Hatch seeks tax credits for hybrid-car buyers

With concern over U.S. dependence on foreign oil deepening, a renewed effort is forming in the Senate to give consumers tax credits for the purchase of hybrid gas-electric cars and other energy-efficient vehicles.

Sen. Orrin Hatch, R-Utah, plans to introduce a bill dubbed the CLEAR Act later this month to provide tax credits for the purchase of hybrids such as the Toyota Prius.

The amount of the credit would vary depending on fuel savings and the type of technology employed, with models that use more advanced technologies and little or no gasoline or other petroleum products eligible for the largest credits.

"The CLEAR Act is just one of several proposals I will be introducing in the next few months to help consumers who are suffering from sticker-shock at the pump," Hatch said Wednesday.

"It's apparent to anybody filling up their tanks right now that we need to encourage the use of alternative fuels, and the CLEAR Act will make a significant impact on reducing our nation's dependency on oil."

A similar plan was included two years ago in the Senate version of legislation to overhaul the nation's energy policies and retained in negotiations with the House. But the plan died when the energy measure ran aground as the result of other issues.

Hybrids, which run on an electric-battery-powered engine backed up by a small gasoline motor, have been eligible for a $2,000 tax deduction that is being phased out. A credit for hybrids like the Prius or Honda's Civic could range from about $2,000 to $3,000 under Hatch's plan, said Hatch aide J.J. Brown said.

The senator's proposal would cost an estimated $3 billion over six to 10 years. Other alternative-fuel vehicles that use compressed natural gas, primarily ethanol fuel, or hydrogen fuel cells would also qualify for the credits. However, those technologies are far behind hybrids in market penetration.

Since 1999, more than 200,000 hybrids have been sold in the United States. Six hybrid models are currently on the market, with five to eight to be released in the next three years. With gas prices hitting a record high in many parts of the country, including Utah, some dealers are tacking a premium on the sticker price of hybrids.

"Transportation accounts for about two-thirds of the oil consumed in the United States, and we are 97 percent dependent on oil for our transportation needs," Hatch said.