Representative Eliot Engel (D-NY) said legislation HR-1356, which he introduced last week, promotes the development, sale and purchase of environmentally-friendly automobiles in efforts to reduce the nation’s dependence on Middle Eastern oil, as well as improve the health of our environment.

In addition to helping consumers by giving them tax-credits for purchasing energy-efficient vehicles, the bill gives American corporations who develop and produce said automobiles federally backed loan guarantees.

“For too long, this nation has increased its dependence on oil every year,” said Engel, a member of the Energy and Commerce Committee. “Our government is doing little to reduce this trend and all Americans are paying the price. I believe many Americans would buy energy-efficient automobiles if there were available and affordable. My legislation will both encourage auto-makers to produce these gas saving cars and help Americans afford them. I have faith in American know-how and technology, and this legislation will spark the drive to implement more energy efficient technologies to increase gas-mileage, improve the environment, and reduce our dependence on oil and the Middle East.”

The bill would create a vehicle tax credit that will allow consumers of fuel efficient cars to receive a tax credit of up to $5,000 (or up to 25 percent of the cost of the car) if the vehicle gets 40 miles per gallon, or up to $6,000 (or up to 35 percent of the cost of the car) if the vehicle gets 50 miles per gallon.

It would also create an assembly tax credit for makers of the vehicles, so that a U.S. plant that assembles cars that get at least 40 miles per gallon receive a tax credit of $2,000 per vehicle.

In addition, the bill would provide loan guarantees of up to $100 million per loan to manufactures of motor vehicles or motor vehicle engines to retool their plants so that they can make vehicles that get over 40 miles per gallon.

The bill would permanently extend and increase the Research and Development tax credit so that scientists and engineers can continue to develop newer, energy efficient technologies for vehicles. Also, cars that qualify for the tax credit will not impact the current fuel economy standards of a manufacturers’ fleet. Therefore, they would not be able to change their fleet’s fuel economy standards by offsetting big gas guzzlers by producing these fuel efficient cars.

“Vehicles in the United States are becoming less fuel-efficient and more damaging to the environment every year,” Engel concluded. “As American technology advances, it is hard to believe that we cannot improve the gas-mileage in the cars we drive. Now on Earth Day 2003, as we are engaged in war in the Middle East, it is time to reduce our dependence on oil and shift to more environmentally sound technologies.”