I

106TH CONGRESS

1ST SESSION H. R. 2252

To amend the Internal Revenue Code of 1986 to provide increased tax

incentives for the purchase of alternative fuel and electric vehicles, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 17, 1999

Mr. CAMP (for himself, Mr. LEVIN, Mr. RAMSTAD, Mr. MATSUI, Ms. DUNN,

Mr. LEWIS of Kentucky, Mr. BOEHLERT, Mr. CANNON, Mr. COOK, Mrs.

NORTHUP, Mr. BILBRAY, Mr. MARKEY, Mr. BECERRA, and Mr.

MCINNIS) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

increased tax incentives for the purchase of alternative

fuel and electric 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.

4 This Act may be cited as the ‘‘Alternative Fuels Pro5 motion Act’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:
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1 (1)(A) Since 1994, the United States has im2 ported over half its oil.

3 (B) Without efforts to mitigate this dependence

4 on foreign oil, the percentage of oil imported is ex5 pected to grow to all-time highs.

6 (C) This reliance on foreign oil presents a na7 tional security risk, which Congress should address

8 through policy changes designed to increase the use

9 of domestically-available alternative transportation

10 fuels.

11 (2)(A) The importing of a majority of the oil

12 used in the United States contributes negatively to

13 the balance of trade of the United States.

14 (B) Assuring the Nation’s economic security de15 mands the development and promotion of domesti16 cally-available alternative transportation fuels.

17 (3)(A) The reliance on oil as a transportation

18 fuel has numerous negative environmental con19 sequences, including increasing air pollution and

20 greenhouse gas emissions.

21 (B) Developing alternative transportation fuels

22 will help address these environmental impacts by re23 ducing emissions.

24 (4) In order to encourage installation of alter25 native fueling infrastructure, and make alternative
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1 fuels economically favorable to the producer, dis2 tributor, marketer, and consumer, tax credits pro3 vided at the point of distribution into an alternative

4 fuel vehicle are necessary.

5 (5)(A) In the short-term, United States alter6 native fuel policy must be made fuel neutral.

7 (B) Fuel neutrality will foster private innova8 tion and commercialization using the most techno9 logically feasible and economic fuels available.

10 (C) This will allow market forces to decide the

11 alternative fuel winners and losers.

12 (6)(A) Tax credits which have been in place

13 have led to increases in the quantity and quality of

14 alternative fuel technology available today.

15 (B) Extending these credits is an efficient

16 means of promoting alternative fuel vehicles and al17 ternative fueling infrastructures.

18 (7)(A) The Federal fleet is one of the best cus19 tomers for alternative fuel vehicles due to its com20 bination of large purchasing power, tight record

21 keeping, geographic diversity, and high fuel usage.

22 (B) For these reasons, the National Energy

23 Policy Act of 1991 required Federal fleets to pur24 chase certain numbers of alternatively-fueled vehi25 cles.
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1 (C) In most cases, these requirements have not

2 been met.

3 (D) Efforts must be made to ensure that all

4 Federal agencies comply with Federal fleet purchase

5 requirement laws and executive orders.

6 SEC. 3. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

7 (a) INCREASED CREDIT FOR VEHICLES WHICH

8 MEET CERTAIN RANGE REQUIREMENTS.—

9 (1) IN GENERAL.—Section 30(a) of the Internal

10 Revenue Code of 1986 (relating to allowance of

11 credit) is amended to read as follows:

12 ‘‘(a) ALLOWANCE OF CREDIT.—

13 ‘‘(1) IN GENERAL.—There shall be allowed as a

14 credit against the tax imposed by this chapter for

15 the taxable year an amount equal to the sum of—

16 ‘‘(A) 10 percent of the cost of any quali17 fied electric vehicle placed in service by the tax18 payer during the taxable year, plus

19 ‘‘(B) in the case of any such vehicle also

20 meeting the requirement described in paragraph

21 (2), $5,000.

22 ‘‘(2) RANGE REQUIREMENT.—The requirement

23 described in this paragraph is a driving range of at

24 least 100 miles—
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1 ‘‘(A) on a single charge of the vehicle’s re2 chargeable batteries, fuel cells, or other portable

3 source of electrical current, and

4 ‘‘(B) measured pursuant to the urban dy5 namometer schedules under appendix I to part

6 86 of title 40, Code of Federal Regulations.’’.

7 (2) CONFORMING AMENDMENT.—Section

8 30(b)(1) of the Internal Revenue Code of 1986 is

9 amended by striking ‘‘subsection (a)’’ and inserting

10 ‘‘subsection (a)(1)(A)’’.

11 (b) CREDIT EXTENDED THROUGH 2010.—

12 (1) IN GENERAL.—Section 30(e) of the Internal

13 Revenue Code of 1986 (relating to termination) is

14 amended by striking ‘‘2004’’ and inserting ‘‘2010’’.

15 (2) CONFORMING AMENDMENTS.—Section

16 30(b)(2) of such Code (relating to phaseout) is

17 amended—

18 (A) by striking ‘‘2002’’ in subparagraph

19 (A) and inserting ‘‘2008’’,

20 (B) by striking ‘‘2003’’ in subparagraph

21 (B) and inserting ‘‘2009’’, and

22 (C) by striking ‘‘2004’’ in subparagraph

23 (C) and inserting ‘‘2010’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to property placed in service after

3 the date of enactment of this Act.

4 SEC. 4. ADDITIONAL DEDUCTION FOR COST OF INSTALLA5 TION OF ALTERNATIVE FUELING STATIONS.

6 (a) IN GENERAL.—Subparagraph (A) of section

7 179A(b)(2) of the Internal Revenue Code of 1986 (relat8 ing to qualified clean-fuel vehicle refueling property) is

9 amended to read as follows:

10 ‘‘(A) IN GENERAL.—The aggregate cost

11 which may be taken into account under sub12 section (a)(1)(B) with respect to qualified

13 clean-fuel vehicle refueling property placed in

14 service during the taxable year at a location

15 shall not exceed the sum of—

16 ‘‘(i) with respect to costs not de17 scribed in clause (ii), the excess (if any)

18 of—

19 ‘‘(I) $100,000, over

20 ‘‘(II) the aggregate amount of

21 such costs taken into account under

22 subsection (a)(1)(B) by the taxpayer

23 (or any related person or predecessor)

24 with respect to property placed in
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1 service at such location for all pre2 ceding taxable years, plus

3 ‘‘(ii) the lesser of—

4 ‘‘(I) the cost of the installation of

5 such property, or

6 ‘‘(II) $30,000.’’.

7 (b) EFFECTIVE DATE.—The amendment made by

8 this section shall apply to property placed in service after

9 the date of enactment of this Act.

10 SEC. 5. CREDIT FOR RETAIL SALE OF CLEAN BURNING

11 FUELS AS MOTOR VEHICLE FUEL.

12 (a) IN GENERAL.—Subpart D of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of

14 1986 (relating to business related credits) is amended by

15 inserting after section 40 the following:

16 ‘‘SEC. 40A. CREDIT FOR RETAIL SALE OF CLEAN BURNING

17 FUELS AS MOTOR VEHICLE FUEL.

18 ‘‘(a) GENERAL RULE.—For purposes of section 38,

19 the clean burning fuel retail sales credit of any taxpayer

20 for any taxable year is 50 cents for each gasoline gallon

21 equivalent of clean burning fuel sold at retail by the tax22 payer during such year as a fuel to propel any qualified

23 motor vehicle.

24 ‘‘(b) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) CLEAN BURNING FUEL.—The term ‘clean

2 burning fuel’ means natural gas, compressed natural

3 gas, liquefied natural gas, liquefied petroleum gas,

4 hydrogen, and any liquid at least 85 percent of

5 which consists of methanol.

6 ‘‘(2) GASOLINE GALLON EQUIVALENT.—The

7 term ‘gasoline gallon equivalent’ means, with respect

8 to any clean burning fuel, the amount (determined

9 by the Secretary) of such fuel having a Btu content

10 of 114,000.

11 ‘‘(3) QUALIFIED MOTOR VEHICLE.—The term

12 ‘qualified motor vehicle’ means any motor vehicle (as

13 defined in section 179A(e)) which meets any applica14 ble Federal or State emissions standards with re15 spect to each fuel by which such vehicle is designed

16 to be propelled.

17 ‘‘(4) SOLD AT RETAIL.—

18 ‘‘(A) IN GENERAL.—The term ‘sold at re19 tail’ means the sale, for a purpose other than

20 resale, after manufacture, production, or impor21 tation.

22 ‘‘(B) USE TREATED AS SALE.—If any per23 son uses clean burning fuel as a fuel to propel

24 any qualified motor vehicle (including any use

25 after importation) before such fuel is sold at re-
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1 tail, then such use shall be treated in the same

2 manner as if such fuel were sold at retail as a

3 fuel to propel such a vehicle by such person.

4 ‘‘(c) NO DOUBLE BENEFIT.—The amount of the

5 credit determined under subsection (a) shall be reduced

6 by the amount of any deduction or credit allowable under

7 this chapter for fuel taken into account in computing the

8 amount of such credit.

9 ‘‘(d) TERMINATION.—This section shall not apply to

10 any fuel sold at retail after December 31, 2007.’’.

11 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec12 tion 38(b) of the Internal Revenue Code of 1986 (relating

13 to current year business credit) is amended by striking

14 ‘‘plus’’ at the end of paragraph (11), by striking the period

15 at the end of paragraph (12) and inserting ‘‘, plus’’, and

16 by adding at the end the following:

17 ‘‘(13) the clean burning fuel retail sales credit

18 determined under section 40A(a).’’.

19 (c) TRANSITIONAL RULE.—Section 39(d) of the In20 ternal Revenue Code of 1986 (relating to transitional

21 rules) is amended by adding at the end the following:

22 ‘‘(9) NO CARRYBACK OF SECTION 40A CREDIT

23 BEFORE EFFECTIVE DATE.—No portion of the un24 used business credit for any taxable year which is

25 attributable to the clean burning fuel retail sales
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1 credit determined under section 40A(a) may be car2 ried back to a taxable year ending before January

3 1, 1999.’’.

4 (d) CLERICAL AMENDMENT.—The table of sections

5 for subpart D of part IV of subchapter A of chapter 1

6 of the Internal Revenue Code of 1986 is amended by in7 serting after the item relating to section 40 the following:

‘‘Sec. 40A. Credit for retail sale of clean burning fuels as motor vehicle

fuel.’’.

8 (e) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to fuel sold at retail after Decem10 ber 31, 1999, in taxable years ending after such date.

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