II
109th CONGRESS
2d Session
S. 4000
IN THE SENATE OF THE UNITED STATES
September 29, 2006
Mr. Lugar introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to modify the alcohol credit and the alternative fuel credit, to amend the Clean Air Act to promote the installation of fuel pumps for E–85 fuel, to amend title 49 of the United States Code to require the manufacture of dual fueled automobiles, and for other purposes.
Short title; table of contents
Short title
This Act may be cited
as the National Fuels Initiative
.
Table of contents
The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Declaration of United States policy on the development and use of renewable alternative fuels.
Sec. 4. Modification to alcohol credit and alternative fuel credit.
Sec. 5. Installation of E–85 fuel pumps by major oil companies at owned stations and branded stations.
Sec. 6. Requirement to manufacture dual fueled automobiles.
Sec. 7. Definition of automobile.
Sec. 8. Average fuel economy standards.
Sec. 9. Credit trading and compliance.
Sec. 10. Consumer tax credit.
Sec. 11. Advanced technology motor vehicles manufacturing credit.
Findings
Congress makes the following findings:
The national security and economic prosperity of the United States is threatened by our oil dependence, and the reliance of the United States on oil imports impinges on our foreign policy. Adversarial regimes rich in oil and natural gas are using their energy supplies as leverage against import-dependent countries and are using increased revenues from oil and gas exports to gain international influence, fund anti-American appeals, entrench authoritarianism, and support terrorism.
Global competition for oil reserves is increasing as supply is depleted, demand increases, and foreign governments attempt to exert more control over reserves. Supplies of oil are vulnerable to disruption resulting from war, political manipulation, natural disasters, and terrorist attacks. A major loss in oil supply could result in a price shock extremely damaging to the economy of the United States and our way of life, and competition over scarce resources could create conflict.
Inefficient and unclean use of oil damages the environment and worsens the threat of global climate change.
Declaration of United States policy on the development and use of renewable alternative fuels
Congress declares that:
It is the policy of the United States to reduce dependence on imported oil through increased efficiency and diversification of fuel sources through dramatically expanded use of clean alternative fuels. Such a reduction will increase the foreign policy flexibility of the United States, make the United States less vulnerable to oil supply disruption, and promote economic growth. The United States will continue to promote research and development of a range of alternatives fuels, and it will implement policies to accelerate the deployment and commercialization of existing efficiency and alternative fuels technologies.
It is the policy goal of the United States to produce and utilize the equivalent of at least 100,000,000,000 gallons of renewable fuel per year by 2025. This amount of renewable fuel, along with innovation in fuel efficiency, will substantially reduce the need for oil imports in the United States.
It is the policy of the United States to promote the development of a global biofuels market through partnerships with other nations and to reduce trade barriers for renewable fuels.
Modification to alcohol credit and alternative fuel credit
Income tax credit for alcohol
Rate based on price of oil
Section 40 of the Internal Revenue Code of 1986
(relating to alcohol used as fuel) is amended by striking 60
cents
each place it appears and inserting the applicable
amount
.
Applicable amount
Subsection (h) of section 40 of such Code is amended to read as follows:
Applicable amount
In general
For purposes of this section, the term applicable amount means, with respect to any quarter—
$.05 for each $1 (or any fraction thereof) by which $45 exceeds—
in the case of the alcohol mixture credit, the average price of a barrel of oil for the quarter during which the qualified mixture in which the alcohol was used is sold or used, and
in the case of the alcohol credit, the average price of a barrel of oil for the quarter during which the alcohol was sold or used, and
$0 for any quarter in which the price of a barrel of oil is greater than $45.
Determination of average price
The average price of a barrel of oil shall be determined under regulations prescribed by the Secretary.
Barrel
For purposes of this subsection, the term barrel means 42 United States gallons.
.
Elimination of small ethanol producer credit
Section 40(a) of such Code is amended—
by
striking , plus
at the end of paragraph (2) and inserting a
period, and
by striking paragraph (3).
Section 40(b) of such Code is amended by striking paragraph (4) and by redesignating paragraph (5) as paragraph (4).
Section 40(d)(3) of such Code is amended by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C).
Section 40(d)(3)(C) of such Code,
as redesignated by clause (i), is amended by striking subparagraph (A),
(B), or (C)
and inserting subparagraph (A) or
(C)
.
Section 40 of such Code is amended by striking subsection (g) and by redesignating subsection (h), as amended by paragraph (2), as subsection (g).
Extension of credit
Paragraph (1) of section 40(e) of such Code is amended—
in subparagraph
(A), by striking 2010
and inserting 2020
,
and
in subparagraph
(B), by striking 2011
and inserting 2021
.
Conforming amendment
Section 40(b) of such Code, as amended by subsection (a), is amended by striking paragraph (3) and by redesignating paragraph (4) as paragraph (3).
Modifications to excise tax credit and payments for alcohol
In general
Paragraph (2) of section 6426(b) of the Internal Revenue Code of 1986 is amended to read as follows:
Applicable amount
For purposes of this subsection, the applicable amount shall be the amount determined under section 40(g).
.
Extension
Alcohol fuel mixture credit
Paragraph (5) of section 6426(b) of such Code is
amended by striking 2010
and inserting
2020
.
Payments
Subparagraph
(A) of section 6427(e)(5) of such Code is amended by striking
2010
and inserting 2020
.
Modifications to excise tax and payments for alternative fuel
Alternative fuel credit
Rate
In general
Paragraph (1) of section 6426(d) of the Internal Revenue
Code of 1986 is amended by striking 50 cents
and inserting
the applicable amount
.
Applicable amount
Subsection (d) of section 6426 of such Code is amended by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (4), and (5), respectively, and by inserting after paragraph (1) the following new paragraph:
Applicable amount
For purposes of this subsection, the applicable amount shall be the amount determined under section 40(g).
.
Extension
Paragraph
(5) of section 6426(d) of such Code, as redesignated by paragraph (1), is
amended by striking 2009 (September 30, 2014, in the case of any sale or
use involving liquified hydrogen)
and inserting
2020
.
Alternative fuel mixture credit
Rate
In general
Paragraph (1) of section 6426(e) of the Internal Revenue
Code of 1986 is amended by striking 50 cents
and inserting
the applicable amount
.
Applicable amount
Subsection (e) of section 6426 of such Code is amended by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively, and by inserting after paragraph (1) the following new paragraph:
Applicable amount
For purposes of this subsection, the applicable amount shall be the amount determined under section 40(g).
.
Extension
Paragraph
(4) of section 6426(e) of such Code, as redesignated by paragraph (1), is
amended by striking 2009 (September 30, 2014, in the case of any sal or
use involving liquified hydrogen)
and inserting
2020
.
Payments
Paragraph
(5) of section 6427(e) is amended by inserting and
at the end of
subparagraph (B), by striking subparagraphs (C) and (D), and by inserting after
subparagraph (B) the following:
any alternative fuel or alternative fuel mixture (as defined in subsection (d)(3) or (e)(3) of section 6426) sold or used after September 30, 2020.
.
Effective date
The amendments made by this section shall apply to fuel used or sold in quarters beginning after the date of the enactment of this Act.
Installation of E–85 fuel pumps by major oil companies at owned stations and branded stations
Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at the end the following:
Installation of E–85 fuel pumps by major oil companies at owned stations and branded stations
Definitions
In this paragraph:
E–85 fuel
The term E–85 fuel means a blend of gasoline approximately 85 percent of the content of which is derived from ethanol produced in the United States.
Major oil company
The term major oil company means any person that, individually or together with any other person with respect to which the person has an affiliate relationship or significant ownership interest, has not less than 4,500 retail station outlets according to the latest publication of the Petroleum News Annual Factbook.
Secretary
The term Secretary means the Secretary of Energy, acting in consultation with the Administrator of the Environmental Protection Agency and the Secretary of Agriculture.
Regulations
The Secretary shall promulgate regulations to ensure that each major oil company that sells or introduces gasoline into commerce in the United States through wholly-owned stations or branded stations installs or otherwise makes available 1 or more pumps that dispense E–85 fuel (including any other equipment necessary, such as including tanks, to ensure that the pumps function properly) at not less than the applicable percentage of the wholly-owned stations and the branded stations of the major oil company specified in subparagraph (C).
Applicable percentage
For the purpose of subparagraph (B), the applicable percentage of the wholly-owned stations and the branded stations shall be determined in accordance with the following table:
| Calendar year: | Applicable percentage of wholly-owned stations and branded stations (percent): |
| 2008 | 5 |
| 2009 | 10 |
| 2010 | 15 |
| 2011 | 20 |
| 2012 | 25 |
| 2013 | 30 |
| 2014 | 35 |
| 2015 | 40 |
| 2016 | 45 |
| 2017 and each calendar year thereafter | 50. |
Geographic distribution
In general
Subject to clause (ii), in promulgating regulations under subparagraph (B), the Secretary shall ensure that each major oil company described in subparagraph (B) installs or otherwise makes available 1 or more pumps that dispense E–85 fuel at not less than a minimum percentage (specified in the regulations) of the wholly-owned stations and the branded stations of the major oil company in each State.
Requirement
In specifying the minimum percentage under clause (i), the Secretary shall ensure that each major oil company installs or otherwise makes available 1 or more pumps described in that clause in each State in which the major oil company operates.
Financial responsibility
In promulgating regulations under subparagraph (B), the Secretary shall ensure that each major oil company described in that subparagraph assumes full financial responsibility for the costs of installing or otherwise making available the pumps described in that subparagraph and any other equipment necessary (including tanks) to ensure that the pumps function properly.
Production credits for exceeding E–85 fuel pumps installation requirement
Earning and period for applying credits
If the percentage of the wholly-owned stations and the branded stations of a major oil company at which the major oil company installs E–85 fuel pumps in a particular calendar year exceeds the percentage required under subparagraph (C), the major oil company earns credits under this paragraph, which may be applied to any of the 3 consecutive calendar years immediately after the calendar year for which the credits are earned.
Trading credits
Subject to clause (iii), a major oil company that has earned credits under clause (i) may sell credits to another major oil company to enable the purchaser to meet the requirement under subparagraph (C).
Exception
A major oil company may not use credits purchased under clause (ii) to fulfill the geographic distribution requirement in subparagraph (D).
.
Requirement to manufacture dual fueled automobiles
Requirement
In general
Chapter 329 of title 49, United States Code, is amended by inserting after section 32902 the following:
Requirement to manufacture dual fueled automobiles
Requirement
Each manufacturer of new automobiles that are capable of operating on gasoline or diesel fuel shall ensure that the percentage of such automobiles, manufactured in any model year after model year 2007 and distributed in commerce for sale in the United States, which are dual fueled automobiles is equal to not less than the applicable percentage set forth in the following table:
| For the model year: | The percentage of dual fueled automobiles manufactured shall be not less than: |
| 2008 | 10 percent |
| 2009 | 20 percent |
| 2010 | 30 percent |
| 2011 | 40 percent |
| 1012 | 50 percent |
| 2013 | 60 percent |
| 2014 | 70 percent |
| 2015 | 80 percent |
| 2016 | 90 percent |
| 2017 and beyond | 100 percent |
Production credits for exceeding flexible fuel automobile production requirement
Earning and period for applying credits
If the number of dual fueled automobiles manufactured by a manufacturer in a particular model year exceeds the number required under subsection (a), the manufacturer earns credits under this section, which may be applied to any of the 3 consecutive model years immediately after the model year for which such credits are earned.
Trading credits
A manufacturer that has earned credits under paragraph (1) may sell credits to another manufacturer to enable the purchaser to meet the requirement under subsection (a).
.
Technical amendment
The table of sections for chapter 329 of title 49, United States Code, is amended by inserting after the item relating to section 32902 the following:
32902A. Requirement to manufacture dual fueled automobiles.
.
Activities to promote the use of certain alternative fuels
The Secretary of Transportation shall carry out activities to promote the use of fuel mixtures containing gasoline or diesel fuel and 1 or more alternative fuels, including a mixture containing at least 85 percent of methanol, denatured ethanol, and other alcohols by volume with gasoline or other fuels, to power automobiles in the United States.
Definition of automobile
In general
Section 32901(a)(3) of title 49, United States Code, is
amended by striking rated at—
and all that follows through the
period at the end and inserting rated at not more than 10,000 pounds
gross vehicle weight.
.
Fuel economy information
Section 32908(a) of title 49, United States Code, is
amended, by striking section—
and all that follows through
(2)
and inserting section, the term
.
Effective date
The amendments made by this section shall apply to model year 2009 and each subsequent model year.
Average fuel economy standards
Standards
Section 32902 of title 49, United States Code, is amended—
in subsection (a)—
in the header, by
inserting manufactured
before model year 2012
after Non-passenger
automobiles
; and
by adding at the
end the following: This subsection shall not apply to automobiles
manufactured after model year 2011.
;
in subsection (b)—
in the header, by
inserting manufactured
before model year 2012
after Passenger
automobiles
;
by inserting
and before model year 2009
after 1984
; and
by adding at the
end the following: Such standard shall be increased by 4 percent per
year for model years 2009 through 2011 (rounded to the nearest 1/10 mile per
gallon)
;
by amending subsection (c) to read as follows:
Automobiles manufactured after model year 2011
Not later than 18 months before the beginning of each model year after model year 2011, the Secretary of Transportation shall prescribe, by regulation—
an average fuel economy standard for automobiles manufactured by a manufacturer in that model year; or
based on 1 or more vehicle attributes that relate to fuel economy—
separate standards for different classes of automobiles; or
standards expressed in the form of a mathematical function.
Except as provided under paragraphs (3) and (4) and subsection (d), standards under paragraph (1) shall attain a projected aggregate level of average fuel economy of 27.5 miles per gallon for all automobiles manufactured by all manufacturers for model year 2012.
The projected aggregate level of average fuel economy for model year 2013 and each succeeding model year shall be increased by 4 percent from the level for the prior model year (rounded to the nearest 1/10 mile per gallon).
Notwithstanding subparagraphs (A) and (B), the fleetwide average fuel economy standard for passenger automobiles manufactured by a manufacturer in a model year for that manufacturer’s domestic fleet and for its foreign fleet as calculated under section 32904 as in effect before the date of enactment of the National Fuels Initiative shall not be less than 92 percent of the average fuel economy projected by the Secretary for the combined domestic and foreign fleets manufactured by all manufacturers in that model year.
If the actual aggregate level of average fuel economy achieved by manufacturers for each of 3 consecutive model years is at least 5 percent less than the projected aggregate level of average fuel economy for such model year, the Secretary shall make appropriate adjustments to the standards prescribed under this subsection.
Notwithstanding paragraphs (1) through (3) and subsection (b), the Secretary of Transportation may prescribe a lower average fuel economy standard for 1 or more model years if the Secretary of Transportation, in consultation with the Secretary of Energy, determines that the minimum standards prescribed under paragraph (2) or (3) or subsection (b) for each model year—
are technologically unachievable;
cannot be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States; or
is shown, by clear and convincing evidence, not to be cost effective.
If a lower standard is prescribed for a model year under subparagraph (A), such standard shall be the maximum standard that—
is technologically achievable;
can be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States; and
is cost effective.
In determining cost effectiveness under paragraph (4)(A)(iii), the Secretary of Transportation shall take into account the total value to the Nation of reduced petroleum use, including the value of reducing external costs of petroleum use, using a value for such costs equal to 50 percent of the value of a gallon of gasoline saved or the amount determined in an analysis of the external costs of petroleum use that considers—
value to consumers;
economic security;
national security;
foreign policy;
the impact of oil use—
on sustained cartel rents paid to foreign suppliers;
on long-run potential gross domestic product due to higher normal-market oil price levels, including inflationary impacts;
on import costs, wealth transfers, and potential gross domestic product due to increased trade imbalances;
on import costs and wealth transfers during oil shocks;
on macroeconomic dislocation and adjustment costs during oil shocks;
on the cost of existing energy security policies, including the management of the Strategic Petroleum Reserve;
on the timing and severity of the oil peaking problem;
on the risk, probability, size, and duration of oil supply disruptions;
on OPEC strategic behavior and long-run oil pricing;
on the short term elasticity of energy demand and the magnitude of price increases resulting from a supply shock;
on oil imports, military costs, and related security costs, including intelligence, homeland security, sea lane security and infrastructure, and other military activities;
on oil imports, diplomatic and foreign policy flexibility, and connections to geopolitical strife, terrorism, and international development activities;
all relevant environmental hazards under the jurisdiction of the Environmental Protection Agency; and
on well-to-wheels urban and local
air emissions of pollutants
and their uninternalized
costs;
the impact of the oil or energy intensity of the United States economy on the sensitivity of the economy to oil price changes, including the magnitude of gross domestic product losses in response to short term price shocks or long term price increases;
the impact of United States payments for oil imports on political, economic, and military developments in unstable or unfriendly oil exporting countries;
the uninternalized costs of pipeline and storage oil seepage, and for risk of oil spills from production, handling, and transport, and related landscape damage; and
additional relevant factors, as determined by the Secretary.
When considering the value to consumers of a gallon of gasoline saved, the Secretary of Transportation may not use a value less than the greatest of—
the average national cost of a gallon of gasoline sold in the United States during the 12-month period ending on the date on which the new fuel economy standard is proposed;
the most recent weekly estimate by the Energy Information Administration of the Department of Energy of the average national cost of a gallon of gasoline (all grades) sold in the United States; or
the gasoline prices projected by the Energy Information Administration for the 20-year period beginning in the year following the year in which the standards are established.
In prescribing standards under this subsection, the Secretary may prescribe standards for 1 or more model years.
Not later than December 31, 2016, the Secretary of Transportation, the Secretary of Energy, and the Administrator of the Environmental Protection Agency shall submit a joint report to Congress on the state of global automotive efficiency technology development, and on the accuracy of tests used to measure fuel economy of automobiles under section 32904(c), utilizing the study and assessment of the National Academy of Sciences referred to in subparagraph (B).
The Secretary shall enter into appropriate arrangements with the National Academy of Sciences to conduct a comprehensive study of the technological opportunities to enhance fuel economy and an analysis and assessment of the accuracy of fuel economy tests used by the Administrator of the Environmental Protection Agency to measure fuel economy for each model under section 32904(c). Such analysis and assessment shall identify any additional factors or methods that should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles. The Secretary and the Administrator of the Environmental Protection Agency shall furnish, at the request of the Academy, any information which the Academy determines to be necessary to conduct the study, analysis, and assessment under this subparagraph.
The report submitted under subparagraph (A) shall include—
the study of the National Academy of Sciences referred to in subparagraph (B); and
an assessment by the Secretary of technological opportunities to enhance fuel economy and opportunities to increase overall fleet safety.
The report submitted under subparagraph (A) shall identify and examine additional opportunities to reform the regulatory structure under this chapter, including approaches that seek to merge vehicle and fuel requirements into a single system that achieves equal or greater reduction in petroleum use and environmental benefits.
The report submitted under subparagraph (A) shall—
include conclusions reached by the Administrator of the Environmental Protection Agency, as a result of detailed analysis and public comment, on the accuracy of current fuel economy tests;
identify any additional factors that the Administrator determines should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles; and
include a description of options, formulated by the Secretary and the Administrator, to incorporate such additional factors in fuel economy tests in a manner that will not effectively increase or decrease average fuel economy for any automobile manufacturer.
There is authorized to be appropriated to the Secretary such amounts as are required to carry out the study, analysis, and assessment required by subparagraph (B).
; and
in subsection
(g)(2), by striking (and submit the amendment to Congress when required
under subsection (c)(2) of this section)
.
Conforming amendments
In general
Chapter 329 of title 49, United States Code, is amended—
in section 32903—
by
striking passenger
each place it appears;
by
striking section 32902(b)–(d) of this title
each place it
appears and inserting subsection (c) or (d) of section
32902
;
by striking subsection (e); and
by redesignating subsection (f) as subsection (e); and
in section 32904(a)—
by
striking passenger
each place it appears; and
in
paragraph (1), by striking subject to
and all that follows
through section 32902(b)–(d) of this title
and inserting
subsection (c) or (d) of section 32902
.
Effective date
The amendments made by paragraph (1) shall apply to automobiles manufactured after model year 2011.
Credit trading and compliance
Credit trading
Section 32903(a) of title 49, United States Code, is amended—
by inserting
Credits earned by a manufacturer under this section may be sold to any
other manufacturer and used as if earned by that manufacturer; except that
credits earned by a manufacturer described in section 32904(b)(1)(A)(i) may not
be sold to or purchased by a manufacturer described in
32904(b)(1)(A)(ii),
after earns credits.
; and
by striking
3 consecutive model years immediately
each place it appears and
inserting model years
.
Treatment of imports
Conforming amendment
Section 32904(b) is amended by striking
passenger
each place it appears.
Applicability
The amendments made by paragraph (1) shall apply to automobiles manufactured after model year 2011.
Multi-year compliance period
Section 32904(c) of such title is amended—
by inserting
(1)
before The Administrator
; and
by adding at the end the following:
The Secretary, by rule, may allow a manufacturer to elect a multi-year compliance period of not more than 4 consecutive model years in lieu of the single model year compliance period otherwise applicable under this chapter.
.
Consumer tax credit
Elimination on number of new qualified hybrid and advanced lean burn technology vehicles eligible for alternative motor vehicle credit
In general
Section 30B 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.
Conforming amendments
Paragraphs (4) and (6) of section 30B(h) of
such Code are each amended by striking (determined without regard to
subsection (g))
and inserting determined without regard to
subsection (f))
.
Section 38(b)(25) of such Code is amended
by striking section 30B(g)(1)
and inserting section
30B(f)(1)
.
Section 55(c)(2) of such Code is amended by
striking section 30B(g)(2)
and inserting section
30B(f)(2)
.
Section 1016(a)(36) of such Code is amended
by striking section 30B(h)(4)
and inserting section
30B(g)(4)
.
Section 6501(m) of such Code is amended by
striking section 30B(h)(9)
and inserting section
30B(g)(9)
.
Extension of alternative vehicle credit for new qualified hybrid motor vehicles
Paragraph (3) of
section 30B(i) of such Code (as redesignated by subsection (a)) is amended by
striking December 31, 2009
and inserting December 31,
2010
.
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.
Advanced technology motor vehicles manufacturing credit
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:
Advanced technology motor vehicles manufacturing credit
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 the qualified investment of an eligible taxpayer for such taxable year.
Qualified investment
For purposes of this section—
In general
The qualified investment for any taxable year is equal to the incremental costs incurred during such taxable year—
to re-equip, expand, or establish any manufacturing facility in the United States of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components,
for engineering integration performed in the United States of such vehicles and components as described in subsection (d),
for research and development performed in the United States related to advanced technology motor vehicles and eligible components, and
for employee retraining with respect to the manufacturing of such vehicles or components (determined without regard to wages or salaries of such retrained employees).
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.
Definitions
In this section:
Advanced technology motor vehicle
The term advanced technology motor vehicle means—
any qualified electric vehicle (as defined in section 30(c)(1)),
any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)),
any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3)),
any new qualified hybrid motor vehicle (as defined in section 30B(d)(2)(A) and determined without regard to any gross vehicle weight rating),
any new qualified alternative fuel motor vehicle (as defined in section 30B(e)(4), including any mixed-fuel vehicle (as defined in section 30B(e)(5)(B)), and
any other motor vehicle using electric drive transportation technology (as defined in paragraph (3)).
Electric drive transportation technology
The term electric drive transportation technology means technology used by vehicles that use an electric motor for all or part of their motive power and that may or may not use off-board electricity, such as battery electric vehicles, fuel cell vehicles, engine dominant hybrid electric vehicles, plug-in hybrid electric vehicles, and plug-in hybrid fuel cell vehicles.
Eligible components
The term eligible component means any component inherent to any advanced technology motor vehicle, including—
with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle—
electric motor or generator;
power split device;
power control unit;
power controls;
integrated starter generator; or
battery;
with respect to any hydraulic new qualified hybrid motor vehicle—
accumulator or other energy storage device;
hydraulic pump;
hydraulic pump-motor assembly;
power control unit; and
power controls;
with respect to any new advanced lean burn technology motor vehicle—
diesel engine;
turbo charger;
fuel injection system; or
after-treatment system, such as a particle filter or NOx absorber; and
with respect to any advanced technology motor vehicle, any other component submitted for approval by the Secretary.
Eligible taxpayer
The term eligible taxpayer means any taxpayer if more than 20 percent of the taxpayer’s gross receipts for the taxable year is derived from the manufacture of motor vehicles or any component parts of such vehicles.
Engineering integration costs
For purposes of subsection (b)(1)(B), costs for engineering integration are costs incurred prior to the market introduction of advanced technology vehicles for engineering tasks related to—
establishing functional, structural, and performance requirements for component and subsystems to meet overall vehicle objectives for a specific application,
designing interfaces for components and subsystems with mating systems within a specific vehicle application,
designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, and
validating functionality and performance of components and subsystems for a specific vehicle application.
Limitation based on amount of tax
The credit allowed under subsection (a) for the taxable year shall not exceed the excess of—
the sum of—
the regular tax liability (as defined in section 26(b)) for such taxable year, plus
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
the sum of the credits allowable under subpart A and sections 27, 30, and 30B for the taxable year.
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.
No double benefit
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.
Research and development costs
In general
Except as provided in subparagraph (B), any amount described in subsection (b)(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.
Costs taken into account in determining base period research expenses
Any amounts described in subsection (b)(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.
Business carryovers allowed
If the credit allowable under subsection (a) for a taxable year exceeds the limitation under subsection (e) 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 to each of the 15 taxable years immediately preceding the unused credit year and as a carryforward to each of the 20 taxable years immediately following the unused credit year.
Special rules
For purposes of this section, rules similar to the rules of section 179A(e)(4) and paragraphs (1) and (2) of section 41(f) shall apply
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.
Regulations
The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.
Termination
This section shall not apply to any qualified investment after December 31, 2010.
.
Conforming amendments
Section 1016(a) of the Internal Revenue
Code of 1986 is amended by striking and
at the end of paragraph
(36), by striking the period at the end of paragraph (37) and inserting
, and
, and by adding at the end the following new
paragraph:
to the extent provided in section 30D(g).
.
Section 6501(m) of such Code is amended by
inserting 30D(k),
after 30C(e)(5),
.
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:
Sec. 30D. Advanced technology motor vehicles manufacturing credit.
.
Effective date
The amendments made by this section shall apply to amounts incurred in taxable years beginning after December 31, 1999.