To provide for Flexible Fuel Vehicle (FFV) refueling capability at new and existing refueling station facilities to promote energy security.

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Alternative Fuel 
Utilization and Infrastructure Development Incentives Act of 2005''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this division an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Purpose.
Sec. 3. Findings.
Sec. 4. Incentives for the installation of alternative fuel refueling 
                            stations.
Sec. 5. Incentives for the retail sale of alternative fuels as motor 
                            vehicle fuel.

SEC. 2. PURPOSE.

    The purpose of this Act is to decrease the dependence of the United 
States on foreign oil by increasing the use of high ratio blends of 
gasoline with a minimum 85 percent domestically derived ethanol content 
(E-85) as an alternative fuel and providing greater access to this fuel 
for American motorists.

SEC. 3. FINDINGS.

    Congress finds the following:
            (1) The growing United States reliance on foreign produced 
        petroleum and the recent escalation of crude oil prices demands 
        that all prudent measures be undertaken to increase United 
        States refining capacity, domestic oil production, and expanded 
        utilization of alternative forms of transportation fuels and 
        infrastructure.
            (2) Recent studies confirm the environmental and overall 
        energy security benefits of high ratio blends of gasoline with 
        a minimum 85 percent domestically derived ethanol content (E-
        85), especially with regard to the reduction of greenhouse gas 
        emissions from the national on-road passenger car vehicle 
        fleet.
            (3) The market penetration of E-85 capable Flexible Fuel 
        Vehicles (FFVs) now exceeds 5,000,000 with an additional 
        1,000,000 or more FFVs expected to be added annually as 
        automakers continue to respond positively to congressionally 
        provided production incentives.
            (4) It is further recognized that actual implementation of 
        the use of E-85 fuel has been significantly underutilized due 
        primarily to the lack of E-85 refueling infrastructure 
        availability and promotion and that such utilization rate will 
        continue to lag unless resources are provided to substantially 
        accelerate national refueling infrastructure development.
            (5) Additionally, incentives in the form of tax credits can 
        serve to stimulate infrastructure development and E-85 fuel 
        utilization.

SEC. 4. INCENTIVES FOR THE INSTALLATION OF ALTERNATIVE FUEL REFUELING 
              STATIONS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.) is amended by adding at the end 
the following new section:

``SEC. 30B. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
50 percent of the cost of any qualified alternative fuel vehicle 
refueling property placed in service by the taxpayer during the taxable 
year.
    ``(b) Limitation.--
            ``(1) In general.--The credit allowed under subsection (a) 
        with respect to any alternative fuel vehicle refueling property 
        shall not exceed--
                    ``(A) $30,000 in the case of a property of a 
                character subject to an allowance for depreciation, and
                    ``(B) $1,000 in any other case.
            ``(2) Phaseout.--In the case of any qualified alternative 
        fuel vehicle refueling property placed in service after 
        December 31, 2010, the limit otherwise applicable under 
        paragraph (1) shall be reduced by--
                    ``(A) 25 percent in the case of any alternative 
                fuel vehicle refueling property placed in service in 
                calendar year 2011, and
                    ``(B) 50 percent in the case of any alternative 
                fuel vehicle refueling property placed in service in 
                calendar year 2012.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified alternative fuel vehicle refueling 
        property.--Except as provided in paragraph (2), the term 
        `qualified alternative fuel vehicle refueling property' has the 
        meaning given to such term by section 179A(d), but only with 
        respect to any fuel at least 85 percent of the volume of which 
        consists of ethanol.
            ``(2) Residential property.--In the case of any property 
        installed on property which is used as the principal residence 
        (within the meaning of section 121) of the taxpayer, paragraph 
        (1) of section 179A(d) shall not apply.
    ``(d) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        29, and 30, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(e) Carryforward Allowed.--
            ``(1) In general.--If the credit amount allowable under 
        subsection (a) for a taxable year exceeds the amount of the 
        limitation under subsection (d) for such taxable year, such 
        excess shall be allowed as a credit carryforward for each of 
        the 20 taxable years following the unused credit year.
            ``(2) Rules.--Rules similar to the rules of section 39 
        shall apply with respect to the credit carryforward under 
        paragraph (1).
    ``(f) Special Rules.--For purposes of this section--
            ``(1) Basis reduction.--The basis of any property shall be 
        reduced by the portion of the cost of such property taken into 
        account under subsection (a).
            ``(2) No double benefit.--No deduction shall be allowed 
        under section 179A with respect to any property with respect to 
        which a credit is allowed under subsection (a).
            ``(3) Property used by tax-exempt entity.--In the case of 
        any qualified alternative fuel vehicle refueling property 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 property to the person or entity using such property shall 
        be treated as the taxpayer that placed such property 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 property 
        (determined without regard to subsection (d)).
            ``(4) 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.
            ``(5) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any property if the taxpayer 
        elects not to have this section apply to such property.
            ``(6) Recapture rules.--Rules similar to the rules of 
        section 179A(e)(4) shall apply.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(h) Termination.--This section shall not apply to any property 
placed in service after December 31, 2013.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (30), by striking the period at the end of 
        paragraph (31) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(32) to the extent provided in section 30B(f)(1).''.
            (2) Section 55(c)(2) is amended by inserting ``30B(e),'' 
        after ``30(b)(3),''.
            (3) Section 6501(m) is amended by inserting ``30B(f)(5),'' 
        after ``30(d)(4),''.
            (4) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30A the following new item:

``Sec. 30B. Alternative fuel vehicle refueling property credit.''.
    (c) 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.

SEC. 5. INCENTIVES FOR THE RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR 
              VEHICLE FUEL.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by inserting after 
section 40A the following new section:

``SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR 
              VEHICLE FUEL.

    ``(a) General Rule.--The alternative fuel retail sales credit for 
any taxable year is 35 cents for each gallon of alternative fuel sold 
at retail by the taxpayer during such year.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Alternative fuel.--The term `alternative fuel' means 
        any fuel at least 85 percent of the volume of which consists of 
        ethanol.
            ``(2) Sold at retail.--
                    ``(A) In general.--The term `sold at retail' means 
                the sale, for a purpose other than resale, after 
                manufacture, production, or importation.
                    ``(B) Use treated as sale.--If any person uses 
                alternative fuel (including any use after importation) 
                as a fuel to propel any qualified alternative fuel 
                motor vehicle (as defined in this section) before such 
                fuel is sold at retail, then such use shall be treated 
                in the same manner as if such fuel were sold at retail 
                as a fuel to propel such a vehicle by such person.
            ``(3) Qualified alternative fuel motor vehicle.--The term 
        `new qualified alternative fuel motor vehicle' means any motor 
        vehicle--
                    ``(A) which is capable of operating on an 
                alternative fuel,
                    ``(B) the original use of which commences with the 
                taxpayer,
                    ``(C) which is acquired by the taxpayer for use or 
                lease, but not for resale, and
                    ``(D) which is made by a manufacturer.
    ``(c) Election to Pass Credit.--A person which sells alternative 
fuel at retail may elect to pass the credit allowable under this 
section to the purchaser of such fuel or, in the event the purchaser is 
a tax-exempt entity or otherwise declines to accept such credit, to the 
person which supplied such fuel, under rules established by the 
Secretary.
    ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
regulations prescribed by the Secretary, rules similar to the rules of 
subsection (d) of section 52 shall apply.
    ``(e) Termination.--This section shall not apply to any fuel sold 
at retail after December 31, 2010.''.
    (b) Credit Treated as Business Credit.--Section 38(b) (relating to 
current year business credit) is amended by striking ``plus'' at the 
end of paragraph (18), by striking the period at the end of paragraph 
(19) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(20) the alternative fuel retail sales credit determined 
        under section 40B(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 40A the following new item:

``Sec. 40B. Credit for retail sale of alternative fuels as motor 
                            vehicle fuel.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel sold at retail after the date of the enactment of this 
Act, in taxable years ending after such date.

Summary: Alternative Fuel Utilization and Infrastructure Development Incentives Act of 2005 - Amends the Internal Revenue Code to allow tax credits for: (1) 50 percent of the cost of any residential or commercial alternative fuel vehicle refueling property to store or dispense E-85 fuel that is placed in service. And (2) the retail sale of E-85 fuel for use in an alternative fuel motor vehicle.