To amend the Internal Revenue Code of 1986 to provide a tax credit for new qualified plug-in hybrid motor vehicles.

Summary: Amends the Internal Revenue Code to allow an alternative motor vehicle tax credit for new qualified plug-in hybrid motor vehicles. Defines such a vehicle as any new qualified hybrid motor vehicle that: (1) is a passenger automobile or light truck with a gross vehicle weight rating of not more than 8,500 pounds; (2) meets or exceeds the Bin 5 Tier II emission standard established by the Environmental Protection Agency; (3) draws propulsion energy from a traction battery of not less than 4 kWh; and (4) is equipped with a means of recharging its energy storage system from an external source of electricity.

SECTION 1. CREDIT FOR NEW QUALIFIED PLUG-IN HYBRID MOTOR VEHICLES.

    (a) In General.--Subparagraph (A) of section 30B(d)(2) of the 
Internal Revenue Code of 1986 (relating to credit amount for passenger 
automobiles and light trucks) is amended to read as follows:
                    ``(A) Credit amount for passenger automobiles and 
                light trucks.--
                            ``(i) In general.--In the case of a new 
                        qualified hybrid motor vehicle (other than a 
                        new qualified plug-in 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 subclauses (I) and 
                        (II).
                                    ``(I) Fuel economy.--The amount 
                                determined under this subclause 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 subclause 
                                is the amount which would be determined 
                                under subsection (c)(2)(B) if such 
                                vehicle were a vehicle referred to in 
                                such subsection.
                            ``(ii) New qualified plug-in hybrid motor 
                        vehicles.--In the case of a new qualified plug-
                        in 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 subclauses (I), (II), and (III).
                                    ``(I) Base amount.--The amount 
                                determined under this subclause is 
                                $3,000.
                                    ``(II) Flexible fuel.--In the case 
                                of a vehicle which is warrantied by its 
                                manufacturer to operate on a fuel 
                                described in section 30C(c)(1)(A), the 
                                amount determined under this subclause 
                                is $150.
                                    ``(III) Power of traction 
                                battery.--In the case of vehicle which 
                                draws propulsion energy from a traction 
                                battery of not less than 5 kWh, the 
                                amount determined under this subclause 
                                is $500, plus $250 for each kWh that 
                                such battery exceeds 5 kWh. The amount 
                                determined under this subclause shall 
                                not exceed $3,000.''.
    (b) New Qualified Plug-In Hybrid Motor Vehicle.--Subsection (d) of 
section 30B of such Code is amended by adding at the end the following 
new paragraph:
            ``(4) New qualified plug-in hybrid motor vehicle.--For 
        purposes of this subsection, the term `new qualified plug-in 
        hybrid motor vehicle' means any new qualified hybrid motor 
        vehicle which--
                    ``(A) 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,
                    ``(B) draws propulsion energy from a traction 
                battery of not less than 4 kWh, and
                    ``(C) is equipped with a means of recharging its 
                rechargeable energy storage system from an external 
                source of electricity.''.
    (c) Application of Limitation on Number of Hybrids Eligible for 
Credit.--
            (1) In general.--Subsection (f) of section 30B of such Code 
        is amended by adding at the end the following new paragraph:
            ``(6) Separate application to new qualified plug-in hybrid 
        motor vehicles.--In the case of a new qualified plug-in hybrid 
        motor vehicle, this subsection shall be applied--
                    ``(A) separately with respect to such vehicles by 
                treating only new qualified plug-in hybrid motor 
                vehicles as qualified vehicles,
                    ``(B) by substituting `100,000' for `60,000' in 
                paragraph (2), and
                    ``(C) by substituting `the date of the enactment of 
                paragraph (6)' for `December 31, 2005' in paragraph 
                (2).''.
            (2) Conforming amendment.--Paragraph (5) of section 30B(f) 
        of such Code is amended by inserting ``other than a new 
        qualified plug-in hybrid motor vehicle'' after ``subsection 
        (d)(2)(A)''.
    (d) 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.