[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 795 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                 S. 795

 To amend the Internal Revenue Code of 1986 to provide additional tax 
 incentives for enhancing motor vehicle fuel efficiency, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 7, 2003

  Mr. Durbin introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide additional tax 
 incentives for enhancing motor vehicle fuel efficiency, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Incentives for Fuel Efficient 
Vehicles Act of 2003''.

SEC. 2. MODIFICATIONS TO GAS GUZZLERS TAX TO ENCOURAGE GREATER AUTO 
              FUEL EFFICIENCY.

    (a) Increase in Tax Rate.--Subsection (a) of section 4064 of the 
Internal Revenue Code of 1986 (relating to gas guzzlers tax) is amended 
to read as follows:
    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed on the sale by 
        the manufacturer of each automobile a tax determined in 
        accordance with the following table:

If the fuel economy for the model year of the
                                                                       
  model type in which the automobile falls is:
                                                            The tax is:
        Less than 5 mpg below the applicable fuel economy           $0 
            standard.
        At least 5 but less than 6 mpg below such standard.      1,000 
        At least 6 but less than 7 mpg below such standard.      1,500 
        At least 7 but less than 8 mpg below such standard.      2,000 
        At least 8 but less than 9 mpg below such standard.      2,500 
        At least 9 but less than 10 mpg below such standard      3,100 
        At least 10 but less than 11 mpg below such              3,800 
            standard.
        At least 11 but less than 12 mpg below such              4,600 
            standard.
        At least 12 but less than 13 mpg below such              5,500 
            standard.
        At least 13 but less than 14 mpg below such              6,500 
            standard.
        At least 14 mpg below such standard................      7,700.
            ``(2) Inflation Adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after 2005, each dollar amount referred to in 
                paragraph (1) shall be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section (1)(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `2004' for `1992'.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $100, such amount 
                shall be rounded to the next lowest multiple of $50.''.
    (b) Expansion of Definition of Automobile.--
            (1) Increase in weight.--Section 4064(b)(1)(A)(ii) of the 
        Internal Revenue Code of 1986 (defining automobile) is amended 
        by striking ``6,000 pounds'' and inserting ``12,000 pounds''.
            (2) Exception for certain vehicles.--Subparagraph (B) of 
        section 4064(b)(1) of such Code is amended to read as follows:
                    ``(B) Exception for certain vehicles.--The term 
                `automobile' does not include--
                            ``(i) a vehicle which has a primary load 
                        carrying device or container attached,
                            ``(ii) a vehicle which has a seating 
                        capacity of more than 12 persons,
                            ``(iii) a vehicle which has a seating 
                        capacity of more than 9 persons behind the 
                        driver's seat, or
                            ``(iv) a vehicle which is equipped with a 
                        cargo area of at least 6 feet in interior 
                        length which is an open area or is designed for 
                        use as an open area but is enclosed by a cap 
                        and is not readily accessible directly from the 
                        passenger compartment.''.
    (c) Additional Definitions.--Section 4064(b) of the Internal 
Revenue Code of 1986 (relating to definitions) is amended by adding at 
the end the following new paragraphs:
            ``(8) Applicable fuel economy standard.--The term 
        `applicable fuel economy standard' means, with respect to any 
        model year, the average fuel economy standard as defined in 
        section 32902 of title 49, United States Code, for passenger 
        automobiles for such model year.
            ``(9) MPG.--The term `mpg' means miles per gallon.''.
  (d) Effective Date.--The amendments made by this section shall apply 
to sales after October 31, 2005.

SEC. 3. HIGHLY FUEL-EFFICIENT AUTOMOBILE CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. HIGHLY FUEL-EFFICIENT AUTOMOBILE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this subtitle for the taxable year an amount 
equal to the new highly fuel-efficient automobile credit determined 
under subsection (b).
    ``(b) New Highly Fuel-Efficient Automobile Credit.--For purposes of 
subsection (a), the new highly fuel-efficient automobile credit with 
respect to any new automobile placed in service by the taxpayer during 
the taxable year is determined in accordance with the following tables:

If the fuel economy for the model year
                                                                       
  of the model type in which the
                                                                       
  passenger automobile falls is:
                                                         The credit is:
        Less than 5 mpg above the applicable fuel economy           $0 
            standard.
        At least 5 but less than 6 mpg above such standard.        770 
        At least 6 but less than 7 mpg above such standard.      1,540 
        At least 7 but less than 8 mpg above such standard.      2,310 
        At least 8 but less than 9 mpg above such standard.      3,080 
        At least 9 but less than 10 mpg above such standard      3,850 
        At least 10 but less than 11 mpg above such              4,620 
            standard.
        At least 11 but less than 12 mpg above such              5,390 
            standard.
        At least 12 but less than 13 mpg above such              6,160 
            standard.
        At least 13 but less than 14 mpg above such              6,930 
            standard.
        At least 14 mpg above such standard................      7,700.

If the fuel economy for the model year
                                                                       
  of the model type in which the
                                                                       
  non-passenger automobile falls is:
                                                         The credit is:
        Less than 5 mpg above the applicable fuel economy           $0 
            standard.
        At least 5 but less than 6 mpg above such standard.        770 
        At least 6 but less than 7 mpg above such standard.      1,540 
        At least 7 but less than 8 mpg above such standard.      2,310 
        At least 8 but less than 9 mpg above such standard.      3,080 
        At least 9 but less than 10 mpg above such standard      3,850 
        At least 10 but less than 11 mpg above such              4,620 
            standard.
        At least 11 but less than 12 mpg above such              5,390 
            standard.
        At least 12 but less than 13 mpg above such              6,160 
            standard.
        At least 13 but less than 14 mpg above such              6,930 
            standard.
        At least 14 mpg above such standard................      7,700.
    ``(c) New Automobile.--For purposes of this section, the term `new 
automobile' means a passenger automobile or non-passenger automobile--
            ``(1) the original use of which commences with the 
        taxpayer,
            ``(2) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(3) which is made by a manufacturer.
    ``(d) Passenger Automobile; Non-Passenger Automobile.--For purposes 
of this section--
            ``(1) Passenger automobile.--The term `passenger 
        automobile' has the meaning given the term `automobile' by 
        section 4064(b)(1).
            ``(2) Non-passenger automobile.--
                    ``(A) In general.--The term `non-passenger 
                automobile' means any automobile (as defined in section 
                4064(b)(1)(A)), but only if such automobile is 
                described in subparagraph (B).
                    ``(B) Non-passenger automobiles described.--An 
                automobile is described in this subparagraph if such 
                automobile is--
                            ``(i) a vehicle which has a primary load 
                        carrying device or container attached,
                            ``(ii) a vehicle which has a seating 
                        capacity of more than 12 persons,
                            ``(iii) a vehicle which has a seating 
                        capacity of more than 9 persons behind the 
                        driver's seat, or
                            ``(iv) a vehicle which is equipped with a 
                        cargo area of at least 6 feet in interior 
                        length which does not extend beyond the frame 
                        of the vehicle and which is an open area or is 
                        designed for use as an open area but is 
                        enclosed by a cap and is not readily accessible 
                        directly from the passenger compartment.
    ``(e) Other Definitions.--Except as provided in subsection (d), for 
purposes of this section, any term used in this section and also in 
section 4064 shall have the meaning given such term by section 4064.
    ``(f) Special Rules.--For purposes of this section--
            ``(1)  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.
            ``(2) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter with respect to an 
        automobile described under subsection (b), shall be reduced by 
        the amount of credit allowed under subsection (a) for such 
        automobile for the taxable year.
            ``(3) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to an 
        automobile which is acquired by an entity exempt from tax under 
        this chapter, the person which sells or leases such automobile 
        to the entity shall be treated as the taxpayer with respect to 
        the automobile for purposes of this section and the credit 
        shall be allowed to such person, but only if the person clearly 
        discloses to the entity at the time of any sale or lease the 
        specific amount of any credit otherwise allowable to the entity 
        under this section.
            ``(4) 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 an 
        automobile).
            ``(5) 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.
            ``(6) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any automobile if the taxpayer 
        elects to not have this section apply to such automobile.
            ``(7) Interaction with air quality and motor vehicle safety 
        standards.--Unless otherwise provided in this section, an 
        automobile shall not be considered eligible for a credit under 
        this section unless such automobile is in compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                automobile (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.--Except as provided in paragraph (2), the 
        Secretary shall promulgate such regulations as necessary to 
        carry out the provisions of this section.
            ``(2) Coordination in prescription of certain 
        regulations.--The Secretary of the Treasury, in coordination 
        with the Secretary of Transportation and the Administrator of 
        the Environmental Protection Agency, shall prescribe such 
        regulations as necessary to determine whether an automobile 
        meets the requirements to be eligible for a credit under this 
        section.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 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 new 
        paragraph:
            ``(29) to the extent provided in section 36(f)(1).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``36(f)(6),'' after ``30(d)(4),''.
            (3) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 36 of such Code''.
            (4) The table of sections for subpart C of part IV of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        striking the last item and inserting the following new items:

                              ``Sec. 36. Highly fuel-efficient 
                                        automobile credit.
                              ``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after October 31, 2005, in taxable 
years ending after such date.
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