[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 206 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 206

To amend the Internal Revenue Code of 1986 to provide a business credit 
 relating to the use of clean-fuel vehicles by businesses within areas 
       designated as nonattainment areas under the Clean Air Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 2005

 Mr. Serrano 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 a business credit 
 relating to the use of clean-fuel vehicles by businesses within areas 
       designated as nonattainment areas under the Clean Air Act.

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

SECTION 1. CLEAN-FUEL CREDIT WITH RESPECT TO BUSINESSES LOCATED IN 
              NONATTAINMENT AREAS.

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

``SEC. 45J. CLEAN-FUEL CREDIT WITH RESPECT TO BUSINESSES LOCATED IN 
              NONATTAINMENT AREAS.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible business the clean-fuel credit determined under this section 
for the taxable year is the sum of--
            ``(1) the clean-fuel property credit, plus
            ``(2) the clean-burning fuel use credit.
    ``(b) Clean-Fuel Property Credit.--
            ``(1) In general.--The clean-fuel property credit is the 
        sum of--
                    ``(A) qualified vehicle property costs, plus
                    ``(B) qualified refueling property costs.
            ``(2) Qualified vehicle property costs.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified vehicle property costs' means the 
                amount paid or incurred by the eligible business for 
                qualified clean-fuel vehicle property which is placed 
                in service during the taxable year by the eligible 
                business and substantially all of the use of which is 
                in a nonattainment area.
                    ``(B) Limitation.--The amount which may be taken 
                into account under subparagraph (A) with respect to any 
                motor vehicle shall not exceed--
                            ``(i) $2,000 in the case of a motor vehicle 
                        not described in clause (ii) or (iii),
                            ``(ii) $5,000 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, or
                            ``(iii) $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) Qualified clean-fuel vehicle property.--The 
                term `qualified clean-fuel vehicle property' shall have 
                the meaning given to such term by section 179A(c) 
                (without regard to paragraph (3) thereof), except that 
                such term does not include property that is a motor 
                vehicle propelled by a fuel that is not a clean-burning 
                fuel.
            ``(3) Qualified refueling property costs.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified refueling property costs' means 
                amounts paid or incurred by the eligible business for 
                qualified clean-fuel vehicle refueling property (as 
                defined by section 179A(d)) which is placed in service 
                in a nonattainment area during the taxable year by the 
                eligible business.
                    ``(B) Limitation.--
                            ``(i) In general.--The aggregate cost which 
                        may be taken into account under subparagraph 
                        (A) with respect to qualified clean-fuel 
                        vehicle refueling property placed in service by 
                        the eligible business during the taxable year 
                        at a location shall not exceed the lesser of--
                                    ``(I) $100,000, or
                                    ``(II) the cost of such property 
                                reduced by the amount described in 
                                clause (ii).
                            ``(ii) Reduction for amounts previously 
                        taken into account.--For purposes of clause 
                        (i)(II), the amount described in this clause is 
                        the sum of--
                                    ``(I) the aggregate amount taken 
                                into account under paragraph (1)(B) for 
                                all preceding taxable years, and
                                    ``(II) the aggregate amount taken 
                                into account under section 
                                179A(a)(1)(B) by the taxpayer (or any 
                                related person or predecessor) with 
                                respect to property placed in service 
                                at such location for all preceding 
                                taxable years.
                            ``(iii) Special rules.--For purposes of 
                        this subparagraph, the provisions of 
                        subparagraphs (B) and (C) of section 179A(b)(2) 
                        shall apply.
    ``(c) Clean-Burning Fuel Use Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        clean-burning fuel use credit is the amount equal to 50 cents 
        for each gasoline gallon equivalent of clean-burning fuel used 
        by an eligible business during the taxable year to propel 
        qualified clean-fuel vehicle property.
            ``(2) Clean-burning fuel.--For purposes of paragraph (1), 
        the term `clean-burning fuel' has the meaning given to such 
        term by section 179A, except that such term includes compressed 
        natural gas and biodiesel (as defined by section 40A(d)(1)).
            ``(3) Gasoline gallon equivalent.--For purposes of 
        paragraph (1), the term `gasoline gallon equivalent' means, 
        with respect to any clean burning fuel, the amount (determined 
        by the Secretary) of such fuel having a Btu content of 114,000.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Eligible business.--The term `eligible business' 
        means--
                    ``(A) a qualified business entity or a qualified 
                proprietorship (as such terms are defined by section 
                1397C, determined by substituting `nonattainment area' 
                for `empowerment zone' and `enterprise zone' each place 
                it appears), and
                    ``(B) a trade or business located outside of a 
                nonattainment area, but only with respect to qualified 
                clean-fuel vehicle property used substantially within a 
                nonattainment area.
            ``(2) Nonattainment area.--The term `nonattainment area' 
        shall have the meaning given to such term by section 171 of the 
        Clean Air Act (42 U.S.C. 7501).
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for any expense for which a deduction or credit is 
allowed under any other provision of this chapter.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of such Code (relating to current year business credit) is 
amended by striking ``plus'' at the end of paragraph (18), by striking 
the period at the end of paragraph (19) and inserting ``, plus'', and 
by adding at the end thereof the following new paragraph:
            ``(20) the clean-fuel credit determined under section 
        45J.''.
    (c) Denial of Double Benefit.--Section 280C of such Code (relating 
to certain expenses for which credits are allowable) is amended by 
adding at the end thereof the following new subsection:
    ``(e) Zone Clean Fuels Expenses.--No deduction shall be allowed for 
that portion of expenses for clean-burning fuel otherwise allowable as 
a deduction for the taxable year which is equal to the amount of the 
credit determined for such taxable year under section 45J.''.
    (d) Credit Allowed Against Regular and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 of such Code 
        (relating to limitation based on amount of tax) is amended by 
        redesignating paragraph (5) as paragraph (6) and by inserting 
        after paragraph (4) the following new paragraph:
            ``(5) Special rules for clean fuels credit.--
                    ``(A) In general.--In the case of the clean fuels 
                credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) subparagraph (A) thereof 
                                shall not apply, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the clean 
                                fuels credit).
                    ``(B) Clean fuels credit.--For purposes of this 
                subsection, the term `clean fuels credit' means the 
                credit allowable under subsection (a) by reason of 
                section 45J.''.
            (2) Conforming amendments.--
                    (A) Subclause (II) of section 38(c)(2)(A)(ii) of 
                such Code is amended by striking ``or the New York 
                Liberty Zone business employee credit'' and inserting 
                ``, the New York Liberty Zone business employee credit, 
                or the clean fuels credit''.
                    (B) Subclause (II) of section 38(c)(3)(A)(ii) of 
                such Code is amended by inserting ``or the clean fuels 
                credit'' after ``employee credit''.
                    (C) Subclause (II) of section 38(c)(4)(A)(ii) of 
                such Code is amended by inserting ``or the clean fuels 
                credit'' after ``specified credits''.
    (e) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196 of such Code is amended by striking ``and'' at the end 
of paragraph (11), by striking the period at the end of paragraph (12) 
and inserting ``, and'', and by adding after paragraph (12) the 
following new paragraph:
            ``(13) the clean fuels credit determined under section 
        45J.''.
    (f) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45I the following new 
item:

``Sec. 45J. Clean-fuel credit with respect to businesses located in 
                            nonattainment areas.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2004.
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