Credit for new neighborhood electric vehicles

(a)

In general

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

30D.

New neighborhood electric vehicles

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year the amount paid or incurred for each new neighborhood electric vehicle placed in service by the taxpayer during the taxable year. (b)

Dollar limitation

The amount allowed as a credit under subsection (a) shall not exceed the lesser of— (1)$1,000, and (2)the amount paid or incurred by the taxpayer for such new neighborhood electric vehicle. (c)

Application with other credits

(1)

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 subsection) 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)). (2)

Personal credit

(A)

In general

For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year. (B)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess 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 (other than this section) and section 27, 30, 30B, and 30C for the taxable year. (d)

New neighborhood electric vehicle

For purposes of this section, the term neighborhood electric vehicle means a vehicle— (1)which draws propulsion energy solely from onboard sources of a rechargeable energy storage system, (2)which is classified as a low-speed vehicle subject to the requirements of Federal Motor Vehicle Safety Standard No. 500 (as promulgated by the National Highway Traffic Safety Administration in section 571.500 of title 49, Code of Federal Regulations) and which has— (A)4 wheels, (B)a top attainable speed in 1 mile of more than 20 mph and not more than 35 mph on a paved level surface, and (C)a gross vehicle weight rating of less than 2,500 pounds, (3)the original use of which commences with the taxpayer, (4)which is acquired for use or lease by the taxpayer and not for resale, and (5)which is made by a manufacturer in the United States. (e)

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)

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)(1) or with respect to the portion of the cost of any property taken into account under section 179. (4)

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. (f)

Termination

This section shall not apply to property purchased after December 31, 2013.

(b)

Credit made part of general business credit

Section 38(b) of such Code is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting , plus, and by adding at the end the following new paragraph:

(34)the portion of the new neighborhood electric vehicle credit to which section 30D(c)(1) applies.

(c)

Conforming amendments

(1)Section 1016(a) of such Code is amended by striking and at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , and, and by adding at the end the following new paragraph:

(37)to the extent provided in section 30D(e)(1).

(2)Section 6501(m) of such Code is amended by inserting 30D(e)(4), after 30C(e)(5),. (3)The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

Sec. 30D. New neighborhood electric vehicles.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.