II 

109TH CONGRESS 

1ST SESSION S. 918 

To provide for Flexible Fuel Vehicle (FFV) refueling capability at new and 

existing refueling station facilities to promote energy security and reduction of greenhouse gas emissions. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2005 

Mr. OBAMA (for himself, Mr. TALENT, and Mr. DURBIN) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL

To provide for Flexible Fuel Vehicle (FFV) refueling capability at new and existing refueling station facilities to 

promote energy security and reduction of greenhouse gas 

emissions.

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, ETC. 

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

5 ‘‘E–85 Fuel Utilization and Infrastructure Development 

6 Incentives Act of 2005’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this division an 
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1 amendment or repeal is expressed in terms of an amend2 ment to, or repeal of, a section or other provision, the ref3 erence shall be considered to be made to a section or other 

4 provision of the Internal Revenue Code of 1986. 

5 (c) TABLE OF CONTENTS.—The table of contents for 

6 this Act is as follows:

Sec. 1. Short title, etc. 

Sec. 2. Purpose. 

Sec. 3. Findings. 

Sec. 4. Incentives for the installation of alternative fuel refueling stations. 

Sec. 5. Incentives for the retail sale of alternative fuels as motor vehicle fuel.

7 SEC. 2. PURPOSE. 

8 The purpose of this Act is to decrease the dependence 

9 of the United States on foreign oil by increasing the use 

10 of high ratio blends of gasoline with a minimum 85 per11 cent domestically derived ethanol content (E–85) as an al12 ternative fuel and providing greater access to this fuel for 

13 American motorists. 

14 SEC. 3. FINDINGS. 

15 Congress finds the following: 

16 (1) The growing United States reliance on for17 eign produced petroleum and the recent escalation of 

18 crude oil prices demands that all prudent measures 

19 be undertaken to increase United States refining ca20 pacity, domestic oil production, and expanded utili21 zation of alternative forms of transportation fuels 

22 and infrastructure. 
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1 (2) Recent studies confirm the environmental 

2 and overall energy security benefits of high ratio 

3 blends of gasoline with a minimum 85 percent do4 mestically derived ethanol content (E–85), especially 

5 with regard to the reduction of greenhouse gas emis6 sions from the national on-road passenger car vehi7 cle fleet. 

8 (3) The market penetration of E–85 capable 

9 Flexible Fuel Vehicles (FFVs) now exceeds 

10 5,000,000 with an additional 1,000,000 or more 

11 FFVs expected to be added annually as automakers 

12 continue to respond positively to congressionally pro13 vided production incentives. 

14 (4) It is further recognized that actual imple15 mentation of the use of E–85 fuel has been signifi16 cantly underutilized due primarily to the lack of E–

17 85 refueling infrastructure availability and pro18 motion and that such utilization rate will continue to 

19 lag unless resources are provided to substantially ac20 celerate national refueling infrastructure develop21 ment. 

22 (5) Additionally, incentives in the form of tax 

23 credits can serve to stimulate infrastructure develop24 ment and E–85 fuel utilization. 
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1 SEC. 4. INCENTIVES FOR THE INSTALLATION OF ALTER2 NATIVE FUEL REFUELING STATIONS. 

3 (a) IN GENERAL.—Subpart B of part IV of sub4 chapter A of chapter 1 (relating to foreign tax credit, etc.) 

5 is amended by adding at the end the following new section: 

6 ‘‘SEC. 30B. ALTERNATIVE FUEL VEHICLE REFUELING PROP7 ERTY CREDIT. 

8 ‘‘(a) CREDIT ALLOWED.—There shall be allowed as 

9 a credit against the tax imposed by this chapter for the 

10 taxable year an amount equal to 50 percent of the amount 

11 paid or incurred by the taxpayer during the taxable year 

12 for the installation of qualified alternative fuel vehicle re13 fueling property. 

14 ‘‘(b) LIMITATION.— 

15 ‘‘(1) IN GENERAL.—The credit allowed under 

16 subsection (a)— 

17 ‘‘(A) with respect to any retail alternative 

18 fuel vehicle refueling property, shall not exceed 

19 $30,000, and 

20 ‘‘(B) with respect to any residential alter21 native fuel vehicle refueling property, shall not 

22 exceed $1,000. 

23 ‘‘(2) PHASEOUT.— 

24 ‘‘(A) IN GENERAL.—In the case of any 

25 qualified alternative fuel vehicle refueling prop26 erty placed in service after December 31, 2010, 
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1 the limit otherwise applicable under paragraph 

2 (1) shall be reduced by— 

3 ‘‘(i) 25 percent in the case of any al4 ternative fuel vehicle refueling property 

5 placed in service in calendar year 2011, 

6 and 

7 ‘‘(ii) 50 percent in the case of any al8 ternative fuel vehicle refueling property 

9 placed in service in calendar year 2012. 

10 ‘‘(c) YEAR CREDIT ALLOWED.—The credit allowed 

11 under subsection (a) shall be allowed in the taxable year 

12 in which the qualified alternative fuel vehicle refueling 

13 property is placed in service by the taxpayer. 

14 ‘‘(d) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) QUALIFIED ALTERNATIVE FUEL VEHICLE

16 REFUELING PROPERTY.—The term ‘qualified alter17 native fuel vehicle refueling property’ has the same 

18 meaning given for clean-fuel vehicle refueling prop19 erty by section 179A(d), but only with respect to 

20 any fuel at least 85 percent of the volume of which 

21 consists of ethanol. 

22 ‘‘(2) RESIDENTIAL ALTERNATIVE FUEL VEHI23 CLE REFUELING PROPERTY.—The term ‘residential 

24 alternative fuel vehicle refueling property’ means 

25 qualified alternative fuel vehicle refueling property 
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1 which is installed on property which is used as the 

2 principal residence (within the meaning of section 

3 121) of the taxpayer. 

4 ‘‘(3) RETAIL ALTERNATIVE FUEL VEHICLE RE5 FUELING PROPERTY.—The term ‘retail alternative 

6 fuel vehicle refueling property’ means qualified alter7 native fuel vehicle refueling property which is in8 stalled on property (other than property described in 

9 paragraph (2)) used in a trade or business of the 

10 taxpayer. 

11 ‘‘(e) APPLICATION WITH OTHER CREDITS.—The 

12 credit allowed under subsection (a) for any taxable year 

13 shall not exceed the excess (if any) of— 

14 ‘‘(1) the regular tax for the taxable year re15 duced by the sum of the credits allowable under sub16 part A and sections 27, 29, and 30, over 

17 ‘‘(2) the tentative minimum tax for the taxable 

18 year. 

19 ‘‘(f) BASIS REDUCTION.—For purposes of this title, 

20 the basis of any property shall be reduced by the portion 

21 of the cost of such property taken into account under sub22 section (a). 

23 ‘‘(g) NO DOUBLE BENEFIT.—No deduction shall be 

24 allowed under section 179A with respect to any property 
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1 with respect to which a credit is allowed under subsection 

2 (a). 

3 ‘‘(h) REFUELING PROPERTY INSTALLED FOR TAX4 EXEMPT ENTITIES.—In the case of qualified alternative 

5 fuel vehicle refueling property installed on property owned 

6 or used by an entity exempt from tax under this chapter, 

7 the person which installs such refueling property for the 

8 entity shall be treated as the taxpayer with respect to the 

9 refueling property for purposes of this section (and such 

10 refueling property shall be treated as retail alternative fuel 

11 vehicle refueling property) and the credit shall be allowed 

12 to such person, but only if the person clearly discloses to 

13 the entity in any installation contract the specific amount 

14 of the credit allowable under this section. 

15 ‘‘(i) CARRYFORWARD ALLOWED.— 

16 ‘‘(1) IN GENERAL.—If the credit amount allow17 able under subsection (a) for a taxable year exceeds 

18 the amount of the limitation under subsection (e) for 

19 such taxable year (referred to as the ‘unused credit 

20 year’ in this subsection), such excess shall be allowed 

21 as a credit carryforward for each of the 20 taxable 

22 years following the unused credit year. 

23 ‘‘(2) RULES.—Rules similar to the rules of sec24 tion 39 shall apply with respect to the credit 

25 carryforward under paragraph (1). 
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1 ‘‘(j) SPECIAL RULES.—Rules similar to the rules of 

2 paragraphs (4) and (5) of section 179A(e) shall apply. 

3 ‘‘(k) REGULATIONS.—The Secretary shall prescribe 

4 such regulations as necessary to carry out the provisions 

5 of this section. 

6 ‘‘(l) TERMINATION.—This section shall not apply to 

7 any property placed in service after December 31, 2013.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 1016(a) is amended by striking 

10 ‘‘and’’ at the end of paragraph (30), by striking the 

11 period at the end of paragraph (31) and inserting ‘‘, 

12 and’’, and by adding at the end the following new 

13 paragraph: 

14 ‘‘(32) to the extent provided in section 

15 30B(f).’’. 

16 (2) Section 55(c)(2) is amended by inserting 

17 ‘‘30B(e),’’ after ‘‘30(b)(3),’’. 

18 (3) The table of sections for subpart B of part 

19 IV of subchapter A of chapter 1 is amended by in20 serting after the item relating to section 30A the fol21 lowing new item:

‘‘Sec. 30B. Alternative fuel vehicle refueling property credit.’’.

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

23 this section shall apply to property placed in service after 

24 the date of the enactment of this Act, in taxable years 

25 ending after such date. 
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1 SEC. 5. INCENTIVES FOR THE RETAIL SALE OF ALTER2 NATIVE FUELS AS MOTOR VEHICLE FUEL. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 (relating to business related cred5 its) is amended by inserting after section 40A the fol6 lowing new section: 

7 ‘‘SEC. 40B. CREDIT FOR RETAIL SALE OF ALTERNATIVE 

8 FUELS AS MOTOR VEHICLE FUEL. 

9 ‘‘(a) GENERAL RULE.—The alternative fuel retail 

10 sales credit for any taxable year is 35 cents for each gallon 

11 of alternative fuel sold at retail by the taxpayer during 

12 such year. 

13 ‘‘(b) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) ALTERNATIVE FUEL.—The term ‘alter15 native fuel’ means any fuel at least 85 percent of the 

16 volume of which consists of ethanol. 

17 ‘‘(2) 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 alternative fuel (including any use 

24 after importation) as a fuel to propel any quali25 fied alternative fuel motor vehicle (as defined in 

26 this section) before such fuel is sold at retail, 
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1 then such use shall be treated in the same man2 ner as if such fuel were sold at retail as a fuel 

3 to propel such a vehicle by such person. 

4 ‘‘(3) QUALIFIED ALTERNATIVE FUEL MOTOR

5 VEHICLE.—The term ‘new qualified alternative fuel 

6 motor vehicle’ means any motor vehicle— 

7 ‘‘(A) which is capable of operating on an 

8 alternative fuel, 

9 ‘‘(B) the original use of which commences 

10 with the taxpayer, 

11 ‘‘(C) which is acquired by the taxpayer for 

12 use or lease, but not for resale, and 

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

14 ‘‘(c) ELECTION TO PASS CREDIT.—A person which 

15 sells alternative fuel at retail may elect to pass the credit 

16 allowable under this section to the purchaser of such fuel 

17 or, in the event the purchaser is a tax-exempt entity or 

18 otherwise declines to accept such credit, to the person 

19 which supplied such fuel, under rules established by the 

20 Secretary. 

21 ‘‘(d) PASS-THRU IN THE CASE OF ESTATES AND

22 TRUSTS.—Under regulations prescribed by the Secretary, 

23 rules similar to the rules of subsection (d) of section 52 

24 shall apply. 
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1 ‘‘(e) TERMINATION.—This section shall not apply to 

2 any fuel sold at retail after December 31, 2010.’’. 

3 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec4 tion 38(b) (relating to current year business credit) is 

5 amended by striking ‘‘plus’’ at the end of paragraph (18), 

6 by striking the period at the end of paragraph (19) and 

7 inserting ‘‘, plus’’, and by adding at the end the following 

8 new paragraph: 

9 ‘‘(20) the alternative fuel retail sales credit de10 termined under section 40B(a).’’. 

11 (c) CLERICAL AMENDMENT.—The table of sections 

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

13 is amended by inserting after the item relating to section 

14 40A the following new item:

‘‘Sec. 40B. Credit for retail sale of alternative fuels as motor vehicle fuel.’’.

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

16 this section shall apply to fuel sold at retail after the date 

17 of the enactment of this Act, in taxable years ending after 

18 such date.

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