Alternative Fuels Incentive Act of 1989

Alternative Fuels Incentive Act of 1989 - Amends the Internal Revenue Code to permit an income tax credit for investments in qualified clean-burning (natural gas, liquefied petroleum gas, or alcohol) motor vehicle fuel property. Permits a 20 percent credit from 1990 through 1999, phasing out the credit in five percent increments annually thereafter to reach zero percent at the end of 2002. Applies the credit to depreciable property that is: (1) equipment designed either to modify a motor vehicle so that it will be propelled only be a clean-burning fuel or to assist in delivering such fuel into such vehicles; or (2) a motor vehicle propelled by clean-burning fuel.

Authorizes the Secretary of the Treasury to make credit-equivalent payments to States and to local governments in connection with qualified property.

 
HR 2269 SC
101st CONGRESS
2d Session
 H. R. 2269
To amend the Internal Revenue Code of 1986 to allow an investment tax credit
for vehicles fueled by clean-burning substances, for converting vehicles to
be so fueled, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
May 9, 1989
Mr. ANDREWS (for himself, Mr. DOWNEY, Mr. DONNELLY, Mr. MCGRATH, Mr. SHARP,
Mr. COELHO, Mr. BOEHLERT, Mr. LELAND, Ms. PELOSI, Mr. SIKORSKI, Mr. SLATTERY,
Mrs. COLLINS, Mr. LAGOMARSINO, Mr. RICHARDSON, Mr. SHUMWAY, Mr. ERDREICH,
Mr. MRAZEK, Mr. WILSON, Mr. ATKINS, Mr. OWENS of Utah, Mr. LEWIS of Georgia,
Mr. BUSTAMANTE, Mr. FROST, Mr. LAUGHLIN, Mr. HOCHBRUECKNER, Mr. COLEMAN of
Missouri, Mr. NEAL of North Carolina, Mr. CHAPMAN, Mr. TOWNS, Mr. GILMAN,
Mr. BRYANT, Mr. FISH, Mr. ROWLAND of Georgia, Mr. LEATH of Texas, Mrs. LOWEY
of New York, Mr. KENNEDY, Mr. COLEMAN of Texas, and Mr. PARKER) introduced
the following bill; which was referred to the Committee on Ways and Means
June 18, 1990
Additional sponsors: Mr. WISE, Mr. TAUZIN, Mr. SCHAEFER, Mr. ROBERTS,
Mr. FIELDS, Mr. MANTON, Mr. SKAGGS, Mr. DORGAN of North Dakota, Mr. PALLONE,
Mr. ARMEY, Mr. ENGLISH, Mr. BRUCE, Mr. SARPALIUS, Mr. ACKERMAN, Mr. LIPINSKI,
Mr. ECKART, Mr. STENHOLM, Mr. JONES of Georgia, Mr. LANCASTER, Mr. GLICKMAN,
Mr. BROWN of Colorado, Mr. PAYNE of New Jersey, Mr. HEFLEY, Mr. PACKARD,
Mr. CAMPBELL of Colorado, Mrs. SMITH of Nebraska, Mr. HALL of Texas,
Mr. MCCURDY, Mr. ARCHER, Mr. EDWARDS of Oklahoma, Mr. PICKLE, Mr. WATKINS,
Mr. PAXON, Mr. HAYES of Louisiana, and Mr. Ridge
A BILL
To amend the Internal Revenue Code of 1986 to allow an investment tax credit
for vehicles fueled by clean-burning substances, for converting vehicles to
be so fueled, 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 `Alternative Fuels Incentive Act of 1989'.
SEC. 2. INVESTMENT TAX CREDIT FOR VEHICLES FUELED BY CLEAN-BURNING FUELS,
FOR PROPERTY CONVERTING VEHICLES TO BE SO FUELED, AND FOR FACILITIES FOR
THE RETAIL DELIVERY OF SUCH FUELS.
  (a) ALLOWANCE OF INVESTMENT CREDIT- Subsection (a) of section 46 of the
  Internal Revenue Code of 1986 (relating to amount of credit) is amended
  by striking `and' at the end of paragraph (2), by striking the period at
  the end of paragraph (3) and inserting `, and', and by adding at the end
  thereof the following new paragraph:
  `(4) in the case of qualified clean-burning motor vehicle fuel property,
  the air quality percentage.'
  (b) AIR QUALITY PERCENTAGE- Subsection (b) of section 46 of such Code
  (relating to determination of percentages) is amended by adding at the
  end thereof the following new paragraph:
  `(5) AIR QUALITY PERCENTAGE- The air quality percentage is--
  `(A) 20 percent for the period beginning January 1, 1990, and ending
  December 31, 1999,
  `(B) 15 percent for the period beginning January 1, 2000, and ending
  December 31, 2000,
  `(C) 10 percent for the period beginning January 1, 2001, and ending
  December 31, 2001,
  `(D) 5 percent for the period beginning January 1, 2002, and ending December
  31, 2002, and
  `(E) 0 for the period after December 31, 2002.'
  (c) QUALIFIED CLEAN-BURNING MOTOR VEHICLE FUEL PROPERTY- Section 48 of
  such Code is amended by redesignating the subsection relating to cross
  reference as subsection (u) and by inserting after subsection (s) the
  following new subsection:
  `(t) QUALIFIED CLEAN-BURNING MOTOR VEHICLE FUEL PROPERTY- For purposes of
  this subpart--
  `(1) IN GENERAL- The term `qualified clean-burning motor vehicle fuel
  property' means new section 38 property--
  `(A) which is equipment designed to modify a motor vehicle which is
  propelled by a fuel which is not a clean-burning fuel so that the vehicle
  may be propelled by a clean-burning fuel,
  `(B) which is a motor vehicle propelled only by a clean-burning fuel but
  only to the extent of the portion of the basis of such vehicle which is
  attributable to the storage or delivery to the engine of such fuel or the
  exhaust of gases from combustion, or
  `(C) which is directly related to the delivery of a clean-burning fuel
  into the fuel tank of a motor vehicle propelled by such fuel (including
  storage tanks for such fuel at the point where such fuel is so delivered).
  `(2) CLEAN-BURNING FUEL- For purposes of paragraph (1), the term
  `clean-burning fuel' means--
  `(A) natural gas,
  `(B) liquefied petroleum gas, and
  `(C) any fuel at least 85 percent of which is 1 or more of the following:
  methanol, ethanol, any other alcohol, or ether.
  (d) BASIS ADJUSTMENT NOT TO APPLY- Subsection (q) of section 48 of such
  Code (relating to basis adjustment to section 38 property) is amended by
  adding at the end thereof the following new paragraph:
  `(8) BASIS ADJUSTMENT NOT TO APPLY TO QUALIFIED CLEAN-BURNING MOTOR VEHICLE
  FUEL PROPERTY- Paragraph (1) shall not apply to the credit determined
  under section 46(a)(4).'
  (e) CREDIT-EQUIVALENT PAYMENTS FOR PROPERTY OWNED BY STATE AND LOCAL
  GOVERNMENTS-
  (1) IN GENERAL- The Secretary of the Treasury or his delegate shall pay to
  each State governmental unit which files a claim under this paragraph for
  any calendar year an amount equal to the credit which would be determined
  under section 46(a)(4) of the Internal Revenue Code of 1986 if--
  (A) all qualified clean-burning motor vehicle fuel property (as defined
  in section 48(t) of such Code) held by such unit were used in a trade
  or business,
  (B) such unit were subject to tax under chapter 1 of such Code, and
  (C) such year were such unit's taxable year.
  (2) COORDINATION WITH RECAPTURE RULES- For purposes of section 47 of such
  Code, any payment under paragraph (1) shall be treated as a credit allowed
  by section 38.
  (3) TREATMENT AS OVERPAYMENT- For purposes of any law of the United
  States, any payment under paragraph (1) shall be treated as a refund of
  an overpayment of tax imposed by chapter 1 of such Code.
  (4) STATE GOVERNMENTAL UNIT- For purposes of this subsection, the term
  `State governmental unit' means any State or political subdivision thereof,
  the District of Columbia, and any agency or instrumentality of any of
  the foregoing.
  (f) RECAPTURE OF CREDIT IF PROPERTY CEASES TO BE QUALIFIED CLEAN-BURNING
  MOTOR VEHICLE FUEL PROPERTY- Paragraph (5) of section 47(a) of such Code
  (relating to certain dispositions, etc., of section 38 property) is amended
  by redesignating subparagraph (E) as subparagraph (F) and by inserting
  after subparagraph (D) the following new subparagraph:
  `(E) SPECIAL RULES FOR QUALIFIED CLEAN-BURNING MOTOR VEHICLE FUEL PROPERTY-
  If, during any taxable year, property with respect to which the taxpayer was
  allowed any credit under section 38 by reason of the air quality percentage
  ceases to be qualified clean-burning motor vehicle fuel property at any
  time during the taxable year (but otherwise continues to be section 38
  property), this paragraph shall be applied--
  `(i) as if such property ceased to be section 38 property at the time of
  such cessation, and
  `(ii) by taking into account only the portion of the credit allowed by
  section 38 which is attributable to the air quality percentage.'
  (g) EFFECTIVE DATE- The amendments made by this section shall apply to
  periods after December 31, 1989, under rules similar to the rules of
  section 48(m) of the Internal Revenue Code of 1986.