Common Sense Automobile Efficiency Act of 2004 - Amends the Internal Revenue Code to repeal the phaseouts of the tax credit for qualified electric vehicles and of the tax deduction for clean-fuel vehicles.
Allows a tax credit for investment in certain alternative motor vehicles, including fuel cell vehicles, advanced lean burn technology motor vehicles, hybrid motor vehicles, and alternative fuel motor vehicles. Sets forth formulae for determining the amount of such credit based on various factors, including vehicle weight and fuel efficiency ratings.
Allows a tax-exempt cooperative organization to elect to apportion amounts of the small ethanol producer tax credit among its patrons on a pro rata basis. Increases from 30 to 60 million gallons the maximum productive capacity allowed to eligible small ethanol producers for purposes of qualifying for the tax credit.
Allows a tax credit for biodiesel used as fuel.
Allows a tax credit against the gasoline excise tax for alcohol fuel and biodiesel mixtures.
Excludes from the export exemption from certain excise taxes the delivery of a taxable fuel into a fuel tank of a motor vehicle which is shipped or driven outside of the United States.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5078 Introduced in House (IH)]
108th CONGRESS
2d Session
H. R. 5078
To amend the Internal Revenue Code of 1986 to provide incentives for
alternative fuels and alternative fuel vehicles.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 14, 2004
Mr. Ruppersberger introduced the following bill; which was referred to
the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide incentives for
alternative fuels and alternative fuel vehicles.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Common Sense
Automobile Efficiency Act of 2004''.
(b) Amendment of 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. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC VEHICLE CREDIT AND
DEDUCTION FOR CLEAN FUEL-VEHICLES.
(a) Credit for Qualified Electric Vehicles.--Subsection (b) of
section 30 (relating to limitations) is amended by striking paragraph
(2) and redesignating paragraph (3) as paragraph (2).
(b) Deduction for Clean-Fuel Vehicles and Certain Refueling
Property.--Paragraph (1) of section 179A(b) (relating to qualified
clean-fuel vehicle property) is amended to read as follows:
``(1) Qualified clean-fuel vehicle property.-- The cost
which may be taken into account under subsection (a)(1)(A) with
respect to any motor vehicle shall not exceed--
``(A) in the case of a motor vehicle not described
in subparagraph (B) or (C), $2,000,
``(B) in the case of any truck or van with a gross
vehicle weight rating greater than 10,000 pounds but
not greater than 26,000 pounds, $5,000, or
``(C) $50,000 in the case of--
``(i) a truck or van with a gross vehicle
weight rating greater than 26,000 pounds, or
``(ii) any bus which has a seating capacity
of at least 20 adults (not including the
driver).''.
(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.
SEC. 3. ALTERNATIVE MOTOR VEHICLE CREDIT.
(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:
``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.
``(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 new qualified fuel cell motor vehicle credit
determined under subsection (b),
``(2) the new advanced lean burn technology motor vehicle
credit determined under subsection (c),
``(3) the new qualified hybrid motor vehicle credit
determined under subsection (d), and
``(4) the new qualified alternative fuel motor vehicle
credit determined under subsection (e).
``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified fuel cell motor vehicle credit determined under this
subsection with respect to a new qualified fuel cell motor
vehicle placed in service by the taxpayer during the taxable
year shall be determined in accordance with the following
table:
``In the case of a vehicle which The new qualified
has a gross vehicle weight fuel cell motor
rating of-- vehicle credit is--
Not more than 8,500 lbs....................... $4,000
More than 8,500 lbs but not more than 14,000 $10,000
lbs.
More than 14,000 lbs but not more than 26,000 $20,000
lbs.
More than 26,000 lbs.......................... $40,000.
``(2) Increase for fuel efficiency.--
``(A) In general.--The amount determined under
paragraph (1) with respect to a new qualified fuel cell
motor vehicle which is a passenger automobile or light
truck shall be increased by the additional credit
amount.
``(B) Additional credit amount.--For purposes of
subparagraph (A), the additional credit amount shall be
determined in accordance with the following table:
``In the case of a vehicle which
achieves a fuel economy
(expressed as a percentage
of the 2002 model year city
fuel economy) of--
The additional credit amount is--
At least 150 percent but less than 175 percent $1,000
At least 175 percent but less than 200 percent $1,500
At least 200 percent but less than 225 percent $2,000
At least 225 percent but less than 250 percent $2,500
At least 250 percent but less than 275 percent $3,000
At least 275 percent but less than 300 percent $3,500
At least 300 percent.......................... $4,000.
``(3) New qualified fuel cell motor vehicle.--For purposes
of this subsection, the term `new qualified fuel cell motor
vehicle' means a motor vehicle--
``(A) which is propelled by power derived from one
or more cells which convert chemical energy directly
into electricity by combining oxygen with hydrogen fuel
which is stored on board the vehicle in any form and
may or may not require reformation prior to use,
``(B) which, in the case of a passenger automobile
or light truck, has received--
``(i) a certificate of conformity under the
Clean Air Act and meets or exceeds the
equivalent qualifying California low emission
vehicle standard under section 243(e)(2) of the
Clean Air Act for that make and model year, and
``(ii) a certificate that such vehicle
meets or exceeds the Bin 5 Tier II emission
standard established in regulations prescribed
by the Administrator of the Environmental
Protection Agency under section 202(i) of the
Clean Air Act for that make and model year
vehicle,
``(C) the original use of which commences with the
taxpayer,
``(D) which is acquired for use or lease by the
taxpayer and not for resale, and
``(E) which is made by a manufacturer.
``(c) New Advanced Lean Burn Technology Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
advanced lean burn technology motor vehicle credit determined
under this subsection with respect to a new advanced lean burn
technology motor vehicle placed in service by the taxpayer
during the taxable year is the credit amount determined under
paragraph (2).
``(2) Credit amount.--
``(A) Fuel economy.--The credit amount determined
under this paragraph shall be determined in accordance
with the following table:
``In the case of a vehicle which
achieves a fuel economy
(expressed as a percentage
of the 2002 model year city
fuel economy) of--
The credit amount is--
At least 125 percent but less than 150 percent $400
At least 150 percent but less than 175 percent $800
At least 175 percent but less than 200 percent $1,200
At least 200 percent but less than 225 percent $1,600
At least 225 percent but less than 250 percent $2,000
At least 250 percent.......................... $2,400.
``(B) Conservation credit.--The amount determined
under subparagraph (A) with respect to a new advanced
lean burn technology motor vehicle shall be increased
by the conservation credit amount determined in
accordance with the following table:
``In the case of a vehicle which
achieves a lifetime fuel
savings (expressed in
gallons of gasoline) of--
The conservation credit amount is--
At least 1,200 but less than 1,800............ $250
At least 1,800 but less than 2,400............ $500
At least 2,400 but less than 3,000............ $750
At least 3,000................................ $1,000.
``(3) New advanced lean burn technology motor vehicle.--For
purposes of this subsection, the term `new advanced lean burn
technology motor vehicle' means a passenger automobile or a
light truck--
``(A) with an internal combustion engine which--
``(i) is designed to operate primarily
using more air than is necessary for complete
combustion of the fuel,
``(ii) incorporates direct injection,
``(iii) achieves at least 125 percent of
the 2002 model year city fuel economy,
``(iv) for 2004 and later model vehicles,
has received a certificate that such vehicle
meets or exceeds--
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more
than 8,500 pounds, the Bin 8 Tier II
emission standard which is so
established,
``(B) the original use of which commences with the
taxpayer,
``(C) which is acquired for use or lease by the
taxpayer and not for resale, and
``(D) which is made by a manufacturer.
``(4) Lifetime fuel savings.--For purposes of this
subsection, the term `lifetime fuel savings' means, in the case
of any new advanced lean burn technology motor vehicle, an
amount equal to the excess (if any) of--
``(A) 120,000 divided by the 2002 model year city
fuel economy for the vehicle inertia weight class, over
``(B) 120,000 divided by the city fuel economy for
such vehicle.
``(d) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection with respect to a new qualified hybrid motor vehicle
placed in service by the taxpayer during the taxable year is
the credit amount determined under paragraph (2).
``(2) Credit amount.--
``(A) Credit amount for passenger automobiles and
light trucks.--In the case of a new qualified hybrid
motor vehicle which is a passenger automobile or light
truck and which has a gross vehicle weight rating
of not more than 8,500 pounds, the amount determined under this
paragraph is the sum of the amounts determined under clauses (i) and
(ii).
``(i) Fuel economy.--The amount determined
under this clause is the amount which would be
determined under subsection (c)(2)(A) if such
vehicle were a vehicle referred to in such
subsection.
``(ii) Conservation credit.--The amount
determined under this clause is the amount
which would be determined under subsection
(c)(2)(B) if such vehicle were a vehicle
referred to in such subsection.
``(B) Credit amount for other motor vehicles.--
``(i) In general.--In the case of any new
qualified hybrid motor vehicle to which
subparagraph (A) does not apply, the amount
determined under this paragraph is the amount
equal to the applicable percentage of the
qualified incremental hybrid cost of the
vehicle as certified under clause (v).
``(ii) Applicable percentage.--For purposes
of clause (i), the applicable percentage is--
``(I) 20 percent if the vehicle
achieves an increase in city fuel
economy relative to a comparable
vehicle of at least 30 percent but less
than 40 percent,
``(II) 30 percent if the vehicle
achieves such an increase of at least
40 percent but less than 50 percent,
and
``(III) 40 percent if the vehicle
achieves such an increase of at least
50 percent.
``(iii) Qualified incremental hybrid
cost.--For purposes of this subparagraph, the
qualified incremental hybrid cost of any
vehicle is equal to the amount of the excess of
the manufacturer's suggested retail price for
such vehicle over such price for a comparable
vehicle, to the extent such amount does not
exceed--
``(I) $7,500, if such vehicle has a
gross vehicle weight rating of not more
than 14,000 pounds,
``(II) $15,000, if such vehicle has
a gross vehicle weight rating of more
than 14,000 pounds but not more than
26,000 pounds, and
``(III) $30,000, if such vehicle
has a gross vehicle weight rating of
more than 26,000 pounds.
``(iv) Comparable vehicle.--For purposes of
this subparagraph, the term `comparable
vehicle' means, with respect to any new
qualified hybrid motor vehicle, any vehicle
which is powered solely by a gasoline or diesel
internal combustion engine and which is
comparable in weight, size, and use to such
vehicle.
``(v) Certification.--A certification
described in clause (i) shall be made by the
manufacturer and shall be determined in
accordance with guidance prescribed by the
Secretary. Such guidance shall specify
procedures and methods for calculating fuel
economy savings and incremental hybrid costs.
``(3) New qualified hybrid motor vehicle.--For purposes of
this subsection--
``(A) In general.--The term `new qualified hybrid
motor vehicle' means a motor vehicle--
``(i) which draws propulsion energy from
onboard sources of stored energy which are
both--
``(I) an internal combustion or
heat engine using consumable fuel, and
``(II) a rechargeable energy
storage system;
``(ii) which, in the case of a vehicle to
which paragraph (2)(A) applies, has received a
certificate of conformity under the Clean Air
Act and meets or exceeds the equivalent
qualifying California low emission vehicle
standard under section 243(e)(2) of the Clean
Air Act for that make and model year, and--
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more
than 8,500 pounds, the Bin 8 Tier II
emission standard which is so
established;
``(iii) which has a maximum available power
of at least--
``(I) 4 percent in the case of a
vehicle to which paragraph (2)(A)
applies,
``(II) 10 percent in the case of a
vehicle which has a gross vehicle
weight rating or more than 8,500 pounds
and not than 14,000 pounds, and
``(III) 15 percent in the case of a
vehicle in excess of 14,000 pounds;
``(iv) which, in the case of a vehicle to
which paragraph (2)(B) applies, has an internal
combustion or heat engine which has received a
certificate of conformity under the Clean Air
Act as meeting the emission standards set in
the regulations prescribed by the Administrator
of the Environmental Protection Agency for 2004
through 2007 model year diesel heavy duty
engines or ottocycle heavy duty engines, as
applicable;
``(v) the original use of which commences
with the taxpayer;
``(vi) which is acquired for use or lease
by the taxpayer and not for resale; and
``(vii) which is made by a manufacturer.
Such term shall not include any vehicle which is not a
passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500
pounds.
``(B) Consumable fuel.--For purposes of
subparagraph (A)(i)(I), the term `consumable fuel'
means any solid, liquid, or gaseous matter which
releases energy when consumed by an auxiliary power
unit.
``(C) Maximum available power.--
``(i) Certain passenger automobiles and
light trucks.--In the case of a vehicle to
which paragraph (2)(A) applies, the term
`maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second
pulse power or equivalent test, divided by such
maximum power and the SAE net power of the heat
engine.
``(ii) Other motor vehicles.--In the case
of a vehicle to which paragraph (2)(B) applies,
the term `maximum available power' means the
maximum power available from the rechargeable
energy storage system, during a standard 10
second pulse power or equivalent test, divided
by the vehicle's total traction power. For
purposes of the preceding sentence, the term
`total traction power' means the sum of the
peak power from the rechargeable energy storage
system and the heat engine peak power of the
vehicle, except that if such storage system is
the sole means by which the vehicle can be
driven, the total traction power is the peak
power of such storage system.
``(e) New Qualified Alternative Fuel Motor Vehicle Credit.--
``(1) Allowance of credit.--Except as provided in paragraph
(5), the new qualified alternative fuel motor vehicle credit
determined under this subsection is an amount equal to the
applicable percentage of the incremental cost of any new
qualified alternative fuel motor vehicle placed in service by
the taxpayer during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage with respect to any new
qualified alternative fuel motor vehicle is--
``(A) 40 percent, plus
``(B) 30 percent, if such vehicle--
``(i) has received a certificate of
conformity under the Clean Air Act and meets or
exceeds the most stringent standard available
for certification under the Clean Air Act for
that make and model year vehicle (other than a
zero emission standard), or
``(ii) has received an order certifying the
vehicle as meeting the same requirements as
vehicles which may be sold or leased in
California and meets or exceeds the most
stringent standard available for certification
under the State laws of California (enacted in
accordance with a waiver granted under section
209(b) of the Clean Air Act) for that make and
model year vehicle (other than a zero emission
standard).
For purposes of the preceding sentence, in the case of any new
qualified alternative fuel motor vehicle which has a gross
vehicle weight rating of more than 14,000 pounds, the most
stringent standard available shall be such standard available
for certification on the date of the enactment of the Energy
Tax Policy Act of 2003.
``(3) Incremental cost.--For purposes of this subsection,
the incremental cost of any new qualified alternative fuel
motor vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over
such price for a gasoline or diesel fuel motor vehicle of the
same model, to the extent such amount does not exceed--
``(A) $5,000, if such vehicle has a gross vehicle
weight rating of not more than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $25,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(4) New qualified alternative fuel motor vehicle.--For
purposes of this subsection--
``(A) In general.--The term `new qualified
alternative fuel motor vehicle' means any motor
vehicle--
``(i) which is only capable of operating on
an alternative fuel,
``(ii) the original use of which commences
with the taxpayer,
``(iii) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(iv) which is made by a manufacturer.
``(B) Alternative fuel.--The term `alternative
fuel' means compressed natural gas, liquefied natural
gas, liquefied petroleum gas, hydrogen, and any liquid
at least 85 percent of the volume of which consists of
methanol.
``(5) Credit for mixed-fuel vehicles.--
``(A) In general.--In the case of a mixed-fuel
vehicle placed in service by the taxpayer during the
taxable year, the credit determined under this
subsection is an amount equal to--
``(i) in the case of a 75/25 mixed-fuel
vehicle, 70 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle, and
``(ii) in the case of a 90/10 mixed-fuel
vehicle, 90 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle.
``(B) Mixed-fuel vehicle.--For purposes of this
subsection, the term `mixed-fuel vehicle' means any
motor vehicle described in subparagraph (C) or (D) of
paragraph (3), which--
``(i) is certified by the manufacturer as
being able to perform efficiently in normal
operation on a combination of an alternative
fuel and a petroleum-based fuel,
``(ii) either--
``(I) has received a certificate of
conformity under the Clean Air Act, or
``(II) has received an order
certifying the vehicle as meeting the
same requirements as vehicles which may
be sold or leased in California and
meets or exceeds the low emission
vehicle standard under section 88.105-
94 of title 40, Code of Federal
Regulations, for that make and model
year vehicle,
``(iii) the original use of which commences
with the taxpayer,
``(iv) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(v) which is made by a manufacturer.
``(C) 75/25 mixed-fuel vehicle.--For purposes of
this subsection, the term `75/25 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 75 percent alternative fuel and not more than 25
percent petroleum-based fuel.
``(D) 90/10 mixed-fuel vehicle.--For purposes of
this subsection, the term `90/10 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 90 percent alternative fuel and not more than 10
percent petroleum-based fuel.
``(f) Limitation on Number of New Qualified Hybrid and Advanced
Lean-Burn Technology Vehicles Eligible for Credit.--
``(1) In general.--In the case of a qualified vehicle sold
during the phaseout period, only the applicable percentage of
the credit otherwise allowable under subsection (c) or (d)
shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which includes
the first date on which the number of qualified vehicles
manufactured by the manufacturer of the vehicle referred to in
paragraph (1) sold for use in the United States after the date
of the enactment of this section is at least 80,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters
of the phaseout period,
``(B) 25 percent for the 3d and 4th calendar
quarters of the phaseout period, and
``(C) 0 percent for each calendar quarter
thereafter.
``(4) Controlled groups.--
``(A) In general.--For purposes of this subsection,
all persons treated as a single employer under
subsection (a) or (b) of section 52 or subsection (m)
or (o) of section 414 shall be treated as a single
manufacturer.
``(B) Inclusion of foreign corporations.--For
purposes of subparagraph (A), in applying subsections
(a) and (b) of section 52 to this section, section 1563 shall be
applied without regard to subsection (b)(2)(C) thereof.
``(5) Qualified vehicle.--For purposes of this subsection,
the term `qualified vehicle' means any new qualified hybrid
motor vehicle and any new advanced lean burn technology motor
vehicle.
``(g) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for the taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under subpart A and
sections 27 and 30 for the taxable year.
``(h) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) Other terms.--The terms `automobile', `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) 2002 model year city fuel economy.--
``(A) In general.--The 2002 model year city fuel
economy with respect to a vehicle shall be determined
in accordance with the following tables:
``(i) In the case of a passenger
automobile:
The 2002 model year city
``If vehicle inertia weight class fuel economy is:
is:
1,500 or 1,750 lbs............................ 45.2 mpg
2,000 lbs..................................... 39.6 mpg
2,250 lbs..................................... 35.2 mpg
2,500 lbs..................................... 31.7 mpg
2,750 lbs..................................... 28.8 mpg
3,000 lbs..................................... 26.4 mpg
3,500 lbs..................................... 22.6 mpg
4,000 lbs..................................... 19.8 mpg
4,500 lbs..................................... 17.6 mpg
5,000 lbs..................................... 15.9 mpg
5,500 lbs..................................... 14.4 mpg
6,000 lbs..................................... 13.2 mpg
6,500 lbs..................................... 12.2 mpg
7,000 to 8,500 lbs............................ 11.3 mpg.
``(ii) In the case of a light truck:
The 2002 model year city
``If vehicle inertia weight class fuel economy is:
is:
1,500 or 1,750 lbs............................ 39.4 mpg
2,000 lbs..................................... 35.2 mpg
2,250 lbs..................................... 31.8 mpg
2,500 lbs..................................... 29.0 mpg
2,750 lbs..................................... 26.8 mpg
3,000 lbs..................................... 24.9 mpg
3,500 lbs..................................... 21.8 mpg
4,000 lbs..................................... 19.4 mpg
4,500 lbs..................................... 17.6 mpg
5,000 lbs..................................... 16.1 mpg
5,500 lbs..................................... 14.8 mpg
6,000 lbs..................................... 13.7 mpg
6,500 lbs..................................... 12.8 mpg
7,000 to 8,500 lbs............................ 12.1 mpg.
``(B) Vehicle inertia weight class.--For purposes
of subparagraph (A), the term `vehicle inertia weight
class' has the same meaning as when defined 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.).
``(4) Fuel economy.--Fuel economy with respect to any
vehicle shall be measured under rules similar to the rules
under section 4064(c).
``(5) 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.
``(6) No double benefit.--The amount of any deduction or
credit allowable under this chapter (other than the credits
allowable under this section and section 30) shall be reduced
by the amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
``(7) Recapture.--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).
``(8) Property used outside united states, etc., not
qualified.--No credit shall be allowed under subsection (a)
with respect to any property referred to in section 50(b) or
with respect to the portion of the cost of any property taken
into account under section 179.
``(9) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(10) Business carryovers allowed.--If the credit
allowable under subsection (a) for a taxable year exceeds the
limitation under subsection (g) for such taxable year, such
excess (to the extent of the credit allowable with respect to
property subject to the allowance for depreciation) shall be
allowed as a credit carryback and carryforward under rules
similar to the rules of section 39.
``(11) Interaction with motor vehicle safety standards.--
Unless 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 the motor
vehicle safety provisions of sections 30101 through 30169 of
title 49, United States Code.
``(i) Regulations.--
``(1) In general.--The Secretary shall promulgate such
regulations as necessary to carry out the provisions of this
section.
``(2) Determination of motor vehicle eligibility.--The
Secretary, after 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.
``(j) Termination.--This section shall not apply to any property
placed in service after--
``(1) in the case of a new qualified alternative fuel motor
vehicle, December 31, 2006,
``(2) in the case of a new advanced lean burn technology
motor vehicle or a new qualified hybrid motor vehicle, December
31, 2008, and
``(3) in the case of a new qualified fuel cell motor
vehicle, December 31, 2012.''.
(b) Conforming Amendments.--
(1) Section 30(d) (relating to special rules) is amended by
adding at the end the following new paragraphs:
``(5) No double benefit.--No credit shall be allowed under
this section for any motor vehicle for which a credit is also
allowed under section 30B.''.
(2) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (27), by striking the period at the end of
paragraph (28) and inserting ``, and'', and by adding at the
end the following:
``(29) to the extent provided in section 30B(h)(5).''.
(3) Section 6501(m) is amended by inserting ``30B(h)(9),''
after ``30(d)(4),''.
(4) 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:
``Sec. 30B. Alternative motor vehicle
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.
(d) Sticker Information Required at Retail Sale.--
(1) In general.--The Secretary of the Treasury shall issue
regulations under which each qualified vehicle sold at retail
shall display a notice--
(A) that such vehicle is a qualified vehicle, and
(B) that the buyer may not benefit from the credit
allowed under section 30B of the Internal Revenue Code
of 1986 if such buyer has insufficient tax liability.
(2) Qualified vehicle.--For purposes of paragraph (1), the
term ``qualified vehicle'' means a vehicle with respect to
which a credit is allowed under section 30B of the Internal
Revenue Code of 1986.
SEC. 4. SMALL ETHANOL PRODUCER CREDIT.
(a) Allocation of Alcohol Fuels Credit to Patrons of a
Cooperative.--Section 40(g) (relating to definitions and special rules
for eligible small ethanol producer credit) is amended by adding at the
end the following new paragraph:
``(6) Allocation of small ethanol producer credit to
patrons of cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a
cooperative organization described in section
1381(a), any portion of the credit determined
under subsection (a)(3) for the taxable year
may, at the election of the organization, be
apportioned pro rata among patrons of the
organization on the basis of the quantity or
value of business done with or for such patrons
for the taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year.
``(B) Treatment of organizations and patrons.--The
amount of the credit apportioned to patrons under
subparagraph (A)--
``(i) shall not be included in the amount
determined under subsection (a) with respect to
the organization for the taxable year, and
``(ii) shall be included in the amount
determined under subsection (a) for the taxable
year of each patron for which the patronage
dividends for the taxable year described in
subparagraph (A) are included in gross income.
``(C) Special rule.--If the amount of a credit
which has been apportioned to any patron under this
paragraph is decreased for any reason--
``(i) such amount shall not increase the
tax imposed on such patron, and
``(ii) the tax imposed by this chapter on
such organization shall be increased by such
amount.
The increase under clause (ii) shall not be treated as
tax imposed by this chapter for purposes of determining
the amount of any credit under this chapter or for
purposes of section 55.''.
(b) Definition of Small Ethanol Producer.--Section 40(g) (relating
to definitions and special rules for eligible small ethanol producer
credit) is amended by striking ``30,000,000'' each place it appears and
inserting ``60,000,000''.
(c) Conforming Amendment.--Section 1388 (relating to definitions
and special rules for cooperative organizations) is amended by adding
at the end the following new subsection:
``(k) Cross Reference.--
``For provisions relating to the
apportionment of the alcohol fuels credit between cooperative
organizations and their patrons, see section 40(g)(6).''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
SEC. 5. INCENTIVES FOR BIODIESEL.
(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 40 the following new section:
``SEC. 40A. BIODIESEL USED AS FUEL.
``(a) General Rule.--For purposes of section 38, the biodiesel
fuels credit determined under this section for the taxable year is an
amount equal to the sum of--
``(1) the biodiesel mixture credit, plus
``(2) the biodiesel credit.
``(b) Definition of Biodiesel Mixture Credit and Biodiesel
Credit.--For purposes of this section--
``(1) Biodiesel mixture credit.--
``(A) In general.--The biodiesel mixture credit of
any taxpayer for any taxable year is 50 cents for each
gallon of biodiesel used by the taxpayer in the
production of a qualified biodiesel mixture.
``(B) Qualified biodiesel mixture.--The term
`qualified biodiesel mixture' means a mixture of
biodiesel and a taxable fuel (within the meaning of
section 4083(a)(1)) which--
``(i) is sold by the taxpayer producing
such mixture to any person for use as a fuel,
or
``(ii) is used as a fuel by the taxpayer
producing such mixture.
``(C) Sale or use must be in trade or business,
etc.--Biodiesel used in the production of a qualified
biodiesel mixture shall be taken into account--
``(i) only if the sale or use described in
subparagraph (B) is in a trade or business of
the taxpayer, and
``(ii) for the taxable year in which such
sale or use occurs.
``(D) Casual off-farm production not eligible.--No
credit shall be allowed under this section with respect
to any casual off-farm production of a qualified
biodiesel mixture.
``(2) Biodiesel credit.--
``(A) In general.--The biodiesel credit of any
taxpayer for any taxable year is 50 cents for each
gallon of biodiesel which is not in a mixture and which
during the taxable year--
``(i) is used by the taxpayer as a fuel in
a trade or business, or
``(ii) is sold by the taxpayer at retail to
a person and placed in the fuel tank of such
person's vehicle.
``(B) User credit not to apply to biodiesel sold at
retail.--No credit shall be allowed under subparagraph
(A)(i) with respect to any biodiesel which was sold in
a retail sale described in subparagraph (A)(ii).
``(3) Credit for agri-biodiesel.--In the case of any
biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A)
shall be applied by substituting `$1.00' for `50 cents'.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which identifies
the product produced and the percentage of biodiesel and agri-
biodiesel in the product.
``(c) Coordination With Credit Against Excise Tax.--The amount of
the credit determined under this section with respect to any biodiesel
shall be properly reduced to take into account any benefit provided
with respect to such biodiesel solely by reason of the application of
section 6426.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Biodiesel.--The term `biodiesel' means the monoalkyl
esters of long chain fatty acids derived from plant or animal
matter which meet--
``(A) the registration requirements for fuels and
fuel additives established by the Environmental
Protection Agency under section 211 of the Clean Air
Act (42 U.S.C. 7545), and
``(B) the requirements of the American Society of
Testing and Materials D6751.
``(2) Agri-biodiesel.--The term `agri-biodiesel' means
biodiesel derived solely from virgin oils, including esters
derived from virgin vegetable oils from corn, soybeans,
sunflower seeds, cottonseeds, canola, crambe, rapeseeds,
safflowers, flaxseeds, rice bran, and mustard seeds, and from
animal fats.
``(3) Mixture or biodiesel not used as a fuel, etc.--
``(A) Mixtures.--If--
``(i) any credit was determined under this
section with respect to biodiesel used in the
production of any qualified biodiesel mixture,
and
``(ii) any person--
``(I) separates the biodiesel from
the mixture, or
``(II) without separation, uses the
mixture other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the rate applicable under subsection
(b)(1)(A) and the number of gallons of such biodiesel
in such mixture.
``(B) Biodiesel.--If--
``(i) any credit was determined under this
section with respect to the retail sale of any
biodiesel, and
``(ii) any person mixes such biodiesel or
uses such biodiesel other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the rate applicable under subsection
(b)(2)(A) and the number of gallons of such biodiesel.
``(C) Applicable laws.--All provisions of law,
including penalties, shall, insofar as applicable and
not inconsistent with this section, apply in respect of
any tax imposed under subparagraph (A) or (B) as if
such tax were imposed by section 4081 and not by this
chapter.
``(4) 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 sale or use
after December 31, 2005.''.
(b) Credit Treated as Part of General Business Credit.--Section
38(b) (relating to current year business credit) is amended by striking
``plus'' at the end of paragraph (16), by striking the period at the
end of paragraph (17) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(18) the biodiesel fuels credit determined under section
40A(a).''.
(c) Conforming Amendments.--
(1)(A) Section 87 is amended to read as follows:
``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.
``Gross income includes--
``(1) the amount of the alcohol fuels credit determined
with respect to the taxpayer for the taxable year under section
40(a), and
``(2) the biodiesel fuels credit determined with respect to
the taxpayer for the taxable year under section 40A(a).''.
(B) The item relating to section 87 in the table of
sections for part II of subchapter B of chapter 1 is
amended by striking ``fuel credit'' and inserting ``and
biodiesel fuels credits''.
(2) Section 196(c) is amended by striking ``and'' at the
end of paragraph (9), by striking the period at the end of
paragraph (10) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(11) the biodiesel fuels credit determined under section
40A(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding after the item
relating to section 40 the following new item:
``Sec. 40A. Biodiesel used as fuel.''.
(d) Effective Date.--The amendments made by this section shall
apply to fuel produced, and sold or used, after December 31, 2003, in
taxable years ending after such date.
SEC. 6. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX CREDIT.
(a) In General.--Subchapter B of chapter 65 (relating to rules of
special application) is amended by inserting after section 6425 the
following new section:
``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.
``(a) Allowance of Credits.--There shall be allowed as a credit
against the tax imposed by section 4081 an amount equal to the sum of--
``(1) the alcohol fuel mixture credit, plus
``(2) the biodiesel mixture credit.
``(b) Alcohol Fuel Mixture Credit.--
``(1) In general.--For purposes of this section, the
alcohol fuel mixture credit is the product of the applicable
amount and the number of gallons of alcohol used by the
taxpayer in producing any alcohol fuel mixture for sale or use
in a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in
subparagraph (B), the applicable amount is 52 cents (51
cents in the case of any sale or use after 2004).
``(B) Mixtures not containing ethanol.--In the case
of an alcohol fuel mixture in which none of the alcohol
consists of ethanol, the applicable amount is 60 cents.
``(3) Alcohol fuel mixture.--For purposes of this
subsection, the term `alcohol fuel mixture' means a mixture of
alcohol and a taxable fuel which--
``(A) is sold by the taxpayer producing such
mixture to any person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing
such mixture, or
``(C) is removed from the refinery by a person
producing such mixture.
``(4) Other definitions.--For purposes of this subsection--
``(A) Alcohol.--The term `alcohol' includes
methanol and ethanol but does not include--
``(i) alcohol produced from petroleum,
natural gas, or coal (including peat), or
``(ii) alcohol with a proof of less than
190 (determined without regard to any added
denaturants).
Such term also includes an alcohol gallon equivalent of
ethyl tertiary butyl ether or other ethers produced
from such alcohol.
``(B) Taxable fuel.--The term `taxable fuel' has
the meaning given such term by section 4083(a)(1).
``(5) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2010.
``(c) Biodiesel Mixture Credit.--
``(1) In general.--For purposes of this section, the
biodiesel mixture credit is the product of the applicable
amount and the number of gallons of biodiesel used by the
taxpayer in producing any biodiesel mixture for sale or use in
a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in
subparagraph (B), the applicable amount is 50 cents.
``(B) Amount for agri-biodiesel.--In the case of
any biodiesel which is agri-biodiesel, the applicable
amount is $1.00.
``(3) Biodiesel mixture.--For purposes of this section, the
term `biodiesel mixture' means a mixture of biodiesel and a
taxable fuel which--
``(A) is sold by the taxpayer producing such
mixture to any person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing
such mixture, or
``(C) is removed from the refinery by a person
producing such mixture.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which identifies
the product produced and the percentage of biodiesel and agri-
biodiesel in the product.
``(5) Other definitions.--Any term used in this subsection
which is also used in section 40A shall have the meaning given
such term by section 40A.
``(6) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2005.
``(d) Mixture Not Used as a Fuel, etc.--
``(1) Imposition of tax.--If--
``(A) any credit was determined under this section
with respect to alcohol or biodiesel used in the
production of any alcohol fuel mixture or biodiesel
mixture, respectively, and
``(B) any person--
``(i) separates the alcohol or biodiesel
from the mixture, or
``(ii) without separation, uses the mixture
other than as a fuel,
then there is hereby imposed on such person a tax equal
to the product of the applicable amount and the number
of gallons of such alcohol or biodiesel.
``(2) Applicable laws.--All provisions of law, including
penalties, shall, insofar as applicable and not inconsistent
with this section, apply in respect of any tax imposed under
paragraph (1) as if such tax were imposed by section 4081 and
not by this section.
``(e) Coordination With Exemption From Excise Tax.--Rules similar
to the rules under section 40(c) shall apply for purposes of this
section.''.
(b) Registration Requirement.--Section 4101(a) (relating to
registration) is amended by inserting ``and every person producing
biodiesel (as defined in section 40A(d)(1)) or alcohol (as defined in
section 6426(b)(4)(A))'' after ``4091''.
(c) Additional Amendments.--
(1) Section 40(c) is amended by striking ``or section
4091(c)'' and inserting ``section 4091(c), or section 6426''.
(2) Section 40(e)(1) is amended--
(A) by striking ``2007'' in subparagraph (A) and
inserting ``2010'', and
(B) by striking ``2008'' in subparagraph (B) and
inserting ``2011''.
(3) Section 40(h) is amended--
(A) by striking ``2007'' in paragraph (1) and
inserting ``2010'', and
(B) by striking ``, 2006, or 2007'' in the table
contained in paragraph (2) and inserting ``through
2010''.
(4)(A) Subpart C of part III of subchapter A of chapter 32
is amended by adding at the end the following new section:
``SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING CERTAIN TAX
BENEFITS.
``(a) In General.--The Secretary shall require any person claiming
tax benefits under the provisions of section 34, 40, 40A, 4041(b)(2),
4041(k), 4081(c), 6426, or 6427(f) to file a quarterly return (in such
manner as the Secretary may prescribe) providing such information
relating to such benefits and the coordination of such benefits as the
Secretary may require to ensure the proper administration and use of
such benefits.
``(b) Enforcement.--With respect to any person described in
subsection (a) and subject to registration requirements under this
title, rules similar to rules of section 4222(c) shall apply with
respect to any requirement under this section.''.
(B) The table of sections for subpart C of part III of
subchapter A of chapter 32 is amended by adding at the end the
following new item:
``Sec. 4104. Information reporting for persons claiming certain
tax benefits.''.
(5) Section 6427(i)(3) is amended--
(A) by adding at the end of subparagraph (A) the
following new flush sentence:
``In the case of an electronic claim, this subparagraph
shall be applied without regard to clause (i).'', and
(B) by striking ``20 days of the date of the filing
of such claim'' in subparagraph (B) and inserting ``45
days of the date of the filing of such claim (20 days
in the case of an electronic claim)''.
(6) Section 9503(b)(1) is amended by adding at the end the
following new flush sentence:
``For purposes of this paragraph, taxes received under sections
4041 and 4081 shall be determined without reduction for credits
under section 6426.''.
(d) Clerical Amendment.--The table of sections for subchapter B of
chapter 65 is amended by inserting after the item relating to section
6425 the following new item:
``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to fuel
sold, used, or removed after December 31, 2003.
(2) Subsection (c)(4).--The amendments made by subsection
(c)(4) shall take effect on January 1, 2004.
(3) Subsection (c)(5).--The amendments made by subsection
(c)(5) shall apply to claims filed after December 31, 2004.
(f) Format for Filing.--The Secretary of the Treasury shall
prescribe the electronic format for filing claims described in section
6427(i)(3)(B) of the Internal Revenue Code of 1986 (as amended by
subsection (c)(5)(A)) not later than December 31, 2004.
SEC. 7. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO MOTOR
VEHICLES REMOVED FROM UNITED STATES.
(a) In General.--Section 4221(d)(2) (defining export) is amended by
adding at the end the following new sentence: ``Such term does not
include the delivery of a taxable fuel (as defined in section
4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or
driven out of the United States.''.
(b) Conforming Amendments.--
(1) Section 4041(g) (relating to other exemptions) is
amended by adding at the end the following new sentence:
``Paragraph (3) shall not apply to the sale for delivery of a
liquid into a fuel tank of a motor vehicle which is shipped or
driven out of the United States.''.
(2) Clause (iv) of section 4081(a)(1)(A) (relating to tax
on removal, entry, or sale) is amended by inserting ``or at a
duty-free sales enterprise (as defined in section 555(b)(8) of
the Tariff Act of 1930)'' after ``section 4101''.
(c) Effective Date.--The amendments made by this section shall
apply to sales or deliveries made after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Sponsor introductory remarks on measure. (CR E1615)
Referred to the House Committee on Ways and Means.
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