To amend the Internal Revenue Code of 1986 to allow a credit against income tax to vehicle fleet operators for purchasing tires made from recycled rubber.

Summary: Tire Investment, Recovery and Extension Act of 2007 [sic]or the TIRE Act of 2007 [sic] - Amends the Internal Revenue Code to allow taxpayers who regularly use more than 100 vehicles a year in a trade or business (vehicle fleet operators) a tax credit for the purchase of new or retread tires made from recycled rubber.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tire Investment, Recovery and 
Extension Act of 2007'' or the ``TIRE Act of 2007''.

SEC. 2. FINDINGS.

            (1) The majority of rubber used by industry in the United 
        States is synthetic rubber that has been derived from 
        petroleum.
            (2) The tire industry is the largest consumer of rubber in 
        the United States, using over 3 billion pounds of rubber 
        annually to produce over 250 million tires.
            (3) Recycled rubber from scrap tires can be used in the 
        production of new tires at loadings exceeding 10 percent of the 
        weight of rubber in the tire if the particle size of the 
        recycled rubber is extremely fine (80 mesh/177 microns or 
        finer) and the particles are free from impurities such as steel 
        and fiber.
            (4) On average, the United States can save a gallon of oil 
        for every tire produced incorporating 10 percent recycled 
        rubber.
            (5) On average, for every pound of recycled rubber used as 
        an alternative to synthetic rubber, the United States will 
        prevent a pound of carbon dioxide from being released into the 
        atmosphere.
            (6) An independent study has determined that air 
        permeability in a standard tire can be reduced by up to 50 
        percent when using recycled content. If recycled content is 
        used in every passenger car in the United States, it would 
        result in a fuel savings of up to 750 million gallons per year.

SEC. 3. CREDIT FOR PURCHASES BY VEHICLE FLEET OPERATORS OF TIRES MADE 
              FROM RECYCLED RUBBER.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 450. PURCHASES BY VEHICLE FLEET OPERATORS OF TIRES MADE FROM 
              RECYCLED RUBBER.

    ``(a) Allowance of Credit.--For purposes of section 38, in the case 
of an eligible taxpayer, the recycled rubber tire credit determined 
under this section is $3 for each qualified tire purchased by the 
taxpayer during the taxable year for use on a highway motor vehicle 
used in a trade or business of the taxpayer.
    ``(b) Dollar Limitation.--
            ``(1) In general.--The credit determined under this section 
        for any taxable year shall not exceed--
                    ``(A) $10,000,000 in the case of taxable years 
                ending during the first year beginning after the date 
                of the enactment of this section,
                    ``(B) $15,000,000 in the case of taxable years 
                ending during the 2nd such year,
                    ``(C) $25,000,000 in the case of taxable years 
                ending during the 3rd, 4th, or 5th such year, and
                    ``(D) except as provided in paragraph (2), zero 
                thereafter.
            ``(2) Carryover of unused limitation.--If the limitation 
        under this subsection for any taxable year (after the 
        application of this paragraph) exceeds the credit determined 
        under this section for such year, such limitation for the 
        succeeding taxable year shall be increased by the amount of 
        such excess. No amount may be carried under the preceding 
        sentence to any taxable year ending after the 6th year 
        beginning after the date of the enactment of this section.
            ``(3) Aggregate limitation.--In no event shall the 
        aggregate credit determined under this section for a taxpayer 
        for all taxable years exceed $100,000,000.
    ``(c) Eligible Taxpayer.--For purposes of this section, the term 
`eligible taxpayer' means any person who regularly uses more than 100 
vehicles in any trade or business of such person during the taxable 
year.
    ``(d) Qualified Tire.--For purposes of this section--
            ``(1) In general.--The term `qualified tire' means--
                    ``(A) any qualified new tire, and
                    ``(B) any qualified retread tire.
            ``(2) Qualified new tire.--The term `qualified new tire' 
        means any tire (other than a retread tire) if--
                    ``(A) the tire is manufactured in the United 
                States,
                    ``(B) the original use of the tire begins with the 
                taxpayer, and
                    ``(C) at least the new tire percentage of the total 
                weight of the rubber in the tire is attributable to 
                recycled rubber powder.
            ``(3) Qualified retread tire.--The term `qualified retread 
        tire' means any retread tire if--
                    ``(A) the tire is of a type used on highway motor 
                vehicles having a gross vehicle weight rating of at 
                least 2,600 pounds,
                    ``(B) the tire is retreaded in the United States,
                    ``(C) the original use of the tire (after 
                retreading) begins with the taxpayer, and
                    ``(D) at least the retread tire percentage of the 
                total weight of the rubber in the retread portion of 
                the tire is attributable to recycled rubber powder.
            ``(4) Recycled content percentages.--The new tire 
        percentage and the retread tire percentage shall be determined 
        in accordance with the following table:

------------------------------------------------------------------------
                                                             The retread
                                              The new tire      tire
    ``If the tire is purchased  during--        percentage   percentage
                                                  is--          is--
------------------------------------------------------------------------
the 1st year after the date of the enactment            8            10
 of this section............................
the 2nd such year...........................            9            11
the 3rd such year...........................           10            12
the 4th such year...........................           11            13
the 5th such year...........................           12            14
------------------------------------------------------------------------

            ``(5) Recycled rubber powder.--The term `recycled rubber 
        powder' means recycled vulcanizate particulate rubber at a size 
        classification of 80 mesh or finer as defined in the ASTM 
        standard D5603-01.
    ``(e) Controlled Groups.--For purposes of this section, 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 one person, 
and the dollar limitation applicable under subsection (b) for any 
taxable year shall be allocated among such persons in proportion to 
their purchases of qualified tires during such year.
    ``(f) Basis Adjustment.--For purposes of this subtitle, if a credit 
is determined under this section with respect to any tire, the basis of 
such tire shall be reduced by the amount of the credit so allowed.
    ``(g) Application of Section.--This section shall apply to tires 
purchased during the 5-year period beginning on the day after the date 
of the enactment of this section.''.
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 38 of such Code is amended by 
        striking ``plus'' at the end of paragraph (30), by striking the 
        period at the end of paragraph (31) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(32) in the case of an eligible taxpayer (as defined in 
        section 45O(b)), the recycled rubber tire credit determined 
        under section 45O(a).''.
            (2) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (35), by striking 
        the period at the end of paragraph (36) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(37) to the extent provided in section 45O(f).''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 45O. Purchases by vehicle fleet operators of tires made from 
                            recycled rubber.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to purchases made after the date of the enactment of this Act in 
taxable years ending after such date.