S.Amdt. 2338

1. Adds SEC. 201. ALTERNATIVE MOTOR VEHICLE CREDIT wherever appropriate

   Adds a section

   Inserted: SEC. 201. ALTERNATIVE MOTOR VEHICLE CREDIT.

   Inserted: (a) In General.--Subpart B of part IV of subchapter A of chapter 1 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

   Inserted: "SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

   Inserted: "(a) Allowance of Credit.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--

   Inserted: "(1) the new qualified fuel cell motor vehicle credit determined under subsection (b),

   Inserted: "(2) the new qualified hybrid motor vehicle credit determined under subsection (c), and

   Inserted: "(3) the new qualified alternative fuel motor vehicle credit determined under subsection (d).

   Inserted: "(b) New Qualified Fuel Cell Motor Vehicle Credit.--

   Inserted: "(1) In general.--For purposes of subsection (a), the new qualified fuel cell motor vehicle credit determined under this subsection with respect to a new qualified fuel cell motor vehicle placed in service by the taxpayer during the taxable year is--

   Inserted: "(A) $4,000, if such vehicle has a gross vehicle weight rating of not more than 8,500 pounds,

   Inserted: "(B) $10,000, if such vehicle has a gross vehicle weight rating of more than 8,500 pounds but not more than 14,000 pounds,

   Inserted: "(C) $20,000, if such vehicle has a gross vehicle weight rating of more than 14,000 pounds but not more than 26,000 pounds, and

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   Inserted: "(D) $40,000, if such vehicle has a gross vehicle weight rating of more than 26,000 pounds.

   Inserted: "(2) Increase for fuel efficiency.--

   Inserted: "(A) In general.--The amount determined under paragraph (1)(A) with respect to a new qualified fuel cell motor vehicle which is a passenger automobile or light truck shall be increased by--

   Inserted: "(i) $1,000, if such vehicle achieves at least 150 percent but less than 175 percent of the 2002 model year city fuel economy,

   Inserted: "(ii) $1,500, if such vehicle achieves at least 175 percent but less than 200 percent of the 2002 model year city fuel economy,

   Inserted: "(iii) $2,000, if such vehicle achieves at least 200 percent but less than 225 percent of the 2002 model year city fuel economy,

   Inserted: "(iv) $2,500, if such vehicle achieves at least 225 percent but less than 250 percent of the 2002 model year city fuel economy,

   Inserted: "(v) $3,000, if such vehicle achieves at least 250 percent but less than 275 percent of the 2002 model year city fuel economy,

   Inserted: "(vi) $3,500, if such vehicle achieves at least 275 percent but less than 300 percent of the 2002 model year city fuel economy, and

   Inserted: "(vii) $4,000, if such vehicle achieves at least 300 percent of the 2002 model year city fuel economy.

   Inserted: "(B) 2002 model year city fuel economy.--For purposes of subparagraph (A), the 2002 model year city fuel economy with respect to a vehicle shall be determined in accordance with the following tables:

   Inserted: "(i) In the case of a passenger automobile:

   Inserted: "If vehicle inertia weight clThe 2002 model year city fuel economy is:

   Inserted: 1,500 or 1,750 lbs............................................45.2 mpg 2,000 lbs.....................................................39.6 mpg 2,250 lbs.....................................................35.2 mpg 2,500 lbs.....................................................31.7 mpg 2,750 lbs.....................................................28.8 mpg 3,000 lbs.....................................................26.4 mpg 3,500 lbs.....................................................22.6 mpg 4,000 lbs.....................................................19.8 mpg 4,500 lbs.....................................................17.6 mpg 5,000 lbs.....................................................15.9 mpg 5,500 lbs.....................................................14.4 mpg 6,000 lbs.....................................................13.2 mpg 6,500 lbs.....................................................12.2 mpg 7,000 to 8,500 lbs............................................11.3 mpg.

   Inserted: "(ii) In the case of a light truck:

   Inserted: The 2002 model year city "If vehicle inertia weight class is: fuel economy is:

   Inserted: 1,500 or 1,750 lbs............................................39.4 mpg 2,000 lbs.....................................................35.2 mpg 2,250 lbs.....................................................31.8 mpg 2,500 lbs.....................................................29.0 mpg 2,750 lbs.....................................................26.8 mpg 3,000 lbs.....................................................24.9 mpg 3,500 lbs.....................................................21.8 mpg 4,000 lbs.....................................................19.4 mpg 4,500 lbs.....................................................17.6 mpg 5,000 lbs.....................................................16.1 mpg 5,500 lbs.....................................................14.8 mpg 6,000 lbs.....................................................13.7 mpg 6,500 lbs.....................................................12.8 mpg 7,000 to 8,500 lbs............................................12.1 mpg.

   Inserted: "(C) Vehicle inertia weight class.--For purposes of subparagraph (B), the term 'vehicle inertia weight class' has the same meaning as when defined in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

   Inserted: "(3) New qualified fuel cell motor vehicle.--For purposes of this subsection, the term 'new qualified fuel cell motor vehicle' means a motor vehicle--

   Inserted: "(A) which is propelled by power derived from one or more cells which convert chemical energy directly into electricity by combining oxygen with hydrogen fuel which is stored on board the vehicle in any form and may or may not require reformation prior to use,

   Inserted: "(B) which, in the case of a passenger automobile or light truck--

   Inserted: "(i) for 2002 and later model vehicles, has received a certificate of conformity under the Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model year, and

   Inserted: "(ii) for 2004 and later model vehicles, has received a certificate that such vehicle meets or exceeds the Bin 5 Tier II emission level established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle,

   Inserted: "(C) the original use of which commences with the taxpayer,

   Inserted: "(D) which is acquired for use or lease by the taxpayer and not for resale, and

   Inserted: "(E) which is made by a manufacturer.

   Inserted: "(c) New Qualified Hybrid Motor Vehicle Credit.--

   Inserted: "(1) In general.--For purposes of subsection (a), the new qualified hybrid motor vehicle credit determined under this subsection with respect to a new qualified hybrid motor vehicle placed in service by the taxpayer during the taxable year is the credit amount determined under paragraph (2).

   Inserted: "(2) Credit amount.--

   Inserted: "(A) In general.--The credit amount determined under this paragraph shall be determined in accordance with the following tables:

   Inserted: "(i) In the case of a new qualified hybrid motor vehicle which is a passenger automobile or light truck and which provides the following percentage of the maximum available power:

   Inserted: "If percentage of the maximum available power is:The credit amount is:

   Inserted: At least 4 percent but less than 10 percent.................$250 ....

   Inserted: At least 10 percent but less than 20 percent................$500 ....

   Inserted: At least 20 percent but less than 30 percent................$750 ....

   Inserted: At least 30 percent.......................................$1,000.....

   Inserted: "(ii) In the case of a new qualified hybrid motor vehicle which is a heavy duty hybrid motor vehicle and which provides the following percentage of the maximum available power:

   Inserted: "(I) If such vehicle has a gross vehicle weight rating of not more than 14,000 pounds:

   Inserted: "If percentage of the maximum available power is:The credit amount is:

   Inserted: At least 20 percent but less than 30 percent..............$1,000 ....

   Inserted: At least 30 percent but less than 40 percent..............$1,750 ....

   Inserted: At least 40 percent but less than 50 percent..............$2,000 ....

   Inserted: At least 50 percent but less than 60 percent..............$2,250 ....

   Inserted: At least 60 percent.......................................$2,500.....

   Inserted: "(II) If such vehicle has a gross vehicle weight rating of more than 14,000 but not more than 26,000 pounds:

   Inserted: "If percentage of the maximum available power is:The credit amount is:

   Inserted: At least 20 percent but less than 30 percent..............$4,000 ....

   Inserted: At least 30 percent but less than 40 percent..............$4,500 ....

   Inserted: At least 40 percent but less than 50 percent..............$5,000 ....

   Inserted: At least 50 percent but less than 60 percent..............$5,500 ....

   Inserted: At least 60 percent.......................................$6,000.....

   Inserted: "(III) If such vehicle has a gross vehicle weight rating of more than 26,000 pounds:

   Inserted: "If percentage of the maximum available power is:The credit amount is:

   Inserted: At least 20 percent but less than 30 percent..............$6,000 ....

   Inserted: At least 30 percent but less than 40 percent..............$7,000 ....

   Inserted: At least 40 percent but less than 50 percent..............$8,000 ....

   Inserted: At least 50 percent but less than 60 percent..............$9,000 ....

   Inserted: At least 60 percent......................................$10,000.....

   Inserted: "(B) Increase for fuel efficiency.--

   Inserted: "(i) Amount.--The amount determined under subparagraph (A)(i) with respect to a new qualified hybrid motor vehicle which is a passenger automobile or light truck shall be increased by--

   Inserted: "(I) $500, if such vehicle achieves at least 125 percent but less than 150 percent of the 2002 model year city fuel economy,

   Inserted: "(II) $1,000, if such vehicle achieves at least 150 percent but less than 175 percent of the 2002 model year city fuel economy,

   Inserted: "(III) $1,500, if such vehicle achieves at least 175 percent but less than 200 percent of the 2002 model year city fuel economy,

   Inserted: "(IV) $2,000, if such vehicle achieves at least 200 percent but less than 225 percent of the 2002 model year city fuel economy,

   Inserted: "(V) $2,500, if such vehicle achieves at least 225 percent but less than 250 percent of the 2002 model year city fuel economy, and

   Inserted: "(VI) $3,000, if such vehicle achieves at least 250 percent of the 2002 model year city fuel economy.

   Inserted: "(ii) 2002 model year city fuel economy.--For purposes of clause (i), the 2002 model year city fuel economy with respect to a vehicle shall be determined using the tables provided in subsection (b)(2)(B) with respect to such vehicle.

   Inserted: "(C) Increase for accelerated emissions performance.--The amount determined under subparagraph (A)(ii) with respect to an applicable heavy duty hybrid motor vehicle shall be increased by the increased credit amount determined in accordance with the following tables:

   Inserted: "(i) In the case of a vehicle which has a gross vehicle weight rating of not more than 14,000 pounds:

   Inserted: "If the model year is: The increased credit amount is:

   Inserted: 2003......................................................$3,000 ....

   Inserted: 2004......................................................$2,500 ....

   Inserted: 2005......................................................$2,000 ....

   Inserted: 2006......................................................$1,500.....

   Inserted: "(ii) In the case of a vehicle which has a gross vehicle weight rating of more than 14,000 pounds but not more than 26,000 pounds:

   Inserted: "If the model year is: The increased credit amount is:

   Inserted: 2003......................................................$7,750 ....

   Inserted: 2004......................................................$6,500 ....

   Inserted: 2005......................................................$5,250 ....

   Inserted: 2006......................................................$4,000.....

   Inserted: "(iii) In the case of a vehicle which has a gross vehicle weight rating of more than 26,000 pounds:

   Inserted: The increased credit amount is:

   Inserted: 2003.....................................................$12,000 ....

   Inserted: 2004.....................................................$10,000 ....

   Inserted: 2005......................................................$8,000 ....

   Inserted: 2006......................................................$6,000.....

   Inserted: "(D) Definitions.--

   Inserted: "(i) Applicable heavy duty hybrid motor vehicle.--For purposes of subparagraph (C), the term 'applicable heavy duty hybrid motor vehicle' means a heavy duty hybrid motor vehicle which is powered by an internal combustion or heat engine which is certified as meeting the emission standards set in the regulations prescribed by the Administrator of the Environmental Protection Agency for 2007 and later model year diesel heavy duty engines, or for 2008 and later model year ottocycle heavy duty engines, as applicable.

   Inserted: "(ii) Heavy duty hybrid motor vehicle.--For purposes of this paragraph, the term 'heavy duty hybrid motor vehicle' means a new qualified hybrid motor vehicle which has a gross vehicle weight rating of more than 10,000 pounds and draws propulsion energy from both of the following onboard sources of stored energy:

   Inserted: "(I) An internal combustion or heat engine using consumable fuel which, for 2002 and later model vehicles, has received a certificate of conformity under the Clean Air Act and meets or exceeds a level of not greater than 3.0 grams per brake horsepower-hour of oxides of nitrogen and 0.01 per brake horsepower-hour of particulate matter.

   Inserted: "(II) A rechargeable energy storage system.

   Inserted: "(iii) Maximum available power.--

   Inserted: "(I) Passenger automobile or light truck.--For purposes of subparagraph (A)(i), the term 'maximum available power' means the maximum power available from the rechargeable energy storage system, during a standard 10 second pulse power or equivalent test, divided by such maximum power and the SAE net power of the heat engine.

   Inserted: "(II) Heavy duty hybrid motor vehicle.--For purposes of subparagraph (A)(ii), the term 'maximum available power' means the maximum power available from the rechargeable energy storage system, during a standard 10 second pulse power or equivalent test, divided by the vehicle's total traction power. The term 'total traction power' means the sum of the peak power from the rechargeable energy storage system and the heat engine peak power of the vehicle, except that if such storage system is the sole means by which the vehicle can be driven, the total traction power is the peak power of such storage system.

   Inserted: "(3) New qualified hybrid motor vehicle.--For purposes of this subsection, the term 'new qualified hybrid motor vehicle' means a motor vehicle--

   Inserted: "(A) which draws propulsion energy from onboard sources of stored energy which are both--

   Inserted: "(i) an internal combustion or heat engine using combustible fuel, and

   Inserted: "(ii) a rechargeable energy storage system,

   Inserted: "(B) which, in the case of a passenger automobile or light truck--

   Inserted: "(i) for 2002 and later model vehicles, has received a certificate of conformity under the Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model year, and

   Inserted: "(ii) for 2004 and later model vehicles, has received a certificate that such vehicle meets or exceeds the Bin 5 Tier II emission level established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle,

   Inserted: "(C) the original use of which commences with the taxpayer,

   Inserted: "(D) which is acquired for use or lease by the taxpayer and not for resale, and

   Inserted: "(E) which is made by a manufacturer.

   Inserted: "(d) New Qualified Alternative Fuel Motor Vehicle Credit.--

   Inserted: "(1) Allowance of credit.--Except as provided in paragraph (5), the new qualified alternative fuel motor vehicle credit determined under this subsection is an amount equal to the applicable percentage of the incremental cost of any new qualified alternative fuel motor vehicle placed in service by the taxpayer during the taxable year.

   Inserted: "(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage with respect to any new qualified alternative fuel motor vehicle is--

   Inserted: "(A) 40 percent, plus

   Inserted: "(B) 30 percent, if such vehicle--

   Inserted: "(i) has received a certificate of conformity under the Clean Air Act and meets or exceeds the most stringent standard available for certification under the Clean Air Act for that make and model year vehicle (other than a zero emission standard), or

   Inserted: "(ii) has received an order certifying the vehicle as meeting the same requirements as vehicles which may be sold or leased in California and meets or exceeds the most stringent standard available for certification under the State laws of California (enacted in accordance with a waiver granted under section 209(b) of the Clean Air Act) for that make and model year vehicle (other than a zero emission standard).

   Inserted: "(3) Incremental cost.--For purposes of this subsection, the incremental cost of any new qualified alternative fuel motor vehicle is equal to the amount of the excess of the manufacturer's suggested retail price for such vehicle over such price for a gasoline or diesel fuel motor vehicle of the same model, to the extent such amount does not exceed--

   Inserted: "(A) $5,000, if such vehicle has a gross vehicle weight rating of not more than 8,500 pounds,

   Inserted: "(B) $10,000, if such vehicle has a gross vehicle weight rating of more than 8,500 pounds but not more than 14,000 pounds,

   Inserted: "(C) $25,000, if such vehicle has a gross vehicle weight rating of more than 14,000 pounds but not more than 26,000 pounds, and

   Inserted: "(D) $40,000, if such vehicle has a gross vehicle weight rating of more than 26,000 pounds.

   Inserted: "(4)New qualified alternative fuel motor vehicle.--For purposes of this subsection--

   Inserted: "(A) In general.--The term 'new qualified alternative fuel motor vehicle' means any motor vehicle--

   Inserted: "(i) which is only capable of operating on an alternative fuel,

   Inserted: "(ii) the original use of which commences with the taxpayer,

   Inserted: "(iii) which is acquired by the taxpayer for use or lease, but not for resale, and

   Inserted: "(iv) which is made by a manufacturer.

   Inserted: "(B) Alternative fuel.--The term 'alternative fuel' means compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, and any liquid at least 85 percent of the volume of which consists of methanol.

   Inserted: "(5) Credit for mixed-fuel vehicles.--

   Inserted: "(A) In general.--In the case of a mixed-fuel vehicle placed in service by the taxpayer during the taxable year, the credit determined under this subsection is an amount equal to--

   Inserted: "(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent of the credit which would have been allowed under this subsection if such vehicle was a qualified alternative fuel motor vehicle, and

   Inserted: "(ii) in the case of a 90/10 mixed-fuel vehicle, 90 percent of the credit which would have been allowed under this subsection if such vehicle was a qualified alternative fuel motor vehicle.

   Inserted: "(B) Mixed-fuel vehicle.--For purposes of this subsection, the term 'mixed-fuel vehicle' means any motor vehicle described in subparagraph (C) or (D) of paragraph (3), which--

   Inserted: "(i) is certified by the manufacturer as being able to perform efficiently in normal operation on a combination of an alternative fuel and a petroleum-based fuel,

   Inserted: "(ii) either--

   Inserted: "(I) has received a certificate of conformity under the Clean Air Act, or

   Inserted: "(II) has received an order certifying the vehicle as meeting the same requirements as vehicles which may be sold or leased in California and meets or exceeds the low emission vehicle standard under section 88.105-94 of title 40, Code of Federal Regulations, for that make and model year vehicle,

   Inserted: "(iii) the original use of which commences with the taxpayer,

   Inserted: "(iv) which is acquired by the taxpayer for use or lease, but not for resale, and

   Inserted: "(v) which is made by a manufacturer.

   Inserted: "(C) 75/25 mixed-fuel vehicle.--For purposes of this subsection, the term '75/25 mixed-fuel vehicle' means a mixed-fuel vehicle which operates using at least 75 percent alternative fuel and not more than 25 percent petroleum-based fuel.

   Inserted: "(D) 90/10 mixed-fuel vehicle.--For purposes of this subsection, the term '90/10 mixed-fuel vehicle' means a mixed-fuel vehicle which operates using at least 90 percent alternative fuel and not more than 10 percent petroleum-based fuel.

   Inserted: "(e) Application With Other Credits.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess (if any) of--

   Inserted: "(1) the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 29, and 30, over

   Inserted: "(2) the tentative minimum tax for the taxable year.

   Inserted: "(f) Other Definitions and Special Rules.--For purposes of this section--

   Inserted: "(1) Consumable fuel.--The term 'consumable fuel' means any solid, liquid, or gaseous matter which releases energy when consumed by an auxiliary power unit.

   Inserted: "(2) Motor vehicle.--The term 'motor vehicle' has the meaning given such term by section 30(c)(2).

   Inserted: "(3) City fuel economy.--The city fuel economy with respect to any vehicle shall be measured in a manner which is substantially similar to the manner city fuel economy is measured in accordance with procedures under part 600 of subchapter Q of chapter I of title 40, Code of Federal Regulations, as in effect on the date of the enactment of this section.

   Inserted: "(4) Other terms.--The terms 'automobile', 'passenger automobile', 'light truck', and 'manufacturer' have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).

   Inserted: "(5) Reduction in basis.--For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (e)).

   Inserted: "(6) No double benefit.--The amount of any deduction or other credit allowable under this chapter--

   Inserted: "(A) for any incremental cost taken into account in computing the amount of the credit determined under subsection (d) shall be reduced by the amount of such credit attributable to such cost, and

   Inserted: "(B) with respect to a vehicle described under subsection (b) or (c), shall be reduced by the amount of credit allowed under subsection (a) for such vehicle for the taxable year.

   Inserted: "(7) Property used by tax-exempt entities.--In the case of a credit amount which is allowable with respect to a motor vehicle which is acquired by an entity exempt from tax under this chapter, the person which sells or leases such vehicle to the entity shall be treated as the taxpayer with respect to the vehicle for purposes of this section and the credit shall be allowed to such person, but only if the person clearly discloses to the entity at the time of any sale or lease the specific amount of any credit otherwise allowable to the entity under this section.

   Inserted: "(8) Recapture.--The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit (including recapture in the case of a lease period of less than the economic life of a vehicle).

   Inserted: "(9) Property used outside united states, etc., not qualified.--No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 179.

   Inserted: "(10) Election to not take credit.--No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.

   Inserted: "(11) Carryback and carryforward allowed.--

   Inserted: "(A) In general.--If the credit amount allowable under subsection (a) for a taxable year exceeds the amount of the limitation under subsection (e) for such taxable year (in this paragraph referred to as the 'unused credit year'), such excess shall be allowed as a credit carryback for each of the 3 taxable years beginning after the date of the enactment of this paragraph, which precede the unused credit year and a credit carryforward for each of the 20 taxable years which succeed the unused credit year.

   Inserted: "(B) Rules.--Rules similar to the rules of section 39 shall apply with respect to the credit carryback and credit carryforward under subparagraph (A).

   Inserted: "(12) Interaction with air quality and motor vehicle safety standards.--Unless otherwise provided in this section, a motor vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with--

   Inserted: "(A) the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and

   Inserted: "(B) the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.

   Inserted: "(g) Regulations.--

   Inserted: "(1) In general.--Except as provided in paragraph (2), the Secretary shall promulgate such regulations as necessary to carry out the provisions of this section.

   Inserted: "(2) Coordination in prescription of certain regulations.--The Secretary of the Treasury, in coordination with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets the requirements to be eligible for a credit under this section.

   Inserted: "(h) Termination.--This section shall not apply to any property purchased after--

   Inserted: "(1) in the case of a new qualified fuel cell motor vehicle (as described in subsection (b)), December 31, 2011, and

   Inserted: "(2) in the case of any other property, December 31, 2006.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Section 1016(a) is amended by striking "and" at the end of paragraph (27), by striking the period at the end of paragraph (28) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(29) to the extent provided in section 30B(f)(5).".

   Inserted: (2) Section 55(c)(2) is amended by inserting "30B(e)," after "30(b)(3)".

   Inserted: (3) Section 6501(m) is amended by inserting "30B(f)(10)," after "30(d)(4),".

   Inserted: (4) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 30A the following new item:

   Inserted: "Sec. 30B. Alternative motor vehicle credit.".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: SEC. 202. MODIFICATION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

   Inserted: (a) Amount of Credit.--

   Inserted: (1) In general.--Section 30(a) (relating to allowance of credit) is amended by striking "10 percent of".

   Inserted: (2) Limitation of credit according to type of vehicle.--Section 30(b) (relating to limitations) is amended--

   Inserted: (A) by striking paragraphs (1) and (2) and inserting the following new paragraph:

   Inserted: "(1) Limitation according to type of vehicle.--The amount of the credit allowed under subsection (a) for any vehicle shall not exceed the greatest of the following amounts applicable to such vehicle:

   Inserted: "(A) In the case of a vehicle which conforms to the Motor Vehicle Safety Standard 500 prescribed by the Secretary of Transportation, as in effect on the date of the enactment of the Energy Tax Incentives Act of 2003, the lesser of--

   Inserted: "(i) 10 percent of the manufacturer's suggested retail price of the vehicle, or

   Inserted: "(ii) $1,500.

   Inserted: "(B) In the case of a vehicle not described in subparagraph (A) with a gross vehicle weight rating not exceeding 8,500 pounds--

   Inserted: "(i) $3,500, or

   Inserted: "(ii) $6,000, if such vehicle is--

   Inserted: "(I) capable of a driving range of at least 100 miles on a single charge of the vehicle's rechargeable batteries as measured pursuant to the urban dynamometer schedules under appendix I to part 86 of title 40, Code of Federal Regulations, or

   Inserted: "(II) capable of a payload capacity of at least 1,000 pounds.

   Inserted: "(C) In the case of a vehicle with a gross vehicle weight rating exceeding 8,500 but not exceeding 14,000 pounds, $10,000.

   Inserted: "(D) In the case of a vehicle with a gross vehicle weight rating exceeding 14,000 but not exceeding 26,000 pounds, $20,000.

   Inserted: "(E) In the case of a vehicle with a gross vehicle weight rating exceeding 26,000 pounds, $40,000.", and

   Inserted: (B) by redesignating paragraph (3) as paragraph (2).

   Inserted: (3) Conforming amendments.--

   Inserted: (A) Section 53(d)(1)(B)(iii) is amended by striking "section 30(b)(3)(B)" and inserting "section 30(b)(2)(B)".

   Inserted: (3) Section 55(c)(2), as amended by this Act, is amended by striking "30(b)(3)" and inserting "30(b)(2)".

   Inserted: (b) Qualified Battery Electric Vehicle.--

   Inserted: (1) In general.--Section 30(c)(1)(A) (defining qualified electric vehicle) is amended to read as follows:

   Inserted: "(A) which is--

   Inserted: "(i) operated solely by use of a battery or battery pack, or

   Inserted: "(ii) powered primarily through the use of an electric battery or battery pack using a flywheel or capacitor which stores energy produced by an electric motor through regenerative braking to assist in vehicle operation,".

   Inserted: (2) Leased vehicles.--Section 30(c)(1)(C) is amended by inserting "or lease" after "use".

   Inserted: (3) Conforming amendments.--

   Inserted: (A) Subsections (a), (b)(2), and (c) of section 30 are each amended by inserting "battery" after "qualified" each place it appears.

   Inserted: (B) The heading of subsection (c) of section 30 is amended by inserting "Battery" after "Qualified".

   Inserted: (C) The heading of section 30 is amended by inserting "battery" after "qualified".

   Inserted: (D) The item relating to section 30 in the table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by inserting "battery" after "qualified".

   Inserted: (E) Section 179A(c)(3) is amended by inserting "battery" before "electric".

   Inserted: (F) The heading of paragraph (3) of section 179A(c) is amended by inserting "battery" before "electric".

   Inserted: (c) Additional Special Rules.--Section 30(d) (relating to special rules) is amended by adding at the end the following new paragraphs:

   Inserted: "(5) No double benefit.--The amount of any deduction or other credit allowable under this chapter for any cost taken into account in computing the amount of the credit determined under subsection (a) shall be reduced by the amount of such credit attributable to such cost.

   Inserted: "(6) Property used by tax-exempt entities.--In the case of a credit amount which is allowable with respect to a vehicle which is acquired by an entity exempt from tax under this chapter, the person which sells or leases such vehicle to the entity shall be treated as the taxpayer with respect to the vehicle for purposes of this section and the credit shall be allowed to such person, but only if the person clearly discloses to the entity at the time of any sale or lease the specific amount of any credit otherwise allowable to the entity under this section.

   Inserted: "(7) Carryback and carryforward allowed.--

   Inserted: "(A) In general.--If the credit amount allowable under subsection (a) for a taxable year exceeds the amount of the limitation under subsection (b)(2) for such taxable year (in this paragraph referred to as the 'unused credit year'), such excess shall be allowed as a credit carryback for each of the 3 taxable years beginning after the date of the enactment of this paragraph, which precede the unused credit year and a credit carryforward for each of the 20 taxable years which succeed the unused credit year.

   Inserted: "(B) Rules.--Rules similar to the rules of section 39 shall apply with respect to the credit carryback and credit carryforward under subparagraph (A).".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: SEC. 203. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

   Inserted: (a) In General.--Subpart B of part IV of subchapter A of chapter 1 (relating to foreign tax credit, etc.), as amended by this Act, is amended by adding at the end the following new section:

   Inserted: "SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY CREDIT.

   Inserted: "(a) Credit Allowed.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 50 percent of the amount paid or incurred by the taxpayer during the taxable year for the installation of qualified clean-fuel vehicle refueling property.

   Inserted: "(b) Limitation.--The credit allowed under subsection (a)--

   Inserted: "(1) with respect to any retail clean-fuel vehicle refueling property, shall not exceed $30,000, and

   Inserted: "(2) with respect to any residential clean-fuel vehicle refueling property, shall not exceed $1,000.

   Inserted: "(c) Year Credit Allowed.--The credit allowed under subsection (a) shall be allowed in the taxable year in which the qualified clean-fuel vehicle refueling property is placed in service by the taxpayer.

   Inserted: "(d) Definitions.--For purposes of this section--

   Inserted: "(1) Qualified clean-fuel vehicle refueling property.--The term 'qualified clean-fuel vehicle refueling property' has the same meaning given such term by section 179A(d).

   Inserted: "(2) Residential clean-fuel vehicle refueling property.--The term 'residential clean-fuel vehicle refueling property' means qualified clean-fuel vehicle refueling property which is installed on property which is used as the principal residence (within the meaning of section 121) of the taxpayer.

   Inserted: "(3) Retail clean-fuel vehicle refueling property.--The term 'retail clean-fuel vehicle refueling property' means qualified clean-fuel vehicle refueling property which is installed on property (other than property described in paragraph (2)) used in a trade or business of the taxpayer.

   Inserted: "(e) Application With Other Credits.--The credit allowed under subsection (a) for any taxable year shall not exceed the excess (if any) of--

   Inserted: "(1) the regular tax for the taxable year reduced by the sum of the credits allowable under subpart A and sections 27, 29, 30, and 30B, over

   Inserted: "(2) the tentative minimum tax for the taxable year.

   Inserted: "(f) Basis Reduction.--For purposes of this title, the basis of any property shall be reduced by the portion of the cost of such property taken into account under subsection (a).

   Inserted: "(g) No Double Benefit.--No deduction shall be allowed under section 179A with respect to any property with respect to which a credit is allowed under subsection (a).

   Inserted: "(h) Refueling Property Installed for Tax-Exempt Entities.--In the case of qualified clean-fuel vehicle refueling property installed on property owned or used by an entity exempt from tax under this chapter, the person which installs such refueling property for the entity shall be treated as the taxpayer with respect to the refueling property for purposes of this section (and such refueling property shall be treated as retail clean-fuel vehicle refueling property) and the credit shall be allowed to such person, but only if the person clearly discloses to the entity in any installation contract the specific amount of the credit allowable under this section.

   Inserted: "(i) Carryforward Allowed.--

   Inserted: "(1) In general.--If the credit amount allowable under subsection (a) for a taxable year exceeds the amount of the limitation under subsection (e) for such taxable year (referred to as the 'unused credit year' in this subsection), such excess shall be allowed as a credit carryforward for each of the 20 taxable years following the unused credit year.

   Inserted: "(2) Rules.--Rules similar to the rules of section 39 shall apply with respect to the credit carryforward under paragraph (1).

   Inserted: "(j) Special Rules.--Rules similar to the rules of paragraphs (4) and (5) of section 179A(e) shall apply.

   Inserted: "(k) Regulations.--The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.

   Inserted: "(l) Termination.--This section shall not apply to any property placed in service--

   Inserted: "(1) in the case of property relating to hydrogen, after December 31, 2011, and

   Inserted: "(2) in the case of any other property, after December 31, 2007.".

   Inserted: (b) Modifications to Extension of Deduction for Certain Refueling Property.--

   Inserted: (1) In general.--Subsection (f) of section 179A is amended to read as follows:

   Inserted: "(f) Termination.--This section shall not apply to any property placed in service--

   Inserted: "(1) in the case of property relating to hydrogen, after December 31, 2011, and

   Inserted: "(2) in the case of any other property, after December 31, 2007.".

   Inserted: (2) Extension of phaseout.--Section 179A(b)(1)(B), as amended by section 606(a) of the Job Creation and Worker Assistance Act of 2002, is amended--

   Inserted: (A) by striking "calendar year 2004" in clause (i) and inserting "calendar years 2004 and 2005 (calendar years 2004 through 2009 in the case of property relating to hydrogen) ",

   Inserted: (B) by striking "2005" in clause (ii) and inserting "2006 (calendar year 2010 in the case of property relating to hydrogen)", and

   Inserted: (C) by striking "2006" in clause (iii) and inserting "2007 (calendar year 2011 in the case of property relating to hydrogen)".

   Inserted: (c) Incentive for Production of Hydrogen at Qualified Clean-Fuel Vehicle Refueling Property.--Section 179A(d) (defining qualified clean-fuel vehicle refueling property) is amended by adding at the end the following new flush sentence:

   Inserted: "In the case of clean-burning fuel which is hydrogen produced from another clean-burning fuel, paragraph (3)(A) shall be applied by substituting 'production, storage, or dispensing' for 'storage or dispensing' both places it appears.".

   Inserted: (d) Conforming Amendments.--(1) Section 1016(a), as amended by this Act, is amended by striking "and" at the end of paragraph (28), by striking the period at the end of paragraph (29) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(30) to the extent provided in section 30C(f).".

   Inserted: (2) Section 55(c)(2), as amended by this Act, is amended by inserting "30C(e)," after "30B(e)".

   Inserted: (3) The table of sections for subpart B of part IV of subchapter A of chapter 1, as amended by this Act, is amended by inserting after the item relating to section 30B the following new item:

   Inserted: "Sec. 30C. Clean-fuel vehicle refueling property credit.".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act, in taxable years ending after such date.

   Inserted: SEC. 204. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE FUEL.

   Inserted: (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business related credits) is amended by inserting after section 40 the following new section:

   Inserted: "SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE FUEL.

   Inserted: "(a) General Rule.--For purposes of section 38, the alternative fuel retail sales credit for any taxable year is the applicable amount for each gasoline gallon equivalent of alternative fuel sold at retail by the taxpayer during such year as a fuel to propel any qualified motor vehicle.

   Inserted: "(b) Definitions.--For purposes of this section--

   Inserted: "(1) Applicable amount.--The term 'applicable amount' means the amount determined in accordance with the following table:

   Inserted: "In the case of any taxable year ending in--The applicable amount is--

   Inserted: 2003........................................................30 cents 2004........................................................40 cents 2005 and 2006...............................................50 cents.

   Inserted: "(2) Alternative fuel.--The term 'alternative fuel' means compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, and any liquid at least 85 percent of the volume of which consists of methanol or ethanol.

   Inserted: "(3) Gasoline gallon equivalent.--The term 'gasoline gallon equivalent' means, with respect to any alternative fuel, the amount (determined by the Secretary) of such fuel having a Btu content of 114,000.

   Inserted: "(4) Qualified motor vehicle.--The term 'qualified motor vehicle' means any motor vehicle (as defined in section 30(c)(2)) which meets any applicable Federal or State emissions standards with respect to each fuel by which such vehicle is designed to be propelled.

   Inserted: "(5) Sold at retail.--

   Inserted: "(A) In general.--The term 'sold at retail' means the sale, for a purpose other than resale, after manufacture, production, or importation.

   Inserted: "(B) Use treated as sale.--If any person uses alternative fuel (including any use after importation) as a fuel to propel any qualified alternative fuel motor vehicle (as defined in section 30B(d)(4)) before such fuel is sold at retail, then such use shall be treated in the same manner as if such fuel were sold at retail as a fuel to propel such a vehicle by such person.

   Inserted: "(c) No Double Benefit.--The amount of any deduction or other credit allowable under this chapter for any fuel taken into account in computing the amount of the credit determined under subsection (a) shall be reduced by the amount of such credit attributable to such fuel.

   Inserted: "(d) Pass-Thru in the Case of Estates and Trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.

   Inserted: "(e) Termination.--This section shall not apply to any fuel sold at retail after December 31, 2006.".

   Inserted: (b) Credit Treated as Business Credit.--Section 38(b) (relating to current year business credit) is amended by striking "plus" at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ", plus", and by adding at the end the following new paragraph:

   Inserted: "(16) the alternative fuel retail sales credit determined under section 40A(a).".

   Inserted: (c) Transitional Rule.--Section 39(d) (relating to transitional rules) is amended by adding at the end the following new paragraph:

   Inserted: "(11) No carryback of section 40a credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the alternative fuel retail sales credit determined under section 40A(a) may be carried back to a taxable year ending on or before the date of the enactment of such section.".

   Inserted: (d) Clerical Amendment.--The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 40 the following new item:

   Inserted: "Sec. 40A. Credit for retail sale of alternative fuels as motor vehicle fuel.".

   Inserted: (e) Effective Date.--The amendments made by this section shall apply to fuel sold at retail after the date of the enactment of this Act, in taxable years ending after such date.

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   Original wording

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As printed