To amend the Internal Revenue Code of 1986 to increase the credit amount for 2- and 3-wheeled electric highway vehicles, and for other purposes.

Summary: Electric Vehicle Advancement Act of 2010 - Amends the Internal Revenue Code, with respect to the tax credit for plug-in electric vehicles, to allow an increased tax credit for the purchase of qualified electric vehicles which are a 2- or 3-wheeled vehicles.

Defines "2- or 3-wheeled vehicle" to include a vehicle: (1) with motive power having a seat, seats, or saddle for the use of the rider or riders and designed to travel on not more than 3 wheels in contact with the ground; (2) that has an electric motor that produces in excess of 5-brake horsepower; (3) that draws propulsion from 1 or more traction batteries; and (4) that has been certified to the Department of Transportation.

Limits the number of such vehicles eligible for the credit based upon a phaseout period effective after the first 100,000 of such vehicles are manufactured.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Electric Vehicle Advancement Act of 
2010''.

SEC. 2. INCREASE IN CREDIT AMOUNT FOR 2- AND 3-WHEELED ELECTRIC HIGHWAY 
              VEHICLES.

    (a) In General.--Subsections (a) and (b) of section 30 of the 
Internal Revenue Code of 1986 are amended to read as follows:
    ``(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--
            ``(1) in the case of any qualified plug-in electric vehicle 
        placed in service by the taxpayer during the taxable year which 
        is a 2- or 3-wheeled vehicle described in subsection (d)(3), 
        the sum of--
                    ``(A) $1,000,
                    ``(B) in the case of a vehicle which draws 
                propulsion energy from a battery with not less than 2.5 
                kilowatt hours of capacity, $417, plus $417 for each 
                kilowatt hour of capacity in excess of 2.5 kilowatt 
                hours, plus
                    ``(C) in the case of a vehicle which achieves at 
                least 75 miles per gallon equivalent, $2,000, and
            ``(2) in the case of any other qualified plug-in electric 
        vehicle placed in service by the taxpayer during the taxable 
        year, 10 percent of the cost of such vehicle.
    ``(b) Dollar Limitations.--
            ``(1) Battery capacity for 2- and 3-wheeled vehicles.--The 
        amount allowed under subsection (a)(1) with respect to any 
        vehicle by reason of subparagraph (B) thereof shall not exceed 
        $5,500.
            ``(2) Total.--The amount allowed under subsection (a)(1) 
        with respect to any vehicle shall not exceed $7,500.
            ``(3) Other qualified plug-in electric vehicles.--The 
        amount of the credit allowed under subsection (a)(2) with 
        respect to any vehicle shall not exceed $2,500.''.
    (b) 2- or 3-Wheeled Motor Vehicles Described.--Subsection (d) of 
section 30 of such Code is amended by redesignating paragraphs (3) and 
(4) as paragraphs (4) and (5), respectively, and by inserting after 
paragraph (2) the following new paragraph:
            ``(3) 2- or 3-wheeled motor vehicle.--A 2- or 3-wheeled 
        vehicle described in this paragraph is a specified vehicle 
        described in paragraph (2)(B)--
                    ``(A) with motive power having a seat, seats, or 
                saddle for the use of the rider or riders and designed 
                to travel on not more than 3 wheels in contact with the 
                ground,
                    ``(B) which has an electric motor that produces in 
                excess of 5-brake horsepower,
                    ``(C) which draws propulsion from 1 or more 
                traction batteries, and
                    ``(D) which has been certified to the Department of 
                Transportation pursuant to section 567 of title 49, 
                Code of Federal Regulations, in effect on the date of 
                the manufacture of the vehicle.''.
    (c) Miles Per Gallon Equivalent.--Subsection (d) of section 30 of 
such Code, as amended by subsection (b), is amended by adding at the 
end the following new paragraph:
            ``(6) Miles per gallon equivalent.--For purposes of this 
        section, the miles per gallon equivalent with respect to any 
        vehicle shall be the combined fuel economy with respect to such 
        vehicle, as determined under section 136(a)(2)(B) of the Energy 
        Independence and Security Act of 2007.''.
    (d) Limitation on Number of 2- and 3-Wheeled Vehicles Eligible for 
Credit.--Section 30 of such Code is amended by redesignating subsection 
(f) as subsection (g) and by inserting after subsection (e) the 
following new subsection:
    ``(e) Limitation on Number of 2- and 3-Wheeled Vehicles Eligible 
for Credit.--
            ``(1) In general.--In the case of a 2- or 3-wheeled 
        electric vehicles described in subsection (d)(3) which are sold 
        during the phaseout period, only the applicable percentage of 
        the credit otherwise allowable under subsection (a) 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 2- or 3-wheeled electric 
        vehicles described in subsection (d)(3) 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 100,000.
            ``(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.--Rules similar to the rules of 
        section 30B(f)(4) shall apply for purposes of this 
        subsection.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.