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Hybrid Watchdog: 2006 Hybrids Legislative Outlook
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There’s been a flurry of interest in hybrids everywhere these days, and Washington is no exception.
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. They’re popular, at least in concept, as these bills have drawn together a diverse collection of supporters, from conservatives like Sam Brownback (R-KS), Jack Kingston (R-GA), and Jeff Sessions (R-AL) to moderate to liberal members such as Evan Bayh (D-IN) and Elliot Engel (D-NY). This newly formed collaboration on both sides of the aisle 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. Rep. Shays’s bill (H.R. 4384) also provides incentives to businesses and consumers to use natural gas and electricity more efficiently, and to increase there use of renewables.
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.
Windfall Profits & Fuel Economy Credits
The estimated costs of oil dependence on the U.S. economy total seven trillion dollars over the past three decades—as much as we paid on the national debt during that period.
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.
As you can see, there’s a lot of interest in Congress in trying to address oil usage and encourage hybrid technology (if you want to look at the specific text of any/all of these bills you can head to the Thomas website), but it’s still too early to tell if any of these bills will become law in the near future. With all of these bills it’s important to focus on the details to make sure that any federal dollars spent will actually encourage advanced technology AND decrease overall oil usage, which is not an easy thing to accomplish. We will continue to track all of these bills, and will update this Watchdog as events unfold.
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