Tax credit introduced for hybrid vehicles

U.S. Representative Rahm Emanuel (D-IL) announced he will introduce the American Hybrid Tax Credit Act of 2005, which will increase tax credits for consumers and small businesses that purchase hybrid and other alternative-fuel motor vehicles assembled in the United States.

"Making hybrids more available to consumers and small businesses is a hat trick for Chicago. It's good energy policy, it's good environmental policy and its good economic policy," said Emanuel. "By increasing the tax credit currently available to purchasers of hybrids, we will reduce our dependence on foreign oil and create a cleaner environment."

The current U.S. energy policy provides a tax credit ranging from $1,700 to $3,400 for buyers of hybrids, depending on the model purchased, beginning on January 1, 2006. Emanuel's legislation increases the credit for individuals and small businesses purchasing hybrid and other alternative-fuel motor vehicles assembled in the United States by $3,000. His legislation also increases the credit available to manufacturers for using new advanced lean burn technology by $3,000 and raises the credit for domestic research and development related to alternative motor vehicle technology from 20% to 40%.

"Last year, 56% of the nation's oil - 11 million barrels a day - came from abroad. It's time we enlisted American consumers in the effort to reduce our dependence on foreign oil," said Emanuel.

While the popularity of consumer hybrid vehicles is growing, Emanuel has also been encouraged by recent studies validating the benefits of diesel-electric hybrid products for commercial applications. For example, independent test results involving International diesel-electric hybrid utility trucks showed a 40 to 60 percent reduction in the amount of fuel used, as well as emissions reduction benefits. ComEd and other utilities are currently involved in a pilot program with International to develop this technology on a broader scale.

"We're pleased to be leading the development of diesel-electric hybrid and advanced lean burn technology for the commercial truck market," said Jim Williams, director of sales and distribution for new products at International Truck and Engine Corporation. "Diesel-electric hybrid trucks are an attractive option for various businesses seeking to reduce fuel costs and decrease emissions."

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