITS.—The potential

6 benefits of introducing lean burn technology,

7 including—

8 ‘‘(A) its impact on fuel consumption; and

9 ‘‘(B) the cost effectiveness (i.e., value) of

10 implementing lean burn technology as a bridge

11 to longer term advanced technologies for fuel

12 economy improvement.

13 ‘‘(2) POTENTIAL BARRIERS.—The potential

14 barriers to introduction of lean burn technology,

15 including—

16 ‘‘(A) emissions control technology for lean

17 burn technology;

18 ‘‘(B) the compatibility of existing fuels to

19 advanced technologies;

20 ‘‘(C) the conflict between lean burn tech21 nology and stringent emissions limits; and

22 ‘‘(D) any legal and market barriers to the

23 introduction of lean burn technologies, such as

24 cost of energy, public awareness, fueling infra25 structure, fuel quality, and other existing regu-
15

•S 2685 IS

1 lations (e.g., Environmental Protection Agency

2 Tier 2 regulations, California emissions stand3 ards, Federal Motor Vehicle Safety Standards);

4 ‘‘(3) RECOMMENDATIONS.—Recommendations

5 for removing or addressing any potential barriers,

6 including—

7 ‘‘(A) the implementation of new tech8 nologies with the least disruption to the econ9 omy; and

10 ‘‘(B) the incremental cost of increasing

11 fuel efficiency.

12 ‘‘(4) Overall recommendations on the value of

13 pursuing lean burn technology as a means of im14 proving fuel efficiency.

15 ‘‘(b) REPORT.—The Secretary shall submit to Con16 gress, not later than 12 months after the date of enact17 ment of this Act, a report describing the results of the

18 study under this section, including any appropriate rec19 ommendations, together with the basis for them and their

20 estimated costs and benefits.’’.

21 SEC. 202. EXTENSION OF CREDITS FOR FLEXIBLE FUEL VE22 HICLES.

23 (a) PURPOSE.—The purpose of this section is to ex24 tend the manufacturing incentives for dual fuel vehicles,

25 as set forth in subsections (b) and (d) of section 32905
16

•S 2685 IS

1 of title 49, United States Code, from the 2004 model year

2 through the 2008 model year, and to extend in like man3 ner the maximum fuel economy increase, as set forth in

4 subsection (a)(1) of section 32906 of title 49, United

5 States Code.

6 (b) AMENDMENTS.—

7 (1) Section 32905 of title 49, United States

8 Code, is amended as follows:

9 (A) Subsections (b) and (d) are each

10 amended by striking ‘‘model years 1993–2004’’

11 and inserting ‘‘model years 1993–2008’’.

12 (B) Subsection (f) is amended by striking

13 ‘Not later than December 31, 2001, the Sec14 retary’ and inserting ‘‘Not later than December

15 31, 2005, the Secretary shall’’.

16 (C) Subsection (f)(1) is amended by strik17 ing ‘‘model year 2004’’ and inserting ‘‘model

18 year 2008’’.

19 (D) Subsection (g) is amended by striking

20 ‘‘Not later than September 30, 2000’’ and in21 serting ‘‘Not later than September 30, 2004’’.

22 (2) Subsection (a)(1) of section 32906 of title

23 49, United States Code, is amended as follows:
17

•S 2685 IS

1 (A) Subsection (a)(1)(A) is amended by

2 striking ‘‘the model years 1993–2004’’ and in3 serting ‘‘model years 1993–2008’’.

4 (B) Subsection (a)(1)(B) is amended by

5 striking ‘‘the model years 2005–2008’’ and in6 serting ‘‘2009–2012’’.

Æ