SECTION 1. CREDIT FOR NEW NEIGHBORHOOD ELECTRIC VEHICLES.

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

``SEC. 30D. NEW NEIGHBORHOOD ELECTRIC VEHICLES.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year the amount 
paid or incurred for each new neighborhood electric vehicle placed in 
service by the taxpayer during the taxable year.
    ``(b) Dollar Limitation.--The amount allowed as a credit under 
subsection (a) shall not exceed the lesser of--
            ``(1) $1,000, and
            ``(2) the amount paid or incurred by the taxpayer for such 
        new neighborhood electric vehicle.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year (determined after application of paragraph (1)) 
                shall be treated as a credit allowable under subpart A 
                for such taxable year.
                    ``(B) Limitation based on amount of tax.--In the 
                case of a taxable year to which section 26(a)(2) does 
                not apply, the credit allowed under subsection (a) for 
                any taxable year (determined after application of 
                paragraph (1)) shall not exceed the excess of--
                            ``(i) the sum of the regular tax liability 
                        (as defined in section 26(b)) plus the tax 
                        imposed by section 55, over
                            ``(ii) the sum of the credits allowable 
                        under subpart A (other than this section) and 
                        section 27, 30, 30B, and 30C for the taxable 
                        year.
    ``(d) New Neighborhood Electric Vehicle.--For purposes of this 
section, the term `neighborhood electric vehicle' means a vehicle--
            ``(1) which draws propulsion energy solely from onboard 
        sources of a rechargeable energy storage system,
            ``(2) which is classified as a low-speed vehicle subject to 
        the requirements of Federal Motor Vehicle Safety Standard No. 
        500 (as promulgated by the National Highway Traffic Safety 
        Administration in section 571.500 of title 49, Code of Federal 
        Regulations) and which has--
                    ``(A) 4 wheels,
                    ``(B) a top attainable speed in 1 mile of more than 
                20 mph and not more than 35 mph on a paved level 
                surface, and
                    ``(C) a gross vehicle weight rating of less than 
                2,500 pounds,
            ``(3) the original use of which commences with the 
        taxpayer,
            ``(4) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(5) which is made by a manufacturer in the United States.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--The basis of any property for which 
        a credit is allowable under subsection (a) shall be reduced by 
        the amount of such credit (determined without regard to 
        subsection (b)).
            ``(2) 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.
            ``(3) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed 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.
            ``(4) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
    ``(f) Termination.--This section shall not apply to property 
purchased after December 31, 2013.''.
    (b) Credit Made Part of General Business Credit.--Section 38(b) of 
such Code is amended by striking ``plus'' at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(34) the portion of the new neighborhood electric vehicle 
        credit to which section 30D(c)(1) applies.''.
    (c) Conforming Amendments.--
            (1) Section 1016(a) 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 30D(e)(1).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(e)(4),'' after ``30C(e)(5),''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 30D. New neighborhood electric vehicles.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.
Amends the Internal Revenue Code to allow a tax credit for the purchase of a new neighborhood electric vehicle. Limits the amount of such credit to the lesser of $1,000 or the amount paid for such vehicle. Defines "new neighborhood electric vehicle" as a U.S. manufactured vehicle which: (1) draws propulsion energy solely from onboard sources of a rechargeable energy storage system; (2) is classified by the National Highway Traffic Safety Administration (NHTSA) as a low-speed vehicle; (3) has four wheels; (4) has a top attainable speed in one mile of more than 20 mph and not more than 35 mph on a paved level surface; and (5) has a gross vehicle weight rating of less than 2,500 pounds. Terminates such credit after 2013.
To amend the Internal Revenue Code of 1986 to provide a credit for the purchase of new neighborhood electric vehicles.