S.Amdt. 4708

1. Adds TITLE __--TAX INCENTIVES FOR VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY wherever appropriate

   Adds a title

   Inserted: TITLE __--TAX INCENTIVES FOR VEHICLE AND FUEL CHOICES FOR AMERICAN SECURITY

   Inserted: Subtitle A--Fuel Efficient Vehicles for the 21st Century SEC. _01. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

   Inserted: (a) In General.--Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

   Inserted: "SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 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 35 percent of so much of the qualified investment of an eligible taxpayer for such taxable year as does not exceed $75,000,000.

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

   Inserted: "(1) In general.--The qualified investment for any taxable year is equal to the incremental costs incurred during such taxable year--

   Inserted: "(A) to re-equip or expand any manufacturing facility of the eleigible taxpayer to produce advanced technology motor vehicles,

   Inserted: "(B) to re-equip, expand, or establish any manufacturing facility of the eligible taxpayer to produce eligible components,

   Inserted: "(C) for engineering integration performed in the United States of such vehicles and components as described in subsection (d), and

   Inserted: "(D) for research and development performed in the United States related to advanced technology motor vehicles and eligible components.

   Inserted: "(2) Attribution rules.--In the event a facility of the eligible taxpayer produces both advanced technology motor vehicles and conventional motor vehicles, or eligible and non-eligible components, only the qualified investment attributable to production of advanced technology motor vehicles and eligible components shall be taken into account.

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   Inserted: "(c) Advanced Technology Motor Vehicles and Eligible Components.--For purposes of this section--

   Inserted: "(1) Advanced technology motor vehicle.--The term 'advanced technology motor vehicle' means--

   Inserted: "(A) any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3)), or

   Inserted: "(B) any new qualified hybrid motor vehicle (as defined in section 30B(d)(3)(A) and determined without regard to any gross vehicle weight rating).

   Inserted: "(2) Eligible components.--The term 'eligible component' means any component inherent to any advanced technology motor vehicle, including--

   Inserted: "(A) with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle--

   Inserted: "(i) electric motor or generator,

   Inserted: "(ii) power split device,

   Inserted: "(iii) power control unit,

   Inserted: "(iv) power controls,

   Inserted: "(v) integrated starter generator, or

   Inserted: "(vi) battery,

   Inserted: "(B) with respect to any hydraulic new qualified hybrid motor vehicle--

   Inserted: "(i) hydraulic accumulator vessel,

   Inserted: "(ii) hydraulic pump, or

   Inserted: "(iii) hydraulic pump-motor assembly,

   Inserted: "(C) with respect to any new advanced lean burn technology motor vehicle--

   Inserted: "(i) diesel engine,

   Inserted: "(ii) turbocharger,

   Inserted: "(iii) fuel injection system, or

   Inserted: "(iv) after-treatment system, such as a particle filter or NOx absorber, and

   Inserted: "(D) with respect to any advanced technology motor vehicle, any other component submitted for approval by the Secretary.

   Inserted: "(d) Engineering Integration Costs.--For purposes of subsection (b)(1)(C), costs for engineering integration are costs incurred prior to the market introduction of advanced technology vehicles for engineering tasks related to--

   Inserted: "(1) establishing functional, structural, and performance requirements for component and subsystems to meet overall vehicle objectives for a specific application,

   Inserted: "(2) designing interfaces for components and subsystems with mating systems within a specific vehicle application,

   Inserted: "(3) designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, and

   Inserted: "(4) validating functionality and performance of components and subsystems for a specific vehicle application.

   Inserted: "(e) Eligible Taxpayer.--For purposes of this section, the term 'eligible taxpayer' means any taxpayer if more than 50 percent of its gross receipts for the taxable year is derived from the manufacture of motor vehicles or any component parts of such vehicles.

   Inserted: "(f) Limitation Based on Amount of Tax.--The credit allowed under subsection (a) for the taxable year shall not exceed the excess of--

   Inserted: "(1) the sum of--

   Inserted: "(A) the regular tax liability (as defined in section 26(b)) for such taxable year, plus

   Inserted: "(B) the tax imposed by section 55 for such taxable year and any prior taxable year beginning after 1986 and not taken into account under section 53 for any prior taxable year, over

   Inserted: "(2) the sum of the credits allowable under subpart A and sections 27, 30, and 30B for the taxable year.

   Inserted: "(g) Reduction in Basis.--For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this paragraph) result from such expenditure shall be reduced by the amount of the credit so allowed.

   Inserted: "(h) No Double Benefit.--

   Inserted: "(1) Coordination with other deductions and credits.--Except as provided in paragraph (2), the amount of any deduction or other credit allowable under this chapter for any cost taken into account in determining the amount of the credit under subsection (a) shall be reduced by the amount of such credit attributable to such cost.

   Inserted: "(2) Research and development costs.--

   Inserted: "(A) In general.--Except as provided in subparagraph (B), any amount described in subsection (b)(1)(D) taken into account in determining the amount of the credit under subsection (a) for any taxable year shall not be taken into account for purposes of determining the credit under section 41 for such taxable year.

   Inserted: "(B) Costs taken into account in determining base period research expenses.--Any amounts described in subsection (b)(1)(D) taken into account in determining the amount of the credit under subsection (a) for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.

   Inserted: "(i) Business Carryovers Allowed.--If the credit allowable under subsection (a) for a taxable year exceeds the limitation under subsection (f) for such taxable year, such excess (to the extent of the credit allowable with respect to property subject to the allowance for depreciation) shall be allowed as a credit carryback and carryforward under rules similar to the rules of section 39.

   Inserted: "(j) Special Rules.--For purposes of this section, rules similar to the rules of paragraphs (4) and (5) of section 179A(e) and paragraphs (1) and (2) of section 41(f) shall apply

   Inserted: "(k) Election Not to Take Credit.--No credit shall be allowed under subsection (a) for any property if the taxpayer elects not to have this section apply to such property.

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

   Inserted: "(m) Termination.--This section shall not apply to any qualified investment after December 31, 2015.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Section 1016(a) of the Internal Revenue Code of 1986 is amended by striking "and" at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(37) to the extent provided in section 30D(g).".

   Inserted: (2) Section 6501(m) of such Code is amended by inserting "30D(k)," after "30C(e)(5),".

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

   Inserted: "Sec. 30D. Advanced technology motor vehicles manufacturing credit.".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to amounts incurred in taxable years beginning after December 31, 2005.

   Inserted: SEC. _02. CONSUMER INCENTIVES TO PURCHASE ADVANCED TECHNOLOGY VEHICLES.

   Inserted: (a) Elimination on Number of New Qualified Hybrid and Advanced Lean Burn Technology Vehicles Eligible for Alternative Motor Vehicle Credit.--

   Inserted: (1) In general.--Section 30D of the Internal Revenue Code of 1986 is amended by striking subsection (f) and by redesignating subsections (g) through (j) as subsections (f) through (i), respectively.

   Inserted: (2) Conforming amendments.--

   Inserted: (A) Paragraphs (4) and (6) of section 30B(h) of the Internal Revenue Code of 1986 are each amended amended by striking "(determined without regard to subsection (g))" and inserting "determined without regard to subsection (f))".

   Inserted: (B) Section 38(b)(25) of such Code is amended by striking "section 30B(g)(1)" and inserting "section 30B(f)(1)".

   Inserted: (C) Section 55(c)(2) of such Code is amended by striking "section 30B(g)(2)" and inserting "section 30B(f)(2)".

   Inserted: (D) Section 1016(a)(36) of such Code is amended by striking "section 30B(h)(4)" and inserting "section 30B(g)(4)".

   Inserted: (E) Section 6501(m) of such Code is amended by striking "section 30B(h)(9)" and inserting "section 30B(g)(9)".

   Inserted: (b) Extension of Alternative Vehicle Credit for New Qualified Hybrid Motor Vehicles.--Paragraph (3) of section 30B(i) of the Internal Revenue Code of 1986 (as redesignated by subsection (a)) is amended by striking "December 31, 2009" and inserting "December 31, 2010".

   Inserted: (c) Effective Date.--The amendments made by this section shall apply to property placed in service after December 31, 2005, in taxable years ending after such date.

   Inserted: SEC. _03. TAX INCENTIVES FOR PRIVATE FLEETS.

   Inserted: (a) In General.--Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48B the following new section:

   Inserted: "SEC. 48C. FUEL-EFFICIENT FLEET CREDIT.

   Inserted: "(a) General Rule.--For purposes of section 46, the fuel-efficient fleet credit for any taxable year is 15 percent of the qualified fuel-efficient vehicle investment amount of an eligible taxpayer for such taxable year.

   Inserted: "(b) Vehicle Purchase Requirement.--In the case of any eligible taxpayer which places less than 10 qualified fuel-efficient vehicles in service during the taxable year, the qualified fuel-efficient vehicle investment amount shall be zero.

   Inserted: "(c) Qualified Fuel-Efficient Vehicle Investment Amount.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualified fuel-efficient vehicle investment amount' means the basis of any qualified fuel-efficient vehicle placed in service by an eligible taxpayer during the taxable year.

   Inserted: "(2) Qualified fuel-efficient vehicle.--The term 'qualified fuel-efficient vehicle' means an automobile which has a fuel economy which is at least 125 percent greater than the average fuel economy standard for an automobile of the same class and model year.

   Inserted: "(3) Other terms.--The terms 'automobile', 'average fuel economy standard', 'fuel economy', and 'model year' have the meanings given to such terms under section 32901 of title 49, United States Code.

   Inserted: "(d) Eligible Taxpayer.--The term 'eligible taxpayer' means, with respect to any taxable year, a taxpayer who owns a fleet of 100 or more vehicles which are used in the trade or business of the taxpayer on the first day of such taxable year.

   Inserted: "(e) Termination.--This section shall not apply to any vehicle placed in service after December 31, 2010.".

   Inserted: (b) Credit Treated as Part of Investment Credit.--Section 46 of the Internal Revenue Code of 1986 is amended by striking "and" at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(5) the fuel-efficient fleet credit.".

   Inserted: (c) Conforming Amendments.--

   Inserted: (1) Section 49(a)(1)(C) of the Internal Revenue Code of 1986 is amended by striking "and" at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ", and", and by adding at the end the following new clause:

   Inserted: "(v) the basis of any qualified fuel-efficient vehicle which is taken into account under section 48C.".

   Inserted: (2) The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48 the following new item:

   Inserted: "Sec. 48C. Fuel-efficient fleet credit.".

   Inserted: (d) Effective Date.--The amendments made by this section shall apply to periods after December 31, 2005, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

   Inserted: SEC. _04. REDUCING INCENTIVES TO GUZZLE GAS.

   Inserted: (a) Inclusion of Heavy Vehicles in Limitation on Depreciation of Certain Luxury Automobiles.--

   Inserted: (1) In general.--Section 280F(d)(5)(A) of the Internal Revenue Code of 1986 (defining passenger automobile) is amended--

   Inserted: (A) by striking clause (ii) and inserting the following new clause:

   Inserted: "(ii)(I) which is rated at 6,000 pounds unloaded gross vehicle weight or less, or

   Inserted: "(II) which is rated at more than 6,000 pounds but not more than 14,000 pounds gross vehicle weight.",

   Inserted: (B) by striking "clause (ii)" in the second sentence and inserting "clause (ii)(I)".

   Inserted: (2) Exception for vehicles used in farming business.--Section 280F(d)(5)(B) of such Code (relating to exception for certain vehicles) is amended by striking "and" at the end of clause (ii), by redesignating clause (iii) as clause (iv), and by inserting after clause (ii) the following new clause:

   Inserted: "(iii) any vehicle used in a farming business (as defined in section 263A(e)(4), and".

   Inserted: (3) Effective date.--The amendments made by this subsection shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: (b) Updated Depreciation Deduction Limits.--

   Inserted: (1) In general.--Subparagraph (A) of section 280F(a)(1) of the Internal Revenue Code of 1986 (relating to limitation on amount of depreciation for luxury automobiles) is amended to read as follows:

   Inserted: "(I) Limitation.--The amount of the depreciation deduction for any taxable year shall not exceed for any passenger automobile--

   Inserted: "(i) for the 1st taxable year in the recovery period--

   Inserted: "(I) described in subsection (d)(5)(A)(ii)(I), $4,000,

   Inserted: "(II) described in the second sentence of subsection (d)(5)(A), $5,000, and

   Inserted: "(III) described in subsection (d)(5)(A)(ii)(II), $6,000,

   Inserted: "(ii) for the 2nd taxable year in the recovery period--

   Inserted: "(I) described in subsection (d)(5)(A)(ii)(I), $6,400,

   Inserted: "(II) described in the second sentence of subsection (d)(5)(A), $8,000, and

   Inserted: "(III) described in subsection (d)(5)(A)(ii)(II), $9,600,

   Inserted: "(iii) for the 3rd taxable year in the recovery period--

   Inserted: "(I) described in subsection (d)(5)(A)(ii)(I), $3,850,

   Inserted: "(II) described in the second sentence of subsection (d)(5)(A), $4,800, and

   Inserted: "(III) described in subsection (d)(5)(A)(ii)(II), $5,775, and

   Inserted: "(iv) for each succeeding taxable year in the recovery period--

   Inserted: "(I) described in subsection (d)(5)(A)(ii)(I), $2,325,

   Inserted: "(II) described in the second sentence of subsection (d)(5)(A), $2,900, and

   Inserted: "(III) described in subsection (d)(5)(A)(ii)(II), $3,475.".

   Inserted: (2) Years after recovery period.--Section 280F(a)(1)(B)(ii) of such Code is amended to read as follows:

   Inserted: "(ii) Limitation.--The amount treated as an expense under clause (i) for any taxable year shall not exceed for any passenger automobile--

   Inserted: "(I) described in subsection (d)(5)(A)(ii)(I), $2,325,

   Inserted: "(II) described in the second sentence of subsection (d)(5)(A), $2,900, and

   Inserted: "(III) described in subsection (d)(5)(A)(ii)(II), $3,475.".

   Inserted: (3) Inflation adjustment.--Section 280F(d)(7) of such Code (relating to automobile price inflation adjustment) is amended--

   Inserted: (A) by striking "after 1988" in subparagraph (A) and inserting "after 2006", and

   Inserted: (B) by striking subparagraph (B) and inserting the following new subparagraph:

   Inserted: "(B) Automobile price inflation adjustment.--For purposes of this paragraph--

   Inserted: "(i) In general.--The automobile price inflation adjustment for any calendar year is the percentage (if any) by which--

   Inserted: "(I) the average wage index for the preceding calendar year, exceeds

   Inserted: "(II) the average wage index for 2005.

   Inserted: "(ii) Average wage index.--The term 'average wage index' means the average wage index published by the Social Security Administration.".

   Inserted: (4) Effective date.--The amendments made by this subsection shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: (c) Expensing Limitation for Farm Vehicles.--

   Inserted: (1) In general.--Paragraph (6) of section 179(b) of the Internal Revenue Code of 1986 (relating to limitations) is amended to read as follows:

   Inserted: "(6) Limitation on cost taken into account for farm vehicles.--The cost of any vehicle described in section 280F(d)(5)(B)(iii) for any taxable year which may be taken into account under this section shall not exceed $30,000.".

   Inserted: (2) Effective date.--The amendment made by this subsection shall apply to property placed in service after the date of the enactment of this Act.

   Inserted: Subtitle B--Fuel Choices for the 21st Century SEC. _11. INCREASE IN ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

   Inserted: (a) In General.--Subsection (a) of section 30C of the Internal Revenue Code of 1986 is amended by striking "30 percent" and inserting "50 percent".

   Inserted: (b) Effective Date.--The amendment made by this section shall apply to property placed in service after December 31, 2005, in taxable years ending after such date.

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