II 

109TH CONGRESS 

1ST SESSION S. 971 

To amend the Internal Revenue Code of 1986 to encourage and accelerate 

the nationwide production, retail sale, and consumer use of new motor 

vehicles that are powered by fuel cell technology, hybrid technology, 

battery electric technology, alternative fuels, or other advanced motor 

vehicle technologies, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 28, 2005 

Mr. HATCH (for himself, Mr. ROCKEFELLER, Mr. ENSIGN, Mr. CHAFEE, Ms. 

COLLINS, Ms. SNOWE, Mr. JEFFORDS, Mr. LIEBERMAN, and Mr. SMITH) 

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 

and accelerate the nationwide production, retail sale, and 

consumer use of new motor vehicles that are powered 

by fuel cell technology, hybrid technology, battery electric 

technology, alternative fuels, or other advanced motor 

vehicle technologies, 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, 
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1 SECTION 1. SHORT TITLE; ETC. 

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

3 ‘‘Clean Efficient Automobiles Resulting From Advanced 

4 Car Technologies (CLEAR ACT) Act of 2005’’. 

5 (b) AMENDMENT OF 1986 CODE.—Except as other6 wise expressly provided, whenever in this division an 

7 amendment or repeal is expressed in terms of an amend8 ment to, or repeal of, a section or other provision, the ref9 erence shall be considered to be made to a section or other 

10 provision of the Internal Revenue Code of 1986. 

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

12 this Act is as follows:

Sec. 1. Short title; etc. 

Sec. 2. Findings and purposes. 

Sec. 3. Alternative motor vehicle credit. 

Sec. 4. Modification of credit for qualified electric vehicles. 

Sec. 5. Credit for installation of alternative fueling stations. 

Sec. 6. Credit for retail sale of alternative fuels as motor vehicle fuel. 

Sec. 7. Study of effectiveness of certain provisions by GAO.

13 SEC. 2. FINDINGS AND PURPOSES. 

14 (a) FINDINGS.—Congress finds the following: 

15 (1) The United States is a large and diverse ge16 ographic area that includes densely populated urban 

17 and suburban areas along with large sparsely popu18 lated rural areas separated by long distances, and, 

19 as a result, Americans require reliable, efficient, and 

20 diversified modes of transportation. 

21 (2) According to the Energy Information Ad22 ministration’s (referred to in this section as the 
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1 ‘‘EIA’’) March 2000 publication ‘‘International En2 ergy Outlook’’, oil currently provides a larger share 

3 of world energy consumption than any other energy 

4 source and most of the growth in oil consumption in 

5 industrialized countries, including the United States, 

6 is projected for the transportation sector, where few 

7 alternatives are currently economical. 

8 (3) To meet all its national security, economic 

9 development, and public health and welfare needs, 

10 the United States depends on oil as the primary fuel 

11 source for the transportation of people and goods 

12 and services in intrastate and interstate commerce. 

13 (4) Since 1994, the United States has imported 

14 over 50 percent of the oil it has consumed and the 

15 EIA expects North American petroleum imports 

16 from the Persian Gulf to more than double over the 

17 forecast period of 1997–2020, with additional im18 ports from offshore Atlantic Basin producers and re19 finers; this increasingly heavy reliance on imported 

20 oil presents national security risks, contributes nega21 tively to the balance of trade of the United States, 

22 and adversely affects the United States economy, 

23 public health, and the environment. 

24 (5) The United States currently has 121 areas 

25 containing over a third of its population that do not 
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1 meet the National Ambient Air Quality Standards 

2 resulting in losses of many billions of dollars in extra 

3 economic costs and lost opportunities, immeasurable 

4 health problems, and a general reduction in the 

5 quality of life for millions of Americans. 

6 (6) Mobile sources have become a top cause of 

7 emissions in the United States. 

8 (7) This heavy reliance on imported oil and fail9 ure to meet the National Ambient Air Quality 

10 Standards demonstrate the need to accelerate devel11 opment of advanced fuel cell technology, hybrid tech12 nology, battery electric technology, and alternative 

13 fuels technology for new motor vehicles in the trans14 portation of people and goods and services as an im15 portant means of helping to reverse the trends of in16 creasing dependence on oil imports and non-attain17 ment of air quality standards, contributing to less18 ening national security risks, improving our balance 

19 of trade with other nations, increasing economic 

20 growth, improving health and quality of life for mil21 lions of Americans, and providing public health, wel22 fare, and economic benefits. 

23 (8) Despite the availability of significant Fed24 eral and private sector funds and programs to en25 courage technological advancement for the develop-
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1 ment and use of motor vehicles that are powered by 

2 fuel cell and hybrid technologies, battery electric 

3 technology, and alternative technologies, consumer 

4 acceptance of such vehicles and fuels has been re5 strained by 3 major barriers—the increased costs of 

6 these technologies, the cost of alternative fuels, and 

7 the lack of adequate infrastructure to refuel the al8 ternative-fueled vehicles. 

9 (b) PURPOSES.—The purposes of this Act are to— 

10 (1) help instill consumer confidence and accept11 ance of alternative motor vehicles by lowering the 3 

12 major barriers to this confidence and acceptance; 

13 (2) enable the accelerated introduction into the 

14 marketplace of new motor vehicle technologies with15 out adverse emission impact, while retaining a policy 

16 of fuel neutrality in order to foster private innova17 tion and commercialization and allow market forces 

18 to decide the technologies and fuels that are con19 sumer-friendly, safe, environmentally sound, and 

20 economic; 

21 (3) provide, for a limited time period, financial 

22 incentives to encourage consumers nationwide to 

23 purchase or lease new fuel cell, hybrid, battery elec24 tric, and alternative fuel motor vehicles; 
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1 (4) increase demand of such vehicles so as to 

2 make the annual production by manufacturers and 

3 retail sale of such vehicles economically and commer4 cially viable for the consumer; 

5 (5) promote and expand the use of such vehicles 

6 nationwide; and 

7 (6) promote a nationwide diversity of motor ve8 hicle fuels for advanced and hybrid technology and 

9 alternatively fueled motor vehicles. 

10 SEC. 3. ALTERNATIVE MOTOR VEHICLE CREDIT. 

11 (a) IN GENERAL.—Subpart B of part IV of sub12 chapter A of chapter 1 (relating to foreign tax credit, etc.) 

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

14 ‘‘SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT. 

15 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al16 lowed as a credit against the tax imposed by this chapter 

17 for the taxable year an amount equal to the sum of— 

18 ‘‘(1) the new qualified fuel cell motor vehicle 

19 credit determined under subsection (b), 

20 ‘‘(2) the new qualified hybrid motor vehicle 

21 credit determined under subsection (c), and 

22 ‘‘(3) the new qualified alternative fuel motor ve23 hicle credit determined under subsection (d). 

24 ‘‘(b) NEW QUALIFIED FUEL CELL MOTOR VEHICLE

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

2 (a), the new qualified fuel cell motor vehicle credit 

3 determined under this subsection with respect to a 

4 new qualified fuel cell motor vehicle placed in service 

5 by the taxpayer during the taxable year is— 

6 ‘‘(A) $8,000 ($4,000 in the case of vehicles 

7 placed in service after December 31, 2009), if 

8 such vehicle has a gross vehicle weight rating of 

9 not more than 8,500 pounds, 

10 ‘‘(B) $10,000, if such vehicle has a gross 

11 vehicle weight rating of more than 8,500 

12 pounds but not more than 14,000 pounds, 

13 ‘‘(C) $20,000, if such vehicle has a gross 

14 vehicle weight rating of more than 14,000 

15 pounds but not more than 26,000 pounds, and 

16 ‘‘(D) $40,000, if such vehicle has a gross 

17 vehicle weight rating of more than 26,000 

18 pounds. 

19 ‘‘(2) INCREASE FOR FUEL EFFICIENCY.— 

20 ‘‘(A) IN GENERAL.—The amount deter21 mined under paragraph (1)(A) with respect to 

22 a new qualified fuel cell motor vehicle which is 

23 a passenger automobile or light truck shall be 

24 increased by— 
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1 ‘‘(i) $1,000, if such vehicle achieves at 

2 least 150 percent but less than 175 per3 cent of the 2002 model year city fuel econ4 omy, 

5 ‘‘(ii) $1,500, if such vehicle achieves 

6 at least 175 percent but less than 200 per7 cent of the 2002 model year city fuel econ8 omy, 

9 ‘‘(iii) $2,000, if such vehicle achieves 

10 at least 200 percent but less than 225 per11 cent of the 2002 model year city fuel econ12 omy, 

13 ‘‘(iv) $2,500, if such vehicle achieves 

14 at least 225 percent but less than 250 per15 cent of the 2002 model year city fuel econ16 omy, 

17 ‘‘(v) $3,000, if such vehicle achieves 

18 at least 250 percent but less than 275 per19 cent of the 2002 model year city fuel econ20 omy, 

21 ‘‘(vi) $3,500, if such vehicle achieves 

22 at least 275 percent but less than 300 per23 cent of the 2002 model year city fuel econ24 omy, and 
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1 ‘‘(vii) $4,000, if such vehicle achieves 

2 at least 300 percent of the 2002 model 

3 year city fuel economy. 

4 ‘‘(B) 2002 MODEL YEAR CITY FUEL ECON5 OMY.—For purposes of subparagraph (A), the 

6 2002 model year city fuel economy with respect 

7 to a vehicle shall be determined in accordance 

8 with the following tables: 

9 ‘‘(i) In the case of a passenger auto10 mobile:

‘‘If vehicle inertia The 2002 model year city 

weight class is: fuel economy is: 

1,500 or 1,750 lbs .................................................................... 45.2 mpg

2,000 lbs .................................................................................. 39.6 mpg

2,250 lbs .................................................................................. 35.2 mpg

2,500 lbs .................................................................................. 31.7 mpg

2,750 lbs .................................................................................. 28.8 mpg

3,000 lbs .................................................................................. 26.4 mpg

3,500 lbs .................................................................................. 22.6 mpg

4,000 lbs .................................................................................. 19.8 mpg

4,500 lbs .................................................................................. 17.6 mpg

5,000 lbs .................................................................................. 15.9 mpg

5,500 lbs .................................................................................. 14.4 mpg

6,000 lbs .................................................................................. 13.2 mpg

6,500 lbs .................................................................................. 12.2 mpg

7,000 to 8,500 lbs .................................................................... 11.3 mpg.

11 ‘‘(ii) In the case of a light truck:

‘‘If vehicle inertia The 2002 model year city 

weight class is: fuel economy is: 

1,500 or 1,750 lbs .................................................................... 39.4 mpg

2,000 lbs .................................................................................. 35.2 mpg

2,250 lbs .................................................................................. 31.8 mpg

2,500 lbs .................................................................................. 29.0 mpg

2,750 lbs .................................................................................. 26.8 mpg

3,000 lbs .................................................................................. 24.9 mpg

3,500 lbs .................................................................................. 21.8 mpg

4,000 lbs .................................................................................. 19.4 mpg

4,500 lbs .................................................................................. 17.6 mpg

5,000 lbs .................................................................................. 16.1 mpg

5,500 lbs .................................................................................. 14.8 mpg

6,000 lbs .................................................................................. 13.7 mpg
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‘‘If vehicle inertia The 2002 model year city 

weight class is: fuel economy is: 

6,500 lbs .................................................................................. 12.8 mpg

7,000 to 8,500 lbs .................................................................... 12.1 mpg.

1 ‘‘(C) VEHICLE INERTIA WEIGHT CLASS.—

2 For purposes of subparagraph (B), the term 

3 ‘vehicle inertia weight class’ has the same 

4 meaning as when defined in regulations pre5 scribed by the Administrator of the Environ6 mental Protection Agency for purposes of the 

7 administration of title II of the Clean Air Act 

8 (42 U.S.C. 7521 et seq.). 

9 ‘‘(3) NEW QUALIFIED FUEL CELL MOTOR VEHI10 CLE.—For purposes of this subsection, the term 

11 ‘new qualified fuel cell motor vehicle’ means a motor 

12 vehicle— 

13 ‘‘(A) which is propelled by power derived 

14 from one or more cells which convert chemical 

15 energy directly into electricity by combining ox16 ygen with hydrogen fuel which is stored on 

17 board the vehicle in any form and may or may 

18 not require reformation prior to use, 

19 ‘‘(B) which, in the case of a passenger 

20 automobile or light truck, has received a certifi21 cate that such vehicle meets or exceeds the Bin 

22 5 Tier II emission level established in regula23 tions prescribed by the Administrator of the 
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1 Environmental Protection Agency under section 

2 202(i) of the Clean Air Act for that make and 

3 model year vehicle, 

4 ‘‘(C) the original use of which commences 

5 with the taxpayer, 

6 ‘‘(D) which is acquired for use or lease by 

7 the taxpayer and not for resale, and 

8 ‘‘(E) which is made by a manufacturer. 

9 ‘‘(c) NEW QUALIFIED HYBRID MOTOR VEHICLE

10 CREDIT.— 

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

12 (a), the new qualified hybrid motor vehicle credit de13 termined under this subsection with respect to a new 

14 qualified hybrid motor vehicle placed in service by 

15 the taxpayer during the taxable year is the credit 

16 amount determined under paragraph (2). 

17 ‘‘(2) CREDIT AMOUNT.— 

18 ‘‘(A) IN GENERAL.—The credit amount de19 termined under this paragraph shall be deter20 mined in accordance with the following tables: 

21 ‘‘(i) In the case of a new qualified hy22 brid motor vehicle which is a passenger 

23 automobile, medium duty passenger vehi24 cle, or light truck and which provides the 
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1 following percentage of the maximum 

2 available power:

‘‘If percentage of the maximum 

available power is: The credit amount is: 

At least 5 percent but less than 10 percent ............................ $250

At least 10 percent but less than 20 percent .......................... $500

At least 20 percent but less than 30 percent .......................... $750

At least 30 percent .................................................................. $1,000.

3 ‘‘(ii) In the case of a new qualified hy4 brid motor vehicle which is a heavy duty 

5 hybrid motor vehicle and which provides 

6 the following percentage of the maximum 

7 available power: 

8 ‘‘(I) If such vehicle has a gross 

9 vehicle weight rating of not more than 

10 14,000 pounds:

‘‘If percentage of the maximum 

available power is: The credit amount is: 

At least 20 percent but less than 30 percent .......................... $1,000

At least 30 percent but less than 40 percent .......................... $1,750

At least 40 percent but less than 50 percent .......................... $2,000

At least 50 percent but less than 60 percent .......................... $2,250

At least 60 percent .................................................................. $2,500.

11 ‘‘(II) If such vehicle has a gross 

12 vehicle weight rating of more than 

13 14,000 but not more than 26,000 

14 pounds:

‘‘If percentage of the maximum 

available power is: The credit amount is: 

At least 20 percent but less than 30 percent .......................... $4,000

At least 30 percent but less than 40 percent .......................... $4,500

At least 40 percent but less than 50 percent .......................... $5,000

At least 50 percent but less than 60 percent .......................... $5,500

At least 60 percent .................................................................. $6,000.
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1 ‘‘(III) If such vehicle has a gross 

2 vehicle weight rating of more than 

3 26,000 pounds:

‘‘If percentage of the maximum 

available power is: The credit amount is: 

At least 20 percent but less than 30 percent .......................... $6,000

At least 30 percent but less than 40 percent .......................... $7,000

At least 40 percent but less than 50 percent .......................... $8,000

At least 50 percent but less than 60 percent .......................... $9,000

At least 60 percent .................................................................. $10,000.

4 ‘‘(B) INCREASE FOR FUEL EFFICIENCY.— 

5 ‘‘(i) AMOUNT.—The amount deter6 mined under subparagraph (A)(i) with re7 spect to a new qualified hybrid motor vehi8 cle which is a passenger automobile or 

9 light truck shall be increased by— 

10 ‘‘(I) $500, if such vehicle 

11 achieves at least 125 percent but less 

12 than 150 percent of the 2002 model 

13 year city fuel economy, 

14 ‘‘(II) $1,000, if such vehicle 

15 achieves at least 150 percent but less 

16 than 175 percent of the 2002 model 

17 year city fuel economy, 

18 ‘‘(III) $1,500, if such vehicle 

19 achieves at least 175 percent but less 

20 than 200 percent of the 2002 model 

21 year city fuel economy, 
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1 ‘‘(IV) $2,000, if such vehicle 

2 achieves at least 200 percent but less 

3 than 225 percent of the 2002 model 

4 year city fuel economy, 

5 ‘‘(V) $2,500, if such vehicle 

6 achieves at least 225 percent but less 

7 than 250 percent of the 2002 model 

8 year city fuel economy, and 

9 ‘‘(VI) $3,000, if such vehicle 

10 achieves at least 250 percent of the 

11 2002 model year city fuel economy. 

12 ‘‘(ii) 2002 MODEL YEAR CITY FUEL

13 ECONOMY.—For purposes of clause (i), the 

14 2002 model year city fuel economy with re15 spect to a vehicle shall be determined on a 

16 gasoline gallon equivalent basis as deter17 mined by the Administrator of the Envi18 ronmental Protection Agency using the ta19 bles provided in subsection (b)(2)(B) with 

20 respect to such vehicle. 

21 ‘‘(C) INCREASE FOR ACCELERATED EMIS22 SIONS PERFORMANCE.—The amount deter23 mined under subparagraph (A)(ii) with respect 

24 to an applicable heavy duty hybrid motor vehi25 cle shall be increased by the increased credit 
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1 amount determined in accordance with the fol2 lowing tables: 

3 ‘‘(i) In the case of a vehicle which has 

4 a gross vehicle weight rating of not more 

5 than 14,000 pounds:

‘‘If the model year is: The increased credit amount is: 

2005 ......................................................................................... $2,000

2006 ......................................................................................... $1,500.

6 ‘‘(ii) In the case of a vehicle which 

7 has a gross vehicle weight rating of more 

8 than 14,000 pounds but not more than 

9 26,000 pounds:

‘‘If the model year is: The increased credit amount is: 

2005 ......................................................................................... $5,250

2006 ......................................................................................... $4,000.

10 ‘‘(iii) In the case of a vehicle which 

11 has a gross vehicle weight rating of more 

12 than 26,000 pounds:

‘‘If the model year is: The increased credit amount is: 

2005 ......................................................................................... $8,000

2006 ......................................................................................... $6,000.

13 ‘‘(D) DEFINITIONS RELATING TO CREDIT

14 AMOUNT.— 

15 ‘‘(i) APPLICABLE HEAVY DUTY HY16 BRID MOTOR VEHICLE.—For purposes of 

17 subparagraph (C), the term ‘applicable 

18 heavy duty hybrid motor vehicle’ means a 

19 heavy duty hybrid motor vehicle which is 

20 powered by an internal combustion or heat 
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1 engine which is certified as meeting the 

2 emission standards set in the regulations 

3 prescribed by the Administrator of the En4 vironmental Protection Agency for 2007 

5 and later model year diesel heavy duty en6 gines, or for 2008 and later model year 

7 ottocycle heavy duty engines, as applicable. 

8 ‘‘(ii) MAXIMUM AVAILABLE POWER.— 

9 ‘‘(I) PASSENGER AUTOMOBILE, 

10 MEDIUM DUTY PASSENGER VEHICLE, 

11 OR LIGHT TRUCK.—For purposes of 

12 subparagraph (A)(i), the term ‘max13 imum available power’ means the 

14 maximum power available from the re15 chargeable energy storage system, 

16 during a standard 10 second pulse 

17 power or equivalent test, divided by 

18 such maximum power and the SAE 

19 net power of the heat engine. 

20 ‘‘(II) HEAVY DUTY HYBRID

21 MOTOR VEHICLE.—For purposes of 

22 subparagraph (A)(ii), the term ‘max23 imum available power’ means the 

24 maximum power available from the re25 chargeable energy storage system, 
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1 during a standard 10 second pulse 

2 power or equivalent test, divided by 

3 the vehicle’s total traction power. The 

4 term ‘total traction power’ means the 

5 sum of the peak power from the re6 chargeable energy storage system and 

7 the heat engine peak power of the ve8 hicle, except that if such storage sys9 tem is the sole means by which the ve10 hicle can be driven, the total traction 

11 power is the peak power of such stor12 age system. 

13 ‘‘(3) NEW QUALIFIED HYBRID MOTOR VEHI14 CLE.—For purposes of this subsection, the term 

15 ‘new qualified hybrid motor vehicle’ means a motor 

16 vehicle— 

17 ‘‘(A) which draws propulsion energy from 

18 onboard sources of stored energy which are 

19 both— 

20 ‘‘(i) an internal combustion or heat 

21 engine using combustible fuel, and 

22 ‘‘(ii) a rechargeable energy storage 

23 system, 

24 ‘‘(B) which, in the case of a passenger 

25 automobile, medium duty passenger vehicle, or 
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1 light truck, has received a certificate that such 

2 vehicle meets or exceeds the Bin 5 Tier II emis3 sion level established in regulations prescribed 

4 by the Administrator of the Environmental Pro5 tection Agency under section 202(i) of the 

6 Clean Air Act for that make and model year ve7 hicle, 

8 ‘‘(C) which, in the case of a heavy duty hy9 brid motor vehicle, the internal combustion or 

10 heat engine of which has received a certificate 

11 of conformity under the Clean Air Act as meet12 ing the emission standards set in the regula13 tions prescribed by the Administrator of the 

14 Environmental Protection Agency for 2004 

15 through 2007 model year diesel heavy duty en16 gines or ottocycle heavy duty engines, as appli17 cable, 

18 ‘‘(D) the original use of which commences 

19 with the taxpayer, 

20 ‘‘(E) which is acquired for use or lease by 

21 the taxpayer and not for resale, and 

22 ‘‘(F) which is made by a manufacturer. 

23 ‘‘(4) HEAVY DUTY HYBRID MOTOR VEHICLE.—

24 For purposes of this subsection, the term ‘heavy 

25 duty hybrid motor vehicle’ means a new qualified hy-
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1 brid motor vehicle which has a gross vehicle weight 

2 rating of more than 8,500 pounds. Such term does 

3 not include a medium duty passenger vehicle. 

4 ‘‘(d) NEW QUALIFIED ALTERNATIVE FUEL MOTOR

5 VEHICLE CREDIT.— 

6 ‘‘(1) ALLOWANCE OF CREDIT.—Except as pro7 vided in paragraph (5), the new qualified alternative 

8 fuel motor vehicle credit determined under this sub9 section is an amount equal to the applicable percent10 age of the incremental cost of any new qualified al11 ternative fuel motor vehicle placed in service by the 

12 taxpayer during the taxable year. 

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

14 of paragraph (1), the applicable percentage with re15 spect to any new qualified alternative fuel motor ve16 hicle is— 

17 ‘‘(A) 50 percent, plus 

18 ‘‘(B) 30 percent, if such vehicle— 

19 ‘‘(i) has received a certificate of con20 formity under the Clean Air Act and meets 

21 or exceeds the most stringent standard 

22 available for certification under the Clean 

23 Air Act for that make and model year vehi24 cle (other than a zero emission standard), 

25 or 
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1 ‘‘(ii) has received an order certifying 

2 the vehicle as meeting the same require3 ments as vehicles which may be sold or 

4 leased in California and meets or exceeds 

5 the most stringent standard available for 

6 certification under the State laws of Cali7 fornia (enacted in accordance with a waiv8 er granted under section 209(b) of the 

9 Clean Air Act) for that make and model 

10 year vehicle (other than a zero emission 

11 standard). 

12 For purposes of the preceding sentence, in the case 

13 of any new qualified alternative fuel motor vehicle 

14 which weighs more than 14,000 pounds gross vehicle 

15 weight rating, the most stringent standard available 

16 shall be such standard available for certification in 

17 2002. 

18 ‘‘(3) INCREMENTAL COST.—For purposes of 

19 this subsection, the incremental cost of any new 

20 qualified alternative fuel motor vehicle is equal to 

21 the amount of the excess of the manufacturer’s sug22 gested retail price for such vehicle over such price 

23 for a gasoline or diesel fuel motor vehicle of the 

24 same model, to the extent such amount does not ex25 ceed— 
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1 ‘‘(A) $5,000, if such vehicle has a gross ve2 hicle weight rating of not more than 8,500 

3 pounds, 

4 ‘‘(B) $10,000, if such vehicle has a gross 

5 vehicle weight rating of more than 8,500 

6 pounds but not more than 14,000 pounds, 

7 ‘‘(C) $25,000, if such vehicle has a gross 

8 vehicle weight rating of more than 14,000 

9 pounds but not more than 26,000 pounds, and 

10 ‘‘(D) $40,000, if such vehicle has a gross 

11 vehicle weight rating of more than 26,000 

12 pounds. 

13 ‘‘(4) NEW QUALIFIED ALTERNATIVE FUEL

14 MOTOR VEHICLE.—For purposes of this sub15 section— 

16 ‘‘(A) IN GENERAL.—The term ‘new quali17 fied alternative fuel motor vehicle’ means any 

18 motor vehicle— 

19 ‘‘(i) which is only capable of operating 

20 on an alternative fuel, 

21 ‘‘(ii) the original use of which com22 mences with the taxpayer, 

23 ‘‘(iii) which is acquired by the tax24 payer for use or lease, but not for resale, 

25 and 
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1 ‘‘(iv) which is made by a manufac2 turer. 

3 ‘‘(B) ALTERNATIVE FUEL.—The term ‘al4 ternative fuel’ means compressed natural gas, 

5 liquefied natural gas, liquefied petroleum gas, 

6 hydrogen, and any liquid at least 85 percent of 

7 the volume of which consists of methanol. 

8 ‘‘(5) CREDIT FOR MIXED-FUEL VEHICLES.— 

9 ‘‘(A) IN GENERAL.—In the case of a 

10 mixed-fuel vehicle placed in service by the tax11 payer during the taxable year, the credit deter12 mined under this subsection is an amount equal 

13 to— 

14 ‘‘(i) in the case of a 75/25 mixed-fuel 

15 vehicle, 70 percent of the credit which 

16 would have been allowed under this sub17 section if such vehicle was a qualified alter18 native fuel motor vehicle, and 

19 ‘‘(ii) in the case of a 90/10 mixed-fuel 

20 vehicle, 90 percent of the credit which 

21 would have been allowed under this sub22 section if such vehicle was a qualified alter23 native fuel motor vehicle. 

24 ‘‘(B) MIXED-FUEL VEHICLE.—For pur25 poses of this subsection, the term ‘mixed-fuel 
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1 vehicle’ means any motor vehicle described in 

2 subparagraph (C) or (D) of paragraph (3), 

3 which— 

4 ‘‘(i) is certified by the manufacturer 

5 as being able to perform efficiently in nor6 mal operation on a combination of an al7 ternative fuel and a petroleum-based fuel, 

8 ‘‘(ii) either— 

9 ‘‘(I) has received a certificate of 

10 conformity under the Clean Air Act, 

11 or 

12 ‘‘(II) has received an order certi13 fying the vehicle as meeting the same 

14 requirements as vehicles which may be 

15 sold or leased in California and meets 

16 or exceeds the low emission vehicle 

17 standard under section 88.105–94 of 

18 title 40, Code of Federal Regulations, 

19 for that make and model year vehicle, 

20 ‘‘(iii) the original use of which com21 mences with the taxpayer, 

22 ‘‘(iv) which is acquired by the tax23 payer for use or lease, but not for resale, 

24 and 
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1 ‘‘(v) which is made by a manufac2 turer. 

3 ‘‘(C) 75/25 MIXED-FUEL VEHICLE.—For 

4 purposes of this subsection, the term ‘75/25 

5 mixed-fuel vehicle’ means a mixed-fuel vehicle 

6 which operates using at least 75 percent alter7 native fuel and not more than 25 percent petro8 leum-based fuel. 

9 ‘‘(D) 90/10 MIXED-FUEL VEHICLE.—For 

10 purposes of this subsection, the term ‘90/10 

11 mixed-fuel vehicle’ means a mixed-fuel vehicle 

12 which operates using at least 90 percent alter13 native fuel and not more than 10 percent petro14 leum-based fuel. 

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

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

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

18 ‘‘(1) the regular tax for the taxable year re19 duced by the sum of the credits allowable under sub20 part A and sections 27, 29, and 30, over 

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

22 year. 

23 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—

24 For purposes of this section— 
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1 ‘‘(1) CONSUMABLE FUEL.—The term 

2 ‘consumable fuel’ means any solid, liquid, or gaseous 

3 matter which releases energy when consumed by an 

4 auxiliary power unit. 

5 ‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi6 cle’ has the meaning given such term by section 

7 30(c)(2). 

8 ‘‘(3) CITY FUEL ECONOMY.—The city fuel econ9 omy with respect to any vehicle shall be measured in 

10 a manner which is substantially similar to the man11 ner city fuel economy is measured in accordance 

12 with procedures under part 600 of subchapter Q of 

13 chapter I of title 40, Code of Federal Regulations, 

14 as in effect on the date of the enactment of this sec15 tion. 

16 ‘‘(4) OTHER TERMS.—The terms ‘automobile’, 

17 ‘passenger automobile’, ‘medium duty passenger ve18 hicle’, ‘light truck’, and ‘manufacturer’ have the 

19 meanings given such terms in regulations prescribed 

20 by the Administrator of the Environmental Protec21 tion Agency for purposes of the administration of 

22 title II of the Clean Air Act (42 U.S.C. 7521 et 

23 seq.). 

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

25 this subtitle, the basis of any property for which a 
26

•S 971 IS

1 credit is allowable under subsection (a) shall be re2 duced by the amount of such credit so allowed (de3 termined without regard to subsection (e)). 

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

5 any deduction or other credit allowable under this 

6 chapter— 

7 ‘‘(A) for any incremental cost taken into 

8 account in computing the amount of the credit 

9 determined under subsection (d) shall be re10 duced by the amount of such credit attributable 

11 to such cost, and 

12 ‘‘(B) with respect to a vehicle described 

13 under subsection (b) or (c), shall be reduced by 

14 the amount of credit allowed under subsection 

15 (a) for such vehicle for the taxable year. 

16 ‘‘(7) PROPERTY USED BY TAX-EXEMPT ENTI17 TIES.—In the case of a credit amount which is al18 lowable with respect to a motor vehicle which is ac19 quired by an entity exempt from tax under this 

20 chapter, the person which sells or leases such vehicle 

21 to the entity shall be treated as the taxpayer with 

22 respect to the vehicle for purposes of this section 

23 and the credit shall be allowed to such person, but 

24 only if the person clearly discloses to the entity at 

25 the time of any sale or lease the specific amount of 
27

•S 971 IS

1 any credit otherwise allowable to the entity under 

2 this section. 

3 ‘‘(8) RECAPTURE.—The Secretary shall, by reg4 ulations, provide for recapturing the benefit of any 

5 credit allowable under subsection (a) with respect to 

6 any property which ceases to be property eligible for 

7 such credit (including recapture in the case of a 

8 lease period of less than the economic life of a vehi9 cle). 

10 ‘‘(9) PROPERTY USED OUTSIDE UNITED

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

12 allowed under subsection (a) with respect to any 

13 property referred to in section 50(b) or with respect 

14 to the portion of the cost of any property taken into 

15 account under section 179. 

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

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

18 vehicle if the taxpayer elects to not have this section 

19 apply to such vehicle. 

20 ‘‘(11) CARRYBACK AND CARRYFORWARD AL21 LOWED.— 

22 ‘‘(A) IN GENERAL.—If the credit amount 

23 allowable under subsection (a) for a taxable 

24 year exceeds the amount of the limitation under 

25 subsection (e) for such taxable year (in this 
28

•S 971 IS

1 paragraph referred to as the ‘unused credit 

2 year’), such excess shall be allowed as a credit 

3 carryback for each of the 3 taxable years begin4 ning after the date of the enactment of this sec5 tion, which precede the unused credit year and 

6 a credit carryforward for each of the 20 taxable 

7 years which succeed the unused credit year. 

8 ‘‘(B) RULES.—Rules similar to the rules of 

9 section 39 shall apply with respect to the credit 

10 carryback and credit carryforward under sub11 paragraph (A). 

12 ‘‘(12) INTERACTION WITH AIR QUALITY AND

13 MOTOR VEHICLE SAFETY STANDARDS.—Unless oth14 erwise provided in this section, a motor vehicle shall 

15 not be considered eligible for a credit under this sec16 tion unless such vehicle is in compliance with— 

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

18 Air Act for the applicable make and model year 

19 of the vehicle (or applicable air quality provi20 sions of State law in the case of a State which 

21 has adopted such provision under a waiver 

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

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

24 sections 30101 through 30169 of title 49, 

25 United States Code. 
29

•S 971 IS

1 ‘‘(g) REGULATIONS.— 

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), the Secretary shall promulgate such regu4 lations as necessary to carry out the provisions of 

5 this section. 

6 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER7 TAIN REGULATIONS.—The Secretary of the Treas8 ury, in coordination with the Secretary of Transpor9 tation and the Administrator of the Environmental 

10 Protection Agency, shall prescribe such regulations 

11 as necessary to determine whether a motor vehicle 

12 meets the requirements to be eligible for a credit 

13 under this section. 

14 ‘‘(h) TERMINATION.—This section shall not apply to 

15 any property purchased after— 

16 ‘‘(1) in the case of a new qualified fuel cell 

17 motor vehicle (as described in subsection (b)), De18 cember 31, 2014, and 

19 ‘‘(2) in the case of any other property, Decem20 ber 31, 2010.’’. 

21 (b) CONFORMING AMENDMENTS.— 

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

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

24 period at the end of paragraph (31) and inserting ‘‘, 
30

•S 971 IS

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

2 paragraph: 

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

4 30B(f)(5).’’. 

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

6 ‘‘30B(e),’’ after ‘‘30(b)(3)’’. 

7 (3) Section 6501(m) is amended by inserting 

8 ‘‘30B(f)(10),’’ after ‘‘30(d)(4),’’. 

9 (4) The table of sections for subpart B of part 

10 IV of subchapter A of chapter 1 is amended by in11 serting after the item relating to section 30A the fol12 lowing new item:

‘‘Sec. 30B. Alternative motor vehicle credit.’’.

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

14 this section shall apply to property placed in service after 

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

16 ending after such date. 

17 SEC. 4. MODIFICATION AND EXTENSION OF CREDIT FOR 

18 QUALIFIED ELECTRIC VEHICLES. 

19 (a) AMOUNT OF CREDIT.— 

20 (1) IN GENERAL.—Section 30(a) (relating to al21 lowance of credit) is amended by striking ‘‘10 per22 cent of’’. 

23 (2) LIMITATION OF CREDIT ACCORDING TO

24 TYPE OF VEHICLE.—Section 30(b) (relating to limi25 tations) is amended— 
31

•S 971 IS

1 (A) by striking paragraphs (1) and (2) and 

2 inserting the following new paragraph: 

3 ‘‘(1) LIMITATION ACCORDING TO TYPE OF VE4 HICLE.—The amount of the credit allowed under 

5 subsection (a) for any vehicle shall not exceed the 

6 greatest of the following amounts applicable to such 

7 vehicle: 

8 ‘‘(A) In the case of a vehicle which con9 forms to the Motor Vehicle Safety Standard 

10 500 prescribed by the Secretary of Transpor11 tation, as in effect on the date of the enactment 

12 of the Clean Efficient Automobiles Resulting 

13 From Advanced Car Technologies (CLEAR 

14 ACT) Act of 2005, the lesser of— 

15 ‘‘(i) 10 percent of the manufacturer’s 

16 suggested retail price of the vehicle, or 

17 ‘‘(ii) $1,500. 

18 ‘‘(B) In the case of a vehicle not described 

19 in subparagraph (A) with a gross vehicle weight 

20 rating not exceeding 8,500 pounds— 

21 ‘‘(i) $4,000, or 

22 ‘‘(ii) $6,000, if such vehicle is— 

23 ‘‘(I) capable of a driving range of 

24 at least 100 miles on a single charge 

25 of the vehicle’s rechargeable batteries 
32

•S 971 IS

1 as measured pursuant to the urban 

2 dynamometer schedules under appen3 dix I to part 86 of title 40, Code of 

4 Federal Regulations, or 

5 ‘‘(II) capable of a payload capac6 ity of at least 1,000 pounds. 

7 ‘‘(C) In the case of a vehicle with a gross 

8 vehicle weight rating exceeding 8,500 but not 

9 exceeding 14,000 pounds, $10,000. 

10 ‘‘(D) In the case of a vehicle with a gross 

11 vehicle weight rating exceeding 14,000 but not 

12 exceeding 26,000 pounds, $20,000. 

13 ‘‘(E) In the case of a vehicle with a gross 

14 vehicle weight rating exceeding 26,000 pounds, 

15 $40,000.’’, and 

16 (B) by redesignating paragraph (3) as 

17 paragraph (2). 

18 (3) CONFORMING AMENDMENTS.— 

19 (A) Section 53(d)(1)(B)(iii) is amended by 

20 striking ‘‘section 30(b)(3)(B)’’ and inserting 

21 ‘‘section 30(b)(2)(B)’’. 

22 (B) Section 55(c)(2), as amended by this 

23 Act, is amended by striking ‘‘30(b)(3)’’ and in24 serting ‘‘30(b)(2)’’. 

25 (b) QUALIFIED BATTERY ELECTRIC VEHICLE.— 
33

•S 971 IS

1 (1) IN GENERAL.—Section 30(c)(1)(A) (defin2 ing qualified electric vehicle) is amended to read as 

3 follows: 

4 ‘‘(A) which is— 

5 ‘‘(i) operated solely by use of a bat6 tery or battery pack, or 

7 ‘‘(ii) powered primarily through the 

8 use of an electric battery or battery pack 

9 using a flywheel or capacitor which stores 

10 energy produced by an electric motor 

11 through regenerative braking to assist in 

12 vehicle operation,’’. 

13 (2) LEASED VEHICLES.—Section 30(c)(1)(C) is 

14 amended by inserting ‘‘or lease’’ after ‘‘use’’. 

15 (3) CONFORMING AMENDMENTS.— 

16 (A) Subsections (a), (b)(2), and (c) of sec17 tion 30 are each amended by inserting ‘‘bat18 tery’’ after ‘‘qualified’’ each place it appears. 

19 (B) The heading of subsection (c) of sec20 tion 30 is amended by inserting ‘‘BATTERY’’ 

21 after ‘‘QUALIFIED’’. 

22 (C) The heading of section 30 is amended 

23 by inserting ‘‘BATTERY’’ after ‘‘QUALIFIED’’. 

24 (D) The item relating to section 30 in the 

25 table of sections for subpart B of part IV of 
34

•S 971 IS

1 subchapter A of chapter 1 is amended by in2 serting ‘‘battery’’ after ‘‘qualified’’. 

3 (E) Section 179A(c)(3) is amended by in4 serting ‘‘battery’’ before ‘‘electric’’. 

5 (F) The heading of paragraph (3) of sec6 tion 179A(c) is amended by inserting ‘‘BAT7 TERY’’ before ‘‘ELECTRIC’’. 

8 (c) ADDITIONAL SPECIAL RULES.—Section 30(d) 

9 (relating to special rules) is amended by adding at the end 

10 the following new paragraphs: 

11 ‘‘(5) NO DOUBLE BENEFIT.—The amount of 

12 any deduction or other credit allowable under this 

13 chapter for any cost taken into account in com14 puting the amount of the credit determined under 

15 subsection (a) shall be reduced by the amount of 

16 such credit attributable to such cost. 

17 ‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTI18 TIES.—In the case of a credit amount which is al19 lowable with respect to a vehicle which is acquired 

20 by an entity exempt from tax under this chapter, the 

21 person which sells or leases such vehicle to the entity 

22 shall be treated as the taxpayer with respect to the 

23 vehicle for purposes of this section and the credit 

24 shall be allowed to such person, but only if the per25 son clearly discloses to the entity at the time of any 
35

•S 971 IS

1 sale or lease the specific amount of any credit other2 wise allowable to the entity under this section. 

3 ‘‘(7) CARRYBACK AND CARRYFORWARD AL4 LOWED.— 

5 ‘‘(A) IN GENERAL.—If the credit amount 

6 allowable under subsection (a) for a taxable 

7 year exceeds the amount of the limitation under 

8 subsection (b)(2) for such taxable year (in this 

9 paragraph referred to as the ‘unused credit 

10 year’), such excess shall be allowed as a credit 

11 carryback for each of the 3 taxable years begin12 ning after the date of the enactment of this 

13 paragraph, which precede the unused credit 

14 year and a credit carryforward for each of the 

15 20 taxable years which succeed the unused 

16 credit year. 

17 ‘‘(B) RULES.—Rules similar to the rules of 

18 section 39 shall apply with respect to the credit 

19 carryback and credit carryforward under sub20 paragraph (A).’’. 

21 (d) EXTENSION OF CREDIT.—Section 30(e) (relating 

22 to termination) is amended by striking ‘‘2006’’ and insert23 ing ‘‘2010’’. 

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

25 this section shall apply to property placed in service after 
36

•S 971 IS

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

2 ending after such date. 

3 SEC. 5. CREDIT FOR INSTALLATION OF ALTERNATIVE 

4 FUELING STATIONS. 

5 (a) IN GENERAL.—Subpart B of part IV of sub6 chapter A of chapter 1 (relating to foreign tax credit, etc.), 

7 as amended by this Act, is amended by adding at the end 

8 the following new section: 

9 ‘‘SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY 

10 CREDIT. 

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

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

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

14 paid or incurred by the taxpayer during the taxable year 

15 for the installation of qualified clean-fuel vehicle refueling 

16 property. 

17 ‘‘(b) LIMITATION.— 

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

19 subsection (a)— 

20 ‘‘(A) with respect to any retail clean-fuel 

21 vehicle refueling property, shall not exceed 

22 $30,000, and 

23 ‘‘(B) with respect to any residential clean24 fuel vehicle refueling property, shall not exceed 

25 $1,000. 
37

•S 971 IS

1 ‘‘(2) PHASEOUT.— 

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

3 subparagraph (B), in the case of any qualified 

4 clean-fuel vehicle refueling property placed in 

5 service after December 31, 2008, the limit oth6 erwise applicable under paragraph (1) shall be 

7 reduced by— 

8 ‘‘(i) 25 percent in the case of any 

9 property placed in service in calendar year 

10 2009, and 

11 ‘‘(ii) 50 percent in the case of any 

12 property placed in service in calendar year 

13 2010. 

14 ‘‘(B) HYDROGEN PROPERTY.—In the case 

15 of any qualified clean-fuel vehicle refueling 

16 property relating to hydrogen placed in service 

17 after December 31, 2012, the limit otherwise 

18 applicable under paragraph (1) shall be reduced 

19 by— 

20 ‘‘(i) 25 percent in the case of any 

21 property placed in service in calendar year 

22 2013, and 

23 ‘‘(ii) 50 percent in the case of any 

24 property placed in service in calendar year 

25 2014. 
38

•S 971 IS

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

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

3 in which the qualified clean-fuel vehicle refueling property 

4 is placed in service by the taxpayer. 

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

6 ‘‘(1) QUALIFIED CLEAN-FUEL VEHICLE RE7 FUELING PROPERTY.—The term ‘qualified clean-fuel 

8 vehicle refueling property’ has the same meaning 

9 given such term by section 179A(d). 

10 ‘‘(2) RESIDENTIAL CLEAN-FUEL VEHICLE RE11 FUELING PROPERTY.—The term ‘residential clean12 fuel vehicle refueling property’ means qualified 

13 clean-fuel vehicle refueling property which is in14 stalled on property which is used as the principal 

15 residence (within the meaning of section 121) of the 

16 taxpayer. 

17 ‘‘(3) RETAIL CLEAN-FUEL VEHICLE REFUELING

18 PROPERTY.—The term ‘retail clean-fuel vehicle re19 fueling property’ means qualified clean-fuel vehicle 

20 refueling property which is installed on property 

21 (other than property described in paragraph (2)) 

22 used in a trade or business of the taxpayer. 

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

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

25 shall not exceed the excess (if any) of— 
39

•S 971 IS

1 ‘‘(1) the regular tax for the taxable year re2 duced by the sum of the credits allowable under sub3 part A and sections 27, 29, 30, and 30B, over 

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

5 year. 

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

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

8 of the cost of such property taken into account under sub9 section (a). 

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

11 allowed under section 179A with respect to any property 

12 with respect to which a credit is allowed under subsection 

13 (a). 

14 ‘‘(h) REFUELING PROPERTY INSTALLED FOR TAX15 EXEMPT ENTITIES.—In the case of qualified clean-fuel ve16 hicle refueling property installed on property owned or 

17 used by an entity exempt from tax under this chapter, the 

18 person which installs such refueling property for the entity 

19 shall be treated as the taxpayer with respect to the refuel20 ing property for purposes of this section (and such refuel21 ing property shall be treated as retail clean-fuel vehicle 

22 refueling property) and the credit shall be allowed to such 

23 person, but only if the person clearly discloses to the entity 

24 in any installation contract the specific amount of the 

25 credit allowable under this section. 
40

•S 971 IS

1 ‘‘(i) CARRYFORWARD ALLOWED.— 

2 ‘‘(1) IN GENERAL.—If the credit amount allow3 able under subsection (a) for a taxable year exceeds 

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

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

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

7 as a credit carryforward for each of the 20 taxable 

8 years following the unused credit year. 

9 ‘‘(2) RULES.—Rules similar to the rules of sec10 tion 39 shall apply with respect to the credit 

11 carryforward under paragraph (1). 

12 ‘‘(j) SPECIAL RULES.—Rules similar to the rules of 

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

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

15 such regulations as necessary to carry out the provisions 

16 of this section. 

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

18 any property placed in service— 

19 ‘‘(1) in the case of property relating to hydro20 gen, after December 31, 2014, and 

21 ‘‘(2) in the case of any other property, after 

22 December 31, 2010.’’. 

23 (b) INCENTIVE FOR PRODUCTION OF HYDROGEN AT

24 QUALIFIED CLEAN-FUEL VEHICLE REFUELING PROP25 ERTY.—Section 179A(d) (defining qualified clean-fuel ve-
41

•S 971 IS

1 hicle refueling property) is amended by adding at the end 

2 the following new flush sentence: 

3 ‘‘In the case of clean-burning fuel which is hydrogen pro4 duced from another clean-burning fuel, paragraph (3)(A) 

5 shall be applied by substituting ‘production, storage, or 

6 dispensing’ for ‘storage or dispensing’ both places it ap7 pears.’’. 

8 (c) CONFORMING AMENDMENTS.— 

9 (1) Section 1016(a), as amended by this Act, is 

10 amended by striking ‘‘and’’ at the end of paragraph 

11 (28), by striking the period at the end of paragraph 

12 (29) and inserting ‘‘, and’’, and by adding at the 

13 end the following new paragraph: 

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

15 30C(f).’’. 

16 (2) Section 55(c)(2), as amended by this Act, is 

17 amended by inserting ‘‘30C(e),’’ after ‘‘30B(e)’’. 

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

19 IV of subchapter A of chapter 1, as amended by this 

20 Act, is amended by inserting after the item relating 

21 to section 30B the following new item:

‘‘Sec. 30C. Clean-fuel vehicle refueling property credit.’’.

22 (d) 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. 
42

•S 971 IS

1 SEC. 6. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS 

2 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.—For purposes of section 38, 

10 the alternative fuel retail sales credit for any taxable year 

11 is the applicable amount for each gasoline gallon equiva12 lent of alternative fuel sold at retail by the taxpayer during 

13 such year as a fuel to propel any qualified motor vehicle. 

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

15 ‘‘(1) APPLICABLE AMOUNT.—The term ‘applica16 ble amount’ means as follows: 

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

18 subparagraph (B), the amount determined in 

19 accordance with the following table:

‘‘In the case of any taxable year 

ending in— The applicable amount is—

2005 or 2006 ........................................................................... 50 cents

2007 ......................................................................................... 40 cents

2008 or 2009 ........................................................................... 30 cents.

20 ‘‘(B) HYDROGEN FUEL.—In the case of an 

21 alternative fuel which is hydrogen fuel, the 

22 amount determined in accordance with the fol23 lowing table:
43

•S 971 IS

‘‘In the case of any taxable year 

ending in— The applicable amount is—

2005 through 2011 .................................................................. 50 cents

2012 ......................................................................................... 40 cents

2013 or 2014 ........................................................................... 30 cents.

1 ‘‘(2) ALTERNATIVE FUEL.—The term ‘alter2 native fuel’ means compressed natural gas, liquefied 

3 natural gas, liquefied petroleum gas, hydrogen, and 

4 any liquid at least 85 percent of the volume of which 

5 consists of methanol or ethanol. 

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

7 term ‘gasoline gallon equivalent’ means, with respect 

8 to any alternative fuel, the amount (determined by 

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

10 114,000. 

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

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

13 defined in section 30(c)(2)) which meets any appli14 cable Federal or State emissions standards with re15 spect to each fuel by which such vehicle is designed 

16 to be propelled. 

17 ‘‘(5) 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 
44

•S 971 IS

1 after importation) as a fuel to propel any quali2 fied alternative fuel motor vehicle (as defined in 

3 section 30B(d)(4)) before such fuel is sold at 

4 retail, then such use shall be treated in the 

5 same manner as if such fuel were sold at retail 

6 as a fuel to propel such a vehicle by such per7 son. 

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

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

10 allowable under this section to the purchaser of such fuel 

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

12 otherwise declines to accept such credit, to the person 

13 which supplied such fuel, under rules established by the 

14 Secretary. 

15 ‘‘(d) NO DOUBLE BENEFIT.—The amount of any de16 duction or other credit allowable under this chapter for 

17 any fuel taken into account in computing the amount of 

18 the credit determined under subsection (a) shall be re19 duced by the amount of such credit attributable to such 

20 fuel. 

21 ‘‘(e) 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. 

25 ‘‘(f) TERMINATION.— 
45

•S 971 IS

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), this section shall not apply to any fuel 

3 sold at retail after December 31, 2009. 

4 ‘‘(2) HYDROGEN FUEL.—In the case of an al5 ternative fuel which is hydrogen fuel, this section 

6 shall not apply to any fuel sold at retail after De7 cember 31, 2014.’’. 

8 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec9 tion 38(b) (relating to current year business credit) is 

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

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

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

13 new paragraph: 

14 ‘‘(20) the alternative fuel retail sales credit de15 termined under section 40B(a).’’. 

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

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

18 is amended by inserting after the item relating to section 

19 40 the following new item:

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

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

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

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

23 such date. 
46

•S 971 IS

1 SEC. 7. STUDY OF EFFECTIVENESS OF CERTAIN PROVI2 SIONS BY GAO. 

3 (a) STUDY.—The Comptroller General of the United 

4 States shall undertake an ongoing analysis of— 

5 (1) the effectiveness of the alternative motor ve6 hicles and fuel incentives provisions under this Act, 

7 and 

8 (2) the recipients of the tax benefits contained 

9 in such provisions, including an identification of 

10 such recipients by income and other appropriate 

11 measurements. 

12 Such analysis shall quantify the effectiveness of such pro13 visions by examining and comparing the Federal Govern14 ment’s forgone revenue to the aggregate amount of energy 

15 actually conserved and tangible environmental benefits 

16 gained as a result of such provisions. 

17 (b) REPORTS.—The Comptroller General of the 

18 United States shall report the analysis required under sub19 section (a) to Congress not later than December 31, 2006, 

20 and annually thereafter.

Æ