Statements on Introduced Bills and Joint Resolutions - S. 795

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. DURBIN:

S. 795. A bill to amend the Internal Revenue Code of 1986 to provide additional tax incentives for enhancing motor vehicle fuel efficiency, and for other purposes; to the Committee on Finance.

Mr. DURBIN. Mr. President, today I rise to introduce a package of legislation—two bills—designed to put us back on track for improved fuel efficiency among automobiles.

I support a balanced, forward-looking energy policy, which should include a strong provision to lessen our dependence on foreign oil. In 2002, the Senate spent several weeks debating energy policy, including fuel efficiency. Unfortunately, a strong bill on this topic was not enacted into law last year.

Both chambers of Congress are currently crafting a national energy policy. As the challenging times we currently face demonstrates, we cannot delay in addressing our national energy policy, including oil consumption.

Throughout the debate on energy policy, I have emphasized that the best way to lessen our Nation's dependence on foreign oil is to improve the fuel efficiency of our automobiles. Transportation as a sector is the largest user of petroleum. If we are truly committed to crafting a forward-thinking energy policy, automobile fuel efficiency is the place to start.

In 1975 the United States Congress had a vision: to double the fuel efficiency of our Nation's passenger vehicles in ten years. By 1985 the automotive industry achieved the goal that Congress set. As of 2001, thanks to the Corporate Average Fuel Economy, CAFE, law, oil consumption was about 2.8 million barrels per day lower than it otherwise would be.

Unfortunately, progress is now at a stand-still, and in fact, the average fuel economy in the United States has slipped since 1985. Since peaking at 22.1 mpg in 1987 and 1998, average fuel economy declined nearly eight percent to 20.4 in 2001, lower than it had been at any time since 1980. Average fuel economy for automobiles 8,500 pounds and fewer continues to decline. One major factor in this regression is the fact that passenger standards have not increased since 1985. While the Bush Administration has recently increased non-passenger standards by a modest 1.5 mpg, this is not enough to compensate for the progress we have failed to achieve for more than a decade.

Another reason why we are losing ground in terms of fuel efficiency is the exploitation of the "non-passenger vehicle" category. Originally intended to cover trucks used for business-oriented purposes, such as farming and construction, this category soon was seriously abused, so that it now includes minivans, sport utility vehicles, SUVs, and cross-over utility vehicles, CUVs.

In addition, out-dated provisions of our tax code have encouraged increased manufacturing and purchasing of non-passenger vehicles. For example, the Federal gas guzzler excise tax, enacted in 1978, exempted non-passenger vehicles. At the time, few non-passenger vehicles existed, aside from heavy duty trucks and vans. But today, sales of SUVs, minivans, and CUVs make up over 30 percent of new vehicle purchases. As these sales have grown, these vehicles have enjoyed increasing subsidies by the Federal Government. In 1999, the SUV loophole in the gas guzzler tax cost the government $5.6 billion in uncollected taxes.

For those in America who want to make a difference in terms of energy policy: take a look at the parking lots across America. Take a look at the inefficient vehicles we are driving on the road today, because this Congress and country have not shown the leadership to spur development of more efficient cars and trucks in America.

We can improve the fuel efficiency of vehicles. We have done it in the past, and we can do it again. A panel at the National Academy of Sciences, the Union of Concerned Scientists, and other reputable organizations have documented the myriad technologies available today, and emerging technologies, that will reduce or eliminate the need for oil in our vehicles.

Today we squarely face the question and challenge of energy security. I believe American families are ready to do their part for their country by purchasing more fuel-efficient vehicles. And I believe the auto manufacturers, scientists and engineers of this country are ready to step up to the plate and produce more fuel-efficient vehicles. By supporting improved fuel economy, we can lead and demonstrate to future generations that we are prepared to make a sacrifice for our national security, environment, and public health.

Many have already voiced their support for decreasing our dependence on oil. I am submitting for the record several editorials, which are just a sample of the many public calls for enacting an energy policy that includes a way to conserve oil. I also am submitting letters from national organizations calling for more fuel efficient vehicles. I ask that these documents be printed in the RECORD at the end of my statement.

Today I am introducing two bills to get us back on the track of progress, to increase fuel efficiency for both passenger and non-passenger vehicles.

The Automobile Fuel Efficiency Improvements Act will increase the fuel economy standard for both types of vehicles. It will increase the CAFE standard of passenger automobiles to 40 miles a gallon by 2015, a 60 percent increase above the current average of 25 miles a gallon, with the first increase required in model year 2006. The bill also will increase the fuel economy of non-passenger automobiles to 27.5 miles a gallon by 2015, a 60 percent increase above the current average of 17.5 miles a gallon, with the first increase required in model year 2006. Through the CAFE standards required this bill, we will save a cumulative 123 billion gallons of gasoline, and over 250 million metric tons of carbon dioxide emissions, by 2015.
This bill also will close the loopholes in the non-passenger vehicle definition. It will update the weight cut-off for passenger and non-passenger automobiles, to reflect changing trends in vehicle weight. Many vehicles, such as the new SUV called the Hummer, weigh more than 8,500 pounds, the current weight cut-off for regulation under CAFE. This bill will regulate vehicles up to 12,000 pounds, in order to prevent large passenger vehicles from circumventing the system. In addition, SUVs, minivans, and CUVs would be considered passenger vehicles under this bill.

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Another provision of this bill would establish a Federal procurement requirement for the purchase of vehicles that exceed CAFE standards. The bill also requires a study to improve the accuracy of the EPA test for fuel economy, and would implement necessary changes to the test, so that we can better account for improvements in fuel efficiency based on how vehicles are truly performing on the roads. Finally, this bill would update the civil penalties for violating CAFE laws, to adjust the amounts for inflation.

The second bill I am introducing today, the Tax Incentives for Fuel Efficient Vehicles Act, would modify the tax code. First, this bill would create a new tax credit for purchasers of passenger and non-passenger vehicles that exceed CAFE standards by at least 5 miles a gallon. Second, this bill would modify the gas guzzler tax, effective at the beginning of Model Year 2006, so that SUVs and other passenger vehicles currently escaping the tax through an existing loophole would be included. Heavy-duty trucks and vans would continue to be excluded.

Modifying the gas guzzler tax to include SUVs, minivans, and CUVs will help us advance the policy goal of discouraging vehicles that are especially inefficient in terms of energy consumption, while at the same time raising revenues that can be used to provide an incentive for vehicles that are especially fuel-efficient. This approach will help spawn investment in automobiles that are better for our environment, energy security and consumers.

I would ask my colleagues to note that it is my intention that the Tax Incentives for Fuel Efficient Vehicles Act will have virtually no cost to the Federal Government. If the revenues raised by the expansion of the gas guzzler tax do not adequately compensate for the cost of the credit, I will adjust the size of the credit accordingly.

I am proud to have the support of Senators NELSON, FL, JEFFORDS, CORZINE, REED and KENNEDY in introducing the Automobile Fuel Efficiency Improvements Act. Also I am pleased that the following organizations are supporting the Automobile Fuel Efficiency Improvements Act: Sierra Club, Union of Concerned Scientists, Natural Resources Defense Council, U.S. PIRG, National Environmental Trust, Friends of the Earth, Public Citizen, The Wilderness Society, Citizen Action Illinois, Coalition on the Environment and Jewish Life, National Council of Churches, Hadassah, the Women's Zionist Organization of America, American Jewish Committee, Jewish Council for Public Affairs, Union of American Hebrew Congregations, Central Conference of American Rabbis, MoveOn, and Chesapeake Climate Action Network.

For the benefit of our children and future generations, I urge my colleagues to support this important legislation.