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                                  Order Code RL33982




Corporate Average Fuel Economy (CAFE):
 A Comparison of Selected Legislation in
                     the 110th Congress




                         Updated August 16, 2007



                               Brent D. Yacobucci
                         Specialist in Energy Policy
          Resources, Science, and Industry Division

                                 Robert Bamberger
                         Specialist in Energy Policy
          Resources, Science, and Industry Division
         Corporate Average Fuel Economy (CAFE):
          A Comparison of Selected Legislation in
                    the 110th Congress

Summary
      The rise in crude oil and gasoline prices since the winter of 2006 has renewed
the focus on U.S. fuel consumption in the transportation sector. Wider concerns over
greenhouse gas emissions and climate change have contributed to interest in reducing
fossil fuel consumption and improving the efficiency of the U.S. transportation
sector. Possible changes to the federal Corporate Average Fuel Economy (CAFE)
standards are one policy option to address the issue.

     CAFE standards are fleetwide fuel economy averages that manufacturers must
meet each model year. Currently, separate CAFE standards are established for
passenger cars and light trucks, which include sport utility vehicles (SUVs), vans,
and pickup trucks. Several bills have been introduced in the 110th Congress to
modify the CAFE program. Senate energy legislation, H.R. 6, passed that body on
June 21, 2007; the bill includes language on CAFE. On August 3, 2007, the House
passed energy legislation -- H.R. 3221 (241-170) and H.R. 2776 (221-189) -- but
these bills did not include CAFE provisions. Two House bills addressing CAFE
(H.R. 1506, H.R. 2729) were circulated as possible amendments, but neither were
debated on the House floor.

     This report provides a side-by-side comparison of these and other bills in the
   th
110 Congress addressing passenger vehicle fuel economy in general and the CAFE
program specifically. The bills are compared on various policy options including, but
not limited to, the types of provisions identified above. The report also compares
provisions in bills that would establish greenhouse gas emissions standards for
passenger cars outside of the CAFE structure. Such emissions standards would likely
also have the effect of increasing fuel economy.

      One issue in the CAFE debate over the years has been whether Congress should
set CAFE standards or delegate that authority exclusively to NHTSA. For passenger
cars, the original EPCA legislation established specific targets for model year (MY)
1978 and MY1985, and required that the Secretary of Transportation set standards
for the interim years. Some of the current proposals would also set specific targets
in the future; others would require annual improvements in CAFE by some specified
percentage. In some instances, both approaches are used. Those proposals would
establish a mandated CAFE by a certain date and require subsequent annual
percentage increases. Some bills would also require NHTSA to set the maximum
feasible interim standards.

      Another key question is the form CAFE standards should take. One bill would
require that the CAFE standard be expressed in grams per mile of carbon dioxide
emissions (CO2), in addition to miles per gallon. States are pre-empted from
establishing their own CAFE standards but are permitted to set clean air
requirements. This has generated controversy, and some believe a requirement to
report fuel economy as a function of CO2 emissions is intended to have some bearing
on the differing treatment of the states between CAFE and emissions standards.
Contents

Background: Establishment of the CAFE Standards . . . . . . . . . . . . . . . . . . . . . . . 1

Recent CAFE Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
     Policy Options Within CAFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
          Combined Passenger Car/Light Truck Standards . . . . . . . . . . . . . . . . . 3
          Definition of "Automobile" and "Light Truck" . . . . . . . . . . . . . . . . . . . 3
          Mandated Numeric Increase in CAFE Standards . . . . . . . . . . . . . . . . . 3
          Mandated Percentage Increase in CAFE Standards . . . . . . . . . . . . . . . . 3
          Regulatory Flexibility/Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
          Expanded Considerations for Maximum Feasible Fuel Economy . . . . . 4
          Attribute-Based Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
          Credit Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
          Carbon Dioxide Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     Bush Administration Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
     Non-CAFE Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Comparison of Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6



List of Tables
Table 1. Comparison of Senate CAFE Bills in the 110th Congress . . . . . . . . . . . 7
Table 2. Comparison of House CAFE Bills in the 110th Congress . . . . . . . . . . . 13
Table 3. Comparison of Bills To Establish Automobile Greenhouse Gas
    Standards in the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
    Corporate Average Fuel Economy (CAFE):
      A Comparison of Selected Legislation
              in the 110th Congress
      The rise in crude oil and gasoline prices since the winter of 2006 has renewed
the focus on U.S. fuel consumption in the transportation sector. Wider concerns over
greenhouse gas emissions and climate change have contributed to interest in reducing
fossil fuel consumption and improving the efficiency of the U.S. transportation
sector. Among the various policy options to address the issue are changes to the
federal Corporate Average Fuel Economy (CAFE) standards.1 CAFE refers to the
average miles per gallon used by a manufacturer's entire fleet of cars or light trucks
in a given model year.

      Various bills in the 110th Congress would modify the CAFE program to increase
fuel economy standards for all vehicles, heighten the stringency of testing procedures,
and/or grant the National Highway Traffic Safety Administration (NHTSA) broader
authority to implement the program. In the Senate, S. 357 was reported, as amended,
from the Committee on Commerce, Science, and Transportation on May 8, 2007.
Some of its provisions were inserted, along with other energy initiatives reported
from committee, into S.Amdt. 1502 to H.R. 6. H.R. 6 passed the Senate June 21,
2007 and includes CAFE language.

     On August 3, 2007, the House passed energy legislation -- H.R. 3221 (241-170)
and H.R. 2776 (221-189) -- but these bills did not include CAFE provisions. Two
House bills addressing CAFE (H.R. 1506, H.R. 2729) were circulated as possible
amendments, but neither were debated on the House floor. Some argued that it would
strengthen House negotiations with the Senate in conference if the House bill had
also included CAFE provisions. An effort to add CAFE language to House energy
legislation was defeated on June 28th in a House Committee on Energy and
Commerce markup (26-31). It is possible that provisions of H.R. 1506 and H.R. 2927
may figure in discussions should an energy bill reach conference.


    Background: Establishment of the CAFE Standards
      The Arab oil embargo of 1973-1974 and the subsequent tripling in the price of
crude oil brought into sharp focus the fuel inefficiency of U.S. automobiles. New car
fleet fuel economy had declined from 14.8 miles per gallon (mpg) in model year
(MY) 1967 to 12.9 mpg in 1974. In the search for ways to reduce dependence on
imported oil, automobiles were an obvious target. The Energy Policy and


1
 For more information on CAFE, see CRS Report RL33413, Automobile and Light Truck
Fuel Economy: The CAFE Standards, by Brent D. Yacobucci and Robert Bamberger.
                                           CRS-2

Conservation Act (EPCA, P.L. 94-163) established CAFE standards for passenger
cars for MY1978. The CAFE standards called for an eventual doubling in new car
fleet fuel economy. EPCA also granted NHTSA the authority to establish CAFE
standards for other classes of vehicles, including light-duty trucks.2 NHTSA
established fuel economy standards for light trucks, beginning in MY1979. For
passenger cars, the current standard is 27.5 miles per gallon (mpg) for MY2007. For
light trucks, the standard is 22.2 mpg for MY2007.

     Under EPCA, the Secretary of Transportation has the discretion to adjust the
passenger car standard within a range from 26.0 to 27.5 mpg. Any increase above
27.5 mpg or below 26.0 mpg requires the Secretary to issue an amendment to the
standards. That amendment would be in force unless either chamber of Congress
disapproves. However, this one-House veto could be judged to be unconstitutional.3
The Secretary has much broader discretion with respect to setting light truck fuel
economy standards (referred to in the regulations as "non-passenger automobiles").
This includes the authority to establish different standards for different classifications
of these vehicles.


                         Recent CAFE Regulations
      In April 2006, NHTSA promulgated new CAFE rules for light trucks. After
MY2007, light truck manufacturers may voluntarily comply with a new "reformed"
standard based on the size of each specific manufacturer's vehicles. Starting in
MY2011, all light truck makers will be subject to the reformed standards, which
NHTSA estimates will be equivalent to about 24.0 mpg under the old system. EPCA
gives NHTSA the authority to modify the light truck standards as it sees fit, including
setting standards based on vehicle attributes (in this case, size). EPCA does not grant
similar flexibility in application of the passenger car standard.


                                  Policy Options
Policy Options Within CAFE
     Several bills would amend the current CAFE program to increase CAFE
standards, change testing procedures, and/or grant NHTSA broader regulatory
discretion. CRS analyzed 12 CAFE-related bills with regard to several key policy
options:

        !   combined passenger car/light truck standards,
        !   definition of "automobile" and "light truck,"
        !   mandated numeric increase in CAFE standards,
        !   mandated percentage increase in CAFE standards,


2
    Light-duty trucks include most sport utility vehicles (SUVs), vans, and pickups.
3
 For more information see CRS Report RS22132, Legislative Vetoes After Chadha, by
Louis Fisher.
                                       CRS-3

     !   regulatory flexibility/authority,
     !   expanded considerations for maximum feasible fuel economy,
     !   attribute-based standards,
     !   credit trading,
     !   carbon dioxide emissions, and
     !   other key provisions.

None of these policy options is mutually exclusive, and any or all options could be
adopted together. Each of these options is discussed below.

      Combined Passenger Car/Light Truck Standards. One criticism of the
current CAFE program is its separate treatment of light trucks and passenger cars.
When EPCA was first enacted, most light trucks were used solely as work vehicles,
and they constituted a relatively small percentage of the light-duty vehicle fleet.
Since that time, light trucks, which include sport utility vehicles (SUVs) and vans,
are used more and more as passenger vehicles. Currently, light trucks make up
roughly half of the new light-duty vehicle market. As a consequence, some argue
that the distinction between the two fleets should be eliminated. Critics also allege
that specifications for some car-like vehicle models may have been designed
purposefully to qualify those vehicles for the lower mpg standard that applies to the
light truck fleet.

     Definition of "Automobile" and "Light Truck". Passenger car and light
truck standards could be combined by simply expanding the definition of "passenger
automobile" to include light trucks up to 8,500 pounds. Some proponents of tighter
standards argue that light trucks should be treated as passenger vehicles.

     Further, some light trucks are too heavy to be included under the current CAFE
standard. Therefore, some proposals would expand the definition of "automobile"
or "light truck" to include all vehicles up to 10,000 pounds gross weight (current
standards cover vehicles up to 8,500 pounds gross weight). Other proposals would
expand CAFE standards to some heavier vehicles (e.g. SUVs and passenger vans) but
would exclude "work trucks" (e.g. pickups and cargo vans).

      Mandated Numeric Increase in CAFE Standards. Some analysts argue
that price volatility in oil markets sends inconsistent signals to prospective new car
purchasers, and that the only way to avoid these mixed signals would be to mandate
higher CAFE standards. Some legislative proposals would require NHTSA to
establish new CAFE standards set at a fixed mpg target in a given year. Various
proposals would mandate increased standards for passenger cars, light trucks, or
both.

     Mandated Percentage Increase in CAFE Standards. While some bills
would mandate an increase in the CAFE standards to specified levels, others would
require NHTSA to set rules to increase fuel economy by a set percentage every year.
In most cases, the bills mandate an annual CAFE increase of 4% from the previous
year. The bills vary on whether the increase would cover passenger cars, light trucks,
or both.
                                       CRS-4

     Regulatory Flexibility/Authority. As was mentioned above, NHTSA
currently has limited authority to modify the specific mpg target or the general design
of passenger car CAFE standards. Some legislative proposals would significantly
broaden NHTSA's authority to amend the program, including allowing NHTSA to
set higher passenger car standards than EPCA currently allows. Currently, any
increase above 27.5 mpg or below 26.0 mpg requires the Secretary to issue an
amendment to the standards. That amendment is to be in force unless either chamber
of Congress disapproves.

    Other proposals would allow NHTSA to extend the current single-year
compliance period to multiyear periods. Such a proposal, for example, might allow
NHTSA to require manufacturers to meet a set CAFE average for MY2011 through
MY2013, instead of requiring that the CAFE average be achieved in each model year.

     Expanded Considerations for Maximum Feasible Fuel Economy.
Current law requires NHTSA to consider various factors in determining "maximum
feasible average fuel economy." NHTSA must consider "technological feasibility,
economic practicability, the effect of other motor vehicle standards of the
government on fuel economy, and the need of the United States to conserve energy."4
Some of the bills would add a further dimension, "cost-effectiveness," and stipulate
weighing of several factors in assessing the cost-effectiveness of any proposed
changes in the standards. Among these factors are value to consumers, economic
security, national security, foreign policy, and the impact of oil use on various other
national policy concerns.

     Attribute-Based Standards. As noted above, NHTSA has established size-
based CAFE standards for light trucks but does not have similar authority for
passenger cars. Some proposals would allow NHTSA to establish multiple levels of
passenger car CAFE standards for a given model year. The levels could be based on
a variety of vehicle attributes, including size and/or weight. The Senate-passed H.R.
6 would require attribute-based standards. H.R. 6 would also require that, after
enactment, the Secretary of Transportation would initiate a study toward developing
a fuel economy program to raise the vehicle fuel efficiency of medium- and heavy-
duty trucks.

      Credit Trading. For each model year, automakers must meet separate CAFE
targets for three new vehicle fleets: domestically produced passenger cars, imported
passenger cars, and light trucks. In any year that a manufacturer exceeds the CAFE
standard for one of these given fleets, that manufacturer may "bank" credits for use
in meeting future year requirements. Conversely, in any year that the manufacturer
comes up short, it may "borrow" credits from an anticipated surplus in future years.
Under the current CAFE program, banked or borrowed credits may be used only for
the fleet in which they originated. For example, if an automaker generates credits for
its fleet of imported passenger cars, those credits may not be applied to its fleets of
domestic cars or light trucks. Similarly, automakers may not trade credits with other
automakers. However, some of the legislative proposals would allow a manufacturer
to move credits between fleets and/or trade credits with another manufacturer.


4
    49 U.S.C. 32902(f)
                                          CRS-5

     Carbon Dioxide Standards. One bill, H.R. 2927, would require that new
CAFE standards be expressed in grams per mile of carbon dioxide (CO2), in addition
to miles per gallon. Under EPCA, states are pre-empted from establishing their own
CAFE standards. But the Clean Air Act permits states to set their own clean air
requirements. This has generated controversy, and some believe a requirement to
report fuel economy as a function of CO2 emissions is intended to have some bearing
on the differing treatment of the states between CAFE and emissions standards.
Some of these matters are currently being litigated.

Bush Administration Proposal
     In his 2007 State of the Union address, President Bush outlined a goal of
reducing gasoline5 consumption by 20% from projected levels in 2017. Of that 20%
reduction, the President proposed that 15% come from the increased use of renewable
and alternative fuels, and that 5% come from increased vehicle fuel efficiency. It has
been estimated that an annual 4% increase in CAFE standards would lead to a 5%
reduction in projected gasoline consumption in 2017. The Bush Administration has
not proposed legislation that would mandate an increase in CAFE standards.

    On February 6, 2007, NHTSA submitted draft legislation to the House Energy
and Commerce Committee on the Bush Administration's CAFE proposal.6 The
Administration's proposal would not require an increase in fuel economy standards
but would grant NHTSA broader regulatory authority. The draft would allow
NHTSA to establish attribute-based standards for passenger cars and would allow for
CAFE credit trading.

Non-CAFE Policy Options
     In addition to bills modifying the CAFE program, several other bills have been
introduced that would likely increase vehicle fuel economy through other measures.
For example, several bills requiring reductions in carbon dioxide and other
greenhouse gas emissions have been introduced. Of those bills, two would require
per-mile emissions reductions from passenger vehicles. While such emissions
standards would not technically constitute a change in fuel economy standards,
automakers and others contend that there is no way other than fuel economy increases
to reduce automobile greenhouse gas emissions.7




5
 Gasoline is only one part of oil consumption (albeit the largest), and thus a 20% reduction
in gasoline consumption translates to a smaller reduction in overall petroleum consumption.
6
 As of February 22, 2007, no Member has sponsored and introduced the Administration's
proposal.
7
 For more information on climate change bills, see CRS Report RL33846, Climate Change:
Greenhouse Gas Reduction Bills in the 110th Congress, by Larry Parker and Brent D.
Yacobucci.
                                    CRS-6

                   Comparison of Legislation
     Of the 14 CAFE bills compared, the eight Senate bills are compared in Table
1 and the four House bills are compared in Table 2. The two bills to control
greenhouse gas emissions from passenger cars are compared in Table 3.
                                                                               CRS-7

                                   Table 1. Comparison of Senate CAFE Bills in the 110th Congress

                          S. 183              S. 357 (Feinstein)          S. 767 / S. 768                S. 875                   S. 1118              H.R. 6 - Senate
                         (Stevens)             [as introduced]               (Obama)                    (Lugar)                  (Dorgan)              Version (Reid)

Bill Title         Improved Passenger       Ten-in-Ten Fuel           Fuel Economy Reform       Security and Fuel         Fuel Efficiency           Ten-in-Ten Fuel
                   Automobile Fuel          Economy Act               Act                       Efficiency (SAFE)         Energy Act of 2007        Economy Act
                   Economy Act of 2007                                                          Energy Act of 2007

Combined           No provision.            Passenger car and light   Passenger car and light   No provision.             No provision.             Passenger car and light
Passenger                                   truck standards           truck standards                                                               truck standards
Car/Light Truck                             combined starting in      combined starting in                                                          combined starting in
Standards                                   MY2013. [Sec. 2]          MY2013. [Sec. 4]                                                              MY2011. [Sec. 502]

Change in          No provision             Expands light truck       Expands definition of     Establishes that 4-       Establishes that 4-       Includes light trucks
Definition of                               definition to include     "passenger                wheel drive is neither    wheel drive is neither    between 8,500 and
"Automobile" or                             vehicles between          automobile" to include    necessary nor             necessary nor             10,000 pounds that are
"Light Truck"                               8,500 and 10,000          all vehicles of up to     sufficient to qualify     sufficient to qualify     not "work trucks" --
                                            pounds that are not       10,000 pounds             vehicle as a light-duty   vehicle as a light-duty   i.e. not heavier
                                            "work trucks" -- i.e.     designed to carry less    truck. [Sec. 2]           truck. [Sec. 2]           pickups and vans.
                                            not heavier pickups       than 10 passengers.                                                           [Sec. 504]
                                            and vans [Sec. 5]         [Sec. 3]

Mandated           40 mpg for passenger     35 mpg for combined       27.5 mpg for              No provision.             No provision.             35 mpg for combined
Numeric Increase   cars only by MY2017.     fleets by MY2019.         combined fleets by                                                            automobile and light
in CAFE            During interim, the      [Sec. 2]                  MY2013. [Sec. 4]                                                              truck fleets by
Standards          Secretary of                                                                                                                     MY2020. [Sec. 502]
                   Transportation must      Interim MY2010
                   set standards for each   standards of 29.5 mpg
                   individual               for passenger cars and
                   manufacturer at          25.5 mpg for light
                   maximum feasible         trucks. [Sec. 2]
                   level. [Sec. 101]
                                                                              CRS-8

                           S. 183               S. 357 (Feinstein)       S. 767 / S. 768              S. 875                    S. 1118              H.R. 6 - Senate
                          (Stevens)              [as introduced]            (Obama)                  (Lugar)                   (Dorgan)              Version (Reid)

Mandated           An annual, fixed           No provision.          For MY2010 through      For MY2013 through         Starting in MY2013,       Requires the Secretary
Percentage         percentage increase is                            MY2012, requires a      MY2030, requires a         requires that CAFE        of Transportation to
Increase in CAFE   specifically prohibited.                          4% annual increase in   mandatory annual fuel      standard for each class   establish procedures to
Standards          [Sec. 101]                                        passenger car fuel      economy increases of       of vehicles be            ensure the maximum
                                                                     economy. [Sec.          4% for each class of       increased by 4% over      feasible increase in
                                                                     106(a)(3)]              vehicles. [Sec. 102]       the previous model        fuel efficiency for
                                                                                                                        year's standard. [Sec.    medium- and heavy-
                                                                     Starting in MY2013,                                3]                        duty commercial
                                                                     establishes a                                                                vehicles. [Sec. 502]
                                                                     mandatory annual fuel
                                                                     economy increase of
                                                                     4% for passenger cars
                                                                     and light trucks
                                                                     combined. [Sec.
                                                                     106(a)(3)]

Improving Fuel     No comparable              No comparable          No comparable           The Secretary shall        Same as S. 875.           Would require the
Efficiency of      provision                  provision.             provision.              establish average fuel                               Secretary of
Medium and                                                                                   economy standards for                                Transportation, 18
Heavy-Duty                                                                                   medium-duty trucks                                   months after
Trucks                                                                                       that are consistent with                             enactment, to initiate a
                                                                                             the projected benefits                               study that could lead
                                                                                             of hybridization. In                                 to the establishment of
                                                                                             this section, the term                               fuel economy
                                                                                             `medium-duty truck'                                  standards, or other
                                                                                             means a truck (as                                    policies, to improve
                                                                                             defined in section                                   the fuel efficiency of
                                                                                             30127) with a gross                                  medium- and heavy-
                                                                                             vehicle weight                                       duty on-highway
                                                                                             between 10,000 and                                   trucks. Any program
                                                                                             26,000 pounds.                                       would provide a lead
                                                                                                                                                  time of 4 model years
                                                                                                                                                  and make no changes
                                                                                                                                                  in any targets at less
                                                                                                                                                  than three-year
                                                                             CRS-9

                         S. 183              S. 357 (Feinstein)         S. 767 / S. 768                S. 875                    S. 1118               H.R. 6 - Senate
                        (Stevens)             [as introduced]              (Obama)                    (Lugar)                   (Dorgan)               Version (Reid)

                                                                                                                                                    intervals.

Regulatory       NHTSA is authorized       NHTSA is given           NHTSA may set lower       NHTSA may set lower        NHTSA may set lower        NHTSA is given
Flexibility/     to establish multiyear    broader authority to     standards for a model     standards for a model      standards for a model      broader authority to
Authority        compliance periods        increase passenger car   year if the targets are   year if the targets are    year if the targets are    increase passenger car
                 instead of the current    fuel economy without     not technologically       not technologically        not technologically        fuel economy without
                 single-year               congressional            achievable, would lead    achievable, would lead     achievable, would lead     congressional
                 compliance period.        approval. [Sec. 3]       to reductions in          to reductions in           to reductions in           approval. [Sec. 502]
                 [Sec. 101]                                         vehicle safety, or are    vehicle safety, or are     vehicle safety, or are
                                           NHTSA may set            not cost-effective.       not cost-effective.        not cost-effective.        Secretary may set a
                 Standards may be set      different CAFE targets   [Sec. 4]                  [Sec. 102]                 [Sec. 3]                   standard that is lower
                 individually for          for different                                                                                            than the "maximum
                 different classes of a    manufacturers, but in    NHTSA may establish                                                             feasible" level if there
                 manufacturer's fleet of   any given year each      multiyear compliance                                                            is "clear and
                 passenger                 manufacturer must        periods (up to four                                                             convincing evidence"
                 automobiles. [Sec.        achieve a minimum        years). [Sec. 5]                                                                that this level can be
                 101]                      average of 92% of the                                                                                    demonstrated to not be
                                           industry-wide CAFE       NHTSA may set                                                                   "cost-effective." [Sec.
                                           target. [Sec. 2]         different CAFE targets                                                          503]
                                                                    for different
                                                                    manufacturers, but in
                                                                    any given year each
                                                                    manufacturer must
                                                                    achieve a minimum
                                                                    average of 92% of the
                                                                    industry-wide target.
                                                                    [Sec. 4]


Expanded         No provision.             No provision.            Cost-effectiveness is     Substantially similar to   Substantially similar to    Substantially similar
Considerations                                                      added to the list of      S. 767/768.                S. 767/768.                to S. 767/768.
for Maximum                                                         factors for NHTSA to
Feasible Fuel                                                       consider in
Economy                                                             determining maximum
                                                                    feasible fuel economy.
                                                                           CRS-10

                          S. 183             S. 357 (Feinstein)       S. 767 / S. 768               S. 875          S. 1118      H.R. 6 - Senate
                         (Stevens)            [as introduced]            (Obama)                   (Lugar)         (Dorgan)      Version (Reid)

                                                                  Cost-effectiveness
                                                                  would be measured
                                                                  relative to several
                                                                  criteria, including
                                                                  value to consumers,
                                                                  economic security,
                                                                  national security,
                                                                  foreign policy, and the
                                                                  impact of oil use on
                                                                  various other national
                                                                  policy concerns. [Sec.
                                                                  4]

Attribute-Based   NHTSA is given           No provision.          Starting in MY2013,       No provision.    No provision.    NHTSA is required to
Standards         authority to establish                          NHTSA is given                                              establish attribute-
                  attribute-based                                 authority to establish                                      based standards. [Sec.
                  standards. [Sec. 101]                           attribute-based                                             502]
                                                                  standards. [Sec. 4]
                                                                            CRS-11

                          S. 183             S. 357 (Feinstein)         S. 767 / S. 768                 S. 875                   S. 1118              H.R. 6 - Senate
                         (Stevens)            [as introduced]              (Obama)                     (Lugar)                  (Dorgan)              Version (Reid)

Credit Trading    Greenhouse gas credits   Manufacturers may        Before MY2013,             No provision.             No provision.             Substantially similar to
                  registered with a        trade credits between    manufacturers are                                                              S. 357. [Sec. 506]
                  national registry may    fleets and with other    allowed to trade
                  be purchased by          manufacturers. [Sec.     credits with other
                  manufacturers and        9]                       manufacturers for the
                  applied to fleet fuel                             same fleet (e.g.
                  economy results after                             domestic passenger
                  MY2010. However,                                  cars). Starting in
                  credits purchased                                 MY2013,
                  through the registry                              manufacturers may
                  cannot offset more                                trade credits with other
                  than 10% of the fuel                              manufacturers across
                  economy standard.                                 all fleets. However, in
                  [Sec. 102, 201]                                   the absence of such
                                                                    credits, each fleet must
                                                                    achieve at least 92% of
                                                                    the overall CAFE
                                                                    target. [Sec. 5]

Carbon Dioxide    No provision.            No provision.            No provision.              No provision.             No provision.             No provision.
Standards

Other Key CAFE-   The Secretary of         Starting in MY2014,      No provision.              Existing incentives       Broadens authority of     NHTSA must develop
Related           Transportation may       automakers must                                     within the CAFE           NHTSA to establish        a "motor vehicle
Provisions        not set standards that   install devices to                                  program for the           standards for a broader   safety standard" to
                  impose "marginal         provide real-time and                               production of dual-       population of vehicles,   reduce death and
                  costs that exceed        cumulative fuel                                     fuel and flexible fuel    including vehicles        injury by improving
                  marginal benefits."      economy data that will                              vehicles are              with gross vehicle        compatibility of large
                  [Sec. 101]               enable drivers to                                   eliminated. [Sec.         weight of 10,000-         and small vehicles in
                                           operate their vehicles                              102(b)]                   26,000 pounds. [Sec.      frontal- and side-
                  A "national registry     to use fuel more                                                              2]                        impacts. [Sec. 505]
                  system" for voluntary    efficiently. [Sec. 7]                               Requires NHTSA to
                  greenhouse gas trading                                                       set fuel economy          Beginning in              The National
                  would be established.    In order to reduce the                              standards for medium-     MY2012, existing          Academy of Sciences
                  The Secretary of         likelihood of death or                              duty vehicles (vehicles   incentives within the     (NAS) will conduct a
                                                                             CRS-12

                          S. 183             S. 357 (Feinstein)         S. 767 / S. 768                 S. 875                    S. 1118              H.R. 6 - Senate
                         (Stevens)            [as introduced]              (Obama)                     (Lugar)                   (Dorgan)              Version (Reid)

                  Transportation,          injury from accidents,                              with a gross weight         CAFE program for the     study of current and
                  working with the         NHTSA is required to                                between 10,000 and          production of dual-      potential technologies
                  Department of            develop vehicle                                     26,000 pounds). [Sec.       fuel and flexible fuel   that might contribute
                  Commerce, will           ratings and standards                               102(a)]                     vehicles are             to meeting CAFE
                  determine the            to reduce damage by                                                             eliminated. [Sec.3]      standards. [Sec. 509]
                  equivalency between      improving
                  fuel economy             compatibility of large                                                                                   Requires establishment
                  improvements and         and small vehicles in                                                                                    of a tire fuel efficiency
                  greenhouse gas           frontal- and side-                                                                                       consumer information
                  reductions. [Sec. 201]   impacts. [Sec. 6]                                                                                        program.[Sec. 513]

Other Key Non-    No provision.            Requires the             S. 768 also modifies       This is a broad bill that   From MY2012-2022,        Among a number of
CAFE Provisions                            Environmental            existing tax credits for   also: modifies the          manufacturers must       additional provisions,
                                           Protection Agency to     hybrid vehicles and        existing hybrid vehicle     produce not less than    would require
                                           establish a program to   establishes a              purchase tax credit and     10% more dual-fueled     establishment of an
                                           label new vehicles'      manufacturer tax           establishes a tax credit    vehicles than in the     Advanced Battery
                                           expected lifetime        credit for advanced        for fuel-efficient          preceding model year.    Initiative to award
                                           greenhouse gas           technology vehicles.       vehicles; establishes a     [Sec. 3]                 grants and identify
                                           emissions. [Sec. 11]                                manufacturer's tax                                   technological needs;
                                                                                               credit for advanced                                  promulgation of
                                                                                               technology vehicles;                                 standards for biodiesel
                                                                                               modifies the existing                                fuel; and establishment
                                                                                               mandate for renewable                                of a credit-trading
                                                                                               fuels; promotes                                      program; and sets
                                                                                               renewable fuel                                       requirements for
                                                                                               infrastructure;                                      manufacture of
                                                                                               mandates the                                         flexible-fuel vehicles
                                                                                               production of                                        and raising consumer
                                                                                               alternative fuel                                     awareness about
                                                                                               vehicles; limits oil                                 availability of these
                                                                                               exploration in certain                               vehicles.
                                                                                               areas.
                                                                               CRS-13

                                   Table 2. Comparison of House CAFE Bills in the 110th Congress

                      H.R. 656 (Reichert)           H.R. 1133 (Berkley)            H.R. 1500 (DeFazio)            H.R. 1506 (Markey)                 H.R. 2927
                                                                                                                                                       (Hill)

Bill Title or      To require higher standards   Freedom through                Gasoline Price Stabilization   Fuel Economy Reform Act       To increase the corporate
Purpose            of automobile fuel            Renewable Energy               Act of 2007                                                  average fuel economy
                   efficiency with the goal of   Expansion (FREE) Act                                                                        standards for auto-mobiles,
                   reducing the amount of oil                                                                                                to promote the domestic
                   used for fuel by                                                                                                          development and
                   automobiles in the United                                                                                                 production of advanced
                   States by 10 percent                                                                                                      technology vehicles, and
                   beginning in 2017, and for                                                                                                for other purposes.
                   other purposes.

Combined           No provision.                 No provision.                  No provision.                  Passenger car and light       No provision.
Passenger                                                                                                      truck standards combined
Car/Light Truck                                                                                                starting in MY2011. [Sec.
Standards                                                                                                      4]

Change in          No provision.                 No provision.                  No provision.                  Expands definition of         No provision.
Definition of                                                                                                  "automobile" to include all
"Automobile" or                                                                                                vehicles of up to 10,000
"Light Truck"                                                                                                  pounds. [Sec. 3]

Mandated           33 mpg by MY2017;             33 mpg by MY2016;              37 mpg by MY2018 and 40        Mandates "a projected level   Projected fuel economy for
Numeric Increase   interim standards would be    interim standards would be     mpg by MY2023; interim         of average fuel economy"      passenger and non-
in CAFE            set by Secretary of           set by Secretary of            standards would be set by      of at least 27.5 mpg for      passenger automobiles
Standards          Transportation beginning in   Transportation beginning in    Secretary of Transportation    vehicles up to 10,000         would be not less than 32
                   MY2010 to reach the           MY2010 to reach the            beginning in MY2010 to         pounds beginning in           mpg or greater than 35 mpg
                   mandated target. [Sec. 1]     mandated target. [Sec. 8]      reach the mandated target.     MY2012, and 35 mpg in         in MY2022. [Sec. 1]
                                                                                [Sec. 9]                       MY2018.
                                                                       CRS-14

                        H.R. 656 (Reichert)      H.R. 1133 (Berkley)       H.R. 1500 (DeFazio)      H.R. 1506 (Markey)                   H.R. 2927
                                                                                                                                           (Hill)

Mandated             No provision.            No provision.             No provision.            Requires that current 27.5      No provision.
Percentage                                                                                       mpg standard for passenger
Increase in CAFE                                                                                 automobiles be increased
Standards                                                                                        4% annually beginning in
                                                                                                 MY2009. [Sec. 4]

Regulatory           No provision.            No provision.             No provision.            National Highway Traffic        No comparable provision.
Flexibility/                                                                                     Safety Administration
Authority                                                                                        (NHTSA) may set lower
                                                                                                 standards for a
                                                                                                 manufacturer for a model
                                                                                                 year if the targets are not
                                                                                                 technologically achievable,
                                                                                                 or are not cost-effective;
                                                                                                 and if a lower standard
                                                                                                 during MY2012-MY2017
                                                                                                 would not result in a failure
                                                                                                 to attain 35 mpg in
                                                                                                 MY2018. [Sec. 4]

Expanded             No provision.            No provision.             No provision.            Cost-effectiveness is added     No provision.
Considerations for                                                                               to the list of factors for
Maximum Feasible                                                                                 NHTSA to consider in
Fuel Economy                                                                                     determining maximum
                                                                                                 feasible fuel economy.
                                                                                                 Cost-effectiveness would
                                                                                                 be measured relative to
                                                                                                 several criteria, including
                                                                                                 value to consumers,
                                                                                                 economic security, national
                                                                                                 security, foreign policy, and
                                                                                                 the impact of oil use on
                                                                                                 various other national
                                                                                                 policy concerns. [Sec.
                                                                                                 4(a)(3)]
                                                                           CRS-15

                     H.R. 656 (Reichert)             H.R. 1133 (Berkley)       H.R. 1500 (DeFazio)             H.R. 1506 (Markey)                    H.R. 2927
                                                                                                                                                       (Hill)

Attribute-Based   Authorizes Secretary to         No provision.             Authorizes Secretary to         Extends flexibility to          Extends flexibility to
Standards         establish size-based                                      establish size-based            Secretary to establish          Secretary to establish
                  standards for different                                   standards for different         attribute-based standards       attribute-based standards
                  classes of vehicles. [Sec. 1]                             classes of vehicles. [Sec. 9]   (including size) for            (including size) for
                                                                                                            different classes of            different classes of
                                                                                                            vehicles, or in the form of a   vehicles, or in the form of a
                                                                                                            mathematical function.          mathematical function.
                                                                                                            [Sec. 4]                        [Sec. 1]




Changes in Test   No provision.                   No provision.             No provision.                   Requires joint report from      No provision; however,
Procedures                                                                                                  the Departments of              would require that annual
                                                                                                            Transportation and Energy,      standards also be expressed
                                                                                                            and the Environmental           in the equivalent of
                                                                                                            Protection Agency that, in      average grams per mile of
                                                                                                            part, assesses the accuracy     carbon dioxide emissions.
                                                                                                            of CAFE test procedures
                                                                                                            used to measure fuel
                                                                                                            economy, and to "identify
                                                                                                            any additional factors or
                                                                                                            methods that" would
                                                                                                            contribute to the tests' more
                                                                                                            accurately reflecting in-use
                                                                                                            fuel economy. [Sec. 4]

Credit Trading    Authorizes Secretary to         No provision.             No provision.                   No provision.                   Authorizes Secretary to
                  establish a credit trading                                                                                                establish a credit trading
                  program. [Sec. 2]                                                                                                         program. [Sec. 1]
                                                                                        CRS-16

                         H.R. 656 (Reichert)              H.R. 1133 (Berkley)               H.R. 1500 (DeFazio)              H.R. 1506 (Markey)                    H.R. 2927
                                                                                                                                                                     (Hill)

Carbon Dioxide       No provision.                     No provision.                     No provision.                    No provision.                   Requires Secretary to
Standards                                                                                                                                                 establish fuel economy
                                                                                                                                                          standards both in terms of
                                                                                                                                                          miles per gallon and grams
                                                                                                                                                          per mile of carbon dioxide.
                                                                                                                                                          [Sec. 1]

Other Key CAFE-      Preamble states that the          Advises Secretary that            Advises Secretary that           Act is not intended to          Establishes fund for
Related Provisions   bill's intention is to de facto   interim standards not only        interim standards not only       "limit, constrain, supersede,   domestic
                     reduce the amount of oil          reach mandated 33 mpg by          reach mandated goals, but        or expand" authorities for      commercialization and
                     used in automobiles by            MY2016, but maximize              maximize retention of jobs       prescribing motor vehicle       production of advanced
                     10% beginning in 2017.            retention of jobs in the          in the sector, and not           safety standards. [Sec. 5]      technology vehicles and
                                                       sector, and not degrade           degrade safety of                                                components. Fund will be
                     Advises Secretary that            safety of automobiles. [Sec.      automobiles. [Sec. 9]                                            financed by civil penalties
                     interim standards not only        8]                                                                                                 collected for non-
                     reach mandated 33 mpg by                                            Requires Executive Branch                                        compliance with fuel
                     MY2016, but also must                                               agencies to improve the                                          economy standards. [Sec.
                     maximize retention of jobs                                          average fuel economy of                                          1]
                     in the sector, and not                                              new vehicles in each
                     degrade safety of                                                   vehicle class by 3 mph by                                        Requires establishment of a
                     automobiles. [Sec. 1]                                               MY2011, and 6 mpg by                                             tire fuel efficiency
                                                                                         MY2014 over a baseline                                           consumer information
                                                                                         calculated for all vehicles in                                   program.
                                                                                         the MY2008 fleet for each                                        [Sec. 2]
                                                                                         vehicle class. [Sec. 10]
                                                                                                                                                          Requires establishment of a
                                                                                                                                                          fuel conservation education
                                                                                                                                                          program.
                                                                                                                                                          [Sec.3]

                                                                                                                                                          Extends credit for
                                                                                                                                                          production of alternative-
                                                                                                                                                          fueled automobiles. [Sec. 4]

Other Key Non-       No provision.                     This is a broad bill that also    This is a broad bill that also   No provision.                   No provision.
                                                                                CRS-17

                     H.R. 656 (Reichert)            H.R. 1133 (Berkley)             H.R. 1500 (DeFazio)            H.R. 1506 (Markey)                   H.R. 2927
                                                                                                                                                          (Hill)

CAFE Provisions                                 includes provisions relating     includes provisions on
                                                to nuclear energy, offshore      several matters such as
                                                leases, repeal of certain tax    petroleum industry
                                                subsidies and extension of       concentration, the Strategic
                                                certain tax credits,             Petroleum Reserve,
                                                renewable portfolio              minimum inventory levels.
                                                standard, and other matters.



        Table 3. Comparison of Bills To Establish Automobile Greenhouse Gas Standards in the 110th Congress

                                                 S. 309 (Sanders)                                                              S. 485 (Kerry)

Bill Title           Global Warming Pollution Reduction Act                                       Global Warming Reduction Act of 2007

Greenhouse Gas       The Environmental Protection Agency (EPA) Administrator is required          The EPA Administrator is required to establish regulations for reducing
(GHG) Emission       to establish regulations starting in MY2016 requiring the average fleet      greenhouse gas emissions from passenger vehicles at least as stringent as
Standard             greenhouse gas emissions be less than 205 grams per mile for passenger       those adopted by the California Air Resources board on September 23-
                     cars and 332 grams per mile for light trucks. [Sec. 707] (This greenhouse    24, 2004. Those regulations cap greenhouse gas emissions at 205 grams
                     gas standard is roughly equivalent to an MY2016 CAFE standard of 42          per mile for passenger cars and 332 grams per mile for light trucks by
                     mpg for passenger cars and 26 mpg for light trucks.)                         2016. [Sec. 704] (This is roughly equivalent to an MY2016 CAFE
                                                                                                  standard of 42 mpg for passenger cars and 26 mpg for light trucks.)

Other Key CAFE-      Requires greenhouse gas emissions standards for medium- and heavy-           No provision.
Related Provisions   duty trucks.

Other Key Non-       Caps greenhouse gas emissions on an economy-wide basis beginning in          Caps greenhouse gas emissions on an economy-wide basis beginning in
CAFE Provisions      2010. Emissions are capped at 20% of their 1990 levels in the year           2010. Emissions are capped at 38% of their 1990 levels in 2050. The
                     2050. The EPA has the discretion to employ a market-based allowance          allowance trading system includes an allocation scheme that requires an
                     trading program or any combination of cost-effective emission reduction      unspecified percentage of allowances to be auctioned. The bill also
                     strategies. The bill also includes mandatory greenhouse gas emission         includes a new energy efficiency performance standard. The bill would
                     standards for new powerplants, along with a new energy efficiency            establish a renewable portfolio standard (RPS), increase biofuel
                     performance standard. The bill would establish a renewable portfolio         mandates under the Renewable Fuels Standard, and mandate new
                                                     CRS-18

                          S. 309 (Sanders)                                                     S. 485 (Kerry)

standard (RPS) and a new low-carbon generation requirement and   infrastructure for biofuels. Finally, the bill expands and extends existing
trading program.                                                 tax incentives for alternative fuels and advanced technology vehicles,
                                                                 and establishes a manufacturer tax credit for advanced technology
                                                                 vehicle investment.

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