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Clinkers taken out of clunkers rules

ST. PAUL - Clunkers being traded in at Minnesota car dealers may have run smoother than a couple parts of the federal cash-for-clunkers program.

But the problems are being fixed, the U.S. transportation secretary Tuesday assured Sen. Amy Klobuchar, D-Minn.

The program allows vehicle owners to trade in low-gasoline-mileage vehicles for more efficient new cars and receive up to $4,500 off the price of the purchase.

About 20 percent of the 7,500 Minnesotans who have applied for the popular federal cash-for-clunkers car purchase program discovered that a quirk in how the program dealt with state law disqualified them.

Transportation Secretary Ray LaHood said that problem is being fixed.

Federal rules required a continuous registration before money would be approved. But Minnesota law considers a registration to continue even 10 days after the expiration date.

"Fixing the mechanics of the program and making sure that it works in conjunction with Minnesota's registration policies are necessary tune-ups," Klobuchar said. "My top priority right now is making sure that the rug isn't pulled out from under Minnesota dealers and Minnesota customers who have already participated in the program."

Klobuchar called LaHood Tuesday morning to urge him to make changes to accommodate state law. By late afternoon, he sent her a letter saying: "We have adjusted our transaction approval process to accommodate the 10-day grace period."

LaHood also told Klobuchar that glitches in a computer system dealers use to enter their transactions will be fixed.

"I want to assure you that the U.S. Department of Transportation is working closely with dealers to improve the processing of transactions to ensure that money flows quickly to dealers while preventing fraud and abuse," the secretary wrote. "We have already seen significant reductions in the delays as a result of the steps we have implemented."

Klobuchar warned dealers that the computer problems will not disappear immediately.

Minnesota only trails Michigan, Ohio and California for participants in the clunker program, with $26 million in applications.

The program is expected to run out of money by the end of the week if U.S. senators do not approve spending another $2 billion.

Majority Leader Harry Reid said he plans a vote before the Senate adjourns Friday. Republicans were not expected to block the vote, giving cash-for-clunkers backers optimism it will pass.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.