[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 760 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 760

To amend the Internal Revenue Code of 1986 to encourage and accelerate 
 the nationwide production, retail sale, and consumer use of new motor 
 vehicles that are powered by fuel cell technology, hybrid technology, 
battery electric technology, alternative fuels, or other advanced motor 
             vehicle technologies, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 24, 2001

 Mr. Hatch (for himself, Mr. Rockefeller, Mr. Jeffords, Mr. Kerry, Ms. 
Collins, Mr. Lieberman, Mr. Chafee, Mr. Crapo, and Mr. Smith of Oregon) 
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 and accelerate 
 the nationwide production, retail sale, and consumer use of new motor 
 vehicles that are powered by fuel cell technology, hybrid technology, 
battery electric technology, alternative fuels, or other advanced motor 
             vehicle technologies, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Clean Efficient 
Automobiles Resulting From Advanced Car Technologies (CLEAR ACT) Act of 
2001''.
    (b) Amendment of 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.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Alternative motor vehicle credit.
Sec. 4. Modification of credit for qualified electric vehicles.
Sec. 5. Credit for retail sale of alternative fuels as motor vehicle 
                            fuel.
Sec. 6. Extension of deduction for certain refueling property.
Sec. 7. Credit for installation of alternative fueling stations.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The United States is a large and diverse geographic 
        area that includes densely populated urban and suburban areas 
        along with large sparsely populated rural areas separated by 
        long distances, and, as a result, Americans require reliable, 
        efficient, and diversified modes of transportation.
            (2) According to the Energy Information Administration's 
        (referred to in this section as the ``EIA'') March 2000 
        publication ``International Energy Outlook'', oil currently 
        provides a larger share of world energy consumption than any 
        other energy source and most of the growth in oil consumption 
        in industrialized countries, including the United States, is 
        projected for the transportation sector, where few alternatives 
        are currently economical.
            (3) To meet all its national security, economic 
        development, and public health and welfare needs, the United 
        States depends on oil as the primary fuel source for the 
        transportation of people and goods and services in intrastate 
        and interstate commerce.
            (4) Since 1994, the United States has imported over 50 
        percent of the oil it has consumed and the EIA expects North 
        American petroleum imports from the Persian Gulf to more than 
        double over the forecast period of 1997-2020, with additional 
        imports from offshore Atlantic Basin producers and refiners; 
        this increasingly heavy reliance on imported oil presents 
        national security risks, contributes negatively to the balance 
        of trade of the United States, and adversely affects the United 
        States economy, public health, and the environment.
            (5) The United States currently has 121 areas containing 
        over a third of its population that do not meet the National 
        Ambient Air Quality Standards resulting in losses of many 
        billions of dollars in extra economic costs and lost 
        opportunities, immeasurable health problems, and a general 
        reduction in the quality of life for millions of Americans.
            (6) Mobile sources have become the top cause of emissions 
        in the United States.
            (7) This heavy reliance on imported oil and failure to meet 
        the National Ambient Air Quality Standards demonstrate the need 
        to accelerate development of advanced fuel cell technology, 
        hybrid technology, battery electric technology, and alternative 
        fuels technology for new motor vehicles in the transportation 
        of people and goods and services as an important means of 
        helping to reverse the trends of increasing dependence on oil 
        imports and non-attainment of air quality standards, 
        contributing to lessening national security risks, improving 
        our balance of trade with other nations, increasing economic 
        growth, improving health and quality of life for millions of 
        Americans, and providing public health, welfare, and economic 
        benefits.
            (8) Despite the availability of significant Federal and 
        private sector funds and programs to encourage technological 
        advancement for the development and use of motor vehicles that 
        are powered by fuel cell and hybrid technologies, battery 
        electric technology, and alternative technologies, consumer 
        acceptance of such vehicles and fuels has been restrained by 3 
        major barriers--the increased costs of these technologies, the 
        cost of alternative fuels, and the lack of adequate 
        infrastructure to refuel the alternative-fueled vehicles.
    (b) Purposes.--The purposes of this Act are to--
            (1) help instill consumer confidence and acceptance of 
        alternative motor vehicles by lowering the 3 major barriers to 
        this confidence and acceptance;
            (2) enable the accelerated introduction into the 
        marketplace of new motor vehicle technologies without adverse 
        emission impact, while retaining a policy of fuel neutrality in 
        order to foster private innovation and commercialization and 
        allow market forces to decide the technologies and fuels that 
        are consumer-friendly, safe, environmentally sound, and 
        economic;
            (3) provide, for a limited time period, financial 
        incentives to encourage consumers nationwide to purchase or 
        lease new fuel cell, hybrid, battery electric, and alternative 
        fuel motor vehicles;
            (4) increase demand of such vehicles so as to make the 
        annual production by manufacturers and retail sale of such 
        vehicles economically and commercially viable for the consumer;
            (5) promote and expand the use of such vehicles nationwide; 
        and
            (6) promote a nationwide diversity of motor vehicle fuels 
        for advanced and hybrid technology and alternatively fueled 
        motor vehicles.

SEC. 3. ALTERNATIVE MOTOR VEHICLE CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.) is amended by adding at the end 
the following:

``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

    ``(a) Allowance of Credit.--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--
            ``(1) the new qualified fuel cell motor vehicle credit 
        determined under subsection (b),
            ``(2) the new qualified hybrid motor vehicle credit 
        determined under subsection (c), and
            ``(3) the new qualified alternative fuel motor vehicle 
        credit determined under subsection (d).
    ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified fuel cell motor vehicle credit determined under this 
        subsection with respect to a new qualified fuel cell motor 
        vehicle placed in service by the taxpayer during the taxable 
        year is--
                    ``(A) $4,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $20,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(2) Increase for fuel efficiency.--
                    ``(A) In general.--The amount determined under 
                paragraph (1)(A) with respect to a new qualified fuel 
                cell motor vehicle which is a passenger automobile or 
                light truck shall be increased by--
                            ``(i) $1,000, if such vehicle achieves at 
                        least 150 percent but less than 175 percent of 
                        the 2000 model year city fuel economy,
                            ``(ii) $1,500, if such vehicle achieves at 
                        least 175 percent but less than 200 percent of 
                        the 2000 model year city fuel economy,
                            ``(iii) $2,000, if such vehicle achieves at 
                        least 200 percent but less than 225 percent of 
                        the 2000 model year city fuel economy,
                            ``(iv) $2,500, if such vehicle achieves at 
                        least 225 percent but less than 250 percent of 
                        the 2000 model year city fuel economy,
                            ``(v) $3,000, if such vehicle achieves at 
                        least 250 percent but less than 275 percent of 
                        the 2000 model year city fuel economy,
                            ``(vi) $3,500, if such vehicle achieves at 
                        least 275 percent but less than 300 percent of 
                        the 2000 model year city fuel economy, and
                            ``(vii) $4,000, if such vehicle achieves at 
                        least 300 percent of the 2000 model year city 
                        fuel economy.
                    ``(B) 2000 model year city fuel economy.--For 
                purposes of subparagraph (A), the 2000 model year city 
                fuel economy with respect to a vehicle shall be 
                determined in accordance with the following tables:
                            ``(i) In the case of a passenger 
                        automobile:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy is:
    1,500 or 1,750 lbs............................            43.7 mpg 
    2,000 lbs.....................................            38.3 mpg 
    2,250 lbs.....................................            34.1 mpg 
    2,500 lbs.....................................            30.7 mpg 
    2,750 lbs.....................................            27.9 mpg 
    3,000 lbs.....................................            25.6 mpg 
    3,500 lbs.....................................            22.0 mpg 
    4,000 lbs.....................................            19.3 mpg 
    4,500 lbs.....................................            17.2 mpg 
    5,000 lbs.....................................            15.5 mpg 
    5,500 lbs.....................................            14.1 mpg 
    6,000 lbs.....................................            12.9 mpg 
    6,500 lbs.....................................            11.9 mpg 
    7,000 or 8,500 lbs............................            11.1 mpg.
                            ``(ii) In the case of a light truck:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy is:
    1,500 or 1,750 lbs............................            37.6 mpg 
    2,000 lbs.....................................            33.7 mpg 
    2,250 lbs.....................................            30.6 mpg 
    2,500 lbs.....................................            28.0 mpg 
    2,750 lbs.....................................            25.9 mpg 
    3,000 lbs.....................................            24.1 mpg 
    3,500 lbs.....................................            21.3 mpg 
    4,000 lbs.....................................            19.0 mpg 
    4,500 lbs.....................................            17.3 mpg 
    5,000 lbs.....................................            15.8 mpg 
    5,500 lbs.....................................            14.6 mpg 
    6,000 lbs.....................................            13.6 mpg 
    6,500 lbs.....................................            12.8 mpg 
    7,000 or 8,500 lbs............................            12.0 mpg.
                    ``(C) Vehicle inertia weight class.--For purposes 
                of subparagraph (B), the term `vehicle inertia weight 
                class' has the same meaning as when defined in 
                regulations prescribed by the Administrator of the 
                Environmental Protection Agency for purposes of the 
                administration of title II of the Clean Air Act (42 
                U.S.C. 7521 et seq.).
            ``(3) New qualified fuel cell motor vehicle.--For purposes 
        of this subsection, the term `new qualified fuel cell motor 
        vehicle' means a motor vehicle--
                    ``(A) which is propelled by power derived from one 
                or more cells which convert chemical energy directly 
                into electricity by combining oxygen with hydrogen fuel 
                which is stored on board the vehicle in any form and 
                may or may not require reformation prior to use,
                    ``(B) which, in the case of a passenger automobile 
                or light truck--
                            ``(i) for 2002 and later model vehicles, 
                        has received a certificate of conformity under 
                        the Clean Air Act and meets or exceeds the 
                        equivalent qualifying California low emission 
                        vehicle standard under section 243(e)(2) of the 
                        Clean Air Act for that make and model year, and
                            ``(ii) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.
    ``(c) New Qualified Hybrid Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified hybrid motor vehicle credit determined under this 
        subsection with respect to a new qualified hybrid motor vehicle 
        placed in service by the taxpayer during the taxable year is 
        the credit amount determined under paragraph (2).
            ``(2) Credit amount.--
                    ``(A) In general.--The credit amount determined 
                under this paragraph shall be determined in accordance 
                with the following tables:
                            ``(i) In the case of a new qualified hybrid 
                        motor vehicle which is a passenger automobile 
or light truck and which provides the following percentage of the 
maximum available power:

``If percentage of the maximum      The credit amount is:
        available power is:
    At least 5 percent but less than 10 percent...                $250 
    At least 10 percent but less than 20 percent..                $500 
    At least 20 percent but less than 30 percent..                $750 
    At least 30 percent...........................              $1,000.
                            ``(ii) In the case of a new qualified 
                        hybrid motor vehicle which is a heavy duty 
                        hybrid motor vehicle and which provides the 
                        following percentage of the maximum available 
                        power:
                                    ``(I) If such vehicle has a gross 
                                vehicle weight rating of not more than 
                                14,000 pounds:

``If percentage of the maximum      The credit amount is:
        available power is:
    At least 20 percent but less than 30 percent..              $1,500 
    At least 30 percent but less than 40 percent..              $1,750 
    At least 40 percent but less than 50 percent..              $2,000 
    At least 50 percent but less than 60 percent..              $2,250 
    At least 60 percent...........................              $2,500.
                                    ``(II) If such vehicle has a gross 
                                vehicle weight rating of more than 
                                14,000 but not more than 26,000 pounds:

``If percentage of the maximum      The credit amount is:
        available power is:
    At least 20 percent but less than 30 percent..              $4,000 
    At least 30 percent but less than 40 percent..              $4,500 
    At least 40 percent but less than 50 percent..              $5,000 
    At least 50 percent but less than 60 percent..              $5,500 
    At least 60 percent...........................              $6,000.
                                    ``(III) If such vehicle has a gross 
                                vehicle weight rating of more than 
                                26,000 pounds:

``If percentage of the maximum      The credit amount is:
        available power is:
    At least 20 percent but less than 30 percent..              $6,000 
    At least 30 percent but less than 40 percent..              $7,000 
    At least 40 percent but less than 50 percent..              $8,000 
    At least 50 percent but less than 60 percent..              $9,000 
    At least 60 percent...........................             $10,000.
                    ``(B) Increase for fuel efficiency.--
                            ``(i) Amount.--The amount determined under 
                        subparagraph (A)(i) with respect to a passenger 
                        automobile or light truck shall be increased 
                        by--
                                    ``(I) $500, if such vehicle 
                                achieves at least 125 percent but less 
                                than 150 percent of the 2000 model year 
                                city fuel economy,
                                    ``(II) $1,000, if such vehicle 
                                achieves at least 150 percent but less 
                                than 175 percent of the 2000 model year 
                                city fuel economy,
                                    ``(III) $1,500, if such vehicle 
                                achieves at least 175 percent but less 
                                than 200 percent of the 2000 model year 
                                city fuel economy,
                                    ``(IV) $2,000, if such vehicle 
                                achieves at least 200 percent but less 
                                than 225 percent of the 2000 model year 
                                city fuel economy,
                                    ``(V) $2,500, if such vehicle 
                                achieves at least 225 percent but less 
                                than 250 percent of the 2000 model year 
                                city fuel economy, and
                                    ``(VI) $3,000, if such vehicle 
                                achieves at least 250 percent of the 
                                2000 model year city fuel economy.
                            ``(ii) 2000 model year city fuel economy.--
                        For purposes of clause (i), the 2000 model year 
                        city fuel economy with respect to a vehicle 
                        shall be determined using the tables provided 
                        in subsection (b)(2)(B) with respect to such 
                        vehicle.
                    ``(C) Increase for accelerated emissions 
                performance.--The amount determined under subparagraph 
                (A)(ii) with respect to an applicable heavy duty hybrid 
                motor vehicle shall be increased by the increase credit 
                amount determined in accordance with the following 
                tables:
                            ``(i) In the case of a vehicle which has a 
                        gross vehicle weight rating of not more than 
                        14,000 pounds:

``If the model year is:             The increase credit amount is:
    2002..........................................              $3,500 
    2003..........................................              $3,000 
    2004..........................................              $2,500 
    2005..........................................              $2,000 
    2006..........................................              $1,500.
                            ``(ii) In the case of a vehicle which has a 
                        gross vehicle weight rating of more than 14,000 
                        pounds but not more than 26,000 pounds:

``If the model year is:             The increase credit amount is:
    2002..........................................              $9,000 
    2003..........................................              $7,750 
    2004..........................................              $6,500 
    2005..........................................              $5,250 
    2006..........................................              $4,000.
                            ``(iii) In the case of a vehicle which has 
                        a gross vehicle weight rating of more than 
                        26,000 pounds:

``If the model year is:             The increase credit amount is:
    2002..........................................             $14,000 
    2003..........................................             $12,000 
    2004..........................................             $10,000 
    2005..........................................              $8,000 
    2006..........................................              $6,000.
                    ``(D) Definitions.--
                            ``(i) Applicable heavy duty hybrid motor 
                        vehicle.--For purposes of subparagraph (C), the 
                        term `applicable heavy duty hybrid motor 
                        vehicle' means a heavy duty hybrid motor 
                        vehicle which is powered by an internal 
                        combustion or heat engine which is certified as 
                        meeting the emission standards set in the 
                        regulations prescribed by the Administrator of 
                        the Environmental Protection Agency for 2007 
                        and later model year diesel heavy duty engines 
                        or 2008 and later model year ottocycle heavy 
                        duty engines, as applicable.
                            ``(ii) Heavy duty hybrid motor vehicle.--
                        For purposes of this paragraph, the term `heavy 
                        duty hybrid motor vehicle' means a new 
                        qualified hybrid motor vehicle which has a 
                        gross vehicle weight rating of more than 10,000 
                        pounds and draws propulsion energy from both of 
                        the following onboard sources of stored energy:
                                    ``(I) An internal combustion or 
                                heat engine using consumable fuel 
                                which, for 2002 and later model 
                                vehicles, has received a certificate of 
                                conformity under the Clean Air Act and 
                                meets or exceeds a level of not greater 
                                than 3.0 grams per brake horsepower-
                                hour of oxides of nitrogen and 0.01 per 
                                brake horsepower-hour of particulate 
                                matter.
                                    ``(II) A rechargeable energy 
                                storage system.
                            ``(iii) Maximum available power.--
                                    ``(I) Passenger automobile or light 
                                truck.--For purposes of subparagraph 
                                (A)(i), the term `maximum available 
                                power' means the maximum power 
                                available from the battery or other 
                                electrical storage device, during a 
                                standard 10 second pulse power test, 
                                divided by the sum of the battery or 
                                other electrical storage device and the 
                                SAE net power of the heat engine.
                                    ``(II) Heavy duty hybrid motor 
                                vehicle.--For purposes of subparagraph 
                                (A)(ii), the term `maximum available 
                                power' means the maximum power 
                                available from the battery or other 
                                electrical storage device, during a 
                                standard 10 second pulse power test, 
                                divided by the vehicle's total traction 
                                power. The term `total traction power' 
                                means the sum of the electric motor 
                                peak power and the heat engine peak 
                                power of the vehicle, except that if 
                                the electric motor is the sole means by 
                                which the vehicle can be driven, the 
                                total traction power is the peak 
                                electric motor power.
            ``(3) New qualified hybrid motor vehicle.--For purposes of 
        this subsection, the term `new qualified hybrid motor vehicle' 
        means a motor vehicle--
                    ``(A) which draws propulsion energy from onboard 
                sources of stored energy which are both--
                            ``(i) an internal combustion or heat engine 
                        using combustible fuel, and
                            ``(ii) a rechargeable energy storage 
                        system,
                    ``(B) which, in the case of a passenger automobile 
                or light truck--
                            ``(i) for 2002 and later model vehicles, 
                        has received a certificate of conformity under 
                        the Clean Air Act and meets or exceeds the 
                        equivalent qualifying California low emission 
                        vehicle standard under section 243(e)(2) of the 
                        Clean Air Act for that make and model year, and
                            ``(ii) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.
    ``(d) New Qualified Alternative Fuel Motor Vehicle Credit.--
            ``(1) Allowance of credit.--Except as provided in paragraph 
        (5), the credit determined under this subsection is an amount 
        equal to the applicable percentage of the incremental cost of 
        any new qualified alternative fuel motor vehicle placed in 
        service by the taxpayer during the taxable year.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage with respect to any new 
        qualified alternative fuel motor vehicle is--
                    ``(A) 50 percent, plus
                    ``(B) 30 percent, if such vehicle--
                            ``(i) has received a certificate of 
                        conformity under the Clean Air Act and meets or 
                        exceeds the most stringent standard available 
                        for certification under the Clean Air Act for 
                        that make and model year vehicle (other than a 
                        zero emission standard), or
                            ``(ii) has received an order from an 
                        applicable State certifying the vehicle for 
                        sale or lease in California and meets or 
                        exceeds the most stringent standard available 
                        for certification under the State laws of 
                        California (enacted in accordance with a waiver 
                        granted under section 209(b) of the Clean Air 
                        Act) for that make and model year vehicle 
                        (other than a zero emission standard).
            ``(3) Incremental cost.--For purposes of this subsection, 
        the incremental cost of any new qualified alternative fuel 
        motor vehicle is equal to the amount of the excess of the 
        manufacturer's suggested retail price for such vehicle over 
        such price for a gasoline or diesel fuel motor vehicle of the 
        same model, to the extent such amount does not exceed--
                    ``(A) $5,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $25,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(4) Qualified alternative fuel motor vehicle defined.--
        For purposes of this subsection--
                    ``(A) In general.--The term `qualified alternative 
                fuel motor vehicle' means any motor vehicle--
                            ``(i) which is only capable of operating on 
                        an alternative fuel,
                            ``(ii) the original use of which commences 
                        with the taxpayer,
                            ``(iii) which is acquired by the taxpayer 
                        for use or lease, but not for resale, and
                            ``(iv) which is made by a manufacturer.
                    ``(B) Alternative fuel.--The term `alternative 
                fuel' means compressed natural gas, liquefied natural 
                gas, liquefied petroleum gas, hydrogen, and any liquid 
                at least 85 percent of the volume of which consists of 
                methanol.
            ``(5) Credit for mixed-fuel vehicles.--
                    ``(A) In general.--In the case of a mixed-fuel 
                vehicle placed in service by the taxpayer during the 
                taxable year, the credit determined under this 
                subsection is an amount equal to--
                            ``(i) in the case of a 75/25 mixed-fuel 
                        vehicle, 70 percent of the credit which would 
                        have been allowed under this subsection if such 
                        vehicle was a qualified alternative fuel motor 
                        vehicle, and
                            ``(ii) in the case of a 95/5 mixed-fuel 
                        vehicle, 95 percent of the credit which would 
                        have been allowed under this subsection if such 
                        vehicle was a qualified alternative fuel motor 
                        vehicle.
                    ``(B) Mixed-fuel vehicle.--For purposes of this 
                subsection, the term `mixed-fuel vehicle' means any 
                motor vehicle described in subparagraph (C) or (D) of 
                paragraph (3), which--
                            ``(i) is certified by the manufacturer as 
                        being able to perform efficiently in normal 
                        operation on a combination of an alternative 
                        fuel and a petroleum-based fuel,
                            ``(ii) either--
                                    ``(I) has received a certificate of 
                                conformity under the Clean Air Act, or
                                    ``(II) has received an order from 
                                an applicable State certifying the 
                                vehicle for sale or lease in California 
                                and meets or exceeds the low emission 
                                vehicle standard under section 88.105-
                                94 of title 40, Code of Federal 
                                Regulations, for that make and model 
                                year vehicle,
                            ``(iii) the original use of which commences 
                        with the taxpayer,
                            ``(iv) which is acquired by the taxpayer 
                        for use or lease, but not for resale, and
                            ``(v) which is made by a manufacturer.
                    ``(C) 75/25 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `75/25 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 75 percent alternative fuel and not more than 25 
                percent petroleum-based fuel.
                    ``(D) 95/5 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `95/5 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 95 percent alternative fuel and not more than 5 
                percent petroleum-based fuel.
    ``(e) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        29, and 30, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Consumable fuel.--The term `consumable fuel' means 
        any solid, liquid, or gaseous matter which releases energy when 
        consumed by an auxiliary power unit.
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(3) 2000 model year city fuel economy.--The 2000 model 
        year city fuel economy with respect to any vehicle shall be 
        measured under rules similar to the rules under section 
        4064(c).
            ``(4) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
            ``(5)  Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (e)).
            ``(6) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter--
                    ``(A) for any incremental cost taken into account 
                in computing the amount of the credit determined under 
                subsection (d) shall be reduced by the amount of such 
                credit attributable to such cost, and
                    ``(B) with respect to a vehicle described under 
                subsection (b) or (c), shall be reduced by the amount 
                of credit allowed under subsection (a) for such vehicle 
                for the taxable year.
            ``(7) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to a motor 
        vehicle which is acquired by an entity exempt from tax under 
        this chapter, the person which sells or leases such vehicle to 
        the entity shall be treated as the taxpayer with respect to the 
        vehicle for purposes of this section and the credit shall be 
        allowed to such person, but only if the person clearly 
        discloses to the entity in any sale or lease document the 
        specific amount of any credit otherwise allowable to the entity 
        under this section and reduces the sale or lease price of such 
        vehicle by an equivalent amount of such credit.
            ``(8) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit (including recapture in 
        the case of a lease period of less than the economic life of a 
        vehicle).
            ``(9) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(10) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(11) Carryforward allowed.--
                    ``(A) In general.--If the credit amount allowable 
                under subsection (a) for a taxable year exceeds the 
                amount of the limitation under subsection (e) for such 
                taxable year (referred to as the `unused credit year' 
                in this paragraph), such excess shall be allowed as a 
                credit carryforward for each of the 20 taxable years 
                following the unused credit year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryforward 
                under subparagraph (A).
            ``(12) Interaction with air quality and motor vehicle 
        safety standards.--Unless otherwise provided in this section, a 
        motor vehicle shall not be considered eligible for a credit 
        under this section unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provision under a waiver under section 209(b) of the 
                Clean Air Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.
    ``(g) Regulations.--
            ``(1) In general.--The Secretary shall promulgate such 
        regulations as necessary to carry out the provisions of this 
        section.
            ``(2) Administrator of environmental protection agency.--
        The Administrator of the Environmental Protection Agency, in 
        coordination with the Secretary of Transportation and the 
        Secretary of the Treasury, shall prescribe such regulations as 
        necessary to determine whether a motor vehicle meets the 
        requirements to be eligible for a credit under this section.
    ``(h) Termination.--This section shall not apply to any property 
placed in service after--
            ``(1) in the case of a new qualified fuel cell motor 
        vehicle (as described in subsection (b)), December 31, 2011, 
        and
            ``(2) in the case of any other property, December 31, 
        2007.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (26), by striking the period at the end of 
        paragraph (27) and inserting ``, and'', and by adding at the 
        end the following:
            ``(28) to the extent provided in section 30B(f)(4).''.
            (2) Section 53(d)(1)(B)(iii) is amended by inserting ``, or 
        not allowed under section 30B solely by reason of the 
        application of section 30B(e)(2)'' before the period.
            (3) Section 55(c)(2) is amended by inserting ``30B(e),'' 
        after ``30(b)(3)''.
            (4) Section 6501(m) is amended by inserting ``30B(f)(9),'' 
        after ``30(d)(4),''.
            (5) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30A the following:

        ``Sec. 30B. Alternative motor vehicle credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.

SEC. 4. MODIFICATION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

    (a) Amount of Credit.--
            (1) In general.--Section 30(a) (relating to allowance of 
        credit) is amended by striking ``10 percent of''.
            (2) Limitation of credit according to type of vehicle.--
        Section 30(b) (relating to limitations) is amended--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following:
            ``(1) Limitation according to type of vehicle.--The amount 
        of the credit allowed under subsection (a) for any vehicle 
        shall not exceed the greatest of the following amounts 
        applicable to such vehicle:
                    ``(A) In the case of a vehicle which conforms to 
                the Motor Vehicle Safety Standard 500 prescribed by the 
                Secretary of Transportation, the lesser of--
                            ``(i) 10 percent of the manufacturer's 
                        suggested retail price of the vehicle, or
                            ``(ii) $4,000.
                    ``(B) In the case of a vehicle with a gross vehicle 
                weight rating not exceeding 8,500 pounds--
                            ``(i) $4,000, or
                            ``(ii) $6,000, if such vehicle is--
                                    ``(I) capable of a driving range of 
                                at least 100 miles on a single charge 
                                of the vehicle's rechargeable batteries 
                                and measured pursuant to the urban 
                                dynamometer schedules under appendix I 
                                to part 86 of title 40, Code of Federal 
                                Regulations, or
                                    ``(II) capable of a payload 
                                capacity of at least 1000 pounds.
                    ``(C) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 8,500 but not exceeding 14,000 
                pounds, $10,000.
                    ``(D) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 14,000 but not exceeding 26,000 
                pounds, $20,000.
                    ``(E) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 26,000 pounds, $40,000.'', and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
            (3) Conforming amendments.--
                    (A) Section 53(d)(1)(B)(iii) is amended by striking 
                ``section 30(b)(3)(B)'' and inserting ``section 
                30(b)(2)(B)''.
            (3) Section 55(c)(2) is amended by striking ``30(b)(3)'' 
        and inserting ``30(b)(2)''.
    (b) Qualified Battery Electric Vehicle.--
            (1) In general.--Section 30(c)(1)(A) (defining qualified 
        electric vehicle) is amended to read as follows:
                    ``(A) which is--
                            ``(i) operated solely by use of a battery 
                        or battery pack, or
                            ``(ii) powered primarily through the use of 
                        an electric battery or battery pack using a 
                        flywheel or capacitor which stores energy 
                        produced by an electric motor through 
                        regenerative braking to assist in vehicle 
                        operation,''.
            (2) Leased vehicles.--Section 30(c)(1)(C) is amended by 
        inserting ``or lease'' after ``use''.
            (3) Conforming amendments.--
                    (A) Subsections (a), (b)(2), and (c) of section 30 
                are each amended by inserting ``battery'' after 
                ``qualified'' each place it appears.
                    (B) The heading of subsection (c) of section 30 is 
                amended by inserting ``Battery'' after ``Qualified''.
                    (C) The heading of section 30 is amended by 
                inserting ``battery'' after ``qualified''.
                    (D) The item relating to section 30 in the table of 
                sections for subpart B of part IV of subchapter A of 
                chapter 1 is amended by inserting ``battery'' after 
                ``qualified''.
                    (E) Section 179A(c)(3) is amended by inserting 
                ``battery'' before ``electric''.
                    (F) The heading of paragraph (3) of section 179A(c) 
                is amended by inserting ``battery'' before 
                ``electric''.
    (c) Additional Special Rules.--Section 30(d) (relating to special 
rules) is amended by adding at the end the following:
            ``(5) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter for any cost taken into 
        account in computing the amount of the credit determined under 
        subsection (a) shall be reduced by the amount of such credit 
        attributable to such cost.
            ``(6) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to a vehicle 
        which is acquired by an entity exempt from tax under this 
        chapter, the person which sells or leases such vehicle to the 
        entity shall be treated as the taxpayer with respect to the 
        vehicle for purposes of this section and the credit shall be 
        allowed to such person, but only if the person clearly 
        discloses to the entity in any sale or lease contract the 
        specific amount of any credit otherwise allowable to the entity 
        under this section and reduces the sale or lease price of such 
        vehicle by an equivalent amount of such credit.''.
    (d) Extension.--Section 30(e) (relating to termination) is amended 
by striking ``2004'' and inserting ``2007''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.

SEC. 5. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE 
              FUEL.

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

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

    ``(a) General Rule.--For purposes of section 38, the alternative 
fuel retail sales credit for any taxable year is 50 cents for each 
gasoline gallon equivalent of alternative fuel sold at retail by the 
taxpayer during such year as a fuel to propel any qualified motor 
vehicle, but only if the taxpayer reduces the retail sales price of 
such fuel by an equivalent amount of such credit.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Alternative fuel.--The term `alternative fuel' means 
        compressed natural gas, liquefied natural gas, liquefied 
        petroleum gas, hydrogen, and any liquid at least 85 percent of 
        the volume of which consists of methanol.
            ``(2) Gasoline gallon equivalent.--The term `gasoline 
        gallon equivalent' means, with respect to any alternative 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 
        30(c)(2)) 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 
                alternative fuel (including any use after importation) 
                as a fuel to propel any qualified alternative fuel 
                motor vehicle (as defined in section 30B(d)(4)) 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 any deduction or credit 
allowable under this chapter for any fuel taken into account in 
computing the amount of the credit determined under subsection (a) 
shall be reduced by the amount of such credit attributable to such 
fuel.
    ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
regulations prescribed by the Secretary, rules similar to the rules of 
subsection (d) of section 52 shall apply.
    ``(e) 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) (relating to 
current year business credit) is amended by striking ``plus'' at the 
end of paragraph (12), by striking the period at the end of paragraph 
(13) and inserting ``, plus'', and by adding at the end the following:
            ``(14) the alternative fuel retail sales credit determined 
        under section 40A(a).''.
    (c) Transitional Rule.--Section 39(d) (relating to transitional 
rules) is amended by adding at the end the following:
            ``(10) 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 alternative fuel retail sales 
        credit determined under section 40A(a) may be carried back to a 
        taxable year ending before January 1, 2002.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 40 the following:

        ``Sec. 40A. Credit for retail sale of alternative fuels as 
                            motor vehicle fuel.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to fuel sold at retail after December 31, 2001, in taxable years 
ending after such date.

SEC. 6. EXTENSION OF DEDUCTION FOR CERTAIN REFUELING PROPERTY.

    (a) In General.--Section 179A(f) (relating to termination) is 
amended by striking ``2004'' and inserting ``2007''.
    (b) Conforming Amendment.--Section 179A(c) (relating to qualified 
clean-fuel vehicle property defined) is amended by striking paragraph 
(3).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.

SEC. 7. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.), as amended by section 3, is 
amended by adding at the end the following:

``SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY CREDIT.

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal 
to--
            ``(1) 50 percent, in the case of retail clean-fuel vehicle 
        refueling property, and
            ``(2) 50 percent, in the case of residential clean-fuel 
        vehicle refueling property,
of the amount paid or incurred by the taxpayer during the taxable year 
for the installation of clean-fuel vehicle refueling property.
    ``(b) Limitation.--The credit allowed under--
            ``(1) subsection (a)(1) with respect to clean-fuel vehicle 
        refueling property, shall not exceed $30,000, and
            ``(2) subsection (a)(2) with respect to clean-fuel vehicle 
        refueling property, shall not exceed $1,000.
    ``(c) Year Credit Allowed.--The credit allowed under subsection (a) 
shall be allowed in the taxable year in which the clean-fuel vehicle 
refueling property is placed in service by the taxpayer.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Clean-fuel vehicle refueling property.--The term 
        `clean-fuel vehicle refueling property' has the same meaning 
        given the term `qualified clean-fuel vehicle refueling 
        property' under section 179A.
            ``(2) Residential clean-fuel vehicle refueling property.--
        The term `residential clean-fuel vehicle refueling property' 
        means clean-fuel vehicle refueling property which is installed 
        on property which is used as the principal residence (within 
        the meaning of section 121) of the taxpayer.
            ``(3) Retail clean-fuel vehicle refueling property.--The 
        term `retail clean-fuel vehicle refueling property' means 
        clean-fuel vehicle refueling property--
                    ``(A) which is installed on property used in a 
                trade or business of the taxpayer, and
                    ``(B) if such refueling property--
                            ``(i) is--
                                    ``(I) available to the public 
                                during normal business hours, and
                                    ``(II) capable of serving at least 
                                3 motor vehicles at the same time, or
                            ``(ii) regularly serves at least 1 fleet of 
                        10 or more motor vehicles.
    ``(e) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        29, 30, and 30B, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(f) Basis Reduction.--For purposes of this title, the basis of 
any property shall be reduced by the portion of the cost of such 
property taken into account under subsection (a).
    ``(g) No Double Benefit.--No deduction shall be allowed under 
section 179A with respect to any property with respect to which a 
credit is allowed under subsection (a).
    ``(h) Refueling Property Installed for Tax-Exempt Entities.--In the 
case of clean-fuel vehicle refueling property installed on property 
owned or used by an entity exempt from tax under this chapter, the 
person which installs such refueling property for the entity shall be 
treated as the taxpayer with respect to the refueling property for 
purposes of this section (and such refueling property shall be treated 
as retail clean-fuel vehicle refueling property) and the credit shall 
be allowed to such person, but only if the person clearly discloses to 
the entity in any installation contract the specific amount of the 
credit allowable under this section and modifies the price of such 
contract to take into account the amount of such credit.
    ``(i) Carryforward Allowed.--
            ``(1) In general.--If the credit amount allowable under 
        subsection (a) for a taxable year exceeds the amount of the 
        limitation under subsection (b) for such taxable year (referred 
        to as the `unused credit year' in this subsection), such excess 
        shall be allowed as a credit carryforward for each of the 20 
        taxable years following the unused credit year.
            ``(2) Rules.--Rules similar to the rules of section 39 
        shall apply with respect to the credit carryforward under 
        paragraph (1).
    ``(j) Special Rules.--Rules similar to the rules of paragraphs (4) 
and (5) of section 179A(e) shall apply.
    ``(k) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(l) Termination.--This section shall not apply to any property 
placed in service after December 31, 2007.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a), as amended by section 3(b)(1), is 
        amended by striking ``and'' at the end of paragraph (27), by 
        striking the period at the end of paragraph (28) and inserting 
        ``, and'', and by adding at the end the following:
            ``(29) to the extent provided in section 30C(f).''.
            (2) Section 53(d)(1)(B)(iii), as amended by section 
        3(b)(2), is amended by inserting ``, or not allowed under 
        section 30C solely by reason of the application of section 
        30C(e)(2)'' before the period.
            (3) Section 55(c)(2), as amended by section 3(b)(3), is 
        amended by inserting ``30C(e),'' after ``30B(e)''.
            (4) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1, as amended by section 3(b)(5), is 
        amended by inserting after the item relating to section 30B the 
        following:

        ``Sec. 30C. Clean-fuel vehicle refueling property credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.
                                 <all>