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[Congressional Record Volume 155, Number 8 (Wednesday, January 14, 2009)]
[Senate]
[Pages S394-S397]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself, Ms. Collins, and Mr. Schumer):
  S. 247. A bill to accelerate motor fuel savins nationwide and provide 
incentives to registered owners of high fuel consumption automobiles to 
replace such automobiles with fuel efficient automobiles or public 
transportation; to the Committee on Energy and Natural Resources.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce the 
``Accelerated Retirement of Inefficient Vehicles Act.'' This 
legislation is cosponsored by Senators Susan Collins and Charles 
Schumer. A companion bill is also being introduced today in the House 
of Representatives by Mr. Israel and Mr. Inslee.
  Let me first acknowledge the important role of one of my colleagues, 
Senator Salazar, who initiated much of the thought and drafting for 
this legislation at the end of the last Congress. I thank him for his 
leadership, and I thank him for letting us take up the work needed to 
move this bill forward as he begins to transition into his new role 
with the incoming Obama administration.
  Last Congress, we successfully enacted legislation--which I authored

[[Page S395]]

with Senator Snowe and others--to improve the fuel efficiency of 
America's fleet of new cars, trucks and SUVs by 10 miles per gallon 
over 10 years, or from 25 miles per gallon to at least 35 miles per 
gallon by 2020.
  But the fact is that we face real challenges with trying to encourage 
drivers to trade in their older, less fuel efficient vehicles for a 
cleaner and more fuel efficient vehicle--particularly in this tough 
economic climate.
  This bill is designed to address that problem.
  First, let me explain this legislation.
  This bill would establish an incentive program at the Department of 
Energy to provide a voucher, or coupon, of between $2,500 to $4,500 to 
a consumer who trades in an inefficient, used vehicle for a much more 
efficient car, truck, or SUV.
  The traded-in vehicles--which must be then dismantled or scrapped--
must meet the following requirements; have a fuel economy of no more 
than 18 miles per gallons, be in drivable condition, and have been 
registered for at least the past 120 days.
  To receive the benefit of the coupon, purchased vehicles must exceed 
Corporate Average Fuel Economy, CAFE, Standards for that class of 
vehicle by at least 25 percent and have a suggested retail price below 
$45,000.

  The size of the coupon varies based upon the expected oil savings 
created by trading in the vehicle.
  The voucher program will be set up to provide larger credits to new, 
more recent vehicles that would otherwise be on the road for many more 
years, while older ``clunker'' models would be eligible for smaller 
credits.
  The bill specifies that during the first year of the program, 
vouchers will be issued for the following amounts: For model year 2002 
and later: new vehicle: $4,500, used vehicle: $3,000, transit fare 
credit: $3,000. For model year 1999-2001: new vehicle: $3,000, used 
vehicle: $2,000, transit fare credit: $2,000. For model year 1998 and 
earlier: new vehicle: $2,500, used vehicle: $1,500, transit fare 
credit: $1,500. In each subsequent year, 2010, 2011, and 2012, the 
model years would be advanced by 1 year.
  Vouchers would be eligible for redemption for up to 2 years after the 
date of issuance, and no individual would be eligible to obtain more 
than one voucher in any 3-year period.
  Dealers, dismantlers and scrap recycling facilities would also be 
eligible for a payment of $50 per vehicle, or an alternative amount to 
be specified by the Secretary of Energy.
  Simply put, this legislation offers a unique opportunity to both 
stimulate automobile industry sales and reduce vehicular oil use, 
creating a win-win policy for all involved.
  As we know, our Nation's automobile industry is in serious trouble.
  Chrysler, General Motors, and Ford have all asserted in their recent 
viability plans that their dire financial situation is a direct result 
of the collapse in automobile sales.
  The new car sales rate has dropped to less than 11 million vehicles 
sold annually, compared to the 16.2 million vehicles sold in the United 
States in 2007.
  The major Detroit and Japanese carmakers all reported double digit 
sales drops for December. General Motors reported sales dropped 31 
percent; Ford Motor Co. reported a drop of 32 percent; Chrysler LLC 
reported sales plummeted 53 percent; Honda Motor Co. said its sales 
fell 34 percent; Nissan North America said its sales fell 30 percent 
and Toyota Motor Co. said its U.S. sales fell 37 percent.

  Bottom line: The automobile companies are all in trouble because far 
fewer people are buying automobiles.
  According to J.D. Power and Associates, this has produced dealer lots 
full of vehicles that can't be sold. Over the past year the number of 
days that a vehicle sits on a lot has almost doubled.
  The problem is most severe for Chrysler, GM and Ford. Their vehicles 
all sat on dealer lots for in excess of 100 days last year.
  By encouraging automobile sales, this legislation would go a long way 
to addressing the significant troubles that America's once mighty car 
industry now faces.
  While emergency bridge loans help auto companies make payroll, only 
stimulating automobile sales will cure the disease that confronts the 
automobile sector.
  By creating a voucher system for the purchase of a vehicle with 
certain attributes, this legislation would stimulate sales at precisely 
the right moment.
  Perhaps that is why General Motors went out of its way to endorse 
this kind of program in its recent Viability Plan, recommended ``tax 
credits for scrapping older, higher-carbon emitting vehicles.''
  This legislation would also assist owners of the least efficient 
vehicles who are least likely to trade their cars in for something more 
efficient.
  The trade-in value of inefficient vehicles has plummeted, making a 
trade-in financially difficult.
  In a November 2008 analysis, Kelley Blue Book concluded: ``[T]his 
year's vehicles with the lowest retained value include vehicles that 
are not fuel friendly with large V-8 engines. . . . These gas misers . 
. . will only maintain 20 percent of their original value after five 
years of ownership.''
  Bottom line: The legislation is stimulus of the most important kind. 
It would provide incentives for new vehicle sales, incentivize the 
trade-in of inefficient vehicles, and reward consumers who want to 
reduce their oil use and carbon footprint.
  This proposal also provides important benefits for the environment--
and addressing the challenges of climate change.
  I have been a long time champion of increasing fuel economy 
standards, and I was extremely proud to have authored the new fuel 
economy law with Senator Snowe, which was enacted by Congress and 
signed into law in December 2007.

  But new CAFE standards will not take effect until model year 2011. 
They cannot make up for our failure to increase standards for the past 
3 decades.
  The bill we are introducing today would target the very vehicles that 
CAFE standards are unable to reach: older fuel-inefficient cars, trucks 
and SUVs
  It will provide incentives to consumers who wish to buy the most 
efficient vehicles available during the 2 years before the new CAFE 
standards will require improvement.
  It will provide incentives to remove the most inefficient vehicles 
that would have never been part of the fleet had Congress acted to 
increase CAFE standards 5 years ago.
  The result is considerable oil savings and significant reductions of 
greenhouse gas emissions.
  According to analysis by the non-partisan American Council for an 
Energy Efficient Economy, ACEEE, by 2013 this legislation would prompt 
the trade in of between 500,000 and 1 million of the dirtiest, least 
efficient vehicles on the road today.
  As a result, by 2013 between 40,000 and 80,000 fewer barrels of oil 
per day will be burned; between 6.6 million metric tons and 13.3 
million metric tons of carbon dioxide per year will not be emitted.
  This is the equivalent of removing between 1.1 million and 2.2 
million cars from the road.
  In our current economic and environmental circumstance, there are few 
opportunities to both help the automobile industry evolve and improve 
the fuel economy of the fleet.
  This idea--providing consumers with an incentive to trade in their 
inefficient vehicle for something far better--will stimulate the 
economy and save oil, and I encourage my colleagues to support it.
  I strongly encourage the Obama administration and the Appropriations 
Committee to authorize and fund this proposal in the stimulus.
  I am committed to advancing the goals of stimulus and fuel savings, 
and have put what I believe to be the best proposal to meet these 
goals.
  I understand that within the details of this idea, there may be 
different views. I am open to suggestions that improve the structure of 
the program proposed by this legislation, and ask my colleagues to 
communicate their thoughts soon.
  Finally, I hope non-related matters--such as trade policy--will not 
prevent my colleagues from supporting this legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

[[Page S396]]

                                 S. 247

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Accelerated Retirement of 
     Inefficient Vehicles Act of 2009''.

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Automobile; manufacturer; model; model year.--The terms 
     ``automobile'', ``manufacturer'', ``model'', and ``model 
     year'' have the meanings given such terms in section 32901(a) 
     of title 49, United States Code.
       (2) Certificate of title.--The term ``certificate of 
     title'' means a State-issued document showing ownership of an 
     automobile.
       (3) Dealer.--The term ``dealer'' means a person residing in 
     a State that engages in the sale, lease, or distribution of 
     new automobiles to the first person (except a dealer buying 
     as a dealer) that is an ultimate purchaser.
       (4) Dismantler.--The term ``dismantler'' means a person 
     residing in a State who is licensed to operate a business 
     employing 3 or more persons to take automobiles apart for the 
     purpose of reclaiming usable parts and recyclable materials.
       (5) Eligible fleet operator.--The term ``eligible fleet 
     operator'' means--
       (A) the operator of a fleet of automobiles that is owned by 
     a State, Indian tribe, or local government; or
       (B) the owner of 2 or more automobiles authorized to carry 
     passengers for hire under State, tribal, or local regulations 
     governing the operation of taxi cabs.
       (6) Eligible high fuel consumption automobile.--The term 
     ``eligible high fuel consumption automobile'' means a high 
     fuel consumption automobile that, at the time it is presented 
     for participation in the program established under section 
     3--
       (A) is in drivable condition; and
       (B) has been continuously registered and licensed to 
     operate in any State for a period of not fewer than 120 
     consecutive days for operation on public roads.
       (7) Fuel efficient automobile.--The term ``fuel efficient 
     automobile'' means an automobile manufactured for any model 
     year after 2003 that, at the time of the original sale to a 
     consumer--
       (A) carries a manufacturer's suggested retail price of 
     $45,000 or less;
       (B) complies with the applicable air emission and related 
     requirements under the National Emission Standards Act (42 
     U.S.C. 7521 et seq.);
       (C) qualifies for listing in emission bin 1, 2, 3, 4, or 5 
     (as defined in section 86.1803-01 of title 40, Code of 
     Federal Regulations); and
       (D)(i) for automobiles manufactured in any of the model 
     years 2004 through 2010, achieves a measured fuel economy 
     level that exceeds by 25 percent the fuel economy standard 
     prescribed by the Secretary of Transportation under section 
     32902 of title 49, United States Code, for the model year and 
     compliance category of such automobile; or
       (ii) for automobiles manufactured for any model year after 
     2010, achieves a measured fuel economy level that exceeds by 
     25 percent the fuel economy target prescribed by the 
     Secretary of Transportation under such section 32902 for the 
     model year and automobile attribute group into which such 
     automobile is classified.
       (8) High fuel consumption automobile.--The term ``high fuel 
     consumption automobile'' means an automobile manufactured for 
     any model year before 2008 for which the originally certified 
     measured fuel economy level is less than 18 miles per gallon.
       (9) Measured fuel economy level.--The term ``measured fuel 
     economy level'' means the fuel economy level of a new 
     automobile model measured in accordance with section 32904 of 
     title 49, United States Code, and regulations prescribed 
     thereunder.
       (10) New automobile.--The term ``new automobile'' means an 
     automobile for which a manufacturer, distributor, or dealer 
     has never transferred the equitable or legal title to such 
     automobile to an ultimate purchaser.
       (11) Nonpassenger automobile.--The term ``nonpassenger 
     automobile'' means an automobile classified as a light truck 
     under part 523 of title 49, Code of Federal Regulations.
       (12) Person.--The term ``person'' has the meaning given 
     such term in section 551 of title 5, United States Code.
       (13) Program.--The term ``Program'' means the Accelerated 
     Retirement of Inefficient Vehicles Program established under 
     section 3.
       (14) Registered owner.--The term ``registered owner'' 
     means, with respect to an automobile, the person whose name 
     appears on the current State certificate of registration for 
     such automobile.
       (15) Scrap recycling facility.--The term ``scrap recycling 
     facility'' means a business--
       (A) employing 3 or more individuals at a fixed location in 
     a State, where machinery and equipment are utilized for 
     processing and manufacturing scrap metal into prepared 
     grades; and
       (B) whose principal product is scrap iron, scrap steel, or 
     nonferrous metallic scrap for sale for remelting purposes.
       (16) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (17) State.--The term ``State'' has the meaning given such 
     term in section 32101 of title 49, United States Code.
       (18) Ultimate purchaser.--The term ``ultimate purchaser'' 
     means, with respect to any new automobile, the first person 
     who in good faith purchases such automobile for purposes 
     other than resale.
       (19) Voucher.--The term ``voucher'' means a voucher issued 
     to the registered owner of an eligible high fuel consumption 
     automobile under section 3(a).

     SEC. 3. ACCELERATED RETIREMENT OF INEFFICIENT VEHICLES 
                   PROGRAM.

       (a) Establishment.--There is established in the Department 
     of Energy a program to be known as the ``Accelerated 
     Retirement of Inefficient Vehicles Program'', through which 
     the Secretary shall--
       (1) authorize the issuance of a voucher, subject to the 
     limitations described in subsection (e)(1), to any person or 
     eligible fleet operator who is a registered owner of an 
     eligible high fuel consumption automobile, which voucher may 
     be used solely by such person or eligible fleet operator for 
     the purchase of a new or used fuel efficient automobile upon 
     the transfer of the certificate of title to such high fuel 
     consumption automobile to a dealer, dismantler, or scrap 
     recycling facility participating in the Program;
       (2) allow any dealer, dismantler, or scrap recycling 
     facility to participate in the Program if the dealer, 
     dismantler, or scrap recycling facility agrees to--
       (A) scrap any eligible high fuel consumption automobile 
     upon receiving the certificate of title to such automobile 
     pursuant to the Program;
       (B) issue a voucher to the registered owner of such 
     automobile;
       (C) certify to the Secretary that such automobile has been 
     crushed or shredded in accordance with subsection (e)(4); and
       (D) comply with all applicable requirements under this Act 
     and any regulations promulgated by the Secretary to carry out 
     this Act;
       (3) require that all dealers accept vouchers presented by a 
     person or eligible fleet operator described in paragraph (1) 
     as partial payment for the purchase of a new or used fuel 
     efficient automobile; and
       (4) make payments to dealers for vouchers accepted by such 
     dealers under paragraph (3) between January 1, 2009 and 
     December 31, 2014, in accordance with the provisions of this 
     section.
       (b) Amount of Voucher.--
       (1) Voucher redemption value if used toward purchase of new 
     fuel efficient automobile.--A voucher issued under the 
     Program during the 4-year period beginning on January 1, 
     2009, may be applied to offset the purchase price of a new 
     fuel efficient automobile by--
       (A) $4,500 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 7 or fewer years 
     less than the calendar year in which the voucher was issued;
       (B) $3,000 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 8 to 10 years less 
     than the calendar year in which the voucher was issued; and
       (C) $2,500 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 11 or more years 
     less than the calendar year in which the voucher was issued.
       (2) Voucher redemption value if used toward purchase of 
     used fuel efficient automobile.--A voucher issued under the 
     Program during the 4-year period beginning on January 1, 
     2009, may be applied to offset the purchase price of a used 
     fuel efficient automobile by--
       (A) $3,000 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 7 or fewer years 
     less than the calendar year in which the voucher was issued;
       (B) $2,000 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 8 to 10 years less 
     than the calendar year in which the voucher was issued; and
       (C) $1,500 if the eligible high fuel consumption automobile 
     was manufactured for a model year that is 11 or more years 
     less than the calendar year in which the voucher was issued.
       (3) Voucher redemption value if used toward purchase of a 
     highly fuel efficient automobile.--The values determined 
     under paragraphs (1) or (2) shall be increased by $1,000 if 
     the voucher issued under the Program is applied to offset the 
     purchase price of a fuel efficient automobile that achieves a 
     measured fuel economy level that exceeds by 50 percent the 
     fuel economy standard prescribed by the Secretary of 
     Transportation under section 32902 of title 49, United States 
     Code, for the model year and compliance category of such 
     automobile.
       (4) Voucher redemption value if used for transit fare 
     credits.--A voucher issued under the program during the 4-
     year period beginning on January 1, 2009, may be applied to 
     acquire single-passenger transit fare credits from 
     participating transit operators in an amount equal to the 
     amounts provided under paragraph (2).
       (c) Administrative Payments to Participating Dealers, 
     Dismantlers, and Scrap Recycling Facilities.--The Secretary 
     shall provide for a payment of $50, or another amount 
     determined reasonable by the Secretary, to participating 
     dealers, dismantlers, and scrap recycling facilities for each 
     voucher issued under the Program in consideration of the 
     administrative costs related to such issuance.
       (d) Lists of Eligible Automobiles to Be Maintained.--The 
     Secretary, in cooperation

[[Page S397]]

     with the Secretary of Transportation, shall prepare, 
     maintain, publicize, and make available through the Internet, 
     lists of automobiles, classified by make and model, which are 
     classified under this section as--
       (1) eligible high fuel consumption automobiles;
       (2) new fuel efficient automobiles; or
       (3) used fuel efficient automobiles.
       (e) Program Specifications.--
       (1) Limitations.--
       (A) Vouchers per person.--Not more than 1 voucher may be 
     issued to a person in any period of 3 successive calendar 
     years. A person may be issued a voucher if the person 
     demonstrates, in a manner prescribed by rule by the 
     Secretary, that such person--
       (i) is the registered owner of an eligible high fuel 
     consumption automobile; and
       (ii) attests that such high fuel consumption automobile has 
     not been imported into the United States during the previous 
     4-month period.
       (B) Vouchers for eligible fleets.--A voucher for the 
     purchase of a new or used fuel efficient automobile from a 
     dealer may be issued to an eligible fleet operator for each 
     eligible high fuel consumption automobile for which such 
     eligible fleet operator is the registered owner, as 
     demonstrated in a manner prescribed by rule by the Secretary.
       (C) Offset.--A dealer--
       (i) shall credit the amount of the voucher being applied 
     toward the purchase of a fuel efficient automobile; and
       (ii) may not offset the amount of the voucher against any 
     other rebate or discount otherwise being offered by the 
     dealer or manufacturer.
       (D) Joint ownership.--Not more than 1 voucher may be issued 
     to the joint owners of an eligible high fuel consumption 
     automobile, unless such automobile is operated by an eligible 
     fleet operator.
       (E) No combination of vouchers.--A person may not apply 2 
     or more vouchers issued under the Program toward the purchase 
     of a single fuel efficient automobile.
       (F) Combination with other incentives permitted.--
     Notwithstanding any other provision of law, the availability 
     or use of a Federal or State tax incentive or a State-issued 
     voucher for the purchase of a fuel efficient automobile shall 
     not limit the value or issuance of a voucher under the 
     Program to any person or eligible fleet operator otherwise 
     eligible to receive such a voucher.
       (G) Duration.--Each voucher shall expire 2 years after the 
     date on which the voucher is issued and may not be renewed.
       (H) Prompt fulfillment of redemption requests required.--
     The Secretary shall provide for the payment of all vouchers 
     submitted to the Secretary for redemption in accordance with 
     the provisions of this Act not later than 60 days after such 
     submission, or within such lesser period as the Secretary 
     determines to be practicable.
       (I) Number and amount.--The total number and value of 
     vouchers issued under the Program may not exceed the amounts 
     appropriated for such purpose.
       (2) Consumer education program.--The Secretary shall carry 
     out a consumer education program aimed at informing persons 
     about the Program, its fuel economy purposes, and the 
     availability of vouchers under the Program.
       (3) Transit fare credits.--The Secretary shall promulgate 
     regulations that allow operators of bus and rail public 
     transit systems to redeem vouchers properly issued to any 
     person under this Act to offset the purchase price of annual 
     transit passes or any other form of individual transit fare 
     credit designated by the transit system operator. 
     Participating transit system operators shall establish the 
     terms and conditions for the ownership, use, and expiration 
     of any transit fare credits acquired through the use of a 
     voucher issued under this Act.
       (4) Disposition of eligible high fuel consumption 
     automobiles.--
       (A) In general.--Any automobile dealer, dismantler, or 
     scrap recycling facility who receives a certificate of title 
     to any eligible high fuel consumption automobile in exchange 
     for a voucher under the Program shall certify to the 
     Secretary, in such manner as the Secretary shall prescribe by 
     rule, that such automobile and engine--
       (i) have been crushed or shredded within such period as the 
     Secretary prescribes;
       (ii) have been processed prior to crushing or shredding to 
     ensure the removal and appropriate disposition of 
     refrigerants, antifreeze, lead products, mercury switches, 
     and such other toxic or hazardous vehicle components as the 
     Secretary may specify by rule; and
       (iii) have not been, and will not be, sold, leased, 
     exchanged, or otherwise disposed of for use as an automobile 
     in the United States or in any other country.
       (B) Savings provision.--Nothing in subparagraph (A) may be 
     construed to preclude a dismantler from--
       (i) selling any parts of such scrapped automobile other 
     than the engine block and drive train for use as replacement 
     parts; or
       (ii) retaining the proceeds from such sale.
       (C) Coordination.--The Secretary shall coordinate with the 
     Attorney General to ensure that the National Motor Vehicle 
     Title Information System is appropriately updated to reflect 
     the crushing or shredding of high fuel consumption 
     automobiles under this section.
       (f) Rulemaking.--Not later than 120 days after the date of 
     the enactment of this Act, the Secretary shall promulgate 
     regulations to implement the Program, including--
       (1) the removal and disposition of toxic or hazardous 
     materials from eligible high fuel consumption vehicles 
     presented for participation in the program; and
       (2) the enforcement of the penalties described in section 
     4.
       (g) Disclaimer.--Nothing in this Act or any other provision 
     of law limits the authority of Congress or the Secretary to 
     terminate or limit the Program or the issuance of vouchers 
     under the Program.

     SEC. 4. PENALTIES.

       (a) Violation.--It shall be unlawful for any person to 
     violate any provision under this Act or any regulations 
     issued pursuant to section 3(f).
       (b) Penalties.--Any person who commits a violation 
     described in subsection (a) shall be liable to the United 
     States Government for a civil penalty of not more than $5,000 
     for each violation. A separate violation shall be deemed to 
     have occurred for each day the person continues to be in 
     violation of any provision under this Act.

     SEC. 5. REPORT.

       The Secretary shall submit a report to the Committee on 
     Energy and Natural Resources of the Senate and the Committee 
     on Energy and Commerce of the House of Representatives every 
     6 months that specifies, for the most recent 6-month period--
       (1) the number of vouchers which have been used under the 
     Program; and
       (2) the make, model, model year, location of sale, and 
     manufacturing location of each vehicle traded in or purchased 
     under the Program.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated, for each of the 
     fiscal years 2009 through 2014, such sums as may be necessary 
     to carry out this Act, which sums shall remain available 
     until expended.
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