To amend the Internal Revenue Code of 1986 to provide for consumer rebates for purchases of certain new passenger motor vehicles.

Summary: Clean Car Rebate Act of 2009 - Amends the Internal Revenue Code to allow a refundable tax credit for the purchase of new fuel-efficient passenger motor vehicles. Allows a $1,000 tax credit for vehicles purchased in 2009 that achieve a mile per gallon (mpg) rating of 28, and increases such credit amount to $2,500 for an mpg rating of more than 32. Increases required mpg ratings in 2010 and directs the Secretary of the Treasury, in consultation with the Administrator of the Environmental Protection Agency (EPA), to prescribe mpg ratings for such credit for taxable years beginning after 2010 to achieve specified fuel economy goals by 2015. Terminates such credit after December 31, 2014.

Directs the Secretary to establish a program for making advance payments of credit amounts to individuals who purchase vehicles that meet the mpg ratings established by this Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean Car Rebate Act of 2009''.

SEC. 2. CONSUMER REBATE FOR PURCHASES OF CERTAIN NEW PASSENGER MOTOR 
              VEHICLES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36 the following new section:

``SEC. 36A. CONSUMER REBATE FOR PURCHASES OF CERTAIN NEW PASSENGER 
              MOTOR VEHICLES.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year the applicable amount 
for each qualified vehicle placed in service by the taxpayer in the 
taxable year.
    ``(b) Applicable Amount.--For purposes of subsection (a)--
            ``(1) 2009.--In the case of a taxable year beginning in 
        2009, the applicable amount shall be determined in accordance 
        with the following table:

``If miles per gallon rating for              The applicable amount is:
        the qualified vehicle for 
        2009 is:
        Less than 28 mpg...................................         $0 
         28 mpg or more but not more than 29 mpg...........     $1,000 
        More than 29 mpg but not more than 30 mpg..........     $1,500 
        More than 30 mpg but not more than 32 mpg..........     $2,000 
        More than 32 mpg...................................     $2,500.
            ``(2) 2010.--In the case of a taxable year beginning in 
        2010, the applicable amount shall be determined in accordance 
        with the following table:

``If miles per gallon rating for              The applicable amount is:
        the qualified vehicle for 
        2010 is:
        Less than 30 mpg...................................          0 
         30 mpg or more but not more than 31 mpg...........     $1,000 
        More than 31 mpg but not more than 34 mpg..........     $1,500 
        More than 34 mpg...................................     $2,500.
            ``(3) After 2010.--For taxable years beginning after 
        December 31, 2010, the Secretary, in consultation with the 
        Environmental Protection Agency, shall prescribe tables under 
        which the applicable amount is determined in accordance with 
        the following:
                    ``(A) The applicable amount shall be determined in 
                such a manner as to create substantial consumer demand 
                by 2015 for new passenger motor vehicles with fuel 
                economy that meets or exceeds the requirements of 
                corporate average fuel economy for passenger 
                automobiles pursuant to section 32902 of title 49, 
                United States Code, otherwise required of manufacturers 
                by 2020.
                    ``(B) The aggregate amount of revenue foregone to 
                the United States Treasury for any calendar year by 
                reason of the credit allowable under this section for 
                taxable years beginning in such calendar year does not 
                exceed the sum of--
                            ``(i) the aggregate amount of such revenue 
                        foregone under this section for taxable years 
                        beginning in calendar year 2009, plus
                            ``(ii) 10 percent of the amount determined 
                        under clause (i).
    ``(c) Qualified Vehicle.--For purposes of this section, the term 
`qualified vehicle' means a motor vehicle--
            ``(1) which is subject to average fuel economy standards 
        pursuant to section 32902 of title 49, United States Code, for 
        passenger automobiles,
            ``(2) the original use of which commences with the 
        taxpayer,
            ``(3) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(4) which is made by a manufacturer.
    ``(d) Other Definitions and Special Rules.--
            ``(1) Miles per gallon rating.--The term `miles per gallon 
        rating' means the combined fuel economy estimates provided by 
        the Environmental Protection Agency.
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(3) Coordination with advance payments of credit.--With 
        respect to any taxable year, the amount which would (but for 
        this paragraph) be allowed as a credit to the taxpayer under 
        subsection (a) with respect to any qualified vehicle shall be 
        reduced (but not below zero) by the aggregate amount paid to 
        such taxpayer under section 6431 with respect to such vehicle.
            ``(4) Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed.
            ``(5) No double benefit.--
                    ``(A) In general.--Except as provided by 
                subparagraph (B), the amount of any deduction or other 
                credit allowable under this chapter for a qualified 
                vehicle shall be reduced by the amount of credit 
                allowed under subsection (a) for such vehicle for the 
                taxable year.
                    ``(B) Coordination with sections 30b and 30d.--
                Subparagraph (A) shall not apply to with respect to the 
                credit allowed under section 30B or 30D and the credit 
                allowed under subsection (a) with respect to a 
                qualified vehicle shall be in addition to any credit 
                allowed under section 30B or 30D with respect such 
                vehicle.
            ``(6) Property used by tax-exempt entity.--In the case of a 
        vehicle the use of which is described in paragraph (3) or (4) 
        of section 50(b) and which is not subject to a lease, the 
        person who sold such vehicle to the person or entity using such 
        vehicle shall be treated as the taxpayer that placed such 
        vehicle in service, but only if such person clearly discloses 
        to such person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such vehicle 
        (determined without regard to subsection (b)(2)).
            ``(7) Property used outside united states, etc, not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(8) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit (including recapture in 
        the case of a lease period of less than the economic life of a 
        vehicle).
            ``(9) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects not to have this section apply to such vehicle.
            ``(10) Interaction with air quality and motor vehicle 
        safety standards.--Unless otherwise provided in this section, a 
        motor vehicle shall not be considered eligible for a credit 
        under this section unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provision under a waiver under section 209(b) of the 
                Clean Air Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.
    ``(e) Termination.--This section shall not apply with respect to 
any property purchased after December 31, 2014.''.
    (b) Advance Payment of Credit.--Subchapter B of chapter 65 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 6431. CONSUMER REBATE FOR PURCHASES OF CERTAIN NEW PASSENGER 
              MOTOR VEHICLES.

    ``(a) General Rule.--Not later than 3 months after the date of the 
enactment of this section, the Secretary shall establish a program for 
making payments to certified individuals of the applicable amount with 
respect to a qualified vehicle.
    ``(b) Certified Individual.--For purposes of this section, the term 
`certified individual' means any individual for whom a qualified 
passenger motor vehicle eligibility certificate is in effect.
    ``(c) Qualified Passenger Motor Vehicle Eligibility Certificate.--
For purposes of this section, the term `qualified passenger motor 
vehicle eligibility certificate' means any written statement that an 
individual is entitled to a credit under section 36A if such statement 
provides such information as the Secretary may require for purposes of 
this section.
    ``(d) Timing of Payments.--The Secretary shall, subject to the 
provisions of this title, refund or credit any overpayment attributable 
to this section as rapidly as possible.
    ``(e) Regulations.--The Secretary may issue such regulations or 
other guidance as may be necessary or appropriate to carry out this 
section, including the requirement to report information or the 
establishment of other methods for verifying the correct amounts of 
payments and credits under section 36A.''.
    (c) Administrative Amendments.--
            (1) Definition of deficiency.--Section 6211(b)(4)(A) of the 
        Internal Revenue Code of 1986 is amended by inserting ``36A,'' 
        after ``36,''.
            (2) Mathematical or clerical error authority.--Section 
        6213(g)(2) of such Code is amended by striking ``and'' at the 
        end of subparagraph (L), by striking the period at the end of 
        subparagraph (M) and inserting ``, and'', and by inserting 
        after subparagraph (M) the following new subparagraph:
                    ``(N) an omission of information required pursuant 
                to section 36431(e) (relating to consumer rebate for 
                purchases of certain new passenger motor vehicles).''.
    (d) Conforming and Clerical Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36A,'' after ``36,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36 
        the following new item:

``Sec. 36A. Consumer rebate for purchases of certain new passenger 
                            motor vehicles.''.
            (3) The table of sections for subchapter B of chapter 65 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 6431. Consumer rebate for purchases of certain new passenger 
                            motor vehicles.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service in taxable years beginning after 
December 31, 2008.