[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1852 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1852

 To amend the Internal Revenue Code of 1986 to reduce the incentive to 
               purchase larger and luxury motor vehicles.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 6, 2005

  Mr. Salazar 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 reduce the incentive to 
               purchase larger and luxury motor vehicles.

    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 ``Reducing the Incentives to Guzzle 
Gas Act''.

SEC. 2. INCLUSION OF HEAVY VEHICLES IN LIMITATION ON DEPRECIATION OF 
              CERTAIN LUXURY AUTOMOBILES.

    (a) In General.--Section 280F(d)(5)(A) of the Internal Revenue Code 
of 1986 (defining passenger automobile) is amended--
            (1) by striking clause (ii) and inserting the following new 
        clause:
                            ``(ii)(I) which is rated at 6,000 pounds 
                        unloaded gross vehicle weight or less, or
                            ``(II) which is rated at more than 6,000 
                        pounds but not more than 14,000 pounds gross 
                        vehicle weight.'',
            (2) by striking ``clause (ii)'' in the second sentence and 
        inserting ``clause (ii)(I)''.
    (b) Exception for Vehicles Used in Farming Business.--Section 
280F(d)(5)(B) of such Code (relating to exception for certain vehicles) 
is amended by striking ``and'' at the end of clause (ii), by 
redesignating clause (iii) as clause (iv), and by inserting after 
clause (ii) the following new clause:
                            ``(iii) any vehicle used in a farming 
                        business (as defined in section 263A(e)(4), 
                        and''.
    (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. UPDATED DEPRECIATION DEDUCTION LIMITS.

    (a) In General.--Subparagraph (A) of section 280F(a)(1) of the 
Internal Revenue Code of 1986 (relating to limitation on amount of 
depreciation for luxury automobiles) is amended to read as follows:
                    ``(A) Limitation.--The amount of the depreciation 
                deduction for any taxable year shall not exceed for any 
                passenger automobile--
                            ``(i) for the 1st taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $4,000,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $5,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $6,000,
                            ``(ii) for the 2nd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $6,400,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $8,000, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $9,600,
                            ``(iii) for the 3rd taxable year in the 
                        recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $3,850,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $4,800, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $5,775, and
                            ``(iv) for each succeeding taxable year in 
                        the recovery period--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
    (b) Years After Recovery Period.--Section 280F(a)(1)(B)(ii) of such 
Code is amended to read as follows:
                            ``(ii) Limitation.--The amount treated as 
                        an expense under clause (i) for any taxable 
                        year shall not exceed for any passenger 
                        automobile--
                                    ``(I) described in subsection 
                                (d)(5)(A)(ii)(I), $2,325,
                                    ``(II) described in the second 
                                sentence of subsection (d)(5)(A), 
                                $2,900, and
                                    ``(III) described in subsection 
                                (d)(5)(A)(ii)(II), $3,475.''.
    (c) Inflation Adjustment.--Section 280F(d)(7) of such Code 
(relating to automobile price inflation adjustment) is amended--
            (1) by striking ``after 1988'' in subparagraph (A) and 
        inserting ``after 2006'', and
            (2) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) Automobile price inflation adjustment.--For 
                purposes of this paragraph--
                            ``(i) In general.--The automobile price 
                        inflation adjustment for any calendar year is 
                        the percentage (if any) by which--
                                    ``(I) the average wage index for 
                                the preceding calendar year, exceeds
                                    ``(II) the average wage index for 
                                2005.
                            ``(ii) Average wage index.--The term 
                        `average wage index' means the average wage 
                        index published by the Social Security 
                        Administration.''.
    (d) 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. 4. EXPENSING LIMITATION FOR FARM VEHICLES.

    (a) In General.--Paragraph (6) of section 179(b) of the Internal 
Revenue Code of 1986 (relating to limitations) is amended to read as 
follows:
            ``(6) Limitation on cost taken into account for farm 
        vehicles.--The cost of any vehicle described in section 
        280F(d)(5)(B)(iii) for any taxable year which may be taken into 
        account under this section shall not exceed $30,000.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act.
                                 <all>