Hybrid Tax Credit Revisions
Congressman Rahm Emanuel (D-IL) introduced a domestic hybrid tax credit expansion bill that would add another $3,000 to "a new qualified hybrid motor vehicle which is assembled in the United States" and cap the total credit at $6,000. Right now, only the Escape Hybrid and Mercury Mariner would qualify for this perk, but both the Toyota Camry Hybrid and Nissan Altima Hybrid are going to be produced in the U.S. (in Kentucky and Tennessee, respectively), so they would qualify for the credit as well.

There are several other bills that would either remove the unproductive 60,000 vehicle cap on the tax credit, or provide an incentive to manufacturers to retool existing plants to produce efficient vehicles that use new technologies, including hybrids.

Comprehensive Oil Savings Bills
Two of the bills that impose these consumer and manufacturer incentives are comprehensive oil savings bills that set oil savings targets for federal agencies to meet. Both the House bill (H.R. 4409) and the Senate version (S. 2025) include several provisions that would help reduce oil usage for certain vehicles, but there is still no guarantee that the entire oil savings goals would actually be met. These bills have drawn together a diverse collection of supporters which is a sign of increasing support for reducing our use of petroleum and increasing advanced technology vehicle availability through a variety of policy approaches.

Representative Chris Shays (R-CT) introduced a comprehensive bill that would provide incentives to manufacturers to produce advanced technology vehicles, and remove the cap on the hybrid tax credits.

Other bills include Representative Jim Gerlach's (R-PA) oil savings bill that would provide incentives to manufacturers to produce efficient vehicles, and require that the improvements to the overall vehicle fleet are over and above existing fuel economy requirements. Senator Barak Obama (D-IL) and Congressman Jay Inslee (D-WA) also introduced bills (S.2045 and H.R. 4370, respectively) that would assist manufacturers with increasingly burdensome health care costs in exchange for the manufacturers agreement to produce advanced vehicles, including hybrids.

Finally, there are a couple of bills that place a windfall profits tax on oil companies, and use that revenue to either encourage manufacturers or consumers to produce more efficient automobiles. Senator Richard Durbin's (D-IL) bill would focus on automobile manufacturers and suppliers, while Representative Pallone's (D-NJ) bill would provide a tax credit to consumers of $1,000 for purchasing a vehicle that gets over 30 miles per gallon.

The Automobile Fuel Economy Act (S. 255)
Introduced in January 2003 by Senator Dianne Feinstein (D-CA) and Senator Olympia Snowe (R-Maine). Improving the Fuel Efficiency of SUVs and Light Trucks - To combat global warming and increase energy self-sufficiency, phases in an increase in CAFE standards for light duty trucks and SUVs so that by 2011 they would meet the same CAFE standards as cars do today. The bill also mandates that the federal fleet meet higher fuel economy standards.

HR.1815 is the companion bill to S. 255.

The SUV Business Tax Loophole Closure Act (S. 265)
Introduced in January 2003 by Senator Barbara Boxer (D-CA), Senator Hillary Clinton (D-NY), and Senator Charles Schumer (D-NY). This Act would close a tax loophole that effectively subsidizes purchases of large SUVs by small business owners (which could include professionals using the vehicle for personal transportation).

Congress previously capped the accelerated depreciation allowance for small-business automobile purchases at $7600, but excluded "light trucks" weighing over 6,000 pounds from this law, meaning to allow accelerated depreciation for trucks actually used in farming, construction and like industries. Lawmakers did not contemplate that "light trucks" would become immensely popular as personal transportation as they have in recent years. This has resulted in many small business owners buying unnecessarily large SUVs for personal transportation solely in order to get the tax write-offs. S. 265 would bring SUVs under the cap on accelerated depreciation for cars.
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Pending California Legislation

Assembly Bill 198, Joe Nation
Closure of Tax Loophole for Heavy, Polluting Vehicles

Under current federal law, small businesses and individuals are permitted to deduct up to $75,000 in the first year of purchase of a heavy vehicle weighing over 6000 pounds. While originally intended to help small businesses purchase heavy equipment (i.e. tractors), there are currently over 40 heavy, polluting vehicles (Sport Utility Vehicles, SUVs) which qualify for this tax exemption. A tax break such as this during difficult economic times is unacceptable. Thus, AB 848 denies depreciation deductions and small business expense deduction to the purchasers of these heavy vehicles, and offers these available monies as a tax credit to purchasers of environmentally friendly vehicles. Currently being held in the Senate Revenue and Taxation Committee.

Senate Bill (June 13, 2003)
A bill recently introduced by John Burton, representative of the 3rd Senate district of Marin, Sonoma and San Francisco counties, would prohibit state agencies and universities from buying or leasing SUVs for any purpose excluding emergency use, law enforcement or security purposes. If this law passes, the state can expect to save millions of dollars, helping to alleviate the current budget crisis.

Assembly Bill 844
This bill, authored by assembly member Joe Nation follows through on a legislative initiative begun in 2001 with SB 1170, which required the California Energy Commission to prepare a report on the need for and use of "low-rolling resistance tires" as replacement tires (such tires are usually standard on new vehicles because they help automakers meet CAFE standards, but are not usually available in the replacement tire market). The report found that use of these tires improved fuel efficiency by 3%, with a large potential to reduce California's petroleum consumption. AB 844 would require CEC, among other things, to develop a mandatory rating and labeling program for replacement tires to help consumers choose fuel-efficient replacement tires.

Assembly Bill 1500
This bill, proposed by Manny Diaz (Democrat-23rd District) would require that oil companies who operate in California must pay $1 per barrel of oil to the state government. This would generate $750 million a year earmarked for projects and programs that would reduce the impact of petroleum use on California's air and water.
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Pending Legislation in Other States

We'd like to include news and developments from other states in the future. If you're outside of California and have an interesting development you'd like to let us know about, please contact us.

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