II

104TH CONGRESS

2D SESSION S. 1848

To amend the Internal Revenue Code of 1986 to encourage the production

and use of clean-fuel vehicles, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 6, 1996

Mrs. BOXER (for herself, Mr. INOUYE, Mrs. FEINSTEIN, and Mr. KENNEDY)

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 encourage

the production and use of clean-fuel vehicles, 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; AMENDMENT OF 1986 CODE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Clean-Fuel Vehicle Act of 1996’’.

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment

9 to, or repeal of, a section or other provision, the reference
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986.

3 SEC. 2. EXEMPTION OF ELECTRIC AND OTHER CLEAN-FUEL

4 MOTOR VEHICLES FROM LUXURY AUTO5 MOBILE CLASSIFICATION.

6 (a) IN GENERAL.—Subsection (a) of section 4001

7 (relating to imposition of tax) is amended to read as fol8 lows:

9 ‘‘(a) IMPOSITION OF TAX.—

10 ‘‘(1) IN GENERAL.—There is hereby imposed on

11 the 1st retail sale of any passenger vehicle a tax

12 equal to 10 percent of the price for which so sold to

13 the extent such price exceeds the applicable amount.

14 ‘‘(2) APPLICABLE AMOUNT.—

15 ‘‘(A) IN GENERAL.—Except as provided in

16 subparagraphs (B) and (C), the applicable

17 amount is $30,000.

18 ‘‘(B) QUALIFIED CLEAN-FUEL VEHICLE

19 PROPERTY.—In the case of a passenger vehicle

20 which is propelled by a fuel which is not a

21 clean-burning fuel to which is installed qualified

22 clean-fuel vehicle property (as defined in section

23 179A(c)(1)(A)) for purposes of permitting such

24 vehicle to be propelled by a clean-burning fuel,

25 the applicable amount is equal to the sum of—
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•S 1848 IS

1 ‘‘(i) $30,000, plus

2 ‘‘(ii) the increase in the price for

3 which the passenger vehicle was sold (with4 in the meaning of section 4002) due to the

5 installation of such property.

6 ‘‘(C) PURPOSE BUILT PASSENGER VEHI7 CLE.—

8 ‘‘(i) IN GENERAL.—In the case of a

9 purpose built passenger vehicle, the appli10 cable amount is equal to 150 percent of

11 $30,000.

12 ‘‘(ii) PURPOSE BUILT PASSENGER VE13 HICLE.—For purposes of clause (i), the

14 term ‘purpose built passenger vehicle’

15 means a passenger vehicle produced by an

16 original equipment manufacturer and de17 signed so that the vehicle may be propelled

18 primarily by electricity.’’

19 (b) CONFORMING AMENDMENTS.—

20 (1) Subsection (e) of section 4001 (relating to

21 inflation adjustment) is amended to read as follows:

22 ‘‘(e) INFLATION ADJUSTMENT.—

23 ‘‘(1) IN GENERAL.—The $30,000 amount in

24 subparagraphs (A), (B)(i), and (C)(i) of subsection

25 (a)(2) shall be increased by an amount equal to—
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1 ‘‘(A) $30,000, multiplied by

2 ‘‘(B) the cost-of-living adjustment under

3 section 1(f)(3) for the calendar year in which

4 the vehicle is sold, determined by substituting

5 ‘calendar year 1990’ for ‘calendar year 1992’ in

6 subparagraph (B) thereof.

7 ‘‘(2) ROUNDING.—If any amount as adjusted

8 under paragraph (1) is not a multiple of $2,000,

9 such amount shall be rounded to the next lowest

10 multiple of $2,000.’’

11 (2) Subparagraph (B) of section 4003(a)(2) is

12 amended to read as follows:

13 ‘‘(B) the appropriate applicable amount as

14 determined under section 4001(a)(2).’’

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

16 this section shall apply to sales and installations occurring

17 and property placed in service on or after July 1, 1996.

18 SEC. 3. GOVERNMENTAL USE RESTRICTION MODIFIED FOR

19 ELECTRIC VEHICLES.

20 (a) IN GENERAL.—Paragraph (3) of section 30(d)

21 (relating to special rules) is amended by inserting ‘‘(with22 out regard to paragraph (4)(A)(i) thereof)’’ after ‘‘section

23 50(b)’’.

24 (b) CONFORMING AMENDMENT.—Paragraph (5) of

25 section 179A(e) (relating to other definitions and special
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1 rules) is amended by inserting ‘‘(without regard to para2 graph (4)(A)(i) thereof in the case of a qualified electric

3 vehicle described in subclause (I) or (II) of subsection

4 (b)(1)(A)(iii) of this section)’’ after ‘‘section 50(b)’’.

5 (c) EFFECTIVE DATE.—The amendment made by

6 this section shall apply to property placed in service on

7 or after the date of the enactment of this Act.

8 SEC. 4. LARGE ELECTRIC TRUCKS, VANS, AND BUSES ELIGI9 BLE FOR DEDUCTION FOR CLEAN-FUEL VEHI10 CLES.

11 (a) IN GENERAL.—Paragraph (3) of section 179A(c)

12 (defining qualified clean-fuel vehicle property) is amended

13 by inserting ‘‘, other than any vehicle described in sub14 clause (I) or (II) of subsection (b)(1)(A)(iii)’’ after ‘‘sec15 tion 30(c))’’.

16 (b) DENIAL OF CREDIT.—Subsection (c) of section

17 30 (relating to credit for qualified electric vehicles) is

18 amended by adding at the end the following new para19 graph:

20 ‘‘(3) DENIAL OF CREDIT FOR VEHICLES FOR

21 WHICH DEDUCTION ALLOWABLE.—The term ‘quali22 fied electric vehicle’ shall not include any vehicle de23 scribed in subclause (I) or (II) of section

24 179A(b)(1)(A)(iii).’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to property placed in service on

3 or after the date of the enactment of this Act.

4 SEC. 5. ELECTRIC VEHICLE CREDIT AMOUNT AND APPLICA5 TION AGAINST ALTERNATIVE MINIMUM TAX.

6 (a) IN GENERAL.—Subsection (a) of section 30 (re7 lating to credit for qualified electric vehicles) is amended

8 by striking ‘‘10 percent of’’.

9 (b) APPLICATION AGAINST ALTERNATIVE MINIMUM

10 TAX.—Section 30(b) (relating to limitations) is amended

11 by striking paragraph (3).

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

13 this section shall apply to taxable years beginning after

14 December 31, 1996.

15 SEC. 6. RATE OF TAX ON LIQUEFIED NATURAL GAS TO BE

16 EQUIVALENT TO RATE OF TAX ON COM17 PRESSED NATURAL GAS.

18 (a) IN GENERAL.—Paragraph (3) of section 4041(a)

19 (relating to diesel fuel and special motor fuels) is amend20 ed—

21 (1) by striking subparagraph (A) and inserting

22 the following new subparagraph:

23 ‘‘(A) IMPOSITION OF TAX.—
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1 ‘‘(i) IN GENERAL.—There is hereby

2 imposed a tax on compressed or liquefied

3 natural gas—

4 ‘‘(I) sold by any person to an

5 owner, lessee, or other operator of a

6 motor vehicle or motorboat for use as

7 a fuel in such motor vehicle or motor8 boat, or

9 ‘‘(II) used by any person as a

10 fuel in a motor vehicle or motorboat

11 unless there was a taxable sale of

12 such gas under subclause (I).

13 ‘‘(ii) RATE OF TAX.—The rate of tax

14 imposed by this paragraph shall be—

15 ‘‘(I) in the case of compressed

16 natural gas, 48.54 cents per MCF

17 (determined at standard temperature

18 and pressure), and

19 ‘‘(II) in the case of liquefied nat20 ural gas, 4.3 cents per gallon.’’, and

21 (2) by inserting ‘‘OR LIQUEFIED’’ after ‘‘COM22 PRESSED’’ in the heading.

23 (b) CONFORMING AMENDMENTS.—

24 (1) Paragraph (2) of section 4041(a)(2) is

25 amended by striking ‘‘other than a Kerosene’’ and
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1 inserting ‘‘other than liquefied natural gas,

2 keresene’’.

3 (2) The heading for section 9503(f)(2)(D) is

4 amended by inserting ‘‘OR LIQUEFIED’’ after ‘‘COM5 PRESSED’’.

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

7 this section shall take effect on the date of the enactment

8 of this Act.

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