II 

109TH CONGRESS 

1ST SESSION S. 1240 

To amend the Internal Revenue Code of 1986 to allow an investment tax 

credit for the purchase of trucks with new diesel engine technologies, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2005 

Mr. SMITH (for himself and Mrs. LINCOLN) 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 allow an 

investment tax credit for the purchase of trucks with 

new diesel engine technologies, 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. INVESTMENT CREDIT FOR TRUCKS WITH NEW 

4 DIESEL TECHNOLOGY. 

5 (a) IN GENERAL.— 

6 (1) ALLOWANCE OF CREDIT.—Subpart E of 

7 part IV of subchapter A of chapter 1 of the Internal 

8 Revenue Code of 1986 is amended by inserting after 

9 section 48 the following new section: 
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1 ‘‘SEC. 48A. NEW DIESEL TECHNOLOGY CREDIT. 

2 ‘‘(a) GENERAL RULE.—For purposes of section 46, 

3 the new diesel technology credit for any taxable year is 

4 5 percent of the cost of any qualified truck which is placed 

5 in service on or after January 1, 2007, and before Janu6 ary 1, 2008. 

7 ‘‘(b) QUALIFIED TRUCK.—For purposes of this sec8 tion, the term ‘qualified truck’ means any motor vehicle 

9 (as defined in section 30(c)(2)) which— 

10 ‘‘(1) is first placed in service on or after Janu11 ary 1, 2007, 

12 ‘‘(2) is propelled by diesel fuel, 

13 ‘‘(3) has a gross vehicle weight rating of more 

14 than 26,000 pounds, and 

15 ‘‘(4) complies with the regulations of the Envi16 ronmental Protection Agency with respect to diesel 

17 emissions for model year 2007 and later.’’. 

18 (2) CREDIT TREATED AS PART OF INVESTMENT

19 CREDIT.—Section 46 of the Internal Revenue Code 

20 of 1986 is amended by striking ‘‘and’’ at the end of 

21 paragraph (1), by striking the period at the end of 

22 paragraph (2) and inserting ‘‘, and’’, and by adding 

23 at the end the following new paragraph: 

24 ‘‘(3) the new diesel technology credit.’’. 

25 (3) CONFORMING AMENDMENTS.— 
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1 (A) Section 49(a)(1)(C) of such Code is 

2 amended by striking ‘‘and’’ at the end of clause 

3 (ii), by striking the period at the end of clause 

4 (iii) and inserting ‘‘, and’’, and by adding at the 

5 end the following new clause: 

6 ‘‘(iv) the basis of any qualified 

7 truck.’’. 

8 (B) The table of sections for subpart E of 

9 part IV of subchapter A of chapter 1 of such 

10 Code is amended by inserting after the item re11 lating to section 48 the following new item: 

‘‘Sec. 48A. New diesel technology credit.’’. 

12 (b) CREDIT ALLOWED AGAINST AMT.— 

13 (1) IN GENERAL.—Subsection (c) of section 38 

14 of the Internal Revenue Code of 1986 is amended by 

15 redesignating paragraph (5) as paragraph (6) and 

16 by inserting after paragraph (4) the following new 

17 paragraph: 

18 ‘‘(5) SPECIAL RULES FOR NEW DIESEL TECH19 NOLOGY CREDIT.— 

20 ‘‘(A) IN GENERAL.—In the case of the new 

21 diesel technology credit— 

22 ‘‘(i) this section and section 39 shall 

23 be applied separately with respect to such 

24 credit, and 
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1 ‘‘(ii) in applying paragraph (1) to 

2 such credit— 

3 ‘‘(I) the tentative minimum tax 

4 shall be treated as being zero, and 

5 ‘‘(II) the limitation under para6 graph (1) (as modified by subclause 

7 (I)) shall be reduced by the credit al8 lowed under subsection (a) for the 

9 taxable year (other than the new die10 sel technology credit). 

11 ‘‘(B) NEW DIESEL TECHNOLOGY CRED12 IT.—For purposes of this subsection, the term 

13 ‘new diesel technology credit’ means the portion 

14 of the investment credit under section 46 deter15 mined under section 48A.’’. 

16 (2) CONFORMING AMENDMENTS.—Paragraphs 

17 (2)(A)(ii)(II), (3)(A)(ii)(II), and (4)(A)(ii)(II) of 

18 section 38(c) of such Code are each amended by in19 serting ‘‘or the new diesel technology credit’’ after 

20 ‘‘the specified credits’’. 

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

22 this section shall apply to property placed in service on 

23 or after January 1, 2007, in taxable years ending after 

24 such date, under rules similar to the rules of section 48(m) 

25 of the Internal Revenue Code of 1986 (as in effect on the 
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1 day before the date of the enactment of the Revenue Rec2 onciliation Act of 1990). 

3 SEC. 2. ELECTION TO EXPENSE QUALIFIED TRUCKS. 

4 (a) IN GENERAL.—Part VI of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 179B the following new section: 

7 ‘‘SEC. 179C. ELECTION TO EXPENSE NEW DIESEL TECH8 NOLOGY TRUCKS. 

9 ‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 

10 elect to treat the cost of any qualified truck (as defined 

11 in section 48A) as an expense which is not chargeable to 

12 a capital account. Any cost so treated shall be allowed as 

13 a deduction for the taxable year in which the qualified 

14 truck is placed in service. 

15 ‘‘(b) ELECTION.— 

16 ‘‘(1) IN GENERAL.—An election under this sec17 tion for any taxable year shall be made on the tax18 payer’s return of the tax imposed by this chapter for 

19 the taxable year. Such election shall be made in such 

20 manner as the Secretary may by regulations pre21 scribe. 

22 ‘‘(2) ELECTION IRREVOCABLE.—Any election 

23 made under this section may not be revoked except 

24 with the consent of the Secretary. 
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1 ‘‘(c) TERMINATION.—This section shall not apply to 

2 property placed in service after December 31, 2007.’’. 

3 (b) CONFORMING AMENDMENT.—The table of sec4 tions for part VI of subchapter B of chapter 1 of the Inter5 nal Revenue Code of 1986 is amended by inserting after 

6 the item relating to section 179B the following new item: 

‘‘Sec. 179C. Election to expense new diesel technology trucks.’’. 

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

8 this section shall apply to property placed in service on 

9 or after January 1, 2007. 

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