U.S. warns state gas guzzler tax can't be enforced Effort to encourage car fuel economy runs into roadblock

June 18, 1992|By Marina Sarris and Peter Jensen | Marina Sarris and Peter Jensen,Staff Writers

ANNAPOLIS -- Maryland's groundbreaking "gas guzzler" tax appears to have run out of fuel.

The National Highway Traffic Safety Administration has told the state that the so-called gas guzzler/sipper program steps on federal toes and can't be enforced.

Maryland Attorney General J. Joseph Curran Jr. seems inclined to agree. A draft response to the NHTSA concedes that Maryland would be unlikely to win a fight with the federal government, according to sources.

The likely death of the guzzler law is a significant blow to nationwide efforts by environmental groups to get states to step in where the Bush administration has been reluctant to tread: encouraging automotive fuel efficiency.

"It's a blatant attempt by the Bush administration to give in to the auto industry," charged state Senator Gerald W. Winegrad, an Annapolis Democrat and longtime environmentalist. "They're just emitting a lot of gas vapors themselves. This is ridiculous."

The first of its kind in the nation, the Maryland law would add a surcharge to the cost of gas guzzlers and give a rebate from the state's 5 percent titling tax to buyers of fuel-efficient cars.

The General Assembly adopted the program in the last minutes of a special session in April. The program was scheduled to take effect next month, beginning with purchases of 1993 cars.

The Maryland attorney general's office is researching the federal law and hopes to issue a legal opinion in the next few days, said Jack Schwartz, chief counsel for opinions.

However, the legislature's chief fiscal analyst, William S. Ratchford II, predicted in a letter to lawmakers that "it is likely that the 'gas-guzzler/sipper' tax will be found invalid."

"The rug is being pulled from under us," said Jane Nishida, Maryland executive director of the Chesapeake Bay Foundation in Annapolis.

By encouraging residents to buy more fuel-efficient cars, the state program would help reduce smog and bring Maryland closer to meeting federal clean air requirements, Senator Winegrad said.

However, the federal Department of Transportation says Congress has barred states from enacting laws that differ in any way from federal regulations on fuel-economy disclosures.

Congress apparently did not want car manufacturers and dealers to face a "multitude of varying labeling and disclosure requirements" from state to state, NHTSA chief counsel Paul Jackson Rice wrote in a June 8 letter to Mr. Curran.

Maryland's definition of fuel economy differs from the federal agency's, Mr. Rice wrote.

In a telephone interview, he said that fuel economy issues are the sole purview of the federal Transportation Department.

Maryland's car and truck dealers certainly agree.

They're ready to file a lawsuit against the state on the grounds that it doesn't have the authority to implement the program, said Stephen Winter, an attorney for the National Automobile Dealers Association and the Maryland New Car and Truck Dealers Association.

If the program becomes law, car buyers will face a $100 guzzler surcharge when they buy a new car that has an Environmental Protection Agency mileage rating of less than 21 miles per gallon. They will get a $50 rebate if their new car gets more than 35 mpg.

In two years, the standards become tougher: a $50 penalty for every mile per gallon under 27 on 1995 or later models and a $50 rebate for every mile per gallon over 35 -- with a cap of 1 percent of a car's value on both the tax and the rebate.

If the law is struck down, the state will lose millions of dollars in tax revenue that would have been generated.

Legislators had counted on that money to pay for Montgomery and Prince George's counties' share of the Metro subway and bus system operating costs. That means that the state will have to set aside the equivalent of a penny of the recent 5-cent per gallon increase in the state's fuel tax to make up the funding.

The net result: about $70 million to $80 million less for highway and transit improvements over the next six years.

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