[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2129 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2129

      To amend the Internal Revenue Code of 1986 to establish the 
   infrastructure foundation for the hydrogen economy, and for other 
                                purposes


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 3, 2007

Mr. Dorgan (for himself and Mr. Graham) 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 establish the 
   infrastructure foundation for the hydrogen economy, and for other 
                                purposes

    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 ``Hydrogen Tax Incentives Act of 
2007''.

SEC. 2. HYDROGEN INSTALLATION, INFRASTRUCTURE, AND FUEL COSTS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign tax credit, 
etc.) is amended by adding at the end the following new section:

``SEC. 30D. HYDROGEN INSTALLATION, INFRASTRUCTURE, AND FUEL COSTS.

    ``(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 the sum of--
            ``(1) the hydrogen installation and infrastructure costs 
        credit determined under subsection (b), and
            ``(2) the hydrogen fuel costs credit determined under 
        subsection (c).
    ``(b) Hydrogen Installation and Infrastructure Costs Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        hydrogen installation and infrastructure costs credit 
        determined under this subsection with respect to each eligible 
        hydrogen production and distribution facility of the taxpayer 
        is an amount equal to--
                    ``(A) 30 percent of so much of the installation 
                costs which when added to such costs taken into account 
                with respect to such facility for all preceding taxable 
                years under this subparagraph does not exceed $200,000, 
                plus
                    ``(B) 30 percent of so much of the infrastructure 
                costs for the taxable year as does not exceed $200,000 
                with respect to such facility, and which when added to 
                such costs taken into account with respect to such 
                facility for all preceding taxable years under this 
                subparagraph does not exceed $600,000.
        Nothing in this section shall permit the same cost to be taken 
        into account more than once.
            ``(2) Eligible hydrogen production and distribution 
        facility.--For purposes of this subsection, the term `eligible 
        hydrogen production and distribution facility' means a hydrogen 
        production and distribution facility which is placed in service 
        after December 31, 2008.
    ``(c) Hydrogen Fuel Costs Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        hydrogen fuel costs credit determined under this subsection 
        with respect to each eligible hydrogen device of the taxpayer 
        is an amount equal to the qualified hydrogen expenditure 
        amounts with respect to such device.
            ``(2) Qualified hydrogen expenditure amount.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `qualified hydrogen 
                expenditure amount' means, with respect to each 
                eligible hydrogen energy conversion device of the 
                taxpayer with a production capacity of not more than 25 
                kilowatts of electricity per year, the lesser of--
                            ``(i) 30 percent of the amount paid or 
                        incurred by the taxpayer during the taxable 
                        year for hydrogen which is consumed by such 
                        device, and
                            ``(ii) $2,000.
                In the case of any device which is not owned by the 
                taxpayer at all times during the taxable year, the 
                $2,000 amount in subparagraph (B) shall be reduced by 
                an amount which bears the same ratio to $2,000 as the 
                portion of the year which such device is not owned by 
                the taxpayer bears to the entire year.
                    ``(B) Higher limitation for devices with more 
                production capacity.--In the case of any eligible 
                hydrogen energy conversion device with a production 
                capacity of--
                            ``(i) more than 25 but less than 100 
                        kilowatts of electricity per year, subparagraph 
                        (A) shall be applied by substituting `$4,000' 
                        for `$2,000' each place it appears, and
                            ``(ii) not less than 100 kilowatts of 
                        electricity per year, subparagraph (A) shall be 
                        applied by substituting `$6,000' for `$2,000' 
                        each place it appears.
            ``(3) Eligible hydrogen energy conversion devices.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `eligible hydrogen 
                energy conversion device' means, with respect to any 
                taxpayer, any hydrogen energy conversion device which--
                            ``(i) is placed in service after December 
                        31, 2004, and
                            ``(ii) is wholly owned by the taxpayer 
                        during the taxable year.
                If an owner of a device (determined without regard to 
                this subparagraph) provides to the primary user of such 
                device a written statement that such user shall be 
                treated as the owner of such device for purposes of 
                this section, then such user (and not such owner) shall 
                be so treated.
                    ``(B) Hydrogen energy conversion device.--The term 
                `hydrogen energy conversion device' means--
                            ``(i) any electrochemical device which 
                        converts hydrogen into electricity, and
                            ``(ii) any combustion engine which burns 
                        hydrogen as a fuel.
    ``(d) Reduction in Basis.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this paragraph) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(e) 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 amounts which (but 
        for subsection (g) would be allowed as a deduction under 
        section 162 shall be treated as a credit listed in section 
        38(b) for such taxable year (and not allowed under subsection 
        (a)).
            ``(2) Personal credit.--The credit allowed under subsection 
        (a) (after the application of paragraph (1)) for any taxable 
        year shall not exceed the excess (if any) of--
                    ``(A) the regular tax liability (as defined in 
                section 26(b)) reduced by the sum of the credits 
                allowable under subpart A and sections 27, 30, 30B, and 
                30C, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
    ``(f) Denial of Double Benefit.--The amount of any deduction or 
other credit allowable under this chapter for any cost taken into 
account in determining the amount of the credit under subsection (a) 
shall be reduced by the amount of such credit attributable to such 
cost.
    ``(g) Recapture.--The Secretary shall, by regulations, provided 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.
    ``(h) Election Not To Take Credit.--No credit shall be allowed 
under subsection (a) for any property if the taxpayer elects not to 
have this section apply to such property.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(j) Termination.--This section shall not apply to any costs after 
December 31, 2010.''.
    (b) Conforming Amendments.--
            (1) Section 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 portion of the hydrogen installation, 
        infrastructure, and fuel credit to which section 30D(e)(1) 
        applies.''.
            (2) Section 55(c)(3) of such Code is amended by inserting 
        ``30D(e)(2),'' after ``30C(d)(2),''.
            (3) Section 1016(a) of such Code 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).''.
            (4) Section 6501(m) of such Code is amended by inserting 
        ``30D(h),'' after ``30C(e)(5),''.
            (5) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30C the following new item:

``Sec. 30D. Hydrogen installation, infrastructure, and fuel costs.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 2007, in taxable 
years ending after such date.
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