To improve provisions relating to energy tax incentives and provisions relating manufacturing tax incentives for energy property.

SA 274. Ms. CANTWELL (for herself, Mr. Hatch, Ms. Stabenow, and Mr.
Kerry) submitted an amendment intended to be proposed to amendment SA
98 proposed by Mr. Inouye (for himself and Mr. Baucus) to the bill H.R.
1, making supplemental appropriations for job preservation and
creation, infrastructure investment, energy efficiency and science,
assistance to the unemployed, and State and local fiscal stabilization,
for fiscal year ending September 30, 2009, and for other purposes;
which was ordered to lie on the table; as follows:

On page 461, strike lines 8 to 10 and insert the following:
(b) Ensuring Consumer Accessibility to Alternative Fuel
Vehicle Refueling Property in the Case of Electricity.--
Section 179(d)(3) is amended by striking subparagraph (B) and
inserting the following:
``(B) for the recharging of motor vehicles propelled by
electricity, but only if--
``(i) the property complies with the Society of Automotive
Engineers' connection standards,
``(ii) the property provides for non-restrictive access for
charging and for payment interoperability with other systems,
and
``(iii) the property--

``(I) is located on property owned by the taxpayer, or
``(II) is located on property owned by another person, is
placed in service with the permission of such other person,
and is fully maintained by the taxpayer.''.

(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

SEC. 1124. RECOVERY PERIOD FOR DEPRECIATION OF SMART METERS
AND SMART GRID SYSTEMS.

(a) 5-Year Recovery Period.--
(1) In general.--Subparagraph (B) of section 168(e)(3) is
amended by striking ``and'' at the end of clause (vi), by
striking the period at the end of clause (vii) and inserting
``, and'', and by adding at the end the following new
clauses:
``(viii) any qualified smart electric meter, and
``(ix) any qualified smart electric grid system.''.
(2) Conforming amendments.--Subparagraph (D) of section
168(e)(3) is amended by inserting ``and'' at the end of
clause (i), by striking the comma at the end of clause (ii)
and inserting a period, and by striking clauses (iii) and
(iv).
(b) Technical Amendments.--Paragraphs (18)(A)(ii) and
(19)(A)(ii) of section 168(i) are each amended by striking
``16 years'' and inserting ``10 years''.
(c) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property
placed in service after the date of the enactment of this
Act.
(2) Technical amendment.--The amendments made by subsection
(b) shall take effect as if included in section 306 of the
Energy Improvement and Extension Act of 2008.
Beginning on page 467, strike line 21 and all that follows
through page 470, line 23, and insert the following:

SEC. 1161. MODIFICATION OF CREDIT FOR QUALIFIED PLUG-IN
ELECTRIC MOTOR VEHICLES.

(a) Increase in Vehicles Eligible for Credit.--Section
30D(b)(2)(B) is amended by striking ``250,000'' and inserting
``500,000''.
(b) Exclusion of Neighborhood Electric Vehicles From
Existing Credit.--Section 30D(e)(1) is amended to read as
follows:
``(1) Motor vehicle.--The term `motor vehicle' means a
motor vehicle (as defined in section 30(c)(2)), which is
treated as a motor vehicle for purposes of title II of the
Clean Air Act.''.
(c) Credit for Certain Other Vehicles.--Section 30D is
amended--
(1) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively, and
(2) by inserting after subsection (e) the following new
subsection:
``(f) Credit for Certain Other Vehicles.--For purposes of
this section--
``(1) In general.--In the case of a specified vehicle, this
section shall be applied with the following modifications:
``(A) For purposes of subsection (a)(1), in lieu of the
applicable amount determined under subsection (a)(2), the
applicable amount shall be 10 percent of so much of the cost
of the specified vehicle as does not exceed $40,000.
``(B) Subsection (b) shall not apply and no specified
vehicle shall be taken into account under subsection (b)(2).
``(C) In the case of a specified vehicle which is a 2-or 3-
wheeled motor vehicle, subsection (c)(1) shall be applied by
substituting `2.5 kilowatt hours' for `4 kilowatt hours'.
``(D) In the case of a specified vehicle which is a low-
speed motor vehicle, subsection (c)(3) shall not apply.
``(2) Specified vehicle.--For purposes of this subsection--
``(A) In general.--The term `specified vehicle' means--
``(i) any 2- or 3- wheeled motor vehicle, or
``(ii) any low-speed motor vehicle,
which is placed in service after December 31, 2009, and
before January 1, 2012.
``(B) 2- or 3-wheeled motor vehicle.--The term `2- or 3-
wheeled motor vehicle' means any vehicle--
``(i) which would be described in section 30(c)(2) except
that it has 2 or 3 wheels,
``(ii) with motive power having a seat or saddle for the
use of the rider and designed to travel on not more than 3
wheels in contact with the ground,
``(iii) which has an electric motor that produces in excess
of 5-brake horsepower,
``(iv) which draws propulsion from 1 or more traction
batteries, and
``(v) which has been certified to the Department of
Transportation pursuant to section 567 of title 49, Code of
Federal Regulations, as conforming to all applicable Federal
motor vehicle safety standards in effect on the date of the
manufacture of the vehicle.
``(C) Low-speed motor vehicle.--The term `low-speed motor
vehicle' means a motor vehicle (as defined in section
30(c)(2)) which--
``(i) is placed in service after December 31, 2009, and
``(ii) meets the requirements of section 571.500 of title
49, Code of Federal Regulations.''.
(d) Effective Dates.--
(1) In general.--The amendment made by subsections (a) and
(c) shall take effect on the date of the enactment of this
Act.
(2) Other modifications.--The amendments made by subsection
(b) shall apply to property placed in service after December
31, 2009, in taxable years beginning after such date.

SEC. 1162. CONVERSION KITS.

(a) In General.--Section 30B (relating to alternative motor
vehicle credit) is amended by redesignating subsections (i)
and (j) as subsections (j) and (k), respectively, and by
inserting after subsection (h) the following new subsection:
``(i) Plug-In Conversion Credit.--
``(1) In general.--For purposes of subsection (a), the
plug-in conversion credit determined under this subsection
with respect to any motor vehicle which is converted to a
qualified plug-in electric drive motor vehicle is 10 percent
of so much of the cost of the converting such vehicle as does
not exceed $40,000.
``(2) Definitions and special rules.--For purposes of this
subsection--
``(A) Qualified plug-in electric drive motor vehicle.--The
term `qualified plug-in

[[Page S1581]]

electric drive motor vehicle' means any new qualified plug-in
electric drive motor vehicle (as defined in section 30D(c),
determined without regard to paragraphs (4) and (6) thereof).
``(B) Plug-in traction battery module.--The term `plug-in
traction battery module' means an electro-chemical energy
storage device which--
``(i) which has a traction battery capacity of not less
than 2.5 kilowatt hours,
``(ii) which is equipped with an electrical plug by means
of which it can be energized and recharged when plugged into
an external source of electric power,
``(iii) which consists of a standardized configuration and
is mass produced,
``(iv) which has been tested and approved by the National
Highway Transportation Safety Administration as compliant
with applicable motor vehicle and motor vehicle equipment
safety standards when installed by a mechanic with
standardized training in protocols established by the battery
manufacturer as part of a nationwide distribution program,
``(v) which complies with the requirements of section 32918
of title 49, United States Code, and
``(vi) which is certified by a battery manufacturer as
meeting the requirements of clauses (i) through (v).
``(C) Credit allowed to lessor of battery module.--In the
case of a plug-in traction battery module which is leased to
the taxpayer, the credit allowed under this subsection shall
be allowed to the lessor of the plug-in traction battery
module.
``(D) Credit allowed in addition to other credits.--The
credit allowed under this subsection shall be allowed with
respect to a motor vehicle notwithstanding whether a credit
has been allowed with respect to such motor vehicle under
this section (other than this subsection) in any preceding
taxable year.
``(3) Termination.--This subsection shall not apply to
conversions made after December 31, 2012.''.
(b) Credit Treated as Part of Alternative Motor Vehicle
Credit.--Section 30B(a) 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:
``(5) the plug-in conversion credit determined under
subsection (i).''.
(c) No Recapture for Vehicles Converted to Qualified Plug-
in Electric Drive Motor Vehicles.--Paragraph (8) of section
30B(h) is amended by adding at the end the following: ``,
except that no benefit shall be recaptured if such property
ceases to be eligible for such credit by reason of conversion
to a qualified plug-in electric drive motor vehicle.''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2008, in taxable years beginning after such date.
On page 524, after line 3, insert the following:

SEC. ___. INCENTIVES FOR MANUFACTURING FACILITIES PRODUCING
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES AND
COMPONENTS.

(a) Deduction for Manufacturing Facilities.--Part VI of
subchapter B of chapter 1 (relating to itemized deductions
for individuals and corporations) is amended by inserting
after section 179E the following new section:

``SEC. 179F. ELECTION TO EXPENSE MANUFACTURING FACILITIES
PRODUCING PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES
AND COMPONENTS.

``(a) Treatment as Expenses.--A taxpayer may elect to treat
the applicable percentage of the cost of any qualified plug-
in electric drive motor vehicle manufacturing facility
property as an expense which is not chargeable to a capital
account. Any cost so treated shall be allowed as a deduction
for the taxable year in which the qualified manufacturing
facility property is placed in service.
``(b) Applicable Percentage.--For purposes of subsection
(a), the applicable percentage is--
``(1) 100 percent, in the case of qualified plug-in
electric drive motor vehicle manufacturing facility property
which is placed in service before January 1, 2012, and
``(2) 50 percent, in the case of qualified plug-in electric
drive motor vehicle manufacturing facility property which is
placed in service after December 31, 2011, and before January
1, 2015.
``(c) Election.--
``(1) In general.--An election under this section for any
taxable year shall be made on the taxpayer's return of the
tax imposed by this chapter for the taxable year. Such
election shall be made in such manner as the Secretary may by
regulations prescribe.
``(2) Election irrevocable.--Any election made under this
section may not be revoked except with the consent of the
Secretary.
``(d) Qualified Plug-In Electric Drive Motor Vehicle
Manufacturing Facility Property.--For purposes of this
section--
``(1) In general.--The term `qualified plug-in electric
drive motor vehicle manufacturing facility property' means
any qualified property--
``(A) the original use of which commences with the
taxpayer,
``(B) which is placed in service by the taxpayer after the
date of the enactment of this section and before January 1,
2015, and
``(C) no written binding contract for the construction of
which was in effect on or before the date of the enactment of
this section.
``(2) Qualified property.--
``(A) In general.--The term `qualified property' means any
property which is a facility or a portion of a facility used
for the production of--
``(i) any new qualified plug-in electric drive motor
vehicle (as defined by section 30D(c)), or
``(ii) any eligible component.
``(B) Eligible component.--The term `eligible component'
means any battery, any electric motor or generator, or any
power control unit which is designed specifically for use
with a new qualified plug-in electric drive motor vehicle (as
so defined).
``(e) Special Rule for Dual Use Property.--In the case of
any qualified plug-in electric drive motor vehicle
manufacturing facility property which is used to produce both
qualified property and other property which is not qualified
property, the amount of costs taken into account under
subsection (a) shall be reduced by an amount equal to--
``(1) the total amount of such costs (determined before the
application of this subsection), multiplied by
``(2) the percentage of property expected to be produced
which is not qualified property.
``(f) Election to Accelerate the AMT and Research Credit in
Lieu of Deduction.--
``(1) In general.--If a taxpayer elects to have this
subsection apply for any taxable year--
``(A) subsection (a) shall not apply to any qualified plug-
in electric drive motor vehicle manufacturing facility
property placed in service by the taxpayer, and
``(B) each of the limitations described in paragraph (2)
for any such taxable year shall be increased by the qualified
plug-in electric drive motor vehicle manufacturing facility
amount which is--
``(i) determined for such taxable year under paragraph (3),
and
``(ii) allocated to such limitation under paragraph (4).
``(2) Limitations to be increased.--The limitations
described in this paragraph are--
``(A) the limitation imposed by section 38(c), and
``(B) the limitation imposed by section 53(c).
``(3) Qualified plug-in electric drive motor vehicle
manufacturing facility amount.--For purposes of this
paragraph--
``(A) In general.--The qualified plug-in electric drive
motor vehicle manufacturing facility amount is an amount
equal to the applicable percentage of any qualified plug-in
electric drive motor vehicle manufacturing facility which is
placed in service during the taxable year.
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is--
``(i) 35 percent, in the case of qualified plug-in electric
drive motor vehicle manufacturing facility property which is
placed in service before January 1, 2012, and
``(ii) 17.5 percent, in the case of qualified plug-in
electric drive motor vehicle manufacturing facility property
which is placed in service after December 31, 2011, and
before January 1, 2015.
``(C) Special rule for dual use property.--In the case of
any qualified plug-in electric drive motor vehicle
manufacturing facility property which is used to produce both
qualified property and other property which is not qualified
property, the amount of costs taken into account under
subparagraph (A) shall be reduced by an amount equal to--
``(i) the total amount of such costs (determined before the
application of this subparagraph), multiplied by
``(ii) the percentage of property expected to be produced
which is not qualified property.
``(4) Allocation of qualified plug-in electric drive motor
vehicle manufacturing facility amount.--The taxpayer shall,
at such time and in such manner as the Secretary may
prescribe, specify the portion (if any) of the qualified
plug-in electric drive motor vehicle manufacturing facility
amount for the taxable year which is to be allocated to each
of the limitations described in paragraph (2) for such
taxable year.
``(5) Election.--
``(A) In general.--An election under this subsection for
any taxable year shall be made on the taxpayer's return of
the tax imposed by this chapter for the taxable year. Such
election shall be made in such manner as the Secretary may by
regulations prescribe.
``(B) Election irrevocable.--Any election made under this
subsection may not be revoked except with the consent of the
Secretary.
``(6) Credit refundable.--For purposes of section 6401(b),
the aggregate increase in the credits allowable under part IV
of subchapter A for any taxable year resulting from the
application of this subsection shall be treated as allowed
under subpart C of such part (and not any other subpart).''.
(b) Technical Amendment.--Section 1324(b)(2) of title 31,
United States Code, is amended by inserting ``179F(f),''
after ``168(k)(4)(F),''.
(c) Clerical Amendment.--The table of sections for part VI
of subchapter B of chapter 1 is amended by adding at the end
the following new item:

``Sec. 179F. Election to expense manufacturing facilities producing
plug-in electric drive motor vehicle and components.''.

[[Page S1582]]

(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
______