U.S. Legislative Updates

The National Highway Traffic Safety Administration (NHTSA) and the U.S. Environmental Protection Agency (EPA) have issued a proposed regulation to further improve fuel economy and reduce greenhouse gas emissions for passenger cars and light trucks for model years 2017 through 2025. The standards proposed would apply to passenger cars and light trucks (from subcompact cars to large sedans and station wagons, to crossover utility vehicles, to SUVs, minivans, and pickup trucks) manufactured in model years 2017 through 2025. The proposal is expected to require increases in fuel efficiency equivalent to 54.5 mpg by MY 2025.


U.S. Senator Robert Menendez (D-NJ), Majority Leader Harry Reid (D-NV) and Senator Richard Burr (R-NC) have introduced the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011. S. 1863 would extend tax credits for natural gas vehicles and refueling infrastructure  and be fully paid for by a temporary user fee on natural gas used as a vehicle fuel.  The difference between this bill and other versions of the NAT GAS Act is the user fee.

The vehicle and infrastructure tax credits are available to the purchaser of the vehicle. For government fleets, and other tax exempt entities, the bill treats the seller as if they placed the fueling infrastructure or vehicle in service and allows the seller to claim the tax credit, but only if they disclose the value of the tax credit to the fleet purchaser.


On November 9, 2011, the Senate Environment and Public Works Committee (EPW) unanimously approved a two-year bipartisan highway reauthorization bill (S. 1813). The committee approval is the first step in the legislative process, which will hinge on Senate Finance Committee Chairman Max Baucus (D-MT) finding an additional $12 billion to offset the cost of the bill.  Meanwhile in the House, Speaker John Boehner (R-OH) announced that House Republicans will soon unveil legislation – the American Jobs & Infrastructure Act, which will be a six-year highway reauthorization.


The U.S. Department of Energy (DOE) has issued a proposed regulation that would allow fleets to earn compliance credits for the acquisition of hybrid vehicles. DOE’s Alternative Fuel Transportation Program (AFTP) mandates certain state government and utility company fleets (covered fleets) to acquire a specific percentage of alternative fueled vehicles annually. Seventy-five percent of a covered state fleet's annual light-duty acquisitions must be alternative fuel vehicles (AFVs) and ninety percent of a utility company’s vehicle acquisitions must be AFVs.  The proposal is a response to section 133 of the Energy Independence and Security Act of 2007, which directed the Secretary of Energy to allocate credits for hybrid vehicles.

The proposed rule would allocate credits in the following fashion:

• One-half (1/2) credit for a hybrid electric vehicle.
• One-half (1/2) credit for a plug-in hybrid electric vehicle.
• One-fourth (1/4) credit for a neighborhood electric vehicle.
• One-half (1/2) credit for a heavy-duty hybrid electric vehicle. 
• One (1) credit for every $25,000 invested in alternative fuel infrastructure and/or alternative fuel non-road equipment.

In the proposed rule, DOE explains its decision to provide only partial credit for hybrid vehicles saying that hybrids should not receive as much credit as AFVs, but rather should receive only partial credit because they do not have as significant an effect on petroleum replacement as do AFVs. DOE says, "...an HEV that is not an AFV; even if the vehicle achieves twice the efficiency of a comparable vehicle, the vehicle itself is only reducing petroleum consumption by half, whereas an AFV has the potential to decrease petroleum consumption in full if it is operated solely on alternative fuel."