[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 829 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 829

To amend the Internal Revenue Code of 1986 to encourage the production 
        and use of clean-fuel vehicles, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 3, 1997

 Mrs. Boxer (for herself, Mrs. Feinstein, and Mr. Kennedy) 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 encourage the production 
        and use of clean-fuel vehicles, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Clean-Fuel Vehicle 
Act of 1997''.
    (b) Reference to 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. EXEMPTION OF ELECTRIC AND OTHER CLEAN-FUEL MOTOR VEHICLES FROM 
              LUXURY AUTOMOBILE CLASSIFICATION.

    (a) In General.--Subsection (a) of section 4001 (relating to 
imposition of tax) is amended to read as follows:
    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed on the 1st 
        retail sale of any passenger vehicle a tax equal to 10 percent 
        of the price for which so sold to the extent such price exceeds 
        the applicable amount.
            ``(2) Applicable amount.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the applicable amount is 
                $30,000.
                    ``(B) Qualified clean-fuel vehicle property.--In 
                the case of a passenger vehicle which is propelled by a 
                fuel which is not a clean-burning fuel to which is 
                installed qualified clean-fuel vehicle property (as 
                defined in section 179A(c)(1)(A)) for purposes of 
                permitting such vehicle to be propelled by a clean-
                burning fuel, the applicable amount is equal to the sum 
                of--
                            ``(i) $30,000, plus
                            ``(ii) the increase in the price for which 
                        the passenger vehicle was sold (within the 
                        meaning of section 4002) due to the 
                        installation of such property.
                    ``(C) Purpose built passenger vehicle.--
                            ``(i) In general.--In the case of a purpose 
                        built passenger vehicle, the applicable amount 
                        is equal to 150 percent of $30,000.
                            ``(ii) Purpose built passenger vehicle.--
                        For purposes of clause (i), the term `purpose 
                        built passenger vehicle' means a passenger 
                        vehicle produced by an original equipment 
                        manufacturer and designed so that the vehicle 
                        may be propelled primarily by electricity.''
    (b) Conforming Amendments.--
            (1) Subsection (e) of section 4001 (relating to inflation 
        adjustment) is amended to read as follows:
    ``(e) Inflation Adjustment.--
            ``(1) In general.--The $30,000 amount in subparagraphs (A), 
        (B)(i), and (C)(i) of subsection (a)(2) shall be increased by 
        an amount equal to--
                    ``(A) $30,000, multiplied by
                    ``(B) the cost-of-living adjustment under section 
                1(f)(3) for the calendar year in which the vehicle is 
                sold, determined by substituting `calendar year 1990' 
                for `calendar year 1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $2,000, such amount shall be rounded 
        to the next lowest multiple of $2,000.''
            (2) Subsection (f) of section 4001 (relating to phasedown) 
        is amended by striking ``subsection (a)'' and inserting 
        ``subsection (a)(1)''.
            (3) Subparagraph (B) of section 4003(a)(2) is amended to 
        read as follows:
                    ``(B) the appropriate applicable amount as 
                determined under section 4001(a)(2).''
    (c) Effective Date.--The amendments made by this section shall 
apply to sales and installations occurring and property placed in 
service on or after the date of enactment of this Act.

SEC. 3. EXEMPTION OF THE INCREMENTAL COST OF A CLEAN FUEL VEHICLE FROM 
              THE LIMITS ON DEPRECIATION FOR VEHICLES.

    (a) In General.--Section 280F(a)(1) (relating to limiting 
depreciation on luxury automobiles) is amended by adding at the end the 
following new subparagraph:
                    ``(C) Special rule for certain clean-fuel passenger 
                automobiles.--
                            ``(i) Modified automobiles.--In the case of 
                        a passenger automobile which is propelled by a 
                        fuel which is not a clean-burning fuel to which 
                        is installed qualified clean-fuel vehicle 
                        property (as defined in section 179A(c)(1)(A)) 
                        for purposes of permitting such vehicle to be 
                        propelled by a clean burning fuel (as defined 
                        in section 179A(e)(1)), the depreciation 
                        deductions specified in subparagraph (A) shall 
                        be increased by the incremental cost of the 
                        installed qualified clean burning vehicle 
                        property as depreciated pursuant to section 168 
                        by applying the rules under subsections (b)(1), 
                        (d)(1), and (e)(3)(B) thereof.
                            ``(ii) Purpose built passenger vehicles.--
                        In the case of a purpose built passenger 
                        vehicle (as defined in section 
                        4001(a)(2)(C)(ii)), the depreciation deductions 
                        specified in subparagraph (A) shall be tripled.
                            ``(iii) Incremental cost.--For purposes of 
                        clause (i), the incremental cost shall be the 
                        equal of the lesser of--
                                    ``(I) the incremental cost of the 
                                installed qualified clean fuel vehicle 
                                property (as so defined), or
                                    ``(II) the amount by which the 
                                total cost of the clean fuel passenger 
                                automobile exceeds the sum of the 
                                amounts that would be allowed under 
                                subparagraph (A) for the recovery 
                                period determined by applying the rules 
                                under subsections (d)(1) and (e)(3) of 
                                section 168.''
    (b) Effective Date.--The amendment made by this section shall apply 
to sales and installations occurring and property placed in service on 
or after the date of enactment of this Act and before January 1, 2005.

SEC. 4. GOVERNMENTAL USE RESTRICTION MODIFIED FOR ELECTRIC VEHICLES.

    (a) In General.--Paragraph (3) of section 30(d) (relating to 
special rules) is amended by inserting ``(without regard to paragraph 
(4)(A)(i) thereof)'' after ``section 50(b)''.
    (b) Conforming Amendment.--Paragraph (5) of section 179A(e) 
(relating to other definitions and special rules) is amended by 
inserting ``(without regard to paragraph (4)(A)(i) thereof in the case 
of a qualified electric vehicle described in subclause (I) or (II) of 
subsection (b)(1)(A)(iii) of this section)'' after ``section 50(b)''.
    (c) Effective Date.--The amendment made by this section shall apply 
to property placed in service on or after the date of enactment of this 
Act.

SEC. 5. LARGE ELECTRIC TRUCKS, VANS, AND BUSES ELIGIBLE FOR DEDUCTION 
              FOR CLEAN-FUEL VEHICLES.

    (a) In General.--Paragraph (3) of section 179A(c) (defining 
qualified clean-fuel vehicle property) is amended by inserting ``, 
other than any vehicle described in subclause (I) or (II) of subsection 
(b)(1)(A)(iii)'' after ``section 30(c))''.
    (b) Denial of Credit.--Subsection (c) of section 30 (relating to 
credit for qualified electric vehicles) is amended by adding at the end 
the following new paragraph:
            ``(3) Denial of credit for vehicles for which deduction 
        allowable.--The term `qualified electric vehicle' shall not 
        include any vehicle described in subclause (I) or (II) of 
        section 179A(b)(1)(A)(iii).''
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service on or after the date of enactment 
of this Act.

SEC. 6. ELECTRIC VEHICLE CREDIT AMOUNT AND APPLICATION AGAINST 
              ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subsection (a) of section 30 (relating to credit 
for qualified electric vehicles) is amended by striking ``10 percent 
of''.
    (b) Application Against Alternative Minimum Tax.--Section 30(b) 
(relating to limitations) is amended by striking paragraph (3).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 7. RATE OF TAX ON LIQUEFIED NATURAL GAS TO BE EQUIVALENT TO RATE 
              OF TAX ON COMPRESSED NATURAL GAS.

    (a) In General.--Paragraph (3) of section 4041(a) (relating to 
diesel fuel and special motor fuels) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) Imposition of tax.--
                            ``(i) In general.--There is hereby imposed 
                        a tax on compressed or liquefied natural gas--
                                    ``(I) sold by any person to an 
                                owner, lessee, or other operator of a 
                                motor vehicle or motorboat for use as a 
                                fuel in such motor vehicle or 
                                motorboat, or
                                    ``(II) used by any person as a fuel 
                                in a motor vehicle or motorboat unless 
                                there was a taxable sale of such gas 
                                under subclause (I).
                            ``(ii) Rate of tax.--The rate of tax 
                        imposed by this paragraph shall be--
                                    ``(I) in the case of compressed 
                                natural gas, 48.54 cents per MCF 
                                (determined at standard temperature and 
                                pressure), and
                                    ``(II) in the case of liquefied 
                                natural gas, 3.54 cents per gallon.'', 
                                and
            (2) by inserting ``or liquefied'' after ``Compressed'' in 
        the heading.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 4041(a)(2) is amended by 
        striking ``other than a Kerosene'' and inserting ``other than 
        liquefied natural gas, kerosene''.
            (2) The heading for section 9503(f)(2)(D) is amended by 
        inserting ``or liquefied'' after ``Compressed''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
                                 <all>