[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1003 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1003

  To amend the Internal Revenue Code of 1986 to provide increased tax 
incentives for the purchase of alternative fuel and electric vehicles, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 11, 1999

  Mr. Rockefeller (for himself, Mr. Hatch, Mr. Crapo, and Mr. Bryan) 
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 provide increased tax 
incentives for the purchase of alternative fuel and electric 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.

    This Act may be cited as the ``Alternative Fuels Promotion Act''.

SEC. 2. FINDINGS.

    The Senate finds the following:
            (1)(A) Since 1994, the United States has imported over half 
        its oil.
            (B) Without efforts to mitigate this dependence on foreign 
        oil, the percentage of oil imported is expected to grow to all-
        time highs.
            (C) This reliance on foreign oil presents a national 
        security risk, which Congress should address through policy 
        changes designed to increase the use of domestically-available 
        alternative transportation fuels.
            (2)(A) The importing of a majority of the oil used in the 
        United States contributes negatively to the balance of trade of 
        the United States.
            (B) Assuring the Nation's economic security demands the 
        development and promotion of domestically-available alternative 
        transportation fuels.
            (3)(A) The reliance on oil as a transportation fuel has 
        numerous negative environmental consequences, including 
        increasing air pollution and greenhouse gas emissions.
            (B) Developing alternative transportation fuels will help 
        address these environmental impacts by reducing emissions.
            (4) In order to encourage installation of alternative 
        fueling infrastructure, and make alternative fuels economically 
        favorable to the producer, distributor, marketer, and consumer, 
        tax credits provided at the point of distribution into an 
        alternative fuel vehicle are necessary.
            (5)(A) In the short-term, United States alternative fuel 
        policy must be made fuel neutral.
            (B) Fuel neutrality will foster private innovation and 
        commercialization using the most technologically feasible and 
        economic fuels available.
            (C) This will allow market forces to decide the alternative 
        fuel winners and losers.
            (6)(A) Tax credits which have been in place have led to 
        increases in the quantity and quality of alternative fuel 
        technology available today.
            (B) Extending these credits is an efficient means of 
        promoting alternative fuel vehicles and alternative fueling 
        infrastructures.
            (7)(A) The Federal fleet is one of the best customers for 
        alternative fuel vehicles due to its combination of large 
        purchasing power, tight record keeping, geographic diversity, 
        and high fuel usage.
            (B) For these reasons, the National Energy Policy Act of 
        1991 required Federal fleets to purchase certain numbers of 
        alternatively-fueled vehicles.
            (C) In most cases, these requirements have not been met.
            (D) Efforts must be made to ensure that all Federal 
        agencies comply with Federal fleet purchase requirement laws 
        and executive orders.

                        TITLE I--TAX INCENTIVES

SEC. 101. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

    (a) Increased Credit for Vehicles Which Meet Certain Range 
Requirements.--
            (1) In general.--Section 30(a) of the Internal Revenue Code 
        of 1986 (relating to allowance of credit) is amended to read as 
        follows:
    ``(a) Allowance of Credit.--
            ``(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 the sum of--
                    ``(A) 10 percent of the cost of any qualified 
                electric vehicle placed in service by the taxpayer 
                during the taxable year, plus
                    ``(B) in the case of any such vehicle also meeting 
                the requirement described in paragraph (2), $5,000.
            ``(2) Range requirement.--The requirement described in this 
        paragraph is a driving range of at least 100 miles--
                    ``(A) on a single charge of the vehicle's 
                rechargeable batteries, fuel cells, or other portable 
                source of electrical current, and
                    ``(B) measured pursuant to the urban dynamometer 
                schedules under appendix I to part 86 of title 40, Code 
                of Federal Regulations.''.
            (2) Conforming amendment.--Section 30(b)(1) of the Internal 
        Revenue Code of 1986 is amended by striking ``subsection (a)'' 
        and inserting ``subsection (a)(1)(A)''.
    (b) Credit Extended Through 2010.--
            (1) In general.--Section 30(e) of the Internal Revenue Code 
        of 1986 (relating to termination) is amended by striking 
        ``2004'' and inserting ``2010''.
            (2) Conforming amendments.--Section 30(b)(2) of such Code 
        (relating to phaseout) is amended--
                    (A) by striking ``2002'' in subparagraph (A) and 
                inserting ``2008'',
                    (B) by striking ``2003'' in subparagraph (B) and 
                inserting ``2009'', and
                    (C) by striking ``2004'' in subparagraph (C) and 
                inserting ``2010''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of enactment of this 
Act.

SEC. 102. ADDITIONAL DEDUCTION FOR COST OF INSTALLATION OF ALTERNATIVE 
              FUELING STATIONS.

    (a) In General.--Subparagraph (A) of section 179A(b)(2) of the 
Internal Revenue Code of 1986 (relating to qualified clean-fuel vehicle 
refueling property) is amended to read as follows:
                    ``(A) In general.--The aggregate cost which may be 
                taken into account under subsection (a)(1)(B) with 
                respect to qualified clean-fuel vehicle refueling 
                property placed in service during the taxable year at a 
                location shall not exceed the sum of--
                            ``(i) with respect to costs not described 
                        in clause (ii), the excess (if any) of--
                                    ``(I) $100,000, over
                                    ``(II) the aggregate amount of such 
                                costs taken into account under 
                                subsection (a)(1)(B) by the taxpayer 
                                (or any related person or predecessor) 
                                with respect to property placed in 
                                service at such location for all 
                                preceding taxable years, plus
                            ``(ii) the lesser of--
                                    ``(I) the cost of the installation 
                                of such property, or
                                    ``(II) $30,000.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of enactment of this Act.

SEC. 103. CREDIT FOR RETAIL SALE OF CLEAN BURNING FUELS AS MOTOR 
              VEHICLE FUEL.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by inserting after section 40 the following:

``SEC. 40A. CREDIT FOR RETAIL SALE OF CLEAN BURNING FUELS AS MOTOR 
              VEHICLE FUEL.

    ``(a) General Rule.--For purposes of section 38, the clean burning 
fuel retail sales credit of any taxpayer for any taxable year is 50 
cents for each gasoline gallon equivalent of clean burning fuel sold at 
retail by the taxpayer during such year as a fuel to propel any 
qualified motor vehicle.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Clean burning fuel.--The term `clean burning fuel' 
        means natural gas, compressed natural gas, liquefied natural 
        gas, liquefied petroleum gas, hydrogen, and any liquid at least 
        85 percent of which consists of methanol.
            ``(2) Gasoline gallon equivalent.--The term `gasoline 
        gallon equivalent' means, with respect to any clean burning 
        fuel, the amount (determined by the Secretary) of such fuel 
        having a Btu content of 114,000.
            ``(3) Qualified motor vehicle.--The term `qualified motor 
        vehicle' means any motor vehicle (as defined in section 
        179A(e)) which meets any applicable Federal or State emissions 
        standards with respect to each fuel by which such vehicle is 
        designed to be propelled.
            ``(4) Sold at retail.--
                    ``(A) In general.--The term `sold at retail' means 
                the sale, for a purpose other than resale, after 
                manufacture, production, or importation.
                    ``(B) Use treated as sale.--If any person uses 
                clean burning fuel as a fuel to propel any qualified 
                motor vehicle (including any use after importation) 
                before such fuel is sold at retail, then such use shall 
                be treated in the same manner as if such fuel were sold 
                at retail as a fuel to propel such a vehicle by such 
                person.
    ``(c) No Double Benefit.--The amount of the credit determined under 
subsection (a) shall be reduced by the amount of any deduction or 
credit allowable under this chapter for fuel taken into account in 
computing the amount of such credit.
    ``(d) Termination.--This section shall not apply to any fuel sold 
at retail after December 31, 2007.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (11), 
by striking the period at the end of paragraph (12) and inserting ``, 
plus'', and by adding at the end the following:
            ``(13) the clean burning fuel retail sales credit 
        determined under section 40A(a).''.
    (c) Transitional Rule.--Section 39(d) of the Internal Revenue Code 
of 1986 (relating to transitional rules) is amended by adding at the 
end the following:
            ``(9) No carryback of section 40a credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the clean burning fuel retail 
        sales credit determined under section 40A(a) may be carried 
        back to a taxable year ending before January 1, 1999.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 40 the 
following:

        ``Sec. 40A. Credit for retail sale of clean burning fuels as 
                            motor vehicle fuel.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to fuel sold at retail after December 31, 1999, in taxable years 
ending after such date.

                     TITLE II--PROGRAM EFFICIENCIES

SEC. 201. EXCEPTION TO HOV PASSENGER REQUIREMENTS FOR ALTERNATIVE FUEL 
              VEHICLES.

    Section 102(a) of title 23, United States Code, is amended by 
inserting ``(unless, at the discretion of the State highway department, 
the vehicle operates on, or is fueled by, an alternative fuel (as 
defined in section 301 of Public Law 102-486 (42 U.S.C. 13211(2)))'' 
after ``required''.
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