S.Amdt. 908

1. Adds SEC. __. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT wherever appropriate

   Adds a section

   Inserted: SEC. __. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

   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. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

   Inserted: "(a) Credit Allowed.--

   Inserted: "(1) In general.--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 the qualified investment of an eligible taxpayer for such taxable year.

   Inserted: "(2) Limitation.--The credit allowed under subsection (a) for any taxable year shall not exceed $25,000,000.

   Inserted: "(b) Eligible Taxpayer.--For purposes of this section, the term 'eligible taxpayer' means any taxpayer if more than 50 percent of its gross receipts from manufacturing (as determined under section 199) for the taxable year is derived from the manufacture of motor vehicles or any component parts of such vehicles.

   Inserted: "(c) 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 a manufacturing facility of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components,

   Inserted: "(B) for engineering integration of such vehicles and components as described in subsection (e), and

   Inserted: "(C) for research and development related to advanced technology motor vehicles and eligible components.

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   Inserted: "(2) Attribution rules.--In the event a facility of the 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.

   Inserted: "(d) 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)(2)(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 NO<inf>x</inf> absorber, and

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

   Inserted: "(e) Engineering Integration Costs.--For purposes of subsection (c)(1)(B), 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: "(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 (c)(1)(C) 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 (c)(1)(C) 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, 2010.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Section 1016(a), as amended by this Act, is amended by striking "and" at the end of paragraph (39), by striking the period at the end of paragraph (40) and inserting ", and", and by adding at the end the following new paragraph:

   Inserted: "(41) to the extent provided in section 30D(g).".

   Inserted: (2) Section 6501(m), as amended by this Act, is amended by inserting "30D(k)," after "30C(j),".

   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 30C the following new item:

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

   Inserted: (c) Effective Date.--The amendments made by this section (other than subsection (d)) shall apply to amounts incurred in taxable years beginning after December 31, 2006.

   Inserted: (d) Reduction in Period by Which Renewable Energy Production Credit Extended.--Section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities), as amended by section 1501, is amended by striking "2009" each place it appears in paragraphs (1) through (7) and inserting "2008".

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As printed