[Congressional Record Volume 145, Number 85 (Wednesday, June 16, 1999)]
[Senate]
[Pages S7136-S7138]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER:
  S. 1230. A bill to amend the Internal Revenue Code of 1986 to 
encourage the production and use of clean-fuel vehicles, and for other 
purposes; to the Committee on Finance.


        The Electric Vehicle Consumer Incentive Tax Act of 1999

  Mrs. BOXER. Mr. President, today I am introducing the ``Electric 
Vehicle Consumer Incentive Tax Act of 1999'' to

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provide new incentives and extend previous ones to spark the zero 
emission vehicle market. This legislation is similar to previous bills 
that I have introduced in the 104th and 105th Congresses.
  I am pleased to see that already the market for electric vehicles is 
emerging. All major domestic automakers and most of foreign automakers 
have zero emission vehicles in the market. However, we still need to 
provide tax incentives to help lower the cost of the new technology 
vehicles. Despite the what appears to be a new understanding from our 
automakers that they must begin to produce environmentally friendly 
vehicles, the costs of these new generation of vehicles are still steep 
for most Americans.
  The need to decrease automobile pollution is still critical. Since 
1970, total U.S. population increased 31 percent and vehicle miles 
traveled--that's our best measure of vehicle use--increased 127 
percent. During that time, emissions for most of the key pollutants 
have decreased from the introduction of new technologies. But we are 
still failing to meet air quality standards in many areas. In fact, the 
emissions of one key pollutant--nitrogen oxides--actually increased 11 
percent from 1970 to 1997. Nitrogen oxides, produced largely from 
automobile fuel combustion, is the building block for smog. About 107 
million Americans were residing in counties that did not meet the air 
quality standards for at least one of the National Ambient Air Quality 
Standards pollutants in 1997.
  These emissions still produce profound and troubling impacts on the 
health of Americans, particularly the young.
  That is why I believe Congress should help and encourage Americans to 
purchase or lease zero emission vehicles. Electric vehicles, which 
produce no pollution from their engines, will not become the preferred 
automobile for all Americans, but for many it can become the preferred 
commuter vehicle or city car. Electric vehicles can also help state and 
local governments, and private fleet operators, meet new and future air 
quality requirements.
  Mr. President, I am pleased to say that previous provisions of my 
clean fuel vehicle legislation have become law. The lowering of the 
excise tax on liquified natural gas will help spur the market for that 
fuel for heavy duty vehicles. The repeal of the luxury tax on electric 
vehicles also helps remove or lessen market barriers. But more needs to 
be done. That is why I have introduced the ``Electric Vehicle Consumer 
Incentive Tax Act of 1999.'' U.S. Representative Mac Collins of Georgia 
has introduced the companion bill in the House, H.R. 1108.
  The bill provides four major incentives. First, it removes the 
governmental use restrictions for electric vehicles. At present, the 
Internal Revenue Code prohibits any tax credit taken for property (in 
this case electric vehicles) used by the United States or any state or 
local government. Removing this bar will encourage the leasing of 
electric vehicles for state and local use. By removing restriction on 
governmental use of electric vehicles, owners of electric vehicle 
fleets could ``pass on'' any cost savings from tax credits to the 
government.
  Second, the bill makes large electric trucks, vans, and buses 
eligible for the same tax deduction available now for other clean-fuel 
vehicles under the Energy Policy Act of 1992. Large electric trucks, 
vans and buses currently are limited to the maximum tax credit of 
$4,000 under the Code. Other clean-fuel vehicles, however, may receive 
a $50,000 tax deduction. This section of the bill would remove the 
unfair distinction between large electric and other large clean-fuel 
vehicles. Each would qualify for the tax deduction incentive which 
would serve to promote the greatest use of clean-fuel vehicles. The 
bill would end the tax credit for large electric vehicles and provide a 
tax deduction instead.
  Third, the bill provides a flat $4,000 tax credit on the purchase of 
an electric vehicle. Under current law, electric vehicles are eligible 
under the Code for a 10 percent tax credit for the cost of qualified 
electric vehicles, up to a maximum of $4,000. The bill would modify 
that section to provide for a flat $4,000 tax credit (rather than 10 
percent of the purchase price up to $4,000) in order to maximize the 
tax incentive.
  Fourth, the bill extends the sunset period for the tax credit. 
Current law phases out the electric vehicle tax credit beginning in the 
year 2002. The Energy Policy Act of 1992 anticipated that electric 
vehicles would be available commercially in 1992. The first electric 
vehicles were not available to the public until 1997. All major 
automakers now have electric vehicles on the market. However, that 
market is still very small. Therefore, the bill extends the phase out 
for four years with the credit sunsetting December 31, 2008, instead of 
December 31, 2004. The phase out provisions are conformed by amending 
the Code to provide that the credit will be phased out, at a 25 percent 
annual cumulative rate, for each of the three years preceding 
termination.
  I believe these provisions can provide important market incentives 
for Americans to purchase automobiles that do not contribute to urban 
smog or other pollution and at a modest cost in reduced Federal taxes. 
I ask that my colleagues join me in supporting this legislation and 
making way for a clean fuel future in the 21st Century.
  I ask unanimous consent that the full text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1230

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This Act may be cited as the ``Electric 
     Vehicle Consumer Incentive Tax Act of 1999''.
       (b) Reference to 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

     SEC. 2. GOVERNMENTAL USE RESTRICTION MODIFIED FOR ELECTRIC 
                   VEHICLES.

       (a) In General.--Paragraph (3) of section 30(d) (relating 
     to special rules) is amended by inserting ``(without regard 
     to paragraph (4)(A)(i) thereof)'' after ``section 50(b)''.
       (b) Conforming Amendment.--Paragraph (5) of section 179A(e) 
     (relating to other definitions and special rules) is amended 
     by inserting ``(without regard to paragraph (4)(A)(i) thereof 
     in the case of a qualified electric vehicle described in 
     subclause (I) or (II) of subsection (b)(1)(A)(iii) of this 
     section)'' after ``section 50(b)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of enactment of this Act.

     SEC. 3. LARGE ELECTRIC TRUCKS, VANS, AND BUSES ELIGIBLE FOR 
                   DEDUCTION FOR CLEAN-FUEL VEHICLES.

       (a) In General.--Paragraph (3) of section 179A(c) (defining 
     qualified clean-fuel vehicle property) is amended by 
     inserting ``, other than any vehicle described in subclause 
     (I) or (II) of subsection (b)(1)(A)(iii)'' after ``section 
     30(c))''.
       (b) Denial of Credit.--Subsection (c) of section 30 
     (relating to credit for qualified electric vehicles)is 
     amended by adding at the end the following new paragraph:
       ``(3) Denial of credit for vehicles for which deduction 
     allowable.--The term `qualified electric vehicle' shall not 
     include any vehicle described in subclause (I) or (II) of 
     section 179A(b)(1)(A)(iii).''
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service on or after the 
     date of enactment of this Act.

     SEC. 4. ELECTRIC VEHICLE CREDIT AMOUNT AND APPLICATION 
                   AGAINST ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subsection (a) of section 30 (relating to 
     credit for qualified electric vehicles) is amended by 
     striking ``10 percent of''.
       (b) Application Against Alternative Minimum Tax.--Section 
     30(b) (relating to limitations) is amended by striking 
     paragraph (3).
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1998.

     SEC. 5. EXTENSION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

       (a) In General.--Section 30(e) (relating to the termination 
     of the credit) is amended by striking ``December 31, 2004'' 
     and inserting ``December 31, 2008''.
       (b) Conforming Amendment.--Section 30(b)(2) (relating to 
     the phaseout of the credit) is amended by striking ``December 
     31, 2001'' and inserting ``December 31, 2005'' and by 
     striking ``2002'', ``2003'', and ``2004'' and inserting 
     ``2006'', ``2007'', and ``2008'', respectively.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

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