II 

110TH CONGRESS 

1ST SESSION S. 1617 

To amend the Internal Revenue Code of 1986 to provide incentives for 

plug-in electric drive motor vehicles. 

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2007 

Mr. HATCH (for himself, Ms. CANTWELL, Mr. OBAMA, Mr. KERRY, Ms. 

STABENOW, and Mr. SALAZAR) 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 

incentives for plug-in electric drive motor vehicles. 

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 ‘‘Fuel Reduction using 

5 Electrons to End Dependence On the Mid-East (FREE6 DOM) Act of 2007’’. 

7 SEC. 2. CREDIT FOR PLUG-IN ELECTRIC DRIVE MOTOR VE8 HICLES. 

9 (a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE

10 CREDIT.— 

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1 (1) IN GENERAL.—Subpart B of part IV of 

2 subchapter A of chapter 1 of the Internal Revenue 

3 Code of 1986 (relating to other credits) is amended 

4 by adding at the end the following new section: 

5 ‘‘SEC. 30D. PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE 

6 CREDIT. 

7 ‘‘(a) ALLOWANCE OF CREDIT.— 

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

9 credit against the tax imposed by this chapter for 

10 the taxable year an amount equal to the applicable 

11 amount with respect to each new qualified plug-in 

12 electric drive motor vehicle placed in service by the 

13 taxpayer during the taxable year. 

14 ‘‘(2) APPLICABLE AMOUNT.—For purposes of 

15 paragraph (1)— 

16 ‘‘(A) IN GENERAL.—The applicable 

17 amount is sum of— 

18 ‘‘(i) $2,000, plus 

19 ‘‘(ii) $400 for each kilowatt hour of 

20 traction batter capacity in excess of 2.5 

21 kilowatt hours. 

22 ‘‘(B) ADDITIONAL CREDIT FOR FLEXIBLE

23 FUEL VEHICLES.—In the case of a new quali24 fied plug-in electric drive motor vehicle which is 

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1 a flexible fuel motor vehicle, the applicable 

2 amount shall be increased by $150. 

3 ‘‘(b) LIMITATIONS.— 

4 ‘‘(1) LIMITATION BASED ON WEIGHT.—The 

5 amount of the credit allowed under subsection (a) by 

6 reason of subsection (a)(2)(A) shall not exceed— 

7 ‘‘(A) $7,500, in the case of any new quali8 fied plug-in electric drive motor vehicle with a 

9 gross vehicle weight rating of not more than 

10 10,000 pounds, 

11 ‘‘(B) $10,000, in the case of any new 

12 qualified plug-in electric drive motor vehicle 

13 with a gross vehicle weight rating of more than 

14 10,000 pounds but not more than 14,000 

15 pounds, 

16 ‘‘(C) $15,000, in the case of any new 

17 qualified plug-in electric drive motor vehicle 

18 with a gross vehicle weight rating of more than 

19 14,000 pounds but not more than 26,000 

20 pounds, and 

21 ‘‘(D) $20,000, in the case of any new 

22 qualified plug-in electric drive motor vehicle 

23 with a gross vehicle weight rating of more than 

24 26,000 pounds. 

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1 ‘‘(2) LIMITATION BASED ON AMOUNT OF

2 TAX.—The credit allowed under subsection (a) for 

3 any taxable year shall not exceed the excess of— 

4 ‘‘(A) the sum of the regular tax liability 

5 (as defined in section 26(b)) plus the tax im6 posed by section 55, over 

7 ‘‘(B) the sum of the credits allowable 

8 under subpart A and section 27 for the taxable 

9 year. 

10 ‘‘(3) LIMITATION ON NUMBER OF PASSENGER

11 VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CRED12 IT.—No credit shall be allowed under subsection (a) 

13 for any new qualified plug-in electric drive motor ve14 hicle which is a passenger vehicle or light truck in 

15 any calendar year following the calendar year which 

16 includes the first date on which the total number of 

17 such new qualified plug-in electric drive motor vehi18 cles sold for use in the United States after Decem19 ber 31, 2007, is at least 250,000. 

20 ‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

21 MOTOR VEHICLE.—For purposes of this section, the term 

22 ‘new qualified plug-in electric drive motor vehicle’ means 

23 a motor vehicle— 

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1 ‘‘(1) which draws propulsion using one or more 

2 traction batteries with an aggregate capacity of not 

3 less than 2.5 kilowatt hours, 

4 ‘‘(2) which uses an offboard source of electricity 

5 to recharge one or more such batteries, 

6 ‘‘(3) which has received a certificate of con7 formity under the Clean Air Act for that make and 

8 model year, 

9 ‘‘(4) the original use of which commences with 

10 the taxpayer, 

11 ‘‘(5) which is acquired for use or lease by the 

12 taxpayer and not for resale, and 

13 ‘‘(6) which is made by a manufacturer. 

14 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

15 For purposes of this section— 

16 ‘‘(1) MOTOR VEHICLE.—The term ‘motor vehi17 cle’ has the meaning given such term by section 

18 30(c)(2). 

19 ‘‘(2) OTHER TERMS.—The terms ‘passenger 

20 automobile’, ‘light truck’, and ‘manufacturer’ have 

21 the meanings given such terms in regulations pre22 scribed by the Administrator of the Environmental 

23 Protection Agency for purposes of the administra24 tion of title II of the Clean Air Act (42 U.S.C. 7521 

25 et seq.). 

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1 ‘‘(3) TRACTION BATTERY CAPACITY.—Traction 

2 battery capacity shall be measured in kilowatt hours 

3 from a 100 percent state of charge to a zero percent 

4 state of charge. 

5 ‘‘(4) FLEXIBLE FUEL MOTOR VEHICLE.—The 

6 term ‘flexible fuel motor vehicle’ means a motor ve7 hicle warranted by the manufacturer as capable of 

8 operating on each of the following fuels: 

9 ‘‘(A) Gasoline. 

10 ‘‘(B) A blend containing 85 percent eth11 anol and 15 percent gasoline by volume. 

12 ‘‘(C) A blend containing 85 percent meth13 anol and 15 percent gasoline by volume. 

14 ‘‘(D) Biodiesel. 

15 ‘‘(5) REDUCTION IN BASIS.—For purposes of 

16 this subtitle, the basis of any property for which a 

17 credit is allowable under subsection (a) shall be re18 duced by the amount of such credit so allowed. 

19 ‘‘(6) NO DOUBLE BENEFIT.—The amount of 

20 any deduction or other credit allowable under this 

21 chapter for a new qualified plug-in electric drive 

22 motor vehicle shall be reduced by the amount of 

23 credit allowed under subsection (a) for such vehicle 

24 for the taxable year. 

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1 ‘‘(7) PROPERTY USED BY TAX-EXEMPT ENTI2 TY.—In the case of a vehicle the use of which is de3 scribed in paragraph (3) or (4) of section 50(b) and 

4 which is not subject to a lease, the person who sold 

5 such vehicle to the person or entity using such vehi6 cle shall be treated as the taxpayer that placed such 

7 vehicle in service, but only if such person clearly dis8 closes to such person or entity in a document the 

9 amount of any credit allowable under subsection (a) 

10 with respect to such vehicle (determined without re11 gard to subsection (b)(2)). 

12 ‘‘(8) PROPERTY USED OUTSIDE UNITED

13 STATES, ETC., NOT QUALIFIED.—No credit shall be 

14 allowable under subsection (a) with respect to any 

15 property referred to in section 50(b)(1) or with re16 spect to the portion of the cost of any property 

17 taken into account under section 179. 

18 ‘‘(9) RECAPTURE.—The Secretary shall, by reg19 ulations, provide for recapturing the benefit of any 

20 credit allowable under subsection (a) with respect to 

21 any property which ceases to be property eligible for 

22 such credit (including recapture in the case of a 

23 lease period of less than the economic life of a vehi24 cle). 

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1 ‘‘(10) ELECTION TO NOT TAKE CREDIT.—No 

2 credit shall be allowed under subsection (a) for any 

3 vehicle if the taxpayer elects not to have this section 

4 apply to such vehicle. 

5 ‘‘(11) INTERACTION WITH AIR QUALITY AND

6 MOTOR VEHICLE SAFETY STANDARDS.—Unless oth7 erwise provided in this section, a motor vehicle shall 

8 not be considered eligible for a credit under this sec9 tion unless such vehicle is in compliance with— 

10 ‘‘(A) the applicable provisions of the Clean 

11 Air Act for the applicable make and model year 

12 of the vehicle (or applicable air quality provi13 sions of State law in the case of a State which 

14 has adopted such provision under a waiver 

15 under section 209(b) of the Clean Air Act), and 

16 ‘‘(B) the motor vehicle safety provisions of 

17 sections 30101 through 30169 of title 49, 

18 United States Code. 

19 ‘‘(e) REGULATIONS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), the Secretary shall promulgate such regu22 lations as necessary to carry out the provisions of 

23 this section. 

24 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER25 TAIN REGULATIONS.—The Secretary of the Treasmstockstill on PROD1PC66 with BILLS

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1 ury, in coordination with the Secretary of Transpor2 tation and the Administrator of the Environmental 

3 Protection Agency, shall prescribe such regulations 

4 as necessary to determine whether a motor vehicle 

5 meets the requirements to be eligible for a credit 

6 under this section. 

7 ‘‘(f) TERMINATION.—This section shall not apply to 

8 property purchased after December 31, 2014.’’. 

9 (2) COORDINATION WITH OTHER MOTOR VEHI10 CLE CREDITS.— 

11 (A) ELECTRIC DRIVE MOTOR VEHICLES.— 

12 Paragraph (1) of section 30(c) of the Internal 

13 Revenue Code of 1986 is amended by adding at 

14 the end the following new flush sentence: 

15 ‘‘Such term shall not include any motor vehicle 

16 which is a new qualified plug-in electric drive motor 

17 vehicle (as defined by section 30D(c)).’’. 

18 (B) NEW QUALIFIED FUEL CELL MOTOR

19 VEHICLES.—Paragraph (3) of section 30B(b) of 

20 such Code is amended by adding at the end the 

21 following new flush sentence: 

22 ‘‘Such term shall not include any motor vehicle 

23 which is a new qualified plug-in electric drive motor 

24 vehicle (as defined by section 30D(c)).’’. 

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1 (C) NEW QUALIFIED HYBRID MOTOR VEHI2 CLES.—Paragraph (3) of section 30B(d) of 

3 such Code is amended by adding at the end the 

4 following new flush sentence: 

5 ‘‘Such term shall not include any motor vehicle 

6 which is a new qualified plug-in electric drive motor 

7 vehicle (as defined by section 30D(c)).’’. 

8 (3) CONFORMING AMENDMENTS.— 

9 (A) Section 1016(a) of the Internal Rev10 enue Code of 1986 is amended by striking 

11 ‘‘and’’ at the end of paragraph (36), by striking 

12 the period at the end of paragraph (37) and in13 serting ‘‘, and’’, and by adding at the end the 

14 following new paragraph: 

15 ‘‘(38) to the extent provided in section 

16 30D(d)(5).’’. 

17 (B) Section 6501(m) of such Code is 

18 amended by inserting ‘‘30D(d)(10)’’ after 

19 ‘‘30C(e)(5)’’. 

20 (C) The table of sections for subpart B of 

21 part IV of such Code is amended by adding at 

22 the end the following new item: 

‘‘Sec. 30D. Plug-in electric drive motor vehicle credit.’’. 

23 (b) CONVERSION KITS.— 

24 (1) IN GENERAL.—Section 30B of the Internal 

25 Revenue Code of 1986 (relating to alternative motor 

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1 vehicle credit) is amended by redesignating sub2 sections (i) and (j) as subsections (j) and (k), re3 spectively, and by inserting after subsection (h) the 

4 following new subsection: 

5 ‘‘(i) PLUG-IN CONVERSION CREDIT.— 

6 ‘‘(1) IN GENERAL.—For purposes of subsection 

7 (a), the plug-in conversion credit determined under 

8 this subsection with respect to any motor vehicle 

9 which is converted to a qualified plug-in electric 

10 drive motor vehicle is the lesser of— 

11 ‘‘(A) an amount equal to— 

12 ‘‘(i) $2,000, plus 

13 ‘‘(ii) $400 for each kilowatt hour of 

14 capacity of the plug-in traction battery 

15 module installed in such vehicle in excess 

16 of 2.5 kilowatt hours, or 

17 ‘‘(B) 50 percent of the cost of the plug-in 

18 traction battery module installed in such vehicle 

19 as part of such conversion. 

20 ‘‘(2) LIMITATIONS.—The amount of the credit 

21 allowed under this subsection shall not exceed 

22 $4,000 with respect to the conversion of any motor 

23 vehicle. 

24 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 

25 purposes of this subsection— 

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1 ‘‘(A) QUALIFIED PLUG-IN ELECTRIC DRIVE

2 MOTOR VEHICLE.—The term ‘qualified plug-in 

3 electric drive motor vehicle’ means any new 

4 qualified plug-in electric drive motor vehicle (as 

5 defined in section 30D(c), determined without 

6 regard to paragraphs (4) and (6) thereof). 

7 ‘‘(B) PLUG-IN TRACTION BATTERY MOD8 ULE.—The term ‘plug-in traction battery mod9 ule’ means an electro-chemical energy storage 

10 device which— 

11 ‘‘(i) has a traction battery capacity of 

12 not less than 2.5 kilowatt hours, 

13 ‘‘(ii) is equipped with an electrical 

14 plug by means of which it can be energized 

15 and recharged when plugged into an exter16 nal source of electric power, 

17 ‘‘(iii) consists of a standardized con18 figuration and is mass produced, 

19 ‘‘(iv) has been tested and approved by 

20 the National Highway Transportation 

21 Safety Administration as compliant with 

22 applicable motor vehicle and motor vehicle 

23 equipment safety standards when installed 

24 by a mechanic with standardized training 

25 in protocols established by the battery 

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1 manufacturer as part of a nationwide dis2 tribution program, and 

3 ‘‘(v) is certified by a battery manufac4 turer as meeting the requirements of 

5 clauses (i) through (iv). 

6 ‘‘(C) CREDIT ALLOWED TO LESSOR OF

7 BATTERY MODULE.—In the case of a plug-in 

8 traction battery module which is leased to the 

9 taxpayer, the credit allowed under this sub10 section shall be allowed to the lessor of the 

11 plug-in traction battery module. 

12 ‘‘(D) CREDIT ALLOWED IN ADDITION TO

13 OTHER CREDITS.—The credit allowed under 

14 this subsection shall be allowed with respect to 

15 a motor vehicle notwithstanding whether a cred16 it has been allowed with respect to such motor 

17 vehicle under this section (other than this sub18 section) in any preceding taxable year. 

19 ‘‘(4) TERMINATION.—This subsection shall not 

20 apply to conversions made after December 31, 

21 2010.’’. 

22 (2) CREDIT TREATED AS PART OF ALTER23 NATIVE MOTOR VEHICLE CREDIT.—Section 30B(a) 

24 of such Code is amended by striking ‘‘and’’ at the 

25 end of paragraph (3), by striking the period at the 

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1 end of paragraph (4) and inserting ‘‘, and’’, and by 

2 adding at the end the following new paragraph: 

3 ‘‘(5) the plug-in conversion credit determined 

4 under subsection (i).’’. 

5 (3) NO RECAPTURE FOR VEHICLES CONVERTED

6 TO QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VE7 HICLES.—Paragraph (8) of section 30B(h) of such 

8 Code is amended by adding at the end the following: 

9 ‘‘, except that no benefit shall be recaptured if such 

10 property ceases to eligible for such credit by reason 

11 of conversion to a qualified plug-in electric drive 

12 motor vehicle.’’ 

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

14 this section shall apply to property placed in service after 

15 December 31, 2007, in taxable years beginning after such 

16 date. 

17 SEC. 3. INCENTIVES FOR MANUFACTURING FACILITIES 

18 PRODUCING PLUG-IN ELECTRIC DRIVE 

19 MOTOR VEHICLE AND COMPONENTS. 

20 (a) DEDUCTION FOR MANUFACTURING FACILI21 TIES.—Part VI of subchapter B of chapter 1 of the Inter22 nal Revenue Code of 1986 (relating to itemized deductions 

23 for individuals and corporations) is amended by inserting 

24 after section 179E the following new section: 

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1 ‘‘SEC. 179F. EXPENSING FOR MANUFACTURING FACILITIES 

2 PRODUCING PLUG-IN ELECTRIC DRIVE 

3 MOTOR VEHICLE AND COMPONENTS. 

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

5 elect to treat the applicable percentage of the cost of any 

6 qualified plug-in electric drive motor vehicle manufac7 turing facility property as an expense which is not charge8 able to a capital account. Any cost so treated shall be al9 lowed as a deduction for the taxable year in which the 

10 qualified manufacturing facility property is placed in serv11 ice. 

12 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

13 subsection (a), the applicable percentage is— 

14 ‘‘(1) 100 percent, in the case of qualified plug15 in electric drive motor vehicle manufacturing facility 

16 property which is placed in service before January 1, 

17 2013, and 

18 ‘‘(2) 50 percent, in the case of qualified plug19 in electric drive motor vehicle manufacturing facility 

20 property which is placed in service after December 

21 31, 2012, and before January 1, 2015. 

22 ‘‘(c) ELECTION.— 

23 ‘‘(1) IN GENERAL.—An election under this sec24 tion for any taxable year shall be made on the tax25 payer’s return of the tax imposed by this chapter for 

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

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1 manner as the Secretary may by regulations pre2 scribe. 

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

4 made under this section may not be revoked except 

5 with the consent of the Secretary. 

6 ‘‘(d) QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR

7 VEHICLE MANUFACTURING FACILITY PROPERTY.—For 

8 purposes of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified plug-in 

10 electric drive motor vehicle manufacturing facility 

11 property’ means any qualified property— 

12 ‘‘(A) the original use of which commences 

13 with the taxpayer, 

14 ‘‘(B) which is placed in service by the tax15 payer after the date of the enactment of this 

16 section and before January 1, 2015, and 

17 ‘‘(C) no written binding contract for the 

18 construction of which was in effect on or before 

19 the date of the enactment of this section. 

20 ‘‘(2) QUALIFIED PROPERTY.— 

21 ‘‘(A) IN GENERAL.—The term ‘qualified 

22 property’ means any property which is a facility 

23 or a portion of a facility used for the production 

24 of— 

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1 ‘‘(i) any new qualified plug-in electric 

2 drive motor vehicle (as defined by section 

3 30D(c)), or 

4 ‘‘(ii) any eligible component. 

5 ‘‘(B) ELIGIBLE COMPONENT.—The term 

6 ‘eligible component’ means any battery, any 

7 electric motor or generator, or any power con8 trol unit which is designed specifically for use 

9 in a new qualified plug-in electric drive motor 

10 vehicle (as so defined). 

11 ‘‘(e) SPECIAL RULE FOR DUAL USE PROPERTY.—In 

12 the case of any qualified plug-in electric drive motor vehi13 cle manufacturing facility property which is used to 

14 produce both qualified property and other property which 

15 is not qualified property, the amount of costs taken into 

16 account under subsection (a) shall be reduced by an 

17 amount equal to— 

18 ‘‘(1) the total amount of such costs (determined 

19 before the application of this subsection), multiplied 

20 by 

21 ‘‘(2) the percentage of property expected to be 

22 produced which is not qualified property.’’. 

23 (b) REFUND OF CREDIT FOR PRIOR YEAR MINIMUM

24 TAX LIABILITY.—Section 53 of the Internal Revenue 

25 Code of 1986 (relating to credit for prior year minimum 

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1 tax liability) is amended by adding at the end the following 

2 new subsection: 

3 ‘‘(f) ELECTION TO TREAT AMOUNTS ATTRIBUTABLE

4 TO QUALIFIED MANUFACTURING FACILITY.— 

5 ‘‘(1) IN GENERAL.—In the case of an eligible 

6 taxpayer, the amount determined under subsection 

7 (c) for the taxable year (after the application of sub8 section (e)) shall be increased by an amount equal 

9 to the applicable percentage of any qualified plug-in 

10 electric drive motor vehicle manufacturing facility 

11 property which is placed in service during the tax12 able year. 

13 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

14 of paragraph (1), the applicable percentage is— 

15 ‘‘(A) 35 percent, in the case of qualified 

16 plug-in electric drive motor vehicle manufac17 turing facility property which is placed in serv18 ice before January 1, 2013, and 

19 ‘‘(B) 17.5 percent, in the case of qualified 

20 plug-in electric drive motor vehicle manufac21 turing facility property which is placed in serv22 ice after December 31, 2012, and before Janu23 ary 1, 2015. 

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1 ‘‘(3) ELIGIBLE TAXPAYER.—For purposes of 

2 this subsection, the term ‘eligible taxpayer’ means 

3 any taxpayer— 

4 ‘‘(A) who places in service qualified plug5 in electric drive motor vehicle manufacturing fa6 cility property during the taxable year, 

7 ‘‘(B) who does not make an election under 

8 section 179F(c), and 

9 ‘‘(C) who makes an election under this 

10 subsection. 

11 ‘‘(4) OTHER DEFINITIONS AND SPECIAL

12 RULES.— 

13 ‘‘(A) QUALIFIED PLUG-IN ELECTRIC DRIVE

14 MOTOR VEHICLE MANUFACTURING FACILITY

15 PROPERTY.—The term ‘qualified plug-in electric 

16 drive motor vehicle manufacturing facility prop17 erty’ has the meaning given such term under 

18 section 179F(d). 

19 ‘‘(B) SPECIAL RULE FOR DUAL USE PROP20 ERTY.—In the case of any qualified plug-in 

21 electric drive motor vehicle manufacturing facil22 ity property which is used to produce both 

23 qualified property (as defined in section 

24 179F(d)) and other property which is not quali25 fied property, the amount of costs taken into 

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1 account under paragraph (1)shall be reduced by 

2 an amount equal to— 

3 ‘‘(i) the total amount of such costs 

4 (determined before the application of this 

5 subparagraph), multiplied by 

6 ‘‘(ii) the percentage of property ex7 pected to be produced which is not quali8 fied property. 

9 ‘‘(C) ELECTION.— 

10 ‘‘(i) IN GENERAL.—An election under 

11 this subsection for any taxable year shall 

12 be made on the taxpayer’s return of the 

13 tax imposed by this chapter for the taxable 

14 year. Such election shall be made in such 

15 manner as the Secretary may by regula16 tions prescribe. 

17 ‘‘(ii) ELECTION IRREVOCABLE.—Any 

18 election made under this subsection may 

19 not be revoked except with the consent of 

20 the Secretary. 

21 ‘‘(5) CREDIT REFUNDABLE.—For purposes of 

22 this title (other than this section), the credit allowed 

23 by reason of this subsection shall be treated as if it 

24 were allowed under subpart C.’’. 

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

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 4. CREDIT FOR UTILITY REBATES FOR CUSTOMERS 

5 PURCHASING PLUG-IN ELECTRIC DRIVE 

6 MOTOR VEHICLES. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 (relating to business related credits) is amended by 

10 adding at the end the following new section: 

11 ‘‘SEC. 45O. UTILITY REBATE CREDIT. 

12 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

13 the case of an eligible taxpayer, the utility rebate credit 

14 for any taxable year is an amount equal to 50 percent 

15 of the sum of the qualified rebates paid or accrued by the 

16 eligible taxpayer during the taxable year. 

17 ‘‘(b) LIMITATION.— 

18 ‘‘(1) IN GENERAL.—The amount of the credit 

19 allowed under subsection (a) with respect to any 

20 qualified rebate paid or accrued in any taxable year 

21 shall not exceed— 

22 ‘‘(A) $1,000, in the case of an eligible tax23 payer ranked in the first quartile in the green24 house gas emissions rankings published by the 

25 Secretary under paragraph (2), 

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1 ‘‘(B) $800, in the case of an eligible tax2 payer ranked in the second quartile of such 

3 rankings, 

4 ‘‘(C) $600, in the case of an eligible tax5 payer ranked in the third quartile of such 

6 rankings, and 

7 ‘‘(D) $400, in the case of an eligible tax8 payer ranked in the fourth quartile of such 

9 rankings. 

10 ‘‘(2) RANKING OF GREENHOUSE GAS EMIS11 SIONS.— 

12 ‘‘(A) IN GENERAL.—The Secretary, in con13 sultation with the Administrator of the Envi14 ronmental Protection Agency, shall publish, on 

15 an annual basis, a ranking of electric utilities 

16 based on the rate of greenhouse gasses emitted 

17 by each such utility. Such publication shall list 

18 the ranking of each utility by quartile, with the 

19 utilities emitting the lowest rate of greenhouse 

20 gasses in the first quartile. 

21 ‘‘(B) GREENHOUSE GAS.—For purposes of 

22 subparagraph (A), the term ‘greenhouse gas’ 

23 means— 

24 ‘‘(i) carbon dioxide; 

25 ‘‘(ii) methane; 

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1 ‘‘(iii) nitrous oxide; 

2 ‘‘(iv) hydrofluorocarbons; 

3 ‘‘(v) perfluorocarbons; and 

4 ‘‘(vi) sulfur hexafluoride. 

5 ‘‘(3) DETERMINATION OF RANKING.—The rank6 ing of an eligible taxpayer in the greenhouse gas 

7 emissions rankings published by the Secretary under 

8 paragraph (2) for any taxable year shall be deter9 mined by using the most recent such rank of such 

10 eligible taxpayer at the end of such taxable year. 

11 ‘‘(c) ELIGIBLE TAXPAYER.—For purposes of this sec12 tion, the term ‘eligible taxpayer’ means a electric utility 

13 which is included on the list of rankings for emissions of 

14 greenhouse gases published by the Secretary under sub15 section (b)(2). 

16 ‘‘(d) QUALIFIED REBATE.—For purposes of this sec17 tion, the term ‘qualified rebate’ means a rebate with re18 spect to amounts owed by a customer of an eligible tax19 payer for the cost of electricity or any service connected 

20 with supply of electricity if such rebate is paid or accrued 

21 on account of— 

22 ‘‘(1) the purchase by the customer of a new 

23 qualified plug-in electric drive motor vehicle (as de24 fined by section 30D(c)) or a qualified plug-in elecmstockstill on PROD1PC66 with BILLS

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1 tric drive motor vehicle (as defined by section 

2 30B(i)(3)), or 

3 ‘‘(2) the conversion by the customer of a motor 

4 vehicle to a qualified plug-in electric drive motor ve5 hicle (as so defined). 

6 ‘‘(e) SPECIAL RULE FOR CERTAIN TAX-EXEMPT

7 UTILITIES.— 

8 ‘‘(1) IN GENERAL.—In the case of an eligible 

9 taxpayer which is exempt from tax under this chap10 ter, the aggregate credits allowed to the eligible tax11 payer under subpart C shall be increased by the less12 er of— 

13 ‘‘(A) the credit which would be allowed 

14 under this section without regard to this sub15 section, or 

16 ‘‘(B) the amount of the payroll taxes im17 posed on the eligible taxpayer during the cal18 endar year in which the taxable year begins. 

19 ‘‘(2) PAYROLL TAXES.—For purposes of this 

20 subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘payroll 

22 taxes’ means the taxes imposed by— 

23 ‘‘(i) section 3111, and 

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1 ‘‘(ii) sections 3211(a) and 3221(a) 

2 (determined at a rate equal to the rates 

3 under section 3111). 

4 ‘‘(B) SPECIAL RULE.—A rule similar to 

5 the rule of section 24(d)(2)(C) shall apply for 

6 purposes of subparagraph (A).’’. 

7 (b) CREDIT TREATED AS PART OF GENERAL BUSI8 NESS CREDIT.—Section 38(b) of the Internal Revenue 

9 Code of 1986 is amended by striking ‘‘plus’’ at the end 

10 of paragraph (30), by striking the period at the end of 

11 paragraph (31) and inserting ‘‘, plus’’, and by adding at 

12 the end the following new paragraph: 

13 ‘‘(32) the utility rebate credit determined under 

14 section 45O(a).’’. 

15 (c) NO DOUBLE BENEFIT.—Section 280C of the In16 ternal Revenue Code of 1986 is amended by adding at the 

17 end the following new subsection: 

18 ‘‘(f) UTILITY REBATE CREDIT.—No deduction shall 

19 be allowed for that portion of any amount otherwise allow20 able as a deduction for the taxable year which is equal 

21 to the amount of the credit determined for the taxable 

22 year under section 45O(a).’’. 

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

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

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1 of the Internal Revenue Code of 1986 is amended by add2 ing at the end the following new item: 

‘‘Sec. 45O. Utility rebate credit.’’. 

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

4 this section shall apply to rebates paid or accrued in tax5 able years beginning after the date of the enactment of 

6 this Act. 

Æ 

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