‘‘(4) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowed under subsection (a) with respect to any 
property referred to in section 50(b) or with respect 
to the portion of the cost of any property taken into 
account under section 179. 
‘‘(5) ELECTION
TO
NOT
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) CARRYOVERS ALLOWED.—
‘‘(A) IN GENERAL.—If the credit amount 
allowable under subsection (a) for a taxable 
year exceeds the amount of the limitation under 
subsection (d) for such taxable year (referred to 
as the ‘unused credit year’ in this paragraph), 
such excess shall be allowed as a credit 
carryforward for each of the 20 taxable years 
following the unused credit year and a 
carryback for each of the 3 preceding years. 
‘‘(B) RULES.—Rules similar to the rules of 
section 39 shall apply with respect to the credit 
carryforward under subparagraph (A). 
‘‘(f) TERMINATION.—This section shall not apply to 
any property placed in service after December 31, 2010.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (29), by 
striking the period at the end of paragraph (30) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing: 
‘‘(31) to the extent provided in section 
30B(e)(1).’’. 
(2) Section 6501(m) of such Code is amended 
by inserting ‘‘30B(e)(5),’’ after ‘‘30(d)(4),’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 30A the following:
‘‘Sec. 30B. Clean diesel motor vehicle credit.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2004, in taxable years beginning after such 
date. 
SEC. 203. LIFETIME FUEL SAVINGS CREDIT. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to foreign tax credit, etc.) is amended by 
adding at the end the following:
‘‘SEC. 30C. LIFETIME FUEL SAVINGS CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the lifetime fuel 
savings credit determined under subsection (b). 
‘‘(b) LIFETIME FUEL SAVINGS CREDIT.—For pur-
poses of subsection (a), the lifetime fuel savings credit is 
the credit amount determined under section 201(c) of the 
Clean Diesel Act of 2003 with respect to a new qualified 
clean diesel motor vehicle placed in service by the taxpayer 
during the taxable year. 
‘‘(c) CLEAN DIESEL MOTOR VEHICLE.—The term 
‘clean diesel motor vehicle’ has the meaning given to such 
term by section 201(e)(1) of the Clean Diesel Act of 2003. 
‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.—The 
credit allowed under subsection (a) for the taxable year 
shall not exceed the excess of—
‘‘(1) the sum of the regular tax liability (as de-
fined in section 26(b)) plus the tax imposed by sec-
tion 55, over 
‘‘(2) the sum of the credits allowable under sub-
part A and sections 27, 29, 30A, and 30B for the 
taxable year. 
‘‘(e) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) REDUCTION IN BASIS.—For purposes of 
this subtitle, the basis of any property for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of such credit so allowed. 
‘‘(2) PROPERTY USED BY TAX-EXEMPT ENTI-
TIES.—In the case of a credit amount which is al-
lowable with respect to a motor vehicle which is ac-
quired by an entity exempt from tax under this 
chapter, the person which sells or leases such vehicle 
to the entity shall be treated as the taxpayer with 
respect to the vehicle for purposes of this section 
and the credit shall be allowed to such person, but 
only if the person clearly discloses to the entity in 
any sale or lease document the specific amount of
any credit otherwise allowable to the entity under 
this section. 
‘‘(3) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit (including recapture in the case of a 
lease period of less than the economic life of a vehi-
cle). 
‘‘(4) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be
allowed under subsection (a) with respect to any 
property referred to in section 50(b) or with respect 
to the portion of the cost of any property taken into 
account under section 179. 
‘‘(5) ELECTION
TO
NOT
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) CARRYOVERS ALLOWED.—
‘‘(A) IN GENERAL.—If the credit amount 
allowable under subsection (a) for a taxable 
year exceeds the amount of the limitation under 
subsection (d) for such taxable year (referred to 
as the ‘unused credit year’ in this paragraph), 
such excess shall be allowed as a credit 
carryforward for each of the 20 taxable years 
following the unused credit year and a 
carryback for each of the 3 preceding years. 
‘‘(B) RULES.—Rules similar to the rules of 
section 39 shall apply with respect to the credit 
carryforward under subparagraph (A). 
‘‘(f) TERMINATION.—This section shall not apply to 
any property placed in service after December 31, 2010.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (30), by 
striking the period at the end of paragraph (31) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing: 
‘‘(32) to the extent provided in section 
30C(e)(1).’’. 
(2) Section 6501(m) of such Code is amended 
by inserting ‘‘30C(e)(5),’’ after ‘‘30B(e)(5),’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 30B the following:
‘‘Sec. 30C. Lifetime fuel savings credit.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2004, in taxable years beginning after such 
date. 
SEC. 204. EXPENSING OF CAPITAL COSTS INCURRED IN 
COMPLYING WITH ENVIRONMENTAL PROTEC-
TION AGENCY SULFUR REGULATIONS. 
(a) IN GENERAL.—Section 179(b) of the Internal 
Revenue Code of 1986 (relating to election to expense cer-
tain depreciable business assets) is amended by adding at 
the end the following new paragraph: 
‘‘(5) LIMITATION FOR REFINERS.—