1.This Act may be cited as
the Fuel Reduction using Electrons to
End Dependence On the Mid-East (FREEDOM) Act of
2007
.
2.Credit for
plug-in electric drive motor vehicles
(a)Plug-in
electric drive motor vehicle credit
(1)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
electric drive motor vehicle credit
(a)
(1)There shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the applicable
amount with respect to each new qualified plug-in electric drive motor vehicle
placed in service by the taxpayer during the taxable year.
(2)For purposes of paragraph (1)—
(A)The applicable amount is sum of—
(i)$2,000,
plus
(ii)$400 for each
kilowatt hour of traction batter capacity in excess of 2.5 kilowatt
hours.
(B)Additional
credit for flexible fuel vehiclesIn the case of a new qualified
plug-in electric drive motor vehicle which is a flexible fuel motor vehicle,
the applicable amount shall be increased by $150.
(b)
(1)Limitation
based on weightThe amount of the credit allowed under subsection
(a) by reason of subsection (a)(2)(A) shall not exceed—
(A)$7,500, in the
case of any new qualified plug-in electric drive motor vehicle with a gross
vehicle weight rating of not more than 10,000 pounds,
(B)$10,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 10,000 pounds but not more than 14,000 pounds,
(C)$15,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 14,000 pounds but not more than 26,000 pounds, and
(D)$20,000, in the case of any new qualified
plug-in electric drive motor vehicle with a gross vehicle weight rating of more
than 26,000 pounds.
(2)Limitation
based on amount of taxThe credit allowed under subsection (a)
for any taxable year shall not exceed the excess of—
(A)the sum of the
regular tax liability (as defined in section 26(b)) plus the tax imposed by
section 55, over
(B)the sum of the
credits allowable under subpart A and section 27 for the taxable year.
(3)Limitation on
number of passenger vehicles and light trucks eligible for
creditNo credit shall be allowed under subsection (a) for any
new qualified plug-in electric drive motor vehicle which is a passenger vehicle
or light truck in any calendar year following the calendar year which includes
the first date on which the total number of such new qualified plug-in electric
drive motor vehicles sold for use in the United States after December 31, 2007,
is at least 250,000.
(c)New qualified
plug-in electric drive motor vehicleFor purposes of this section, the term
new qualified plug-in electric drive motor vehicle means a motor
vehicle—
(1)which draws propulsion using one or more
traction batteries with an aggregate capacity of not less than 2.5 kilowatt
hours,
(2)which uses an offboard source of
electricity to recharge one or more such batteries,
(3)which has received a certificate of
conformity under the Clean Air Act for that make and model year,
(4)the original use
of which commences with the taxpayer,
(5)which is acquired
for use or lease by the taxpayer and not for resale, and
(6)which is made by
a manufacturer.
(d)Other
definitions and special rulesFor purposes of this
section—
(1)The term motor vehicle has the meaning given
such term by section 30(c)(2).
(2)The terms 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.).
(3)Traction
battery capacityTraction battery capacity shall be measured in
kilowatt hours from a 100 percent state of charge to a zero percent state of
charge.
(4)Flexible fuel
motor vehicleThe term flexible fuel motor vehicle
means a motor vehicle warranted by the manufacturer as capable of operating on
each of the following fuels:
(A)Gasoline.
(B)A blend
containing 85 percent ethanol and 15 percent gasoline by volume.
(C)A blend
containing 85 percent methanol and 15 percent gasoline by volume.
(D)Biodiesel.
(5)For purposes of this subtitle, the basis of any property
for which a credit is allowable under subsection (a) shall be reduced by the
amount of such credit so allowed.
(6)The amount of any deduction or other credit allowable
under this chapter for a new qualified plug-in electric drive motor vehicle
shall be reduced by the amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
(7)Property used
by tax-exempt entityIn the case of a vehicle the use of which is
described in paragraph (3) or (4) of section 50(b) and which is not subject to
a lease, the person who sold such vehicle to the person or entity using such
vehicle shall be treated as the taxpayer that placed such vehicle in service,
but only if such person clearly discloses to such person or entity in a
document the amount of any credit allowable under subsection (a) with respect
to such vehicle (determined without regard to subsection (b)(2)).
(8)Property used
outside United States, etc., not qualifiedNo credit shall be
allowable 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.
(9)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 (including recapture in the case of a
lease period of less than the economic life of a vehicle).
(10)Election to
not take creditNo credit shall be allowed under subsection (a)
for any vehicle if the taxpayer elects not to have this section apply to such
vehicle.
(11)Interaction
with air quality and motor vehicle safety standardsUnless
otherwise provided in this section, a motor vehicle shall not be considered
eligible for a credit under this section unless such vehicle is in compliance
with—
(A)the applicable
provisions of the Clean Air Act for the applicable make and model year of the
vehicle (or applicable air quality provisions of State law in the case of a
State which has adopted such provision under a waiver under section 209(b) of
the Clean Air Act), and
(B)the motor vehicle
safety provisions of sections 30101 through 30169 of title 49, United States
Code.
(e)
(1)Except as provided in paragraph (2), the Secretary shall
promulgate such regulations as necessary to carry out the provisions of this
section.
(2)Coordination in
prescription of certain regulationsThe Secretary of the
Treasury, in coordination with the Secretary of Transportation and the
Administrator of the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle meets the
requirements to be eligible for a credit under this section.
(f)This
section shall not apply to property purchased after December 31,
2014.
.
(2)Coordination
with other motor vehicle credits
(A)Electric drive
motor vehiclesParagraph (1) of section 30(c) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new flush
sentence:
Such term shall not include any motor
vehicle which is a new qualified plug-in electric drive motor vehicle (as
defined by section
30D(c))..
(B)New qualified
fuel cell motor vehiclesParagraph (3) of section 30B(b) of such
Code is amended by adding at the end the following new flush sentence:
Such term
shall not include any motor vehicle which is a new qualified plug-in electric
drive motor vehicle (as defined by section
30D(c))..
(C)New qualified
hybrid motor vehiclesParagraph (3) of section 30B(d) of such
Code is amended by adding at the end the following new flush sentence:
Such term
shall not include any motor vehicle which is a new qualified plug-in electric
drive motor vehicle (as defined by section
30D(c))..
(3)
(A)Section 1016(a)
of the Internal Revenue Code of 1986 is amended by striking and
at the end of paragraph (36), by striking the period at the end of paragraph
(37) and inserting , and
, and by adding at the end the following
new paragraph:
(38)to the extent
provided in section
30D(d)(5).
.
(B)Section 6501(m)
of such Code is amended by inserting 30D(d)(10)
after
30C(e)(5)
.
(C)The table of
sections for subpart B of part IV of such Code is amended by adding at the end
the following new item:
Sec. 30D. Plug-in electric drive motor vehicle
credit.
.
(b)
(1)Section 30B of the Internal Revenue Code of 1986
(relating to alternative motor vehicle credit) is amended by redesignating
subsections (i) and (j) as subsections (j) and (k), respectively, and by
inserting after subsection (h) the following new subsection:
(i)Plug-in
conversion credit
(1)For purposes of subsection (a), the plug-in conversion
credit determined under this subsection with respect to any motor vehicle which
is converted to a qualified plug-in electric drive motor vehicle is the lesser
of—
(A)an amount equal
to—
(i)$2,000,
plus
(ii)$400 for each
kilowatt hour of capacity of the plug-in traction battery module installed in
such vehicle in excess of 2.5 kilowatt hours, or
(B)50 percent of the
cost of the plug-in traction battery module installed in such vehicle as part
of such conversion.
(2)The
amount of the credit allowed under this subsection shall not exceed $4,000 with
respect to the conversion of any motor vehicle.
(3)Definitions and
special rulesFor purposes of this subsection—
(A)Qualified
plug-in electric drive motor vehicleThe term qualified
plug-in electric drive motor vehicle means any new qualified plug-in
electric drive motor vehicle (as defined in section 30D(c), determined without
regard to paragraphs (4) and (6) thereof).
(B)Plug-in
traction battery moduleThe term plug-in traction battery
module means an electro-chemical energy storage device which—
(i)has a traction
battery capacity of not less than 2.5 kilowatt hours,
(ii)is equipped with
an electrical plug by means of which it can be energized and recharged when
plugged into an external source of electric power,
(iii)consists of a
standardized configuration and is mass produced,
(iv)has been tested
and approved by the National Highway Transportation Safety Administration as
compliant with applicable motor vehicle and motor vehicle equipment safety
standards when installed by a mechanic with standardized training in protocols
established by the battery manufacturer as part of a nationwide distribution
program, and
(v)is certified by a
battery manufacturer as meeting the requirements of clauses (i) through
(iv).
(C)Credit allowed
to lessor of battery moduleIn the case of a plug-in traction
battery module which is leased to the taxpayer, the credit allowed under this
subsection shall be allowed to the lessor of the plug-in traction battery
module.
(D)Credit allowed
in addition to other creditsThe credit allowed under this
subsection shall be allowed with respect to a motor vehicle notwithstanding
whether a credit has been allowed with respect to such motor vehicle under this
section (other than this subsection) in any preceding taxable year.
(4)This
subsection shall not apply to conversions made after December 31,
2010.
.
(2)Credit treated
as part of alternative motor vehicle creditSection 30B(a) of
such Code is amended by striking and
at the end of paragraph
(3), by striking the period at the end of paragraph (4) and inserting ,
and
, and by adding at the end the following new paragraph:
(5)the plug-in
conversion credit determined under subsection
(i).
.
(3)No recapture
for vehicles converted to qualified plug-in electric drive motor
vehiclesParagraph (8) of section 30B(h) of such Code is amended
by adding at the end the following: , except that no benefit shall be
recaptured if such property ceases to eligible for such credit by reason of
conversion to a qualified plug-in electric drive motor vehicle.
(c)The amendments made by this section shall apply to property
placed in service after December 31, 2007, in taxable years beginning after
such date.
3.Incentives for
manufacturing facilities producing plug-in electric drive motor vehicle and
components
(a)Deduction for
manufacturing facilitiesPart VI of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by inserting after section 179E the
following new section:
179F.Expensing for
manufacturing facilities producing plug-in electric drive motor vehicle and
components
(a)A taxpayer may elect to treat the applicable percentage
of the cost of any qualified plug-in electric drive motor vehicle manufacturing
facility property 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 manufacturing facility property is placed in
service.
(b)For purposes of subsection (a), the applicable
percentage is—
(1)100 percent, in
the case of qualified plug-in electric drive motor vehicle manufacturing
facility property which is placed in service before January 1, 2013, and
(2)50 percent, in
the case of qualified plug-in electric drive motor vehicle manufacturing
facility property which is placed in service after December 31, 2012, and
before January 1, 2015.
(c)
(1)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)Any election made under this section may not be
revoked except with the consent of the Secretary.
(d)Qualified
plug-in electric drive motor vehicle manufacturing facility
propertyFor purposes of this section—
(1)The term qualified plug-in electric drive motor
vehicle manufacturing facility property means any qualified
property—
(A)the original use
of which commences with the taxpayer,
(B)which is placed
in service by the taxpayer after the date of the enactment of this section and
before January 1, 2015, and
(C)no written
binding contract for the construction of which was in effect on or before the
date of the enactment of this section.
(2)
(A)The term qualified property means any
property which is a facility or a portion of a facility used for the production
of—
(i)any new qualified
plug-in electric drive motor vehicle (as defined by section 30D(c)), or
(ii)any eligible
component.
(B)The term eligible component means any
battery, any electric motor or generator, or any power control unit which is
designed specifically for use in a new qualified plug-in electric drive motor
vehicle (as so defined).
(e)Special rule
for dual use propertyIn the case of any qualified plug-in
electric drive motor vehicle manufacturing facility property which is used to
produce both qualified property and other property which is not qualified
property, the amount of costs taken into account under subsection (a) shall be
reduced by an amount equal to—
(1)the total amount
of such costs (determined before the application of this subsection),
multiplied by
(2)the percentage of
property expected to be produced which is not qualified
property.
.
(b)Refund of
credit for prior year minimum tax liabilitySection 53 of the
Internal Revenue Code of 1986 (relating to credit for prior year minimum tax
liability) is amended by adding at the end the following new subsection:
(f)Election To
treat amounts attributable to qualified manufacturing facility
(1)In the case of an eligible taxpayer, the amount
determined under subsection (c) for the taxable year (after the application of
subsection (e)) shall be increased by an amount equal to the applicable
percentage of any qualified plug-in electric drive motor vehicle manufacturing
facility property which is placed in service during the taxable year.
(2)For purposes of paragraph (1), the applicable
percentage is—
(A)35 percent, in
the case of qualified plug-in electric drive motor vehicle manufacturing
facility property which is placed in service before January 1, 2013, and
(B)17.5 percent, in
the case of qualified plug-in electric drive motor vehicle manufacturing
facility property which is placed in service after December 31, 2012, and
before January 1, 2015.
(3)For purposes of this subsection, the term eligible
taxpayer means any taxpayer—
(A)who places in
service qualified plug-in electric drive motor vehicle manufacturing facility
property during the taxable year,
(B)who does not make
an election under section 179F(c), and
(C)who makes an
election under this subsection.
(4)Other
definitions and special rules
(A)Qualified
plug-in electric drive motor vehicle manufacturing facility
propertyThe term qualified plug-in electric drive motor
vehicle manufacturing facility property has the meaning given such term
under section 179F(d).
(B)Special rule
for dual use propertyIn the case of any qualified plug-in
electric drive motor vehicle manufacturing facility property which is used to
produce both qualified property (as defined in section 179F(d)) and other
property which is not qualified property, the amount of costs taken into
account under paragraph (1)shall be reduced by an amount equal to—
(i)the total amount
of such costs (determined before the application of this subparagraph),
multiplied by
(ii)the percentage
of property expected to be produced which is not qualified property.
(C)
(i)An election under this subsection 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.
(ii)Any election made under this subsection may not be
revoked except with the consent of the Secretary.
(5)For purposes of this title (other than this section),
the credit allowed by reason of this subsection shall be treated as if it were
allowed under subpart
C.
.
(c)The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.
4.Credit for
utility rebates for customers purchasing plug-in electric drive motor
vehicles
(a)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:
45O.
(a)For purposes of section 38, in the case of an eligible
taxpayer, the utility rebate credit for any taxable year is an amount equal to
50 percent of the sum of the qualified rebates paid or accrued by the eligible
taxpayer during the taxable year.
(b)
(1)The amount of the credit allowed under subsection (a)
with respect to any qualified rebate paid or accrued in any taxable year shall
not exceed—
(A)$1,000, in the
case of an eligible taxpayer ranked in the first quartile in the greenhouse gas
emissions rankings published by the Secretary under paragraph (2),
(B)$800, in the case
of an eligible taxpayer ranked in the second quartile of such rankings,
(C)$600, in the case
of an eligible taxpayer ranked in the third quartile of such rankings,
and
(D)$400, in the case
of an eligible taxpayer ranked in the fourth quartile of such rankings.
(2)Ranking of
greenhouse gas emissions
(A)The Secretary, in consultation with the Administrator of
the Environmental Protection Agency, shall publish, on an annual basis, a
ranking of electric utilities based on the rate of greenhouse gasses emitted by
each such utility. Such publication shall list the ranking of each utility by
quartile, with the utilities emitting the lowest rate of greenhouse gasses in
the first quartile.
(B)For purposes of subparagraph (A), the term greenhouse
gas means—
(i)carbon
dioxide;
(ii)methane;
(iii)nitrous
oxide;
(iv)hydrofluorocarbons;
(v)perfluorocarbons;
and
(vi)sulfur
hexafluoride.
(3)The ranking of an eligible taxpayer in the greenhouse
gas emissions rankings published by the Secretary under paragraph (2) for any
taxable year shall be determined by using the most recent such rank of such
eligible taxpayer at the end of such taxable year.
(c)For purposes of this section, the term eligible
taxpayer means a electric utility which is included on the list of
rankings for emissions of greenhouse gases published by the Secretary under
subsection (b)(2).
(d)For purposes of this section, the term qualified
rebate means a rebate with respect to amounts owed by a customer of an
eligible taxpayer for the cost of electricity or any service connected with
supply of electricity if such rebate is paid or accrued on account of—
(1)the purchase by
the customer of a new qualified plug-in electric drive motor vehicle (as
defined by section 30D(c)) or a qualified plug-in electric drive motor vehicle
(as defined by section 30B(i)(3)), or
(2)the conversion by
the customer of a motor vehicle to a qualified plug-in electric drive motor
vehicle (as so defined).
(e)Special rule
for certain tax-exempt utilities
(1)In the case of an eligible taxpayer which is exempt from
tax under this chapter, the aggregate credits allowed to the eligible taxpayer
under subpart C shall be increased by the lesser of—
(A)the credit which
would be allowed under this section without regard to this subsection,
or
(B)the amount of the
payroll taxes imposed on the eligible taxpayer during the calendar year in
which the taxable year begins.
(2)For purposes of this subsection—
(A)The term payroll taxes means the taxes
imposed by—
(i)section 3111,
and
(ii)sections 3211(a)
and 3221(a) (determined at a rate equal to the rates under section
3111).
(B)A rule similar to the rule of section 24(d)(2)(C) shall
apply for purposes of subparagraph
(A).
.
(b)Credit treated
as part of general business creditSection 38(b) of the Internal
Revenue Code of 1986 is amended by striking plus
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 utility
rebate credit determined under section
45O(a).
.
(c)Section 280C of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
(f)No deduction shall be allowed for that portion of any
amount otherwise allowable as a deduction for the taxable year which is equal
to the amount of the credit determined for the taxable year under section
45O(a).
.
(d)The table of sections for subpart D 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 item:
Sec. 45O. Utility rebate
credit.
.
(e)The amendments made by this section shall apply to rebates
paid or accrued in taxable years beginning after the date of the enactment of
this Act.