Credit for plug-in hybrid vehicles

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to other credits) is amended by adding at the end the following new section:

30D.

Plug-in hybrid vehicles

(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 10 percent of the cost of any qualified plug-in hybrid vehicle placed in service by the taxpayer during the taxable year. (b)

Limitations

(1)

Limitation per vehicle

The amount of the credit allowed under subsection (a) for any vehicle shall not exceed the sum of— (A)$4,000 in the case of a plug-in electric drive vehicle with 4kWh traction battery, and (B)$250 for each additional kWh of traction battery capacity of such vehicle as exceeds 4kWh but does not exceed 50kWh. (2)

Application with other credits

(A)

Business credit treated as part of general business credit

So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this paragraph) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)). (B)

Personal credits

The credit allowed by subsection (a) for any taxable year shall not exceed the excess (if any) of— (i)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (ii)the sum of the credits allowable under subpart A and subpart B (other than this section). (c)

Qualified plug-In hybrid vehicle

For purposes of this section— (1)

In general

The term qualified plug-in hybrid vehicle means a motor vehicle (as defined in section 30(c)(2))— (A)the original use of which commences with the taxpayer, (B)which is acquired for use or lease by the taxpayer and not for resale, (C)which is made by a manufacturer, (D)which has received a certificate of conformity under the Clean Air Act, and (E)which has not less than 2 onboard sources of stored energy, different in character from each other, from which to draw propulsion energy, where— (i)at least 1 of such sources is energized by plugging into an external source of electric power, and (ii)at least 1 of such sources is energized from an internal combustion engine, fuel cell, or other means, and such source is utilized to provide mechanical propulsion to the vehicle. (2)

Exception

The term qualified plug-in hybrid vehicle 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. (3)

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.). (4)

KWh traction battery capacity

The term kWh traction battery capacity means the size of an electro chemical storage device, expressed in kWh, as measured from a 100 percent state of charge to 0 percent state of charge. (d)

Special rules

(1)

Basis reduction

The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (b)(2)). (2)

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. (3)

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. (4)

Denial of double benefit

No credit shall be allowed under this section with respect to a vehicle if a credit or deduction is allowed with respect to such vehicle under any other provision of this title. (5)

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. (6)

Property used by tax-exempt entity; interaction with air quality and motor vehicle safety standards

Rules similar to the rules of paragraphs (6) and (10) of section 30B(h) shall apply for purposes of this section. (e)

Termination

This section shall not apply to any property placed in service after December 31, 2014.

(b)

Plug-in hybrid vehicles not counted toward limitation on number of new qualified hybrid vehicles eligible for 30B credit

Section (30)(B)(f)(5) of such Code (defining qualified vehicle) is amended by adding at the end the following new sentence: Such term shall not include a qualified plug-in hybrid vehicle (as defined in section 30D(c)).. (c)

Credit made part of general business credit

Section 38(b) of such Code is amended by striking ‘‘and’’ at the end of paragraph (30), by striking the period at the end of paragraph (31) and inserting ‘‘, plus’’, and by adding at the end the following new paragraph:

(32)the portion of the plug-in hybrid vehicle credit to which section 30D(b)(2)(A) applies.

(d)

Conforming amendment

Section 6501(m) of such Code is amended by inserting 30D(d)(5), after 30C(e)(5),. (e)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.