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

Summary: Plug-in Hybrid Opportunity Act of 2007 - Amends the Internal Revenue Code to allow a tax credit for 35% of the cost of a qualified plug-in battery module (or $4,000, whichever is less) used to convert a hybrid motor vehicle to a plug-in hybrid motor vehicle. Terminates such tax credit after 2010.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Plug-in Hybrid Opportunity Act of 
2007''.

SEC. 2. CREDIT FOR CONVERSION OF HYBRID MOTOR VEHICLES TO PLUG-IN 
              HYBRID MOTOR VEHICLES.

    (a) In General.--Subsection (a) of section 30B of the Internal 
Revenue Code of 1986 (relating to the alternative motor vehicle credit) 
is amended by striking ``and'' at the end of paragraph (3), by striking 
the period at the end of paragraph (4) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(5) the plug-in battery module conversion credit 
        determined under subsection (f).''.
    (b) Plug-in Battery Module Conversion Credit.--Section 30B of such 
Code is amended by redesignating subsections (f) through (j) as 
subsections (g) through (k), respectively, and by inserting after 
subsection (e) the following new subsection:
    ``(f) Plug-in Battery Module Conversion Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        plug-in battery module conversion credit determined under this 
        subsection with respect to any qualified plug-in battery module 
        placed in service by the taxpayer during the taxable year is 35 
        percent of the cost of such module (including reasonable labor 
        costs for installation).
            ``(2) Limitation.--The amount of the credit allowed under 
        this subsection shall not exceed $4,000 with respect to any 
        qualified plug-in battery module.
            ``(3) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Qualified plug-in battery module.--The term 
                `qualified plug-in battery module' means any plug-in 
                battery module--
                            ``(i) the original use of which commences 
                        with the taxpayer,
                            ``(ii) which is acquired for use or lease 
                        by the taxpayer and not for resale, and
                            ``(iii) which is installed in a new 
                        qualified hybrid motor vehicle (as defined in 
                        subsection (d), determined without regard to 
                        subparagraph (A)(v) thereof) of the taxpayer, 
                        but only if such vehicle was not equipped with 
                        a plug-in battery module at any time prior to 
                        such installation.
                    ``(B) Plug-in battery module.--The term `plug-in 
                battery module' means, with respect to any new 
                qualified hybrid motor vehicle, an electro-chemical 
                storage device of a standardized, mass-produced design 
                of a battery manufacturer, which--
                            ``(i) has a traction battery capacity of 
                        not less than 2.5 kilowatt hours,
                            ``(ii) can be energized and recharged by 
                        plugging into an external 120 volt source of 
                        electric power,
                            ``(iii) has been tested, as installed in a 
                        new qualified hybrid motor vehicle of the same 
                        make and model year, by the National Highway 
                        Transportation Safety Administration, and 
                        determined by such Administration to be in 
                        compliance with motor vehicle and motor vehicle 
                        equipment safety standards applicable to that 
                        make and model year vehicle when installed in 
                        such motor vehicle by a mechanic with 
                        standardized training in protocols established 
                        by the battery manufacturer as part of a 
                        nationwide distribution program,
                            ``(iv) has been tested, as installed in a 
                        new qualified hybrid motor vehicle of the same 
                        make and model year, by a testing laboratory 
                        approved the Environmental Protection Agency, 
                        and such testing confirmed no effect on 
                        compliance with the emission standards 
                        applicable to such vehicle, and
                            ``(v) is certified by a battery 
                        manufacturer as meeting the requirements of 
                        clauses (i) through (iv).''.
    (c) No Recapture for Vehicles Converted to Qualified Conversion 
Hybrid Vehicles.--Paragraph (8) of section 30B(i) of such Code, as 
redesignated by this section, is amended by adding at the end the 
following: ``For purposes of the preceding sentence, a new qualified 
hybrid motor vehicle shall not be treated as ceasing to be eligible for 
the credit allowable under subsection (a) solely by reason of the 
installation of a qualified plug-in battery module described in 
subsection (f).''.
    (d) Termination.--Subsection (k) of section 30A of such Code, as 
redesignated by this section, is amended by striking ``and'' at the end 
of paragraph (3), by striking the period at the end of paragraph (4) 
and inserting ``, and'', and by adding at the end the following new 
paragraph:
            ``(5) in the case of a qualified plug-in battery module (as 
        described in subsection (f)), December 31, 2010.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.