Feds' $10G Clunker Trade-In Bill: New Domestics Only
Senators Tom Harkin (D-Iowa) and Richard Durbin (D-IL) have introduced Senate Bill 3737. You can read the full text of the “Sell Fuel Efficient Cars Act of 2008” after the jump. Suffice it to say that the bill is designed to stimulate new car sales by giving low-income ($40k family income) car buyers $10k worth of “federal assistance” towards the purchase of a new vehicle. Of course, not just ANY vehicle. The car, truck, CUV or SUV (of course) must come from a carmaker “with operations in the United States, the failure of which would have a systemic adverse effect on the overall economy of the United States or a significant loss of United States jobs, as determined by the Secretary; and operated a manufacturing facility that produced automobiles or automobile components in the United States throughout the 20-year period ending on the date of the enactment of this Act.” Guess who? And now, the greenwashing…
To qualify, the new car must have fuel economy that “is not less than 25 miles per gallon… that is more than 4.9 miles per gallon greater than the fuel economy of such eligible old automobile.”
Twenty-five mpg is, it has to be said, a very low target– especially for a legislature that recently raised corporate average fuel economy (CAFE) standards to 35mpg by 2020. You don’t think the language was specifically written to help truck-heavy manufacturers, do you? Man, you really got keep an eye on these guys.
[thanks to JT for the link]
To require the Secretary of the Treasury to carry out a program to enable certain individuals to trade certain old automobiles for certain new automobiles, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Sell Fuel Efficient Cars Act of 2008′.
SEC. 2. PASSENGER AUTOMOBILE TRADE-IN PROGRAM.
(a) Definitions- In this section:
(1) AUTOMOBILE, FUEL, MANUFACTURER, PASSENGER AUTOMOBILE- The terms `automobile’, `fuel’, `manufacturer’, and `passenger automobile’ have the meaning given such terms in section 32901 of title 49, United States Code.
(2) ELIGIBLE INDIVIDUAL- The term `eligible individual’ means an individual–
(A) who does not have more than 3 passenger automobiles registered under his or her name;
(B) who filed a return of Federal income tax for a taxable year beginning in 2007, and, if married for such taxable year (as determined under section 7703 of the Internal Revenue Code of 1986), filed a joint return;
(C) who is not an individual with respect to whom a deduction under section 151 of the Internal Revenue Code of 1986 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins;
(D) whose adjusted gross income reported in such return was not more than $25,000 ($40,000 in the case of a joint tax return or a return filed by a head of household (as defined in section 2(b) of the Internal Revenue Code of 1986));
(E) who has not acquired an automobile under the Program; and
(F) who did not file such return jointly with another individual who has acquired an automobile under the Program.
(3) ELIGIBLE NEW AUTOMOBILE-
(A) IN GENERAL- The term `eligible new automobile’, with respect to a trade of an eligible old automobile by an eligible individual under the Program, means a passenger automobile that–
(i) has never been registered in any jurisdiction;
(ii) was manufactured by an automobile manufacturer that has–
(I) operations in the United States, the failure of which would have a systemic adverse effect on the overall economy of the United States or a significant loss of United States jobs, as determined by the Secretary; and
(II) operated a manufacturing facility that produced automobiles or automobile components in the United States throughout the 20-year period ending on the date of the enactment of this Act;
(iii) was assembled in the United States; and
(iv) has a fuel economy that–
(I) is not less than 25 miles per gallon, as determined by the Administrator of the Environmental Protection Agency using the 5-cycle fuel economy measurement methodology of such Agency; and
(II) has a fuel economy that is more than 4.9 miles per gallon greater than the fuel economy of such eligible old automobile, as determined by the Administrator using the 2-cycle fuel economy measurement methodology of such Agency for both automobiles.
(B) FUEL ECONOMY TESTING METHODOLOGIES- If a passenger automobile described in subclause (I) or (II) of subparagraph (A)(iv) has not been measured using the respective methodologies described such subclauses, the Administrator may estimate what such measurement would be if the Administrator were to use the respective methodology for purposes of determining the fuel economy under such subclauses.
(4) ELIGIBLE OLD AUTOMOBILE- The term `eligible old automobile’, with respect to a trade for an eligible new automobile by an eligible individual under the Program, means a passenger automobile that–
(A) is operable;
(B) was first registered in any jurisdiction by any person not less than 10 years before the date on which such trade is initiated;
(C) is registered under such eligible individual’s name on the date on which such trade is initiated; and
(D) was registered under such eligible individual’s name before December 1, 2008.
(5) FUEL ECONOMY- The term `fuel economy’ means the average number of miles traveled by an automobile for each gallon of gasoline (or equivalent amount of other fuel) used, as determined by the Administrator of the Environmental Protection Agency.
(6) PROGRAM- The term `Program’ means the Passenger Automobile Trade-In Program established under subsection (b).
(7) SECRETARY- The term `Secretary’ means the Secretary of the Treasury, or the Secretary’s designee.
(b) Program Established- The Secretary shall establish the Passenger Automobile Trade-In Program to provide eligible individuals with subsidies to purchase eligible new automobiles in exchange for eligible old automobiles.
(c) Duration of Program- The Program shall commence on the date on which the Secretary prescribes regulations under subsection (g) and shall terminate on December 31, 2009.
(1) IN GENERAL- Except as otherwise provided in this subsection, if an eligible individual and a seller of an eligible new automobile initiate a trade as described in subsection (e) for such new automobile with an eligible old automobile of the eligible individual, the Secretary shall provide to the seller of such new automobile $10,000.
(2) LIMITATION ON PURCHASE PRICE OF ELIGIBLE NEW AUTOMOBILES- The Secretary may not make any payment under this subsection for a trade for an eligible new automobile under the Program if the purchase price of such new automobile exceeds the manufacturer’s suggested retail price for such new automobile.
(3) COMPENSATION FOR DELAYED PAYMENTS- In the case that a payment under this subsection to a seller for a trade under the Program is delayed, the Secretary shall provide to such seller the amount otherwise determined under this subsection plus interest at the overpayment rate established under section 6621 of the Internal Revenue Code of 1986.
(e) Initiation of Trade- An eligible individual and the seller of an eligible new automobile initiate a trade under the Program for such eligible new automobile with an eligible old automobile of such individual if–
(1) the eligible individual, or the eligible individual’s designee, drives such old automobile to the location of such seller;
(2) the eligible individual provides to the seller–
(A) such old automobile; and
(B) an amount (if any) equal to the difference between–
(i) the purchase price of such new automobile; and
(ii) the amount the Secretary is required to provide to the seller under subsection (d); and
(3) the eligible individual and the seller notify the Secretary of such trade at such time and in such manner as the Secretary considers appropriate.
(f) Disposal of Eligible Old Automobiles-
(1) IN GENERAL- A seller who receives an eligible old automobile in exchange for an eligible new automobile under the Program shall deliver such old automobile to an appropriate location for proper destruction and disposal as determined by the Secretary.
(2) COMPENSATION- The Secretary shall compensate a seller described in paragraph (1) for costs incurred by such seller under such paragraph in such amounts or at such rates as the Secretary considers appropriate.
(1) IN GENERAL- Not later than 30 days after the date of the enactment of this Act, the Secretary shall prescribe rules to carry out the Program.
(2) EXPEDITED PROCEDURES FOR RULEMAKING- The provisions of chapter 5 of title 5, United States Code, shall not apply to regulations prescribed under paragraph (1).
(h) Direct Spending Authority-
(1) IN GENERAL- There is authorized to be appropriated and is appropriated to the Secretary such sums as may be necessary to carry out the Program.
(2) EMERGENCY DESIGNATION- Amounts appropriated pursuant to paragraph (1) are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204(a) of S. Con. Res. 21 (110th Congress) and section 301(b)(2) of S. Con. Res. 70 (110th Congress), the concurrent resolutions on the budget for fiscal years 2008 and 2009.
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The best way to get all those old clunkers off the road would be to stop the states from taxing the hell out of cars. I would love to see a study, but I would bet good money that the average age of a car in a given state is directly proportional to the taxes on new vehicles. If they keep up all this robinhood crap, I am going to take a few years off and live on the dole.
incorrect comment above, vehicle has to have been registered 10 years before the trade in, just means it has to have been sold(not produced) at least 10 years prior. you must have been the owner since december 2008. to keep new guys from jumping on the bandwagon. Someone somewhere will always find a way to exploit this. Personally it sounds nice for my mother who should be retiring soon. Be nice for her to actually get something back out of the government she's been making rich for the 50 years she's been working. I don't qualify because I'm apparently rich. (45 for joint....seriously?) The concept of giving 4.5k assistance to someone who could really use a car sounds nice. I really don't even mind paying for it. I will hate paying for the "new" government jobs created to keep fraud down(which will be pointless) as we know dealers are completely honest. Buying american made cars is just stupid. Personally i'd want to buy a 45mpg diesel from VW and really help out my pocketbook. could get mom the new VW jetta diesel 2009 model with a $1,300 tax credit and $4,500 trade in, and she'd only have to finance $15,700 plus full coverage for a payment of around $700 a month. Should be able to afford that on social security (yes that's sarcasm) People aren't buying American cars because they aren't the best anymore. The workers care, but the business has forgotten, and prove it with every gas guzzling minivan(suv) the sell. $8500 a year from someone who makes less than $25000 is asinine. $25,000income $8500 car /insurance payment $8500 taxes (between sales, fica, property, etc) leaves $8000 a year this means $666 dollars a month to pay for everything. Food, medical, gasoline, heating fuel, maintainence on that new car, housing. Without even getting into detail. You can see the numbers just don't add up. That is assuming of course that the person would even qualify for a $15,700 loan. They don't. Kinda like the tax credit system they put into place for diesels in 2005, that not a single manufacturer actually produced a car that met qualifications until 2009.