II 

109TH CONGRESS 

2D SESSION S. 2816 

To amend the Internal Revenue Code of 1986 to provide an income tax 

credit for the manufacture of flexible fuel motor vehicles and to extend 

and increase the income tax credit for alternative fuel refueling property, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 16, 2006 

Mr. HARKIN (for himself, Mr. LUGAR, Mr. JOHNSON, Mr. DORGAN, and Mr. 

BIDEN) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

an income tax credit for the manufacture of flexible 

fuel motor vehicles and to extend and increase the income tax credit for alternative fuel refueling property, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Biofuels Security Tax 

5 Act of 2006’’. 


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1 SEC. 2. TAX CREDIT FOR FLEXIBLE FUEL VEHICLES. 

2 (a) IN GENERAL.—Section 30B(e) of the Internal 

3 Revenue Code of 1986 (relating to new qualified alter4 native fuel motor vehicle credit) is amended by adding at 

5 the end the following new paragraph: 

6 ‘‘(6) CREDIT FOR FLEXIBLE FUEL VEHICLES.— 

7 ‘‘(A) IN GENERAL.—In the case of a flexi8 ble fuel vehicle placed in service by the taxpayer 

9 during the taxable year, the credit determined 

10 under this subsection is an amount equal to the 

11 credit which would have been allowed under this 

12 subsection if such vehicle was a qualified alter13 native fuel motor vehicle. 

14 ‘‘(B) FLEXIBLE FUEL VEHICLE.—For pur15 poses of this subsection, the term ‘flexible fuel 

16 vehicle’ means any motor vehicle— 

17 ‘‘(i) which is capable of operating on 

18 both gasoline and a blend of 85 percent 

19 ethanol fuel (E–85) and 15 percent gaso20 line, 

21 ‘‘(ii) which is certified by the manu22 facturer as having a fuel economy rating 

23 when running on E–85 that is substan24 tially the same or better than a fuel econ25 omy rating when running on gasoline only, 


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1 ‘‘(iii) the original use of which com2 mences with the taxpayer, 

3 ‘‘(iv) which is acquired by the tax4 payer for use or lease, but not for resale, 

5 and 

6 ‘‘(v) which is made by a manufac7 turer.’’. 

8 (b) PERIOD OF CREDIT.—Paragraph (4) of section 

9 30B(j) of the Internal Revenue Code of 1986 (relating to 

10 termination) is amended to read as follows: 

11 ‘‘(4) in the case of a new qualified alternative 

12 fuel vehicle— 

13 ‘‘(A) as described in paragraph (4) or (5) 

14 of subsection (e), December 31, 2010, and 

15 ‘‘(B) as described in paragraph (6) of sub16 section (e), December 31, 2016.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to property placed in service after 

19 the date of the enactment of this Act. 

20 SEC. 3. MODIFICATION OF ALTERNATIVE FUEL REFUELING 

21 PROPERTY CREDIT. 

22 (a) EXTENSION.—Section 30C(g) of the Internal 

23 Revenue Code of 1986 is amended by striking ‘‘2009’’ and 

24 inserting ‘‘2016’’. 

25 (b) EXPANSION.— 


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1 (1) RATE.—Section 30C(a) of the Internal Rev2 enue Code of 1986 is amended— 

3 (A) by striking ‘‘30 percent’’ and inserting 

4 ‘‘50 percent’’, and 

5 (B) by adding at the end the following new 

6 sentence: ‘‘In the case of any taxpayer which 

7 places in service not more than 5 qualified al8 ternative fuel vehicle refueling properties deter9 mined by taking into account any such property 

10 placed in service in all preceding taxable years, 

11 the preceding sentence shall be applied with re12 spect to any such property placed in service in 

13 the taxable year by substituting ‘75 percent’ for 

14 ‘50 percent’.’’ 

15 (2) DOLLAR LIMIT FOR SMALL RETAILERS.— 

16 Section 30C(b) of such Code is amended by adding 

17 at the end the following new flush sentence: 

18 ‘‘In the case of any taxpayer which places in service not 

19 more than 5 qualified alternative fuel vehicle refueling 

20 properties determined by taking into account any such 

21 property placed in service in all preceding taxable years, 

22 paragraph (1) shall be applied with respect to any such 

23 property placed in service in the taxable year by sub24 stituting ‘$45,000’ for ‘$30,000’.’’. 


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1 (c) ELIMINATION OF CREDIT FOR MAJOR OIL COM2 PANIES.—Section 30C(e) of the Internal Revenue Code of 

3 1986 is amended by adding at the end the following new 

4 paragraph: 

5 ‘‘(6) NONAPPLICATION OF CREDIT TO MAJOR

6 OIL COMPANIES.— 

7 ‘‘(A) IN GENERAL.—This section shall not 

8 apply to any property placed in service by a 

9 major oil company. 

10 ‘‘(B) MAJOR OIL COMPANY.—The term 

11 ‘major oil company’ means any person that, in12 dividually or together with any other person 

13 with respect to which the person has an affiliate 

14 relationship or significant ownership interest, 

15 has not less than 4,500 retail station outlets ac16 cording to the publication of the Petroleum 

17 News Annual Factbook in effect on such date 

18 of placement.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to property placed in service after 

21 the date of the enactment of this Act. 

Æ 


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