A bill to encourage States to establish motor vehicle disposal programs and to provide for federally guaranteed loans and tax incentives for the acquisition of automobile scrap processing equipment.

Authorizes the Secretary of the Interior to make grants to States, which have State plans approved by him, to pay the Federal share of the cost of carrying out motor vehicle disposal plans approved under this Act.

Requires any State desiring to receive its allotment of Federal funds under this Act to submit a State plan consistent with such basic criteria as the Secretary may establish. States that such plans shall provide, among other things, for the administration by a public agency in the State of a motor vehicle disposal plan designed to provide for the efficient removal to scrap processing facilities of junked motor vehicles.

Provides that a State law meets the requirements of this Act with respect to control of automobile graveyards if it makes provisions for effective control of the establishment and maintenance along all public streets and highways in such State of all outdoor automobile graveyards which are within one thousand feet of the nearest edge of the right-of-way and visible from the main traveled way of any such street or highway.

Authorizes the Secretary to promulgate such rules and regulations as may be necessary to carry out the objectives of this Act. Sets forth the procedure whereby the Secretary, after giving reasonable notice and opportunity for a hearing, may withhold the payment of grants under this Act until he is satisfied that any noncompliance has been, or will be, promptly corrected.

Stipulates that the Secretary may guarantee any lender against loss of principal and interest on any equipment purchase loan made by such lender to an automobile scrap processor. Authorizes the Secretary to prescribe and collect from the lending institution a reasonable guaranty fee in connection with each loan guaranteed under this Act.

Provides for an amortization deduction for automobile scrap processing equipment under the Internal Revenue Code. Increases by $5 per vehicle the automobile manufacturers excise tax. Establishes a trust fund in the Treasury to be known as the Automobile Disposal Trust Fund, which shall consist of all additional taxes received by reason of the increase in the excise tax. States that amounts in such fund shall be available for the purpose of making grants under this Act.