H.R. 2751 would establish a new $4 billion program for the Secretary of Transportation to provide vouchers to offset the purchase or lease of a new vehicle upon the trade-in of a less fuel-efficient used vehicle.  The program, known as the "Cash for Clunkers Temporary Vehicle Trade-in Program," would be established within the National Highway Traffic Safety Administration. 

Voucher Program:  The bill would establish a program to issue electronic vouchers between $3,500 and $4,500 to offset the purchase of a new vehicle upon the trade-in of a vehicle with less fuel efficiency.  H.R. 2751 would require the Secretary to register dealers into the program and require all registered dealers to accept vouchers as a partial payment or down payment for the purchase of a qualifying automobile.  The dealer would also be required to transfer each eligible trade-in to an entity for disposal.  The Secretary would then make an electronic payment to the dealers.

Voucher Qualifications:  Under the legislation, vouchers would be issued at a value of $3,500 or $4,500, based on the fuel-efficiency of the new automobile as compared to the trade-in.

$3,500 vouchers would be issued if:

• The new automobile is a passenger vehicle with fuel economy that is at least four miles per gallon higher than the trade-in.
• The new automobile is a category one truck with fuel economy that is at least two miles per gallon higher than the trade-in.
• The new automobile is a category two truck which gets at least 15 miles per gallon and has a fuel economy that is at least one mile per gallon higher than the trade-in.  This would also apply to a category three truck from model year 2001 or earlier.
• The new automobile is a category three truck and the trade-in vehicle is a category three truck from model year 2001 or earlier.

(Category one trucks have a weight of 6,000 pounds or less, category two trucks have a weight of between 6,000 pounds and 10,000 pounds, and category three trucks weigh between 10,000 pounds and 14,000 pounds.)

$4,500 vouchers would be issued if:

• The new automobile is a passenger vehicle with fuel economy that is ten miles per gallon higher than the trade-in.
• The new automobile is a category one truck with fuel economy that is at least five miles per gallon higher than the trade-in.
• The new automobile is a category two truck which gets at least 15 miles per gallon and has a fuel economy that is at least two miles per gallon higher than the trade-in.

Limitations:  Under the bill, no more than one voucher could be issued to a single person or the joint registered owners of a single vehicle.  Only 7.5 percent of all funds made available could be used to supply vouchers for category three trucks.  H.R. 2751 also prohibits dealers from charging any fees in association with the voucher program.

Disposing of Trade-Ins:  The bill would require dealers to accept the trade-in automobiles on behalf of the U.S. government and arrange for the transfer of any trade-ins to an entity that will dispose of the car by crushing or shredding it.  The trade-in may not be, sold, leased, exchanged, or otherwise disposed.  The entity responsible for crushing the automobile may sell parts from the car other than the engine block and drive train.

Regulations:  H.R. 2751 would require the Secretary of Transportation to develop regulations within 30 days to carry out the voucher program.  Among other things, the regulations would have to provide a dealer registration and reimbursement process, and provide for enforcement and penalties for any fraud or violation of the regulations.  The bill would provide for a civil penalty of up to $15,000 for each violation.

Information:  The Secretary, in consultation with the Environmental Protection Agency (EPA), must create a website within 30 days with information about the program for consumers and dealers.

Database:  The Secretary would be required to maintain a database of vehicle identification numbers of all the new vehicles purchased or leased through the voucher program, as well as all the trade-in vehicles that are disposed of.

Treatment of Payment:  A voucher would not be considered as income for the purposes of determining eligibility for any federal or State benefit or assistance or for the purpose of assessing taxes. 

Period of Eligibility:  Vouchers created by this legislation would apply to the purchase of any qualifying new vehicle between the date of enactment and one year after the Secretary of Transportation promulgates rules regarding the voucher.

Authorization:  The bill would authorize $4 billion to carry out the voucher program.  The total number and value of vouchers issued under the program could not exceed the amounts appropriated.