Investment credit for trucks with new diesel technology

(a)

In general

(1)

Allowance of credit

Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48 the following new section:

48A.

New diesel technology credit

(a)

General rule

For purposes of section 46, the new diesel technology credit for any taxable year is 5 percent of the cost of any qualified truck which is placed in service on or after January 1, 2007, and before January 1, 2008. (b)

Qualified truck

For purposes of this section, the term qualified truck means any motor vehicle (as defined in section 30(c)(2)) which— (1)is first placed in service on or after January 1, 2007, (2)is propelled by diesel fuel, (3)has a gross vehicle weight rating of more than 26,000 pounds, and (4)complies with the regulations of the Environmental Protection Agency with respect to diesel emissions for model year 2007 and later.

(2)

Credit treated as part of investment credit

Section 46 of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting , and, and by adding at the end the following new paragraph:

(3)the new diesel technology credit.

(3)

Conforming amendments

(A)Section 49(a)(1)(C) of such Code is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting , and, and by adding at the end the following new clause:

(iv)the basis of any qualified truck.

(B)The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48 the following new item:

Sec. 48A. New diesel technology credit.

(b)

Credit allowed against AMT

(1)

In general

Subsection (c) of section 38 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

(5)

Special rules for new diesel technology credit

(A)

In general

In the case of the new diesel technology credit— (i)this section and section 39 shall be applied separately with respect to such credit, and (ii)in applying paragraph (1) to such credit— (I)the tentative minimum tax shall be treated as being zero, 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 new diesel technology credit). (B)

New diesel technology credit

For purposes of this subsection, the term new diesel technology credit means the portion of the investment credit under section 46 determined under section 48A.

(2)

Conforming amendments

Paragraphs (2)(A)(ii)(II), (3)(A)(ii)(II), and (4)(A)(ii)(II) of section 38(c) of such Code are each amended by inserting or the new diesel technology credit after the specified credits. (c)

Effective date

The amendments made by this section shall apply to property placed in service on or after January 1, 2007, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

Election to expense qualified trucks

(a)

In general

Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 179B the following new section:

179C.

Election to expense new diesel technology trucks

(a)

Treatment as expenses

A taxpayer may elect to treat the cost of any qualified truck (as defined in section 48A) as an expense which is not chargeable to a capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified truck is placed in service. (b)

Election

(1)

In general

An election under this section for any taxable year shall be made on the taxpayer's return of the tax imposed by this chapter for the taxable year. Such election shall be made in such manner as the Secretary may by regulations prescribe. (2)

Election irrevocable

Any election made under this section may not be revoked except with the consent of the Secretary. (c)

Termination

This section shall not apply to property placed in service after December 31, 2007.

(b)

Conforming amendment

The table of sections for part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 179B the following new item:

Sec. 179C. Election to expense new diesel technology trucks.

(c)

Effective date

The amendments made by this section shall apply to property placed in service on or after January 1, 2007.