House Passes Energy Bill

So, sounds like if you want this, you better buy as soon after Jan. 1, 2006 as you can.

 

I just hope that once Bush signs this the IRS puts out an official explanation of when it goes into effect, how much the credit is for and if a limit on number of credits is in fact going to happen. I read through the part on the credits and it sure sounds to me like it will go into effect this year, not Jan of 06. Some parts of the act don't start till next year but the section about the hybrid credit says it is in effect for vehicles put into service after the enactment of the act in taxable years ending after that date. I think that it may still be good for cars bought this year. I know someone else had posted the exact text of the date it goes into effect. I was not able to find the section on limits to number of vehicles. The problem is even if you do a search on the text of the act it is all so scattered about that it is very easy to miss something. I hope it is good for this year or Toyota may see a drop in sales in November and December even with the new model year out with people waiting for the law to kick in. I know I sure would think about holding off.

 

Here's the entire NYT article:

July 30, 2005
Congress Caps Credits for Hybrid Cars
By JEREMY W. PETERS
DETROIT, July 29 - Tucked away on page 1,391 of the 1,724-page energy bill approved by Congress this week is a new tax credit intended to make fuel-efficient vehicles like hybrids more appealing to consumers. But as is often the case with tax credits, the devil is in the details.

The bill limits the number of vehicles eligible for the credit. That means automakers like Toyota and Honda that have more developed programs will see their vehicles become ineligible faster than companies like DaimlerChrysler and General Motors, whose advanced hybrid technology will not be available until later this decade.

The energy bill sets up a complex formula that begins restricting eligibility for the tax credit once an automaker sells 60,000 gas-electric hybrids or cleaner burning diesels, known as advanced lean-burn vehicles.

Once an auto company hits the 60,000 mark, it has the remainder of that fiscal quarter plus one additional quarter in which buyers of its vehicles can receive the full credit. The credit ranges from $250 to $3,400 depending on the fuel efficiency of the vehicle.

During the two quarters immediately after the cars and trucks of the automakers become ineligible for the full credit, buyers would receive 50 percent of the credit. The next two quarters after that, the credit is 25 percent. The credit is phased out entirely at the end of the fifth full quarter after the automaker sells 60,000 hybrids or advanced diesels.

By capping the credit, Congress has limited the incentives available to companies that have been at the forefront of hybrid technology.

"Ironic isn't it?" said Ed Cohen, Honda's vice president for government and industry relations. "It really does create market mismatch."

Because Toyota already produces many hybrids, its vehicles could become ineligible for the full credit during the first year.

If President Bush signs the energy bill, the clock begins ticking on Jan. 1, 2006, the date the tax credit would take effect. This year alone, Toyota projects it will sell 140,000 hybrids. If sales continue at that level next year, Toyota could hit the 60,000-vehicle cap in the second quarter, giving it until the end of the third quarter before its cars and trucks become eligible only for a reduced tax credit.

Honda faces a similar predicament. It estimates annual hybrid sales at 50,000, meaning its vehicles could become ineligible for the full credit sometime by mid-2007. That would be nearly two years before the credits expire Dec. 31, 2009.

Ford, the first American automaker to embrace hybrid technology in passenger cars and trucks, would also see its vehicles lose eligibility for the full credit before the program expires. Ford currently sells about 20,000 hybrids a year. Over the next three years, however, it will add hybrid technology to three additional models, giving it a total of five hybrid models.

David Friedman, a research director at the Union for Concerned Scientists, said one upside to capping the credit was that it would give companies that have been slow to adopt hybrid technology an incentive to move faster. "What you could argue is that it does penalize the companies that have been out ahead on the issue. On the other hand, it also encourages the laggards to start catching up."

Some who oppose capping the tax credit have said it is a way for Congress to make Japanese hybrids less appealing to consumers as American automakers begin selling more hybrids. While that is up for debate, cost certainly played a role in limiting the credit. The cost of all the alternative technology vehicle tax credits in the bill is $874 million. That includes tax breaks not only for hybrids and cleaner diesel engines but for fuel cell and alternative fuel vehicles as well.

"We feel pretty strongly that 60,000 is a good number," said Dan Brouillette, Ford's vice president for governmental affairs. "They're just not going to write a trillion-dollar energy bill."

 

THIS JUST IN!

Dear Friend,

I am writing to update you on the implementation status of Assembly Bill 2628, which would allow single-occupant hybrid vehicles that achieve at least 45 mpg and a clean air standard to use carpool lanes.

AB 2628 became state law on January 1, 2005. However, because carpool lanes in California have been built with the use of federal funds, and federal law governing federally-financed carpool lanes prohibits single-occupant vehicles from using the lanes except in certain instances, federal law had to be changed to allow California to implement the provisions of AB 2628.

The Federal Transportation Bill, which passed on July 29th, 2005 and is awaiting the President Bush’s signature, allows Hybrids to access HOV lanes, but may not be consistent with the two requirements signed into law by Governor Schwarzenegger.

The Federal Law will allow states to set a standard for miles per gallon that Hybrids must obtain in order use carpool lanes. In California, under AB 2628, that standard is 45 miles per gallon.

The Federal Law, however, is silent on the emissions standards a Hybrid must meet. AB 2628 requires automobiles to meet a very high clean emissions standard in order to reduce air pollution. Right now the Toyota Prius, Honda Civic and Honda Insight meet both requirements.

State Air Resource Board (ARB) Officials are currently reviewing the federal bill to see if California can go ahead and implement the program. With approval from the ARB and federal agencies such as the Department of Transportation and the Environmental Protection Agency, the Department of Motor Vehicles (DMV) can start granting permits to owners of the qualified Hybrid models.

A motorist will have to apply for the permit through the DMV and pay for the special decal, which will be placed on the car prior to being allowed to access any State HOV lane. In the meantime, single-occupant hybrid vehicles are still not allowed in HOV lanes.

I will continue to update you as more information becomes available. You may also check my website http://democrats.assembly.ca.gov/members/a...lt2.htm?hybrids for the latest updates.

Thank you for you interest in this legislation.



Fran Pavley

Assemblymember, 41st District

 

I don't think they'll implement the tax credit for anyone who purchased in 2005.

How would they keep track of their precious 60,000 car limit?

Jerks. :cussing: