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‘‘(f) BIODIESEL V MIXTURES.—Under regulations pre-
scribed by the Secretary—
‘‘(1) IN GENERAL.—In the case of the removal or
entry of a qualified biodiesel mixture with biodiesel V,
the rate of tax under subsection (a) shall be the other-
wise applicable rate reduced by the biodiesel mixture
rate (if any) applicable to the mixture.
‘‘(2) TAX PRIOR TO MIXING.—
‘‘(A) IN GENERAL.—In the case of the re-
moval or entry of diesel fuel for use in producing
at the time of such removal or entry a qualified
biodiesel mixture with biodiesel V, the rate of tax
under subsection (a) shall be the rate determined
under subparagraph (B).
‘‘(B) DETERMINATION OF RATE.—For pur-
poses of subparagraph (A), the rate determined
under this subparagraph is the rate determined
under paragraph (1), divided by a percentage
equal to 100 percent minus the percentage of bio-
diesel V which will be in the mixture.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section, any term used in this subsection which is also
used in section 40B shall have the meaning given
such term by section 40B.
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‘‘(4) CERTAIN RULES TO APPLY.—Rules similar
to the rules of paragraphs (6) and (7) of subsection
(c) shall apply for purposes of this subsection.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 4041 is amended by adding at
the end the following new subsection:
‘‘(n) BIODIESEL V MIXTURES.—Under regulations
prescribed by the Secretary, in the case of the sale or use
of a qualified biodiesel mixture (as defined in section
40B(b)(2)) with biodiesel V, the rates under paragraphs (1)
and (2) of subsection (a) shall be the otherwise applicable
rates, reduced by any applicable biodiesel mixture rate (as
defined in section 40B(b)(1)(B)).’’.
(B) Section 6427 is amended by redesig-
nating subsection (p) as subsection (q) and by
inserting after subsection (o) the following new
subsection:
‘‘(p) BIODIESEL V MIXTURES.—Except as provided in
subsection (k), if any diesel fuel on which tax was imposed
by section 4081 at a rate not determined under section
4081(f) is used by any person in producing a qualified bio-
diesel mixture (as defined in section 40B(b)(2)) with bio-
diesel V which is sold or used in such person’s trade or busi-
ness, the Secretary shall pay (without interest) to such per-
son an amount equal to the per gallon applicable biodiesel
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mixture rate (as defined in section 40B(b)(1)(B)) with re-
spect to such fuel.’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to any fuel sold after
December 31, 2002, and before January 1, 2006.
(c) HIGHWAY TRUST FUND HELD HARMLESS.—There
are hereby transferred (from time to time) from the funds
of the Commodity Credit Corporation amounts determined
by the Secretary of the Treasury to be equivalent to the re-
ductions that would occur (but for this subsection) in the
receipts of the Highway Trust Fund by reason of the
amendments made by this section.
SEC. 2009. CREDIT FOR TAXPAYERS OWNING COMMERCIAL
POWER TAKEOFF VEHICLES.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business-related credits), as
amended by this Act, is amended by adding at the end the
following new section:
‘‘SEC. 45N. COMMERCIAL POWER TAKEOFF VEHICLES CRED-
IT.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
amount of the commercial power takeoff vehicles credit de-
termined under this section for the taxable year is $250 for
each qualified commercial power takeoff vehicle owned by
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the taxpayer as of the close of the calendar year in which
or with which the taxable year of the taxpayer ends.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED COMMERCIAL POWER TAKEOFF
VEHICLE.—The term ‘qualified commercial power
takeoff vehicle’ means any highway vehicle described
in paragraph (2) which is propelled by any fuel sub-
ject to tax under section 4041 or 4081 if such vehicle
is used in a trade or business or for the production
of income (and is licensed and insured for such use).
‘‘(2) HIGHWAY VEHICLE DESCRIBED.—A high-
way vehicle is described in this paragraph if such ve-
hicle is—
‘‘(A) designed to engage in the daily collec-
tion of refuse or recyclables from homes or busi-
nesses and is equipped with a mechanism under
which the vehicle’s propulsion engine provides
the power to operate a load compactor, or
‘‘(B) designed to deliver ready mixed con-
crete on a daily basis and is equipped with a
mechanism under which the vehicle’s propulsion
engine provides the power to operate a mixer
drum to agitate and mix the product en route to
the delivery site.
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‘‘(c) EXCEPTION FOR VEHICLES USED BY GOVERN-
MENTS, ETC.—No credit shall be allowed under this section
for any vehicle owned by any person at the close of a cal-
endar year if such vehicle is used at any time during such
year by—
‘‘(1) the United States or an agency or instru-
mentality thereof, a State, a political subdivision of
a State, or an agency or instrumentality of one or
more States or political subdivisions, or
‘‘(2) an organization exempt from tax under sec-
tion 501(a).
‘‘(d) DENIAL OF DOUBLE BENEFIT.—The amount of
any deduction under this subtitle for any tax imposed by
subchapter B of chapter 31 or part III of subchapter A of
chapter 32 for any taxable year shall be reduced (but not
below zero) by the amount of the credit determined under
this subsection for such taxable year.
‘‘(e) TERMINATION.—This section shall not apply with
respect to any calendar year after 2004.’’.
(b) CREDIT MADE PART
OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 (relating to general
business credit), as amended by this Act, is amended by
striking ‘‘plus’’ at the end of paragraph (22), by striking
the period at the end of paragraph (23) and inserting ‘‘,
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plus’’, and by adding at the end the following new para-
graph:
‘‘(24) the commercial power takeoff vehicles cred-
it under section 45N(a).’’.
(c) CLERICAL AMENDMENT.—The table of sections for
subpart D of part IV of subchapter A of chapter 1, as
amended by this Act, is amended by adding at the end the
following new item:
‘‘Sec. 45N. Commercial power takeoff vehicles credit.’’.
(d) REGULATIONS.—Not later than January 1, 2005,
the Secretary of the Treasury, in consultation with the Sec-
retary of Energy, shall by regulation provide for the method
of determining the exemption from any excise tax imposed
under section 4041 or 4081 of the Internal Revenue Code
of 1986 on fuel used through a mechanism to power equip-
ment attached to a highway vehicle as described in section
45N(b)(2) of such Code, as added by subsection (a).
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after the date
of the enactment of this Act.
SEC. 2010. MODIFICATIONS TO THE INCENTIVES FOR AL-
TERNATIVE VEHICLES AND FUELS.
(a) MODIFICATION
TO
NEW
QUALIFIED
HYBRID
MOTOR
VEHICLE
CREDIT.—The 
table 
in 
section
30B(c)(2)(A) of the Internal Revenue Code of 1986, as
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added by this Act, is amended by striking ‘‘5 percent’’ and
inserting ‘‘4 percent’’.
(b) MODIFICATIONS TO EXTENSION OF DEDUCTION
FOR CERTAIN REFUELING PROPERTY.—
(1) IN GENERAL.—Subsection (f) of section 179A
of the Internal Revenue Code of 1986 is amended to
read as follows:
‘‘(f) TERMINATION.—This section shall not apply to
any property placed in service—
‘‘(1) in the case of property relating to hydrogen,
after December 31, 2011, and
‘‘(2) in the case of any other property, after De-
cember 31, 2007.’’.
(2) 
EXTENSION
OF
PHASEOUT.—Section
179A(b)(1)(B) of such Code, as amended by section
606(a) of the Job Creation and Worker Assistance Act
of 2002, is amended—
(A) by striking ‘‘calendar year 2004’’ in
clause (i) and inserting ‘‘calendar years 2004
and 2005 (calendar years 2004 through 2009 in
the case of property relating to hydrogen) ’’,
(B) by striking ‘‘2005’’ in clause (ii) and
inserting ‘‘2006 (calendar year 2010 in the case
of property relating to hydrogen)’’, and
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(C) by striking ‘‘2006’’ in clause (iii) and
inserting ‘‘2007 (calendar year 2011 in the case
of property relating to hydrogen)’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to property placed in
service after December 31, 2003, in taxable years end-
ing after such date.
(c) MODIFICATION TO CREDIT FOR INSTALLATION OF
ALTERNATIVE FUELING STATIONS.—Subsection (l) of sec-
tion 30C of the Internal Revenue Code of 1986, as added
by this Act, is amended to read as follows:
‘‘(l) TERMINATION.—This section shall not apply to
any property placed in service—
‘‘(1) in the case of property relating to hydrogen,
after December 31, 2011, and
‘‘(2) in the case of any other property, after De-
cember 31, 2007.’’.
(d) EFFECTIVE DATE.—Except as provided in sub-
section (b)(3), the amendments made by this section shall
apply to property placed in service after September 30,
2002, in taxable years ending after such date.
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TITLE XXI—CONSERVATION AND
ENERGY EFFICIENCY PROVI-
SIONS
SEC. 2101. CREDIT FOR CONSTRUCTION OF NEW ENERGY
EFFICIENT HOME.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business related credits), as
amended by this Act, is amended by adding at the end the
following new section:
‘‘SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 38, in the
case of an eligible contractor, the credit determined under
this section for the taxable year is an amount equal to the
aggregate adjusted bases of all energy efficient property in-
stalled in a qualifying new home during construction of
such home.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT.—
‘‘(A) IN GENERAL.—The credit allowed by
this section with respect to a qualifying new
home shall not exceed—
‘‘(i) in the case of a 30-percent home,
$1,250, and
‘‘(ii) in the case of a 50-percent home,
$2,000.
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‘‘(B) 30- OR 50-PERCENT HOME.—For pur-
poses of subparagraph (A)—
‘‘(i) 30-PERCENT
HOME.—The term
‘30-percent home’ means a qualifying new
home which is certified to have a projected
level of annual heating and cooling energy
consumption, measured in terms of average
annual energy cost to the homeowner, which
is at least 30 percent less than the annual
level of heating and cooling energy con-
sumption of a reference qualifying new
home constructed in accordance with the
standards of chapter 4 of the 2000 Inter-
national Energy Conservation Code, or a
qualifying new home which is a manufac-
tured home which meets the applicable
standards of the Energy Star program
managed jointly by the Environmental Pro-
tection Agency and the Department of En-
ergy.
‘‘(ii) 50-PERCENT
HOME.—The term
‘50-percent home’ means a qualifying new
home which is certified to have a projected
level of annual heating and cooling energy
consumption, measured in terms of average
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annual energy cost to the homeowner, which
is at least 50 percent less than such annual
level of heating and cooling energy con-
sumption.
‘‘(C) PRIOR
CREDIT
AMOUNTS
ON
SAME
HOME TAKEN INTO ACCOUNT.—If a credit was
allowed under subsection (a) with respect to a
qualifying new home in 1 or more prior taxable
years, the amount of the credit otherwise allow-
able for the taxable year with respect to that
home shall not exceed the amount under clause
(i) or (ii) of subparagraph (A) (as the case may
be), reduced by the sum of the credits allowed
under subsection (a) with respect to the home for
all prior taxable years.
‘‘(2) COORDINATION WITH REHABILITATION AND
ENERGY CREDITS.—For purposes of this section—
‘‘(A) the basis of any property referred to in
subsection (a) shall be reduced by that portion of
the basis of any property which is attributable to
the rehabilitation credit (as determined under
section 47(a)) or to the energy percentage of en-
ergy property (as determined under section
48(a)), and
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‘‘(B) expenditures taken into account under
either section 47 or 48(a) shall not be taken into
account under this section.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligible
contractor’ means the person who constructed the
qualifying new home, or in the case of a manufac-
tured home which conforms to Federal Manufactured
Home Construction and Safety Standards (24 C.F.R.
3280), the manufactured home producer of such home.
‘‘(2) ENERGY EFFICIENT PROPERTY.—The term
‘energy efficient property’ means any energy efficient
building envelope component, and any energy effi-
cient heating or cooling equipment which can, indi-
vidually or in combination with other components,
meet the requirements of this section.
‘‘(3) QUALIFYING NEW HOME.—The term ‘quali-
fying new home’ means a dwelling—
‘‘(A) located in the United States,
‘‘(B) the construction of which is substan-
tially completed after the date of the enactment
of this section, and
‘‘(C) the first use of which after construction
is as a principal residence (within the meaning
of section 121).
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‘‘(4) CONSTRUCTION.—The term ‘construction’
includes reconstruction and rehabilitation.
‘‘(5) BUILDING
ENVELOPE
COMPONENT.—The
term ‘building envelope component’ means—
‘‘(A) any insulation material or system
which is specifically and primarily designed to
reduce the heat loss or gain of a qualifying new
home when installed in or on such home, and
‘‘(B) exterior windows (including skylights)
and doors.
‘‘(6) MANUFACTURED
HOME
INCLUDED.—The
term ‘qualifying new home’ includes a manufactured
home conforming to Federal Manufactured Home
Construction and Safety Standards (24 C.F.R. 3280).
‘‘(d) CERTIFICATION.—
‘‘(1) METHOD OF CERTIFICATION.—
‘‘(A) IN
GENERAL.—A certification de-
scribed in subsection (b)(1)(B) shall be deter-
mined either by a component-based method or a
performance-based method.
‘‘(B) COMPONENT-BASED METHOD.—A com-
ponent-based method is a method which uses the
applicable technical energy efficiency specifica-
tions or ratings (including product labeling re-
quirements) for the energy efficient building en-
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velope component or energy efficient heating or
cooling equipment. The Secretary shall, in con-
sultation with the Administrator of the Environ-
mental Protection Agency, develop prescriptive
component-based packages that are equivalent in
energy performance to properties that qualify
under subparagraph (C).
‘‘(C) PERFORMANCE-BASED METHOD.—
‘‘(i) IN
GENERAL.—A performance-
based method is a method which calculates
projected energy usage and cost reductions
in the qualifying new home in relation to a
reference qualifying new home—
‘‘(I) heated by the same energy
source and heating system type, and
‘‘(II) constructed in accordance
with the standards of chapter 4 of the
2000 International Energy Conserva-
tion Code.
‘‘(ii) 
COMPUTER
SOFTWARE.—Com-
puter software shall be used in support of a
performance-based 
method 
certification
under clause (i). Such software shall meet
procedures and methods for calculating en-
ergy and cost savings in regulations pro-
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mulgated by the Secretary of Energy. Such
regulations on the specifications for software
and verification protocols shall be based on
the 2001 California Residential Alternative
Calculation Method Approval Manual.
‘‘(2) PROVIDER.—A certification described in
subsection (b)(1)(B) shall be provided by—
‘‘(A) in the case of a component-based meth-
od, a local building regulatory authority, a util-
ity, a manufactured home production inspection
primary inspection agency (IPIA), or a home
energy rating organization, or
‘‘(B) in the case of a performance-based
method, an individual recognized by an organi-
zation designated by the Secretary for such pur-
poses.
‘‘(3) FORM.—
‘‘(A) IN
GENERAL.—A certification de-
scribed in subsection (b)(1)(B) shall be made in
writing in a manner that specifies in readily
verifiable fashion the energy efficient building
envelope components and energy efficient heating
or cooling equipment installed and their respec-
tive rated energy efficiency performance, and in
the case of a performance-based method, accom-
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panied by a written analysis documenting the
proper application of a permissible energy per-
formance calculation method to the specific cir-
cumstances of such qualifying new home.
‘‘(B) FORM PROVIDED TO BUYER.—A form
documenting the energy efficient building enve-
lope components and energy efficient heating or
cooling equipment installed and their rated en-
ergy efficiency performance shall be provided to
the buyer of the qualifying new home. The form
shall include labeled R-value for insulation prod-
ucts, NFRC-labeled U-factor and Solar Heat
Gain Coefficient for windows, skylights, and
doors, labeled AFUE ratings for furnaces and
boilers, labeled HSPF ratings for electric heat
pumps, and labeled SEER ratings for air condi-
tioners.
‘‘(C) RATINGS LABEL AFFIXED IN DWELL-
ING.—A permanent label documenting the rat-
ings in subparagraph (B) shall be affixed to the
front of the electrical distribution panel of the
qualifying new home, or shall be otherwise per-
manently displayed in a readily inspectable lo-
cation in such home.
‘‘(4) REGULATIONS.—
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‘‘(A) IN GENERAL.—In prescribing regula-
tions under this subsection for performance-based
certification methods, the Secretary, after exam-
ining the requirements for energy consultants
and home energy ratings providers specified by
the Mortgage Industry National Accreditation
Procedures for Home Energy Rating Systems,
shall prescribe procedures for calculating annual
energy usage and cost reductions for heating and
cooling and for the reporting of the results. Such
regulations shall—
‘‘(i) provide that any calculation pro-
cedures be fuel neutral such that the same
energy efficiency measures allow a quali-
fying new home to be eligible for the credit
under this section regardless of whether such
home uses a gas or oil furnace or boiler or
an electric heat pump, and
‘‘(ii) require that any computer soft-
ware allow for the printing of the Federal
tax forms necessary for the credit under this
section and for the printing of forms for
disclosure to the homebuyer.
‘‘(B) PROVIDERS.—For purposes of para-
graph (2)(B), the Secretary shall establish re-
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quirements for the designation of individuals
based on the requirements for energy consultants
and home energy raters specified by the Mort-
gage Industry National Accreditation Procedures
for Home Energy Rating Systems.
‘‘(e) TERMINATION.—Subsection (a) shall apply to
qualifying new homes purchased during the period begin-
ning on the date of the enactment of this section and ending
on December 31, 2007.’’.
(b) CREDIT MADE PART
OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 (relating to current
year business credit), as amended by this Act, is amended
by striking ‘‘plus’’ at the end of paragraph (16), by striking
the period at the end of paragraph (17) and inserting ‘‘,
plus’’, and by adding at the end the following new para-
graph:
‘‘(18) the new energy efficient home credit deter-
mined under section 45G(a).’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C (re-
lating to certain expenses for which credits are allowable)
is amended by adding at the end the following new sub-
section:
‘‘(d) NEW ENERGY EFFICIENT HOME EXPENSES.—No
deduction shall be allowed for that portion of expenses for
a qualifying new home otherwise allowable as a deduction
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for the taxable year which is equal to the amount of the
credit determined for such taxable year under section
45G(a).’’.
(d) LIMITATION ON CARRYBACK.—Subsection (d) of
section 39, as amended by this Act, is amended by adding
at the end the following new paragraph:
‘‘(13) NO
CARRYBACK
OF
NEW
ENERGY
EFFI-
CIENT HOME CREDIT BEFORE EFFECTIVE DATE.—No
portion of the unused business credit for any taxable
year which is attributable to the credit determined
under section 45G may be carried back to any taxable
year ending on or before the date of the enactment of
section 45G.’’.
(e) DEDUCTION
FOR CERTAIN UNUSED BUSINESS
CREDITS.—Subsection (c) of section 196, as amended by
this Act, is amended by striking ‘‘and’’ at the end of para-
graph (10), by striking the period at the end of paragraph
(11) and inserting ‘‘, and’’, and by adding after paragraph
(11) the following new paragraph:
‘‘(12) the new energy efficient home credit deter-
mined under section 45G(a).’’.
(f) CLERICAL AMENDMENT.—The table of sections for
subpart D of part IV of subchapter A of chapter 1, as
amended by this Act, is amended by adding at the end the
following new item:
‘‘Sec. 45G. New energy efficient home credit.’’.
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(g) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years ending after the date
of the enactment of this Act.
SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business-related credits), as
amended by this Act, is amended by adding at the end the
following new section:
‘‘SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
energy efficient appliance credit determined under this sec-
tion for the taxable year is an amount equal to the applica-
ble amount determined under subsection (b) with respect
to the eligible production of qualified energy efficient appli-
ances produced by the taxpayer during the calendar year
ending with or within the taxable year.
‘‘(b) APPLICABLE AMOUNT; ELIGIBLE PRODUCTION.—
For purposes of subsection (a)—
‘‘(1) 
APPLICABLE
AMOUNT.—The 
applicable
amount is—
‘‘(A) $50, in the case of—
‘‘(i) a clothes washer which is manu-
factured with at least a 1.26 MEF, or
‘‘(ii) a refrigerator which consumes at
least 10 percent less kWh per year than the
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energy conservation standards for refrig-
erators promulgated by the Department of
Energy effective July 1, 2001, and
‘‘(B) $100, in the case of—
‘‘(i) a clothes washer which is manu-
factured with at least a 1.42 MEF (at least
1.5 MEF for washers produced after 2004),
or
‘‘(ii) a refrigerator which consumes at
least 15 percent less kWh per year than
such energy conservation standards.
‘‘(2) ELIGIBLE PRODUCTION.—
‘‘(A) IN GENERAL.—The eligible production
of each category of qualified energy efficient ap-
pliances is the excess of—
‘‘(i) the number of appliances in such
category which are produced by the tax-
payer during such calendar year, over
‘‘(ii) the average number of appliances
in such category which were produced by
the taxpayer during calendar years 1999,
2000, and 2001.
‘‘(B) CATEGORIES.—For purposes of sub-
paragraph (A), the categories are—
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‘‘(i) clothes washers described in para-
graph (1)(A)(i),
‘‘(ii) clothes washers described in para-
graph (1)(B)(i),
‘‘(iii) refrigerators described in para-
graph (1)(A)(ii), and
‘‘(iv) refrigerators described in para-
graph (1)(B)(ii).
‘‘(c) LIMITATION ON MAXIMUM CREDIT.—
‘‘(1) IN GENERAL.—The maximum amount of
credit allowed under subsection (a) with respect to a
taxpayer for all taxable years shall be—
‘‘(A) $30,000,000 with respect to the credit
determined under subsection (b)(1)(A), and
‘‘(B) $30,000,000 with respect to the credit
determined under subsection (b)(1)(B).
‘‘(2) LIMITATION BASED ON GROSS RECEIPTS.—
The credit allowed under subsection (a) with respect
to a taxpayer for the taxable year shall not exceed an
amount equal to 2 percent of the average annual gross
receipts of the taxpayer for the 3 taxable years pre-
ceding the taxable year in which the credit is deter-
mined.
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‘‘(C) PROFICIENCY OF QUALIFIED INDIVID-
UALS.—The Secretary shall consult with non-
profit organizations and State agencies with ex-
pertise in energy efficiency calculations and in-
spections to develop proficiency tests and train-
ing programs to qualify individuals to determine
compliance.
‘‘(e) BASIS REDUCTION.—For purposes of this subtitle,
if a deduction is allowed under this section with respect
to any energy efficient commercial building property, the
basis of such property shall be reduced by the amount of
the deduction so allowed.
‘‘(f) REGULATIONS.—The Secretary shall promulgate
such regulations as necessary to take into account new tech-
nologies regarding energy efficiency and renewable energy
for purposes of determining energy efficiency and savings
under this section.
‘‘(g) TERMINATION.—This section shall not apply with
respect to any energy efficient commercial building prop-
erty expenditures in connection with property—
‘‘(1) the plans for which are not certified under
subsection (d)(5) on or before December 31, 2007, and
‘‘(2) the construction of which is not completed
on or before December 31, 2009.’’.
(b) CONFORMING AMENDMENTS.—