Title: Zero-Emission Vehicles Act of 2018
Policy area: Environmental Protection

Summary:
Zero-Emission Vehicles Act of 2018
This bill amends the Clean Air Act to establish a zero-emission passenger vehicle standard. Specifically, the bill sets a schedule for increasing the percentage of zero-emission vehicles a vehicle manufacturer must sell, culminating in a requirement to sell only zero-emission vehicles by 2040. The bill also sets forth a zero-emission vehicle credit program that approves one zero-emission vehicle credit for each zero-emission vehicle sold in the United States.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3664 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3664

 To amend the Clean Air Act to create a national zero-emission vehicle 
                   standard, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 28, 2018

 Mr. Merkley (for himself and Mr. Whitehouse) introduced the following 
bill; which was read twice and referred to the Committee on Environment 
                            and Public Works

_______________________________________________________________________

                                 A BILL


 
 To amend the Clean Air Act to create a national zero-emission vehicle 
                   standard, and for other purposes.

    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 ``Zero-Emission Vehicles Act of 
2018''.

SEC. 2. NATIONAL ZERO-EMISSION VEHICLE STANDARD.

    (a) National Zero-Emission Vehicle Standard.--Part A of title II of 
the Clean Air Act (42 U.S.C. 7521 et seq.) is amended by adding at the 
end the following:

``SEC. 220. NATIONAL ZERO-EMISSION VEHICLE STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity of new passenger vehicle sales.--The 
        term `base quantity of new passenger vehicle sales' means the 
        total quantity of new passenger vehicles sold by a vehicle 
        manufacturer during the most recent calendar year.
            ``(2) Passenger vehicle.--The term `passenger vehicle' has 
        the meaning given the term `passenger motor vehicle' in section 
        32101 of title 49, United States Code.
            ``(3) Qualified electric vehicle.--The term `qualified 
        electric vehicle' means a passenger vehicle that is--
                    ``(A) a new qualified hybrid motor vehicle (as 
                defined in section 30B(d)(3) of the Internal Revenue 
                Code of 1986); or
                    ``(B) a new qualified plug-in electric drive motor 
                vehicle (as defined in section 30D(d) of the Internal 
                Revenue Code of 1986).
            ``(4) Retire.--The term `retire', with respect to a zero-
        emission vehicle credit, means to disqualify the zero-emission 
        vehicle credit for any subsequent use under this section, 
        including sale, transfer, exchange, or submission in 
        satisfaction of a compliance obligation.
            ``(5) Vehicle manufacturer.--
                    ``(A) In general.--The term `vehicle manufacturer' 
                means an entity that--
                            ``(i) engaged in the manufacturing of new 
                        passenger vehicles; and
                            ``(ii) sold not fewer than 100 new 
                        passenger vehicles to ultimate purchasers, 
                        either directly or through an affiliate, such 
                        as a dealer.
                    ``(B) Exclusions.--The term `vehicle manufacturer' 
                does not include--
                            ``(i) a motor vehicle parts supplier; or
                            ``(ii) a dealer.
            ``(6) Zero-emission vehicle.--The term `zero-emission 
        vehicle' means a passenger vehicle that produces zero exhaust 
        emissions of any criteria pollutant, precursor pollutant, or 
        greenhouse gas in any mode of operation or condition, as 
        determined by the Administrator.
    ``(b) Compliance.--For calendar year 2030 and each calendar year 
thereafter, each vehicle manufacturer shall meet the requirements of 
subsections (c) and (d) by submitting to the Administrator, not later 
than April 1 of the following calendar year, as applicable--
            ``(1) for a vehicle manufacturer that fails to meet the 
        minimum required percentage of new zero-emission vehicle sales 
        for the applicable calendar year, as determined under 
        subsection (c), a quantity of zero-emission vehicle credits 
        sufficient to offset that excess, as determined by the 
        Administrator; or
            ``(2) for a vehicle manufacturer that meets or exceeds the 
        minimum required percentage of new zero-emission vehicle sales 
        for the applicable calendar year, as determined under 
        subsection (c), a certification of that compliance, as the 
        Administrator determines to be appropriate.
    ``(c) Minimum Required Annual Percentage of New Zero-Emission 
Vehicle Sales.--For calendar years 2030 through 2040, in annual 
increments, the minimum annual percentage of the base quantity of new 
passenger vehicle sales of a vehicle manufacturer that shall be zero-
emission vehicles, or otherwise credited towards the percentage 
requirement pursuant to subsection (e), shall be the applicable 
percentage specified in the following table:

 ``Minimum Required Annual Percentage of New Zero-Emission Vehicle Sales
------------------------------------------------------------------------
                       Calendar Year                          Percentage
------------------------------------------------------------------------
2030.......................................................         50.0
2031.......................................................         55.0
2032.......................................................         60.0
2033.......................................................         65.0
2034.......................................................         70.0
2035.......................................................         75.0
2036.......................................................         80.0
2037.......................................................         85.0
2038.......................................................         90.0
2039.......................................................         95.0
2040.......................................................       100.0.
------------------------------------------------------------------------

    ``(d) Requirement for 2040 and Thereafter.--For calendar year 2040 
and each calendar year thereafter, a vehicle manufacturer shall sell 
only zero-emission vehicles.
    ``(e) Zero-Emission Vehicle Credits.--
            ``(1) In general.--A vehicle manufacturer may satisfy the 
        requirements of subsection (b) through the submission of zero-
        emission vehicle credits--
                    ``(A) issued to the vehicle manufacturer under 
                subsection (f); or
                    ``(B) obtained by purchase, transfer, or exchange 
                under subsection (g).
            ``(2) Limitation.--A zero-emission vehicle credit may be 
        counted toward compliance with subsection (b) only once.
    ``(f) Issuance of Zero-Emission Vehicle Credits.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of this section, the Administrator shall establish by 
        rule a program--
                    ``(A) to verify and issue zero-emission vehicle 
                credits to vehicle manufacturers;
                    ``(B) to track the sale, transfer, exchange, carry 
                over, and retirement of zero-emission vehicle credits; 
                and
                    ``(C) to enforce the requirements of this section.
            ``(2) Application.--
                    ``(A) In general.--A vehicle manufacturer that 
                sold, either directly or through an affiliate, such as 
                a dealer, a new zero-emission vehicle or a qualified 
                electric vehicle in the United States may apply to the 
                Administrator for the issuance of a zero-emission 
                vehicle credit.
                    ``(B) Eligibility.--To be eligible for the issuance 
                of a zero-emission vehicle credit, a vehicle 
                manufacturer shall demonstrate to the Administrator 
                that the vehicle manufacturer sold 1 or more zero-
                emission vehicles or qualified electric vehicles in the 
                previous calendar year.
                    ``(C) Contents.--The application shall indicate--
                            ``(i) the type of zero-emission vehicle or 
                        qualified electric vehicle that was sold;
                            ``(ii) the State in which the zero-emission 
                        vehicle or qualified electric vehicle was sold; 
                        and
                            ``(iii) any other information determined to 
                        be appropriate by the Administrator.
                    ``(D) Aggregation.--An application for a zero-
                emission vehicle credit under subparagraph (A) may 
                aggregate information on all zero-emission vehicles and 
                qualified electric vehicles sold by the vehicle 
                manufacturer in the applicable calendar year.
            ``(3) Quantity of zero-emission vehicle credits.--
                    ``(A) Zero-emission vehicles.--The Administrator 
                shall issue to a vehicle manufacturer the application 
                under paragraph (2) of which is approved 1 zero-
                emission vehicle credit for each zero-emission vehicle 
                sold in the United States.
                    ``(B) Qualified electric vehicles.--For a qualified 
                electric vehicle sold by a vehicle manufacturer the 
                application under paragraph (2) of which is approved, 
                the Administrator shall issue a partial zero-emission 
                vehicle credit based on the estimated proportion of the 
                mileage driven on the battery of the qualified electric 
                vehicle, as determined by the Administrator.
                    ``(C) Fuel-efficient vehicles.--The Administrator 
                may issue a partial zero-emission vehicle credit for a 
                passenger vehicle that consumes less gasoline, as 
                compared to comparable passenger vehicles (as 
                identified by the Administrator), based on the 
                estimated proportion of fuel savings, as determined by 
                the Administrator.
                    ``(D) Credit banking.--A zero-emission vehicle 
                credit issued for any calendar year that is not 
                submitted to comply with the minimum annual percentage 
                of new zero-emission vehicles requirement of subsection 
                (c) during that calendar year may be carried forward 
                for use pursuant to subsection (b)(1) within the next 5 
                years, but not later than 2040.
    ``(g) Zero-Emission Vehicle Credit Trading.--
            ``(1) In general.--A zero-emission vehicle credit for any 
        calendar year before 2040 that is not submitted to the 
        Administrator to comply with the minimum annual percentage of 
        new zero-emission vehicles requirement of subsection (c) for 
        that calendar year may be sold, transferred, or exchanged by 
        the vehicle manufacturer to which the credit is issued or by 
        any other entity that acquires the zero-emission vehicle 
        credit.
            ``(2) Delegation.--The Administrator may delegate to an 
        appropriate market-making entity the administration of a 
        national tradeable zero-emission vehicle credit market for 
        purposes of creating a transparent national market for the sale 
        or trade of zero-emission vehicle credits.
    ``(h) Zero-Emission Vehicle Credit Retirement.--
            ``(1) In general.--Any entity that obtains legal rights to 
        a zero-emission vehicle credit may retire the zero-emission 
        vehicle credit in any calendar year.
            ``(2) Use of retired zero-emission vehicle credit.--A zero-
        emission vehicle credit retired under paragraph (1) may not be 
        used for compliance with subsection (b) in--
                    ``(A) the calendar year in which the zero-emission 
                vehicle credit is retired; or
                    ``(B) any subsequent calendar year.
    ``(i) Information Collection.--The Administrator may collect the 
information necessary to verify and audit--
            ``(1) the annual sales of passenger vehicles of any vehicle 
        manufacturer;
            ``(2) a zero-emission vehicle credit submitted by a vehicle 
        manufacturer pursuant to subsection (b)(1);
            ``(3) the validity of a zero-emission vehicle credit 
        submitted for compliance by a vehicle manufacturer to the 
        Administrator; and
            ``(4) the quantity of passenger vehicle sales in the United 
        States of all vehicle manufacturers.
    ``(j) State Programs.--
            ``(1) In general.--Nothing in this section shall preempt 
        the authority of a State or political subdivision of a State to 
        adopt or enforce any law (including regulations) relating to 
        motor vehicles, including the authority to set standards for 
        motor vehicle emissions and zero-emission vehicle requirements 
        under section 177 and section 209.
            ``(2) Compliance with section.--No law or regulation of a 
        State or political subdivision of a State shall relieve any 
        vehicle manufacturer from compliance with any requirement 
        otherwise applicable under this section.
    ``(k) Regulations.--Not later than 1 year after the date of 
enactment of this section, the Administrator shall promulgate 
regulations to implement this section.
    ``(l) Enforcement.--
            ``(1) Civil penalty.--
                    ``(A) In general.--A vehicle manufacturer that 
                fails to comply with subsection (b) shall be liable for 
                a civil penalty, assessed by the Administrator, in an 
                amount that is equal to twice the average value of the 
                aggregate quantity of zero-emission vehicle credits 
                that the vehicle manufacturer failed to submit in 
                violation of that subsection, as determined by the 
                Administrator.
                    ``(B) Enforcement.--The Administrator shall assess 
                any civil penalty under subparagraph (A).
                    ``(C) Deposit.--With respect to any civil penalty 
                paid to the Administrator pursuant to subparagraph (A), 
                the Administrator shall deposit the amount into the 
                Highway Trust Fund established by section 9503(a) of 
                the Internal Revenue Code of 1986.
            ``(2) Injunction.--After calendar year 2040, the 
        Administrator may issue an injunction on the manufacture of any 
        passenger vehicles other than zero-emission vehicles by a 
        vehicle manufacturer.''.
    (b) Table of Contents Amendment.--The table of contents of the 
Clean Air Act (42 U.S.C. prec. 7401) is amended by adding at the end of 
the items relating to part A of title II the following:

``Sec. 220. National zero-emission vehicle standard.''.
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