[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5146 Introduced in House (IH)]







108th CONGRESS
  2d Session
                                H. R. 5146

 To amend the Internal Revenue Code of 1986 to provide incentives for 
            alternative fuels and alternative fuel vehicles.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 2004

   Mr. Ruppersberger (for himself and Mr. Gilchrest) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
            alternative fuels and alternative fuel vehicles.

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

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Common Sense 
Automobile Efficiency Act of 2004''.
    (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.

SEC. 2. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC VEHICLE CREDIT AND 
              DEDUCTION FOR CLEAN-FUEL VEHICLES.

    (a) Credit for Qualified Electric Vehicles.--Subsection (b) of 
section 30 (relating to limitations) is amended by striking paragraph 
(2) and redesignating paragraph (3) as paragraph (2).
    (b) Deduction for Clean-Fuel Vehicles and Certain Refueling 
Property.--Paragraph (1) of section 179A(b) (relating to qualified 
clean-fuel vehicle property) is amended to read as follows:
            ``(1) Qualified clean-fuel vehicle property.--The cost 
        which may be taken into account under subsection (a)(1)(A) with 
        respect to any motor vehicle shall not exceed--
                    ``(A) in the case of a motor vehicle not described 
                in subparagraph (B) or (C), $2,000,
                    ``(B) in the case of any truck or van with a gross 
                vehicle weight rating greater than 10,000 pounds but 
                not greater than 26,000 pounds, $5,000, or
                    ``(C) $50,000 in the case of--
                            ``(i) a truck or van with a gross vehicle 
                        weight rating greater than 26,000 pounds, or
                            ``(ii) any bus which has a seating capacity 
                        of at least 20 adults (not including the 
                        driver).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

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 advanced lean burn technology motor vehicle 
        credit determined under subsection (c),
            ``(3) the new qualified hybrid motor vehicle credit 
        determined under subsection (d), and
            ``(4) the new qualified alternative fuel motor vehicle 
        credit determined under subsection (e).
    ``(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 shall be determined in accordance with the following 
        table:

``In the case of a vehicle which                      The new qualified
        has a gross vehicle weight                      fuel cell motor
        rating of--                                 vehicle credit is--
    Not more than 8,500 lbs.......................              $4,000 
    More than 8,500 lbs but not more than 14,000               $10,000 
        lbs.
    More than 14,000 lbs but not more than 26,000              $20,000 
        lbs.
    More than 26,000 lbs..........................             $40,000.
            ``(2) Increase for fuel efficiency.--
                    ``(A) In general.--The amount determined under 
                paragraph (1) with respect to a new qualified fuel cell 
                motor vehicle which is a passenger automobile or light 
                truck shall be increased by the additional credit 
                amount.
                    ``(B) Additional credit amount.--For purposes of 
                subparagraph (A), the additional credit amount shall be 
                determined in accordance with the following table:

``In the case of a vehicle which                                       
        achieves a fuel economy                                        
        (expressed as a percentage                       The additional
        of the 2002 model year city                       credit amount
        fuel economy) of--                                         is--
    At least 150 percent but less than 175 percent              $1,000 
    At least 175 percent but less than 200 percent              $1,500 
    At least 200 percent but less than 225 percent              $2,000 
    At least 225 percent but less than 250 percent              $2,500 
    At least 250 percent but less than 275 percent              $3,000 
    At least 275 percent but less than 300 percent              $3,500 
    At least 300 percent..........................              $4,000.
            ``(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, has received--
                            ``(i) 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) a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        standard 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 Advanced Lean Burn Technology Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        advanced lean burn technology motor vehicle credit determined 
        under this subsection with respect to a new advanced lean burn 
        technology motor vehicle placed in service by the taxpayer 
        during the taxable year is the credit amount determined under 
        paragraph (2).
            ``(2) Credit amount.--
                    ``(A) Fuel economy.--The credit amount determined 
                under this paragraph shall be determined in accordance 
                with the following table:

``In the case of a vehicle which                                       
        achieves a fuel economy                                        
        (expressed as a percentage                                     
        of the 2002 model year city                          The credit
        fuel economy) of--                                  amount is--
    At least 125 percent but less than 150 percent                $400 
    At least 150 percent but less than 175 percent                $800 
    At least 175 percent but less than 200 percent              $1,200 
    At least 200 percent but less than 225 percent              $1,600 
    At least 225 percent but less than 250 percent              $2,000 
    At least 250 percent..........................              $2,400.
                    ``(B) Conservation credit.--The amount determined 
                under subparagraph (A) with respect to a new advanced 
                lean burn technology motor vehicle shall be increased 
                by the conservation credit amount determined in 
                accordance with the following table:

``In the case of a vehicle which                                       
        achieves a lifetime fuel                       The conservation
        savings (expressed in                             credit amount
        gallons of gasoline) of--                                  is--
    At least 1,200 but less than 1,800............                $250 
    At least 1,800 but less than 2,400............                $500 
    At least 2,400 but less than 3,000............                $750 
    At least 3,000................................              $1,000.
            ``(3) New advanced lean burn technology motor vehicle.--For 
        purposes of this subsection, the term `new advanced lean burn 
        technology motor vehicle' means a passenger automobile or a 
        light truck--
                    ``(A) with an internal combustion engine which--
                            ``(i) is designed to operate primarily 
                        using more air than is necessary for complete 
                        combustion of the fuel,
                            ``(ii) incorporates direct injection,
                            ``(iii) achieves at least 125 percent of 
                        the 2002 model year city fuel economy, and
                            ``(iv) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds--
                                    ``(I) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                6,000 pounds or less, the Bin 5 Tier II 
                                emission standard 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, and
                                    ``(II) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                more than 6,000 pounds but not more 
                                than 8,500 pounds, the Bin 8 Tier II 
                                emission standard which is so 
                                established,
                    ``(B) the original use of which commences with the 
                taxpayer,
                    ``(C) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(D) which is made by a manufacturer.
            ``(4) Lifetime fuel savings.--For purposes of this 
        subsection, the term `lifetime fuel savings' means, in the case 
        of any new advanced lean burn technology motor vehicle, an 
        amount equal to the excess (if any) of--
                    ``(A) 120,000 divided by the 2002 model year city 
                fuel economy for the vehicle inertia weight class, over
                    ``(B) 120,000 divided by the city fuel economy for 
                such vehicle.
    ``(d) 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) Credit amount for passenger automobiles and 
                light trucks.--In the case of a new qualified hybrid 
                motor vehicle which is a passenger automobile or light 
                truck and which has a gross vehicle weight rating 
of not more than 8,500 pounds, the amount determined under this 
paragraph is the sum of the amounts determined under clauses (i) and 
(ii).
                            ``(i) Fuel economy.--The amount determined 
                        under this clause is the amount which would be 
                        determined under subsection (c)(2)(A) if such 
                        vehicle were a vehicle referred to in such 
                        subsection.
                            ``(ii) Conservation credit.--The amount 
                        determined under this clause is the amount 
                        which would be determined under subsection 
                        (c)(2)(B) if such vehicle were a vehicle 
                        referred to in such subsection.
                    ``(B) Credit amount for other motor vehicles.--
                            ``(i) In general.--In the case of any new 
                        qualified hybrid motor vehicle to which 
                        subparagraph (A) does not apply, the amount 
                        determined under this paragraph is the amount 
                        equal to the applicable percentage of the 
                        qualified incremental hybrid cost of the 
                        vehicle as certified under clause (v).
                            ``(ii) Applicable percentage.--For purposes 
                        of clause (i), the applicable percentage is--
                                    ``(I) 20 percent if the vehicle 
                                achieves an increase in city fuel 
                                economy relative to a comparable 
                                vehicle of at least 30 percent but less 
                                than 40 percent,
                                    ``(II) 30 percent if the vehicle 
                                achieves such an increase of at least 
                                40 percent but less than 50 percent, 
                                and
                                    ``(III) 40 percent if the vehicle 
                                achieves such an increase of at least 
                                50 percent.
                            ``(iii) Qualified incremental hybrid 
                        cost.--For purposes of this subparagraph, the 
                        qualified incremental hybrid cost of any 
                        vehicle is equal to the amount of the excess of 
                        the manufacturer's suggested retail price for 
                        such vehicle over such price for a comparable 
                        vehicle, to the extent such amount does not 
                        exceed--
                                    ``(I) $7,500, if such vehicle has a 
                                gross vehicle weight rating of not more 
                                than 14,000 pounds,
                                    ``(II) $15,000, if such vehicle has 
                                a gross vehicle weight rating of more 
                                than 14,000 pounds but not more than 
                                26,000 pounds, and
                                    ``(III) $30,000, if such vehicle 
                                has a gross vehicle weight rating of 
                                more than 26,000 pounds.
                            ``(iv) Comparable vehicle.--For purposes of 
                        this subparagraph, the term `comparable 
                        vehicle' means, with respect to any new 
                        qualified hybrid motor vehicle, any vehicle 
                        which is powered solely by a gasoline or diesel 
                        internal combustion engine and which is 
                        comparable in weight, size, and use to such 
                        vehicle.
                            ``(v) Certification.--A certification 
                        described in clause (i) shall be made by the 
                        manufacturer and shall be determined in 
                        accordance with guidance prescribed by the 
                        Secretary. Such guidance shall specify 
                        procedures and methods for calculating fuel 
                        economy savings and incremental hybrid costs.
            ``(3) New qualified hybrid motor vehicle.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `new qualified hybrid 
                motor vehicle' means a motor vehicle--
                            ``(i) which draws propulsion energy from 
                        onboard sources of stored energy which are 
                        both--
                                    ``(I) an internal combustion or 
                                heat engine using consumable fuel, and
                                    ``(II) a rechargeable energy 
                                storage system,
                            ``(ii) which, in the case of a vehicle to 
                        which paragraph (2)(A) applies, 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
                                    ``(I) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                6,000 pounds or less, the Bin 5 Tier II 
                                emission standard 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, and
                                    ``(II) in the case of a vehicle 
                                having a gross vehicle weight rating of 
                                more than 6,000 pounds but not more 
                                than 8,500 pounds, the Bin 8 Tier II 
                                emission standard which is so 
                                established,
                            ``(iii) which has a maximum available power 
                        of at least--
                                    ``(I) 4 percent in the case of a 
                                vehicle to which paragraph (2)(A) 
                                applies,
                                    ``(II) 10 percent in the case of a 
                                vehicle which has a gross vehicle 
                                weight rating or more than 8,500 pounds 
                                and not than 14,000 pounds, and
                                    ``(III) 15 percent in the case of a 
                                vehicle in excess of 14,000 pounds,
                            ``(iv) which, in the case of a vehicle to 
                        which paragraph (2)(B) applies, has an internal 
                        combustion or heat engine which has received a 
                        certificate of conformity under the Clean Air 
                        Act as meeting the emission standards set in 
                        the regulations prescribed by the Administrator 
                        of the Environmental Protection Agency for 2004 
                        through 2007 model year diesel heavy duty 
                        engines or ottocycle heavy duty engines, as 
                        applicable,
                            ``(v) the original use of which commences 
                        with the taxpayer,
                            ``(vi) which is acquired for use or lease 
                        by the taxpayer and not for resale, and
                            ``(vii) which is made by a manufacturer.
                Such term shall not include any vehicle which is not a 
                passenger automobile or light truck if such vehicle has 
                a gross vehicle weight rating of less than 8,500 
                pounds.
                    ``(B) Consumable fuel.--For purposes of 
                subparagraph (A)(i)(I), the term `consumable fuel' 
                means any solid, liquid, or gaseous matter which 
                releases energy when consumed by an auxiliary power 
                unit.
                    ``(C) Maximum available power.--
                            ``(i) Certain passenger automobiles and 
                        light trucks.--In the case of a vehicle to 
                        which paragraph (2)(A) applies, the term 
                        `maximum available power' means the maximum 
                        power available from the rechargeable energy 
                        storage system, during a standard 10 second 
                        pulse power or equivalent test, divided by such 
                        maximum power and the SAE net power of the heat 
                        engine.
                            ``(ii) Other motor vehicles.--In the case 
                        of a vehicle to which paragraph (2)(B) applies, 
                        the term `maximum available power' means the 
                        maximum power available from the rechargeable 
                        energy storage system, during a standard 10 
                        second pulse power or equivalent test, divided 
                        by the vehicle's total traction power. For 
                        purposes of the preceding sentence, the term 
                        `total traction power' means the sum of the 
                        peak power from the rechargeable energy storage 
                        system and the heat engine peak power of the 
                        vehicle, except that if such storage system is 
                        the sole means by which the vehicle can be 
                        driven, the total traction power is the peak 
                        power of such storage system.
    ``(e) New Qualified Alternative Fuel Motor Vehicle Credit.--
            ``(1) Allowance of credit.--Except as provided in paragraph 
        (5), the new qualified alternative fuel motor vehicle 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) 40 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 certifying the 
                        vehicle as meeting the same requirements as 
                        vehicles which may be sold or leased 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).
        For purposes of the preceding sentence, in the case of any new 
        qualified alternative fuel motor vehicle which has a gross 
        vehicle weight rating of more than 14,000 pounds, the most 
        stringent standard available shall be such standard available 
        for certification on the date of the enactment of the Energy 
        Tax Policy Act of 2003.
            ``(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) New qualified alternative fuel motor vehicle.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `new 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 90/10 mixed-fuel 
                        vehicle, 90 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 
                                certifying the vehicle as meeting the 
                                same requirements as vehicles which may 
                                be sold or leased 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) 90/10 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `90/10 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 90 percent alternative fuel and not more than 10 
                percent petroleum-based fuel.
    ``(f) Limitation on Number of New Qualified Hybrid and Advanced 
Lean-Burn Technology Vehicles Eligible for Credit.--
            ``(1) In general.--In the case of a qualified vehicle sold 
        during the phaseout period, only the applicable percentage of 
        the credit otherwise allowable under subsection (c) or (d) 
        shall be allowed.
            ``(2) Phaseout period.--For purposes of this subsection, 
        the phaseout period is the period beginning with the second 
        calendar quarter following the calendar quarter which includes 
        the first date on which the number of qualified vehicles 
        manufactured by the manufacturer of the vehicle referred to in 
        paragraph (1) sold for use in the United States after the date 
        of the enactment of this section is at least 80,000.
            ``(3) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 50 percent for the first 2 calendar quarters 
                of the phaseout period,
                    ``(B) 25 percent for the 3d and 4th calendar 
                quarters of the phaseout period, and
                    ``(C) 0 percent for each calendar quarter 
                thereafter.
            ``(4) Controlled groups.--
                    ``(A) In general.--For purposes of this subsection, 
                all persons treated as a single employer under 
                subsection (a) or (b) of section 52 or subsection (m) 
                or (o) of section 414 shall be treated as a single 
                manufacturer.
                    ``(B) Inclusion of foreign corporations.--For 
                purposes of subparagraph (A), in applying subsections 
(a) and (b) of section 52 to this section, section 1563 shall be 
applied without regard to subsection (b)(2)(C) thereof.
            ``(5) Qualified vehicle.--For purposes of this subsection, 
        the term `qualified vehicle' means any new qualified hybrid 
        motor vehicle and any new advanced lean burn technology motor 
        vehicle.
    ``(g) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27 and 30 for the taxable year.
    ``(h) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(2) 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.).
            ``(3) 2002 model year city fuel economy.--
                    ``(A) In general.--The 2002 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:
                                               The 2002 model year city
``If vehicle inertia weight class                      fuel economy is:
        is:
    1,500 or 1,750 lbs............................            45.2 mpg 
    2,000 lbs.....................................            39.6 mpg 
    2,250 lbs.....................................            35.2 mpg 
    2,500 lbs.....................................            31.7 mpg 
    2,750 lbs.....................................            28.8 mpg 
    3,000 lbs.....................................            26.4 mpg 
    3,500 lbs.....................................            22.6 mpg 
    4,000 lbs.....................................            19.8 mpg 
    4,500 lbs.....................................            17.6 mpg 
    5,000 lbs.....................................            15.9 mpg 
    5,500 lbs.....................................            14.4 mpg 
    6,000 lbs.....................................            13.2 mpg 
    6,500 lbs.....................................            12.2 mpg 
    7,000 to 8,500 lbs............................            11.3 mpg.
                            ``(ii) In the case of a light truck:

                                               The 2002 model year city
``If vehicle inertia weight class                      fuel economy is:
        is:
    1,500 or 1,750 lbs............................            39.4 mpg 
    2,000 lbs.....................................            35.2 mpg 
    2,250 lbs.....................................            31.8 mpg 
    2,500 lbs.....................................            29.0 mpg 
    2,750 lbs.....................................            26.8 mpg 
    3,000 lbs.....................................            24.9 mpg 
    3,500 lbs.....................................            21.8 mpg 
    4,000 lbs.....................................            19.4 mpg 
    4,500 lbs.....................................            17.6 mpg 
    5,000 lbs.....................................            16.1 mpg 
    5,500 lbs.....................................            14.8 mpg 
    6,000 lbs.....................................            13.7 mpg 
    6,500 lbs.....................................            12.8 mpg 
    7,000 to 8,500 lbs............................            12.1 mpg.
                    ``(B) Vehicle inertia weight class.--For purposes 
                of subparagraph (A), 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.).
            ``(4) Fuel economy.--Fuel economy with respect to any 
        vehicle shall be measured under rules similar to the rules 
        under section 4064(c).
            ``(5)  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.
            ``(6) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter (other than the credits 
        allowable under this section and section 30) shall be reduced 
        by the amount of credit allowed under subsection (a) for such 
        vehicle for the taxable year.
            ``(7) 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).
            ``(8) 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.
            ``(9) Election not to 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.
            ``(10) Business carryovers allowed.--If the credit 
        allowable under subsection (a) for a taxable year exceeds the 
        limitation under subsection (g) 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 and carryforward under rules 
        similar to the rules of section 39.
            ``(11) Interaction with 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 the motor 
        vehicle safety provisions of sections 30101 through 30169 of 
        title 49, United States Code.
    ``(i) Regulations.--
            ``(1) In general.--The Secretary shall promulgate such 
        regulations as necessary to carry out the provisions of this 
        section.
            ``(2) Determination of motor vehicle eligibility.--The 
        Secretary, after coordination with the Secretary of 
        Transportation and the Administrator of the Environmental 
        Protection Agency, shall prescribe such regulations as 
        necessary to determine whether a motor vehicle meets the 
        requirements to be eligible for a credit under this section.
    ``(j) Termination.--This section shall not apply to any property 
placed in service after--
            ``(1) in the case of a new qualified alternative fuel motor 
        vehicle, December 31, 2006,
            ``(2) in the case of a new advanced lean burn technology 
        motor vehicle or a new qualified hybrid motor vehicle, December 
        31, 2008, and
            ``(3) in the case of a new qualified fuel cell motor 
        vehicle, December 31, 2012.''.
    (b) Conforming Amendments.--
            (1) Section 30(d) (relating to special rules) is amended by 
        adding at the end the following new paragraphs:
            ``(5) No double benefit.--No credit shall be allowed under 
        this section for any motor vehicle for which a credit is also 
        allowed under section 30B.''.
            (2) Section 1016(a) 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 30B(h)(5).''.
            (3) Section 6501(m) is amended by inserting ``30B(h)(9),'' 
        after ``30(d)(4),''.
            (4) 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.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.
    (d) Sticker Information Required at Retail Sale.--
            (1) In general.--The Secretary of the Treasury shall issue 
        regulations under which each qualified vehicle sold at retail 
        shall display a notice--
                    (A) that such vehicle is a qualified vehicle, and
                    (B) that the buyer may not benefit from the credit 
                allowed under section 30B of the Internal Revenue Code 
                of 1986 if such buyer has insufficient tax liability.
            (2) Qualified vehicle.--For purposes of paragraph (1), the 
        term ``qualified vehicle'' means a vehicle with respect to 
        which a credit is allowed under section 30B of the Internal 
        Revenue Code of 1986.

SEC. 4. SMALL ETHANOL PRODUCER CREDIT.

    (a) Allocation of Alcohol Fuels Credit to Patrons of a 
Cooperative.--Section 40(g) (relating to definitions and special rules 
for eligible small ethanol producer credit) is amended by adding at the 
end the following new paragraph:
            ``(6) Allocation of small ethanol producer credit to 
        patrons of cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of a 
                        cooperative organization described in section 
                        1381(a), any portion of the credit determined 
                        under subsection (a)(3) for the taxable year 
                        may, at the election of the organization, be 
                        apportioned pro rata among patrons of the 
                        organization on the basis of the quantity or 
                        value of business done with or for such patrons 
                        for the taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year.
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the taxable 
                        year of each patron for which the patronage 
                        dividends for the taxable year described in 
                        subparagraph (A) are included in gross income.
                    ``(C) Special rule.--If the amount of a credit 
                which has been apportioned to any patron under this 
                paragraph is decreased for any reason--
                            ``(i) such amount shall not increase the 
                        tax imposed on such patron, and
                            ``(ii) the tax imposed by this chapter on 
                        such organization shall be increased by such 
                        amount.
                The increase under clause (ii) shall not be treated as 
                tax imposed by this chapter for purposes of determining 
                the amount of any credit under this chapter or for 
                purposes of section 55.''.
    (b) Definition of Small Ethanol Producer.--Section 40(g) (relating 
to definitions and special rules for eligible small ethanol producer 
credit) is amended by striking ``30,000,000'' each place it appears and 
inserting ``60,000,000''.
    (c) Conforming Amendment.--Section 1388 (relating to definitions 
and special rules for cooperative organizations) is amended by adding 
at the end the following new subsection:
    ``(k) Cross Reference.--

                                ``For provisions relating to the 
apportionment of the alcohol fuels credit between cooperative 
organizations and their patrons, see section 40(g)(6).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 5. INCENTIVES FOR BIODIESEL.

    (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 new section:

``SEC. 40A. BIODIESEL USED AS FUEL.

    ``(a) General Rule.--For purposes of section 38, the biodiesel 
fuels credit determined under this section for the taxable year is an 
amount equal to the sum of--
            ``(1) the biodiesel mixture credit, plus
            ``(2) the biodiesel credit.
    ``(b) Definition of Biodiesel Mixture Credit and Biodiesel 
Credit.--For purposes of this section--
            ``(1) Biodiesel mixture credit.--
                    ``(A) In general.--The biodiesel mixture credit of 
                any taxpayer for any taxable year is 50 cents for each 
                gallon of biodiesel used by the taxpayer in the 
                production of a qualified biodiesel mixture.
                    ``(B) Qualified biodiesel mixture.--The term 
                `qualified biodiesel mixture' means a mixture of 
                biodiesel and a taxable fuel (within the meaning of 
                section 4083(a)(1)) which--
                            ``(i) is sold by the taxpayer producing 
                        such mixture to any person for use as a fuel, 
                        or
                            ``(ii) is used as a fuel by the taxpayer 
                        producing such mixture.
                    ``(C) Sale or use must be in trade or business, 
                etc.--Biodiesel used in the production of a qualified 
                biodiesel mixture shall be taken into account--
                            ``(i) only if the sale or use described in 
                        subparagraph (B) is in a trade or business of 
                        the taxpayer, and
                            ``(ii) for the taxable year in which such 
                        sale or use occurs.
                    ``(D) Casual off-farm production not eligible.--No 
                credit shall be allowed under this section with respect 
                to any casual off-farm production of a qualified 
                biodiesel mixture.
            ``(2) Biodiesel credit.--
                    ``(A) In general.--The biodiesel credit of any 
                taxpayer for any taxable year is 50 cents for each 
                gallon of biodiesel which is not in a mixture and which 
                during the taxable year--
                            ``(i) is used by the taxpayer as a fuel in 
                        a trade or business, or
                            ``(ii) is sold by the taxpayer at retail to 
                        a person and placed in the fuel tank of such 
                        person's vehicle.
                    ``(B) User credit not to apply to biodiesel sold at 
                retail.--No credit shall be allowed under subparagraph 
                (A)(i) with respect to any biodiesel which was sold in 
                a retail sale described in subparagraph (A)(ii).
            ``(3) Credit for agri-biodiesel.--In the case of any 
        biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) 
        shall be applied by substituting `$1.00' for `50 cents'.
            ``(4) Certification for biodiesel.--No credit shall be 
        allowed under this section unless the taxpayer obtains a 
        certification (in such form and manner as prescribed by the 
        Secretary) from the producer of the biodiesel which identifies 
        the product produced and the percentage of biodiesel and agri-
        biodiesel in the product.
    ``(c) Coordination With Credit Against Excise Tax.--The amount of 
the credit determined under this section with respect to any biodiesel 
shall be properly reduced to take into account any benefit provided 
with respect to such biodiesel solely by reason of the application of 
section 6426.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Biodiesel.--The term `biodiesel' means the monoalkyl 
        esters of long chain fatty acids derived from plant or animal 
        matter which meet--
                    ``(A) the registration requirements for fuels and 
                fuel additives established by the Environmental 
                Protection Agency under section 211 of the Clean Air 
                Act (42 U.S.C. 7545), and
                    ``(B) the requirements of the American Society of 
                Testing and Materials D6751.
            ``(2) Agri-biodiesel.--The term `agri-biodiesel' means 
        biodiesel derived solely from virgin oils, including esters 
        derived from virgin vegetable oils from corn, soybeans, 
        sunflower seeds, cottonseeds, canola, crambe, rapeseeds, 
        safflowers, flaxseeds, rice bran, and mustard seeds, and from 
        animal fats.
            ``(3) Mixture or biodiesel not used as a fuel, etc.--
                    ``(A) Mixtures.--If--
                            ``(i) any credit was determined under this 
                        section with respect to biodiesel used in the 
                        production of any qualified biodiesel mixture, 
                        and
                            ``(ii) any person--
                                    ``(I) separates the biodiesel from 
                                the mixture, or
                                    ``(II) without separation, uses the 
                                mixture other than as a fuel,
                then there is hereby imposed on such person a tax equal 
                to the product of the rate applicable under subsection 
                (b)(1)(A) and the number of gallons of such biodiesel 
                in such mixture.
                    ``(B) Biodiesel.--If--
                            ``(i) any credit was determined under this 
                        section with respect to the retail sale of any 
                        biodiesel, and
                            ``(ii) any person mixes such biodiesel or 
                        uses such biodiesel other than as a fuel,
                then there is hereby imposed on such person a tax equal 
                to the product of the rate applicable under subsection 
                (b)(2)(A) and the number of gallons of such biodiesel.
                    ``(C) Applicable laws.--All provisions of law, 
                including penalties, shall, insofar as applicable and 
                not inconsistent with this section, apply in respect of 
                any tax imposed under subparagraph (A) or (B) as if 
                such tax were imposed by section 4081 and not by this 
                chapter.
            ``(4) 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 sale or use 
after December 31, 2005.''.
    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) (relating to current year business credit) is amended by striking 
``plus'' at the end of paragraph (16), by striking the period at the 
end of paragraph (17) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(18) the biodiesel fuels credit determined under section 
        40A(a).''.
    (c) Conforming Amendments.--
            (1)(A) Section 87 is amended to read as follows:

``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.

    ``Gross income includes--
            ``(1) the amount of the alcohol fuels credit determined 
        with respect to the taxpayer for the taxable year under section 
        40(a), and
            ``(2) the biodiesel fuels credit determined with respect to 
        the taxpayer for the taxable year under section 40A(a).''.
            (B) The item relating to section 87 in the table of 
        sections for part II of subchapter B of chapter 1 is amended by 
        striking ``fuel credit'' and inserting ``and biodiesel fuels 
        credits''.
            (2) Section 196(c) is amended by striking ``and'' at the 
        end of paragraph (9), by striking the period at the end of 
        paragraph (10) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(11) the biodiesel fuels credit determined under section 
        40A(a).''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding after the item 
        relating to section 40 the following new item:

                              ``Sec. 40A. Biodiesel used as fuel.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel produced, and sold or used, after December 31, 2003, in 
taxable years ending after such date.

SEC. 6. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX CREDIT.

    (a) In General.--Subchapter B of chapter 65 (relating to rules of 
special application) is amended by inserting after section 6425 the 
following new section:

``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.

    ``(a) Allowance of Credits.--There shall be allowed as a credit 
against the tax imposed by section 4081 an amount equal to the sum of--
            ``(1) the alcohol fuel mixture credit, plus
            ``(2) the biodiesel mixture credit.
    ``(b) Alcohol Fuel Mixture Credit.--
            ``(1) In general.--For purposes of this section, the 
        alcohol fuel mixture credit is the product of the applicable 
        amount and the number of gallons of alcohol used by the 
        taxpayer in producing any alcohol fuel mixture for sale or use 
        in a trade or business of the taxpayer.
            ``(2) Applicable amount.--For purposes of this subsection--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the applicable amount is 52 cents (51 
                cents in the case of any sale or use after 2004).
                    ``(B) Mixtures not containing ethanol.--In the case 
                of an alcohol fuel mixture in which none of the alcohol 
                consists of ethanol, the applicable amount is 60 cents.
            ``(3) Alcohol fuel mixture.--For purposes of this 
        subsection, the term `alcohol fuel mixture' means a mixture of 
        alcohol and a taxable fuel which--
                    ``(A) is sold by the taxpayer producing such 
                mixture to any person for use as a fuel,
                    ``(B) is used as a fuel by the taxpayer producing 
                such mixture, or
                    ``(C) is removed from the refinery by a person 
                producing such mixture.
            ``(4) Other definitions.--For purposes of this subsection--
                    ``(A) Alcohol.--The term `alcohol' includes 
                methanol and ethanol but does not include--
                            ``(i) alcohol produced from petroleum, 
                        natural gas, or coal (including peat), or
                            ``(ii) alcohol with a proof of less than 
                        190 (determined without regard to any added 
                        denaturants).
                Such term also includes an alcohol gallon equivalent of 
                ethyl tertiary butyl ether or other ethers produced 
                from such alcohol.
                    ``(B) Taxable fuel.--The term `taxable fuel' has 
                the meaning given such term by section 4083(a)(1).
            ``(5) Termination.--This subsection shall not apply to any 
        sale, use, or removal for any period after December 31, 2010.
    ``(c) Biodiesel Mixture Credit.--
            ``(1) In general.--For purposes of this section, the 
        biodiesel mixture credit is the product of the applicable 
        amount and the number of gallons of biodiesel used by the 
        taxpayer in producing any biodiesel mixture for sale or use in 
        a trade or business of the taxpayer.
            ``(2) Applicable amount.--For purposes of this subsection--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the applicable amount is 50 cents.
                    ``(B) Amount for agri-biodiesel.--In the case of 
                any biodiesel which is agri-biodiesel, the applicable 
                amount is $1.00.
            ``(3) Biodiesel mixture.--For purposes of this section, the 
        term `biodiesel mixture' means a mixture of biodiesel and a 
        taxable fuel which--
                    ``(A) is sold by the taxpayer producing such 
                mixture to any person for use as a fuel,
                    ``(B) is used as a fuel by the taxpayer producing 
                such mixture, or
                    ``(C) is removed from the refinery by a person 
                producing such mixture.
            ``(4) Certification for biodiesel.--No credit shall be 
        allowed under this section unless the taxpayer obtains a 
        certification (in such form and manner as prescribed by the 
        Secretary) from the producer of the biodiesel which identifies 
        the product produced and the percentage of biodiesel and agri-
        biodiesel in the product.
            ``(5) Other definitions.--Any term used in this subsection 
        which is also used in section 40A shall have the meaning given 
        such term by section 40A.
            ``(6) Termination.--This subsection shall not apply to any 
        sale, use, or removal for any period after December 31, 2005.
    ``(d) Mixture Not Used as a Fuel, Etc.--
            ``(1) Imposition of tax.--If--
                    ``(A) any credit was determined under this section 
                with respect to alcohol or biodiesel used in the 
                production of any alcohol fuel mixture or biodiesel 
                mixture, respectively, and
                    ``(B) any person--
                            ``(i) separates the alcohol or biodiesel 
                        from the mixture, or
                            ``(ii) without separation, uses the mixture 
                        other than as a fuel,
                then there is hereby imposed on such person a tax equal 
                to the product of the applicable amount and the number 
                of gallons of such alcohol or biodiesel.
            ``(2) Applicable laws.--All provisions of law, including 
        penalties, shall, insofar as applicable and not inconsistent 
        with this section, apply in respect of any tax imposed under 
        paragraph (1) as if such tax were imposed by section 4081 and 
        not by this section.
    ``(e) Coordination With Exemption From Excise Tax.--Rules similar 
to the rules under section 40(c) shall apply for purposes of this 
section.''.
    (b) Registration Requirement.--Section 4101(a) (relating to 
registration) is amended by inserting ``and every person producing 
biodiesel (as defined in section 40A(d)(1)) or alcohol (as defined in 
section 6426(b)(4)(A))'' after ``4091''.
    (c) Additional Amendments.--
            (1) Section 40(c) is amended by striking ``or section 
        4091(c)'' and inserting ``section 4091(c), or section 6426''.
            (2) Section 40(e)(1) is amended--
                    (A) by striking ``2007'' in subparagraph (A) and 
                inserting ``2010'', and
                    (B) by striking ``2008'' in subparagraph (B) and 
                inserting ``2011''.
            (3) Section 40(h) is amended--
                    (A) by striking ``2007'' in paragraph (1) and 
                inserting ``2010'', and
                    (B) by striking ``, 2006, or 2007'' in the table 
                contained in paragraph (2) and inserting ``through 
                2010''.
            (4)(A) Subpart C of part III of subchapter A of chapter 32 
        is amended by adding at the end the following new section:

``SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX 
              BENEFITS.

    ``(a) In General.--The Secretary shall require any person claiming 
tax benefits under the provisions of section 34, 40, 40A, 4041(b)(2), 
4041(k), 4081(c), 6426, or 6427(f) to file a quarterly return (in such 
manner as the Secretary may prescribe) providing such information 
relating to such benefits and the coordination of such benefits as the 
Secretary may require to ensure the proper administration and use of 
such benefits.
    ``(b) Enforcement.--With respect to any person described in 
subsection (a) and subject to registration requirements under this 
title, rules similar to rules of section 4222(c) shall apply with 
respect to any requirement under this section.''.
            (B) The table of sections for subpart C of part III of 
        subchapter A of chapter 32 is amended by adding at the end the 
        following new item:

        ``Sec. 4104. Information reporting for persons claiming certain 
                            tax benefits.''.
            (5) Section 6427(i)(3) is amended--
                    (A) by adding at the end of subparagraph (A) the 
                following new flush sentence:
                ``In the case of an electronic claim, this subparagraph 
                shall be applied without regard to clause (i).'', and
                    (B) by striking ``20 days of the date of the filing 
                of such claim'' in subparagraph (B) and inserting ``45 
                days of the date of the filing of such claim (20 days 
                in the case of an electronic claim)''.
            (6) Section 9503(b)(1) is amended by adding at the end the 
        following new flush sentence:
        ``For purposes of this paragraph, taxes received under sections 
        4041 and 4081 shall be determined without reduction for credits 
        under section 6426.''.
    (d) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 is amended by inserting after the item relating to section 
6425 the following new item:

        ``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to fuel 
        sold, used, or removed after December 31, 2003.
            (2) Subsection (c)(4).--The amendments made by subsection 
        (c)(4) shall take effect on January 1, 2004.
            (3) Subsection (c)(5).--The amendments made by subsection 
        (c)(5) shall apply to claims filed after December 31, 2004.
    (f) Format for Filing.--The Secretary of the Treasury shall 
prescribe the electronic format for filing claims described in section 
6427(i)(3)(B) of the Internal Revenue Code of 1986 (as amended by 
subsection (c)(5)(A)) not later than December 31, 2004.

SEC. 7. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO MOTOR 
              VEHICLES REMOVED FROM UNITED STATES.

    (a) In General.--Section 4221(d)(2) (defining export) is amended by 
adding at the end the following new sentence: ``Such term does not 
include the delivery of a taxable fuel (as defined in section 
4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or 
driven out of the United States.''.
    (b) Conforming Amendments.--
            (1) Section 4041(g) (relating to other exemptions) is 
        amended by adding at the end the following new sentence: 
        ``Paragraph (3) shall not apply to the sale for delivery of a 
        liquid into a fuel tank of a motor vehicle which is shipped or 
        driven out of the United States.''.
            (2) Clause (iv) of section 4081(a)(1)(A) (relating to tax 
        on removal, entry, or sale) is amended by inserting ``or at a 
        duty-free sales enterprise (as defined in section 555(b)(8) of 
        the Tariff Act of 1930)'' after ``section 4101''.
    (c) Effective Date.--The amendments made by this section shall 
apply to sales or deliveries made after the date of the enactment of 
this Act.
                                 <all>