I 

108TH CONGRESS 

2D SESSION H. R. 4777 

To amend the Internal Revenue Code of 1986 to repeal the phaseout of 

the credit for qualified electric vehicles, to repeal the phaseout of the 

deduction for clean-fuel vehicle property, and to exempt certain hybrid 

vehicles from the limitation on the depreciation of certain luxury automobiles. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 7, 2004 

Mr. WU 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 repeal 

the phaseout of the credit for qualified electric vehicles, 

to repeal the phaseout of the deduction for clean-fuel 

vehicle property, and to exempt certain hybrid vehicles 

from the limitation on the depreciation of certain luxury 

automobiles. 

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 Efficiency Fair5 ness Act of 2004’’. 
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1 SEC. 2. REPEAL OF PHASEOUT OF CREDIT FOR QUALIFIED 

2 ELECTRIC VEHICLES. 

3 (a) IN GENERAL.—Subsection (b) of section 30 of the 

4 Internal Revenue Code of 1986 is amended by striking 

5 paragraph (2) and by redesignating paragraph (3) as 

6 paragraph (2). 

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

8 this section shall apply to property placed in service after 

9 December 31, 2003. 

10 SEC. 3. REPEAL OF PHASEOUT OF DEDUCTION FOR CLEAN11 FUEL VEHICLE PROPERTY. 

12 (a) IN GENERAL.—Paragraph (1) of section 179A(b) 

13 of the Internal Revenue Code of 1986 is amended to read 

14 as follows: 

15 ‘‘(1) QUALIFIED CLEAN-FUEL VEHICLE PROP16 ERTY.—The cost which may be taken into account 

17 under subsection (a)(1)(A) with respect to any 

18 motor vehicle shall not exceed— 

19 ‘‘(A) in the case of a motor vehicle not de20 scribed in subparagraph (B) or (C), $2,000, 

21 ‘‘(B) in the case of any truck or van with 

22 a gross vehicle weight rating greater than 

23 10,000 pounds but not greater than 26,000 

24 pounds, $5,000, or 

25 ‘‘(C) $50,000 in the case of— 
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1 ‘‘(i) a truck or van with a gross vehi2 cle weight rating greater than 26,000 

3 pounds, or 

4 ‘‘(ii) any bus which has a seating ca5 pacity of at least 20 adults (not including 

6 the driver).’’. 

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

8 this section shall apply to property placed in service after 

9 December 31, 2003. 

10 SEC. 4. EXCEPTION FOR HYBRID VEHICLES FROM LIMITA11 TION ON DEPRECIATION OF CERTAIN LUX12 URY VEHICLES. 

13 (a) IN GENERAL.—Subparagraph (B) of section 

14 280F(d)(5) of the Internal Revenue Code of 1986 is 

15 amended by striking ‘‘and’’ at the end of clause (ii), by 

16 striking the period at the end of clause (iii) and inserting 

17 ‘‘, and’’, and by adding at the end the following new 

18 clause: 

19 ‘‘(iv) any new qualified hybrid motor 

20 vehicle.’’. 

21 (b) NEW QUALIFIED HYBRID MOTOR VEHICLE.— 

22 Subsection (d) of section 280F of such Code is amended 

23 by adding at the end the following new paragraph: 

24 ‘‘(11) NEW QUALIFIED HYBRID MOTOR VEHI25 CLE.— 
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1 ‘‘(A) The term ‘qualified hybrid motor ve2 hicle’ means a passenger automobile (deter3 mined without regard to paragraph 

4 (5)(B)(iv))— 

5 ‘‘(i) which is acquired for use or lease 

6 by the taxpayer and not for resale, 

7 ‘‘(ii) which is made by a manufac8 turer, 

9 ‘‘(iii) which draws propulsion energy 

10 from— 

11 ‘‘(I) an internal combustion or 

12 heat engine using combustible fuel, 

13 and 

14 ‘‘(II) a rechargeable onboard en15 ergy storage system which operates at 

16 no less than 100 volts and which pro17 vides a percentage of maximum avail18 able power of at least 5 percent, 

19 ‘‘(iv) which has received a certificate 

20 that such vehicle meets or exceeds the Bin 

21 5 Tier II emission level established in reg22 ulations prescribed by the Administrator of 

23 the Environmental Protection Agency 

24 under section 202(i) of the Clean Air Act 

25 for that make and model year vehicle, and 
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1 ‘‘(v) which achieves at least 125 per2 cent of the average 2002 model year city 

3 fuel economy in the vehicle inertia weight 

4 classes for the category of passenger auto5 mobile, light duty truck, or medium duty 

6 passenger vehicle (as defined and deter7 mined by the Environmental Protection 

8 Agency) to which it belongs. 

9 ‘‘(B) VEHICLE INERTIA WEIGHT CLASS10 ES.—For purposes of subparagraph (A)(v), the 

11 vehicle inertial weight classes are— 

12 ‘‘(i) 1,500 and 1,750 pounds (cal13 culated based on the 1,750 pound weight 

14 class), 

15 ‘‘(ii) 2,000 pounds, 

16 ‘‘(iii) 2,250 pounds, 

17 ‘‘(iv) 2,500 pounds, 

18 ‘‘(v) 2,750 pounds, 

19 ‘‘(vi) 3,000 pounds, 

20 ‘‘(vii) 3,500 pounds, 

21 ‘‘(viii) 4,000 pounds, 

22 ‘‘(ix) 4,500 pounds, 

23 ‘‘(x) 5,000 pounds, 

24 ‘‘(xi) 5,500 pounds, and 

25 ‘‘(xii) 6,000 pounds.’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to property placed in service after 

3 December 31, 2003. 

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