[Congressional Record Volume 151, Number 53 (Wednesday, April 27, 2005)]
[Senate]
[Pages S4405-S4407]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. OBAMA (for himself, Mr. Talent, and Mr. Durbin):
  S. 918. A bill to provide for Flexible Fuel Vehicle (FFV) refueling 
capability at new and existing refueling station facilities to promote 
energy security and reduction of greenhouse gas emissions; to the 
Committee on Finance.
  Mr. OBAMA. Mr. President, we have all heard from folks back home 
about the high price of gasoline. When you pull into a gas station to 
fill up your tank, you're now paying some of the highest prices of all 
time.
  And when you turn on the news, you see that our dependence on foreign 
oil keeps us tied to one of the most dangerous and unstable regions in 
the world. With oil at more than $50 per barrel, some argue that the 
best way to deal with high gasoline prices is to wait it out--to wait 
until the world market dynamics change.

[[Page S4406]]

  I disagree with that mindset. For too long now, we've relied too 
heavily on foreign oil to fuel our energy needs in this country. This 
is not good for the United States--not for our economy, not for our 
national security, and not for our people.
  The bill I am introducing today, along with my distinguished 
colleagues from Illinois and Missouri, is designed to do something 
about fuel prices and our reliance on foreign oil--something rooted in 
reality, something achievable in the short term, and something that 
actually works.
  Last week, I visited a gasoline station in Springfield, IL, where 
along with regular gasoline, a new kind of fuel is offered for 
consumers--a fuel known as E-85. E-85 is a clean, alternative form of 
transportation fuel consisting of a blend of 85 percent ethanol and 15 
percent gasoline. Ethanol is made from renewable, Midwestern corn, and 
it is 40-60 cents cheaper per gallon than standard gasoline. Last week, 
at this Springfield station, regular gasoline was listed at $2.06 and 
E-85 was selling for $1.69.
  Not every car can run on E-85 fuel--but there are millions of cars 
that can. They're known as ``flexible-fuel vehicles,'' and the auto 
industry is turning out hundreds of thousands of them every year. And 
if any of you are wondering whether cars will run as well on E-85 as 
they would on regular gas, just ask the Indy 500, which recently 
announced that all of their cars will soon run on E-85 fuel.
  The only problem we have now is that we're in short supply of E-85 
stations. While there are more than 180,000 gas stations all over 
America, there are only about 400 E-85 stations. And although E-85 has 
many environmental benefits and is a higher performing fuel, the fuel 
economy of E-85 is slightly lower than that of regular gasoline. An 
additional incentive is needed to help ensure that the cost of this 
clean fuel remains competitive with that of regular gasoline.
  That is why I'm introducing a bill to provide a tax credit of 50% for 
building an E-85 fuel station and a tax credit of 35 cents per gallon 
of E-85 fuel. This provision is similar to a provision that already has 
passed the Senate three times. I hope my colleagues will pass this 
provision again.
  We've talked for too long about energy independence in this country, 
and I think this bill gives us an opportunity to actually get something 
done about it. I urge the support of my colleagues of this bill, and I 
thank the Chair.
  I ask unanimous consent that the 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. 918

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

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``E-85 Fuel 
     Utilization and Infrastructure Development Incentives Act of 
     2005''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division 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.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title, etc.
Sec. 2. Purpose.
Sec. 3. Findings.
Sec. 4. Incentives for the installation of alternative fuel refueling 
              stations.
Sec. 5. Incentives for the retail sale of alternative fuels as motor 
              vehicle fuel.

     SEC. 2. PURPOSE.

       The purpose of this Act is to decrease the dependence of 
     the United States on foreign oil by increasing the use of 
     high ratio blends of gasoline with a minimum 85 percent 
     domestically derived ethanol content (E-85) as an alternative 
     fuel and providing greater access to this fuel for American 
     motorists.

     SEC. 3. FINDINGS.

       Congress finds the following:
       (1) The growing United States reliance on foreign produced 
     petroleum and the recent escalation of crude oil prices 
     demands that all prudent measures be undertaken to increase 
     United States refining capacity, domestic oil production, and 
     expanded utilization of alternative forms of transportation 
     fuels and infrastructure.
       (2) Recent studies confirm the environmental and overall 
     energy security benefits of high ratio blends of gasoline 
     with a minimum 85 percent domestically derived ethanol 
     content (E-85), especially with regard to the reduction of 
     greenhouse gas emissions from the national on-road passenger 
     car vehicle fleet.
       (3) The market penetration of E-85 capable Flexible Fuel 
     Vehicles (FFVs) now exceeds 5,000,000 with an additional 
     1,000,000 or more FFVs expected to be added annually as 
     automakers continue to respond positively to congressionally 
     provided production incentives.
       (4) It is further recognized that actual implementation of 
     the use of E-85 fuel has been significantly underutilized due 
     primarily to the lack of E-85 refueling infrastructure 
     availability and promotion and that such utilization rate 
     will continue to lag unless resources are provided to 
     substantially accelerate national refueling infrastructure 
     development.
       (5) Additionally, incentives in the form of tax credits can 
     serve to stimulate infrastructure development and E-85 fuel 
     utilization.

     SEC. 4. INCENTIVES FOR THE INSTALLATION OF ALTERNATIVE FUEL 
                   REFUELING STATIONS.

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

     ``SEC. 30B. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY 
                   CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the amount paid or incurred 
     by the taxpayer during the taxable year for the installation 
     of qualified alternative fuel vehicle refueling property.
       ``(b) Limitation.--
       ``(1) In general.--The credit allowed under subsection 
     (a)--
       ``(A) with respect to any retail alternative fuel vehicle 
     refueling property, shall not exceed $30,000, and
       ``(B) with respect to any residential alternative fuel 
     vehicle refueling property, shall not exceed $1,000.
       ``(2) Phaseout.--
       ``(A) In general.--In the case of any qualified alternative 
     fuel vehicle refueling property placed in service after 
     December 31, 2010, the limit otherwise applicable under 
     paragraph (1) shall be reduced by--
       ``(i) 25 percent in the case of any alternative fuel 
     vehicle refueling property placed in service in calendar year 
     2011, and
       ``(ii) 50 percent in the case of any alternative fuel 
     vehicle refueling property placed in service in calendar year 
     2012.
       ``(c) Year Credit Allowed.--The credit allowed under 
     subsection (a) shall be allowed in the taxable year in which 
     the qualified alternative fuel vehicle refueling property is 
     placed in service by the taxpayer.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified alternative fuel vehicle refueling 
     property.--The term `qualified alternative fuel vehicle 
     refueling property' has the same meaning given for clean-fuel 
     vehicle refueling property by section 179A(d), but only with 
     respect to any fuel at least 85 percent of the volume of 
     which consists of ethanol.
       ``(2) Residential alternative fuel vehicle refueling 
     property.--The term `residential alternative fuel vehicle 
     refueling property' means qualified alternative fuel vehicle 
     refueling property which is installed on property which is 
     used as the principal residence (within the meaning of 
     section 121) of the taxpayer.
       ``(3) Retail alternative fuel vehicle refueling property.--
     The term `retail alternative fuel vehicle refueling property' 
     means qualified alternative fuel vehicle refueling property 
     which is installed on property (other than property described 
     in paragraph (2)) used in a trade or business of the 
     taxpayer.
       ``(e) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(f) Basis Reduction.--For purposes of this title, the 
     basis of any property shall be reduced by the portion of the 
     cost of such property taken into account under subsection 
     (a).
       ``(g) No Double Benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(h) Refueling Property Installed for Tax-exempt 
     Entities.--In the case of qualified alternative fuel vehicle 
     refueling property installed on property owned or used by an 
     entity exempt from tax under this chapter, the person which 
     installs such refueling property for the entity shall be 
     treated as the taxpayer with respect to the refueling 
     property for purposes of this section (and such refueling 
     property shall be treated as retail alternative fuel vehicle 
     refueling property) and the credit shall be allowed to such 
     person, but only if the person clearly discloses to the 
     entity in any installation contract the specific amount of 
     the credit allowable under this section.
       ``(i) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (e) for such taxable year

[[Page S4407]]

     (referred to as the `unused credit year' in this subsection), 
     such excess shall be allowed as a credit carryforward for 
     each of the 20 taxable years following the unused credit 
     year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(j) Special Rules.--Rules similar to the rules of 
     paragraphs (4) and (5) of section 179A(e) shall apply.
       ``(k) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(l) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2013.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (30), by striking the period at the end of 
     paragraph (31) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(32) to the extent provided in section 30B(f).''.
       (2) Section 55(c)(2) is amended by inserting ``30B(e),'' 
     after ``30(b)(3),''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative fuel vehicle refueling property credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 5. INCENTIVES FOR THE RETAIL SALE OF ALTERNATIVE FUELS 
                   AS MOTOR VEHICLE FUEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by inserting after section 40A the following new section:

     ``SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       ``(a) General Rule.--The alternative fuel retail sales 
     credit for any taxable year is 35 cents for each gallon of 
     alternative fuel sold at retail by the taxpayer during such 
     year.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Alternative fuel.--The term `alternative fuel' means 
     any fuel at least 85 percent of the volume of which consists 
     of ethanol.
       ``(2) Sold at retail.--
       ``(A) In general.--The term `sold at retail' means the 
     sale, for a purpose other than resale, after manufacture, 
     production, or importation.
       ``(B) Use treated as sale.--If any person uses alternative 
     fuel (including any use after importation) as a fuel to 
     propel any qualified alternative fuel motor vehicle (as 
     defined in this section) before such fuel is sold at retail, 
     then such use shall be treated in the same manner as if such 
     fuel were sold at retail as a fuel to propel such a vehicle 
     by such person.
       ``(3) Qualified alternative fuel motor vehicle.--The term 
     `new qualified alternative fuel motor vehicle' means any 
     motor vehicle--
       ``(A) which is capable of operating on an alternative fuel,
       ``(B) the original use of which commences with the 
     taxpayer,
       ``(C) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(D) which is made by a manufacturer.
       ``(c) Election To Pass Credit.--A person which sells 
     alternative fuel at retail may elect to pass the credit 
     allowable under this section to the purchaser of such fuel 
     or, in the event the purchaser is a tax-exempt entity or 
     otherwise declines to accept such credit, to the person which 
     supplied such fuel, under rules established by the Secretary.
       ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     fuel sold at retail after December 31, 2010.''.
       (b) Credit Treated as Business Credit.--Section 38(b) 
     (relating to current year business credit) is amended by 
     striking ``plus'' at the end of paragraph (18), by striking 
     the period at the end of paragraph (19) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(20) the alternative fuel retail sales credit determined 
     under section 40B(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     inserting after the item relating to section 40A the 
     following new item:

``Sec. 40B. Credit for retail sale of alternative fuels as motor 
              vehicle fuel.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel sold at retail after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.
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