Clean-Fuel Vehicle Act of 1996

Summary: Clean-Fuel Vehicle Act of 1996 - Amends the Internal Revenue Code to revise the tax treatment for electric and other clean-fuel motor vehicles.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Clean-Fuel Vehicle 
Act of 1996''.
    (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. EXEMPTION OF ELECTRIC AND OTHER CLEAN-FUEL MOTOR VEHICLES FROM 
              LUXURY AUTOMOBILE CLASSIFICATION.

    (a) In General.--Subsection (a) of section 4001 (relating to 
imposition of tax) is amended to read as follows:
    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed on the 1st 
        retail sale of any passenger vehicle a tax equal to 10 percent 
        of the price for which so sold to the extent such price exceeds 
        the applicable amount.
            ``(2) Applicable amount.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the applicable amount is 
                $30,000.
                    ``(B) Qualified clean-fuel vehicle property.--In 
                the case of a passenger vehicle which is propelled by a 
                fuel which is not a clean-burning fuel to which is 
                installed qualified clean-fuel vehicle property (as 
                defined in section 179A(c)(1)(A)) for purposes of 
                permitting such vehicle to be propelled by a clean-
                burning fuel, the applicable amount is equal to the sum 
                of--
                            ``(i) $30,000, plus
                            ``(ii) the increase in the price for which 
                        the passenger vehicle was sold (within the 
                        meaning of section 4002) due to the 
                        installation of such property.
                    ``(C) Purpose built passenger vehicle.--
                            ``(i) In general.--In the case of a purpose 
                        built passenger vehicle, the applicable amount 
                        is equal to 150 percent of $30,000.
                            ``(ii) Purpose built passenger vehicle.--
                        For purposes of clause (i), the term `purpose 
                        built passenger vehicle' means a passenger 
                        vehicle produced by an original equipment 
                        manufacturer and designed so that the vehicle 
                        may be propelled primarily by electricity.''
    (b) Conforming Amendments.--
            (1) Subsection (e) of section 4001 (relating to inflation 
        adjustment) is amended to read as follows:
    ``(e) Inflation Adjustment.--
            ``(1) In general.--The $30,000 amount in subparagraphs (A), 
        (B)(i), and (C)(i) of subsection (a)(2) shall be increased by 
        an amount equal to--
                    ``(A) $30,000, multiplied by
                    ``(B) the cost-of-living adjustment under section 
                1(f)(3) for the calendar year in which the vehicle is 
                sold, determined by substituting `calendar year 1990' 
                for `calendar year 1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $2,000, such amount shall be rounded 
        to the next lowest multiple of $2,000.''
            (2) Subparagraph (B) of section 4003(a)(2) is amended to 
        read as follows:
                    ``(B) the appropriate applicable amount as 
                determined under section 4001(a)(2).''
    (c) Effective Date.--The amendments made by this section shall 
apply to sales and installations occurring and property placed in 
service on or after July 1, 1996.

SEC. 3. 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 amendment made by this section shall apply 
to property placed in service on or after the date of the enactment of 
this Act.

SEC. 4. 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 the 
enactment of this Act.

SEC. 5. 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, 1996.

SEC. 6. RATE OF TAX ON LIQUEFIED NATURAL GAS TO BE EQUIVALENT TO RATE 
              OF TAX ON COMPRESSED NATURAL GAS.

    (a) In General.--Paragraph (3) of section 4041(a) (relating to 
diesel fuel and special motor fuels) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) Imposition of tax.--
                            ``(i) In general.--There is hereby imposed 
                        a tax on compressed or liquefied natural gas--
                                    ``(I) sold by any person to an 
                                owner, lessee, or other operator of a 
                                motor vehicle or motorboat for use as a 
                                fuel in such motor vehicle or 
                                motorboat, or
                                    ``(II) used by any person as a fuel 
                                in a motor vehicle or motorboat unless 
                                there was a taxable sale of such gas 
                                under subclause (I).
                            ``(ii) Rate of tax.--The rate of tax 
                        imposed by this paragraph shall be--
                                    ``(I) in the case of compressed 
                                natural gas, 48.54 cents per MCF 
                                (determined at standard temperature and 
                                pressure), and
                                    ``(II) in the case of liquefied 
                                natural gas, 4.3 cents per gallon.'', 
                                and
            (2) by inserting ``or liquefied'' after ``Compressed'' in 
        the heading.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 4041(a)(2) is amended by 
        striking ``other than a Kerosene'' and inserting ``other than 
        liquefied natural gas, keresene''.
            (2) The heading for section 9503(f)(2)(D) is amended by 
        inserting ``or liquefied'' after ``Compressed''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.