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‘‘(c) YEAR CREDIT ALLOWED.—The credit allowed
under subsection (a) shall be allowed in the taxable year
in which the qualified clean-fuel vehicle refueling property
is placed in service by the taxpayer.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED CLEAN-FUEL VEHICLE REFUEL-
ING PROPERTY.—The term ‘qualified clean-fuel vehicle
refueling property’ has the same meaning given such
term by section 179A(d).
‘‘(2) RESIDENTIAL
CLEAN-FUEL
VEHICLE
RE-
FUELING PROPERTY.—The term ‘residential clean-fuel
vehicle refueling property’ means qualified clean-fuel
vehicle refueling property which is installed on prop-
erty which is used as the principal residence (within
the meaning of section 121) of the taxpayer.
‘‘(3) RETAIL CLEAN-FUEL VEHICLE REFUELING
PROPERTY.—The term ‘retail clean-fuel vehicle refuel-
ing property’ means qualified clean-fuel vehicle refuel-
ing property which is installed on property (other
than property described in paragraph (2)) used in a
trade or business of the taxpayer.
‘‘(e) APPLICATION WITH OTHER CREDITS.—The credit
allowed under subsection (a) for any taxable year shall not
exceed the excess (if any) of—
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‘‘(1) the regular tax for the taxable year reduced
by the sum of the credits allowable under subpart A
and sections 27, 29, 30, and 30B, over
‘‘(2) the tentative minimum tax for the taxable
year.
‘‘(f) BASIS REDUCTION.—For purposes of this title, the
basis of any property shall be reduced by the portion of
the cost of such property taken into account under sub-
section (a).
‘‘(g) NO DOUBLE BENEFIT.—No deduction shall be al-
lowed under section 179A with respect to any property with
respect to which a credit is allowed under subsection (a).
‘‘(h) REFUELING PROPERTY INSTALLED FOR TAX-EX-
EMPT ENTITIES.—In the case of qualified clean-fuel vehicle
refueling property installed on property owned or used by
an entity exempt from tax under this chapter, the person
which installs such refueling property for the entity shall
be treated as the taxpayer with respect to the refueling prop-
erty for purposes of this section (and such refueling prop-
erty shall be treated as retail clean-fuel vehicle refueling
property) and the credit shall be allowed to such person,
but only if the person clearly discloses to the entity in any
installation contract the specific amount of the credit allow-
able under this section.
‘‘(i) CARRYFORWARD ALLOWED.—
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‘‘(1) IN GENERAL.—If the credit amount allow-
able under subsection (a) for a taxable year exceeds
the amount of the limitation under subsection (e) for
such taxable year (referred to as the ‘unused credit
year’ in this subsection), such excess shall be allowed
as a credit carryforward for each of the 20 taxable
years following the unused credit year.
‘‘(2) RULES.—Rules similar to the rules of sec-
tion 39 shall apply with respect to the credit
carryforward under paragraph (1).
‘‘(j) SPECIAL RULES.—Rules similar to the rules of
paragraphs (4) and (5) of section 179A(e) shall apply.
‘‘(k) REGULATIONS.—The Secretary shall prescribe
such regulations as necessary to carry out the provisions
of this section.
‘‘(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, 2006.’’.
(b) INCENTIVE FOR PRODUCTION OF HYDROGEN AT
QUALIFIED
CLEAN-FUEL
VEHICLE
REFUELING
PROP-
ERTY.—Section 179A(d) (defining qualified clean-fuel vehi-
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cle refueling property) is amended by adding at the end
the following new flush sentence:
‘‘In the case of clean-burning fuel which is hydrogen pro-
duced from another clean-burning fuel, paragraph (3)(A)
shall be applied by substituting ‘production, storage, or dis-
pensing’ for ‘storage or dispensing’ both places it appears.’’.
(c) CONFORMING AMENDMENTS.—(1) Section 1016(a),
as amended by this Act, is amended by striking ‘‘and’’ at
the end of paragraph (28), by striking the period at the
end of paragraph (29) and inserting ‘‘, and’’, and by add-
ing at the end the following new paragraph:
‘‘(30) to the extent provided in section 30C(f).’’.
(2) Section 55(c)(2), as amended by this Act, is
amended by inserting ‘‘30C(e),’’ after ‘‘30B(e)’’.
(3) The table of sections for subpart B of part IV of
subchapter A of chapter 1, as amended by this Act, is
amended by inserting after the item relating to section 30B
the following new item:
‘‘Sec. 30C. Clean-fuel vehicle refueling property credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to property placed in service after Sep-
tember 30, 2002, in taxable years ending after such date.
SEC. 2004. CREDIT FOR RETAIL SALE OF ALTERNATIVE
FUELS AS MOTOR VEHICLE FUEL.
(a) IN GENERAL.—Subpart D of part IV of subchapter
A of chapter 1 (relating to business related credits) is
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amended by inserting after section 40 the following new sec-
tion:
‘‘SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE
FUELS AS MOTOR VEHICLE FUEL.
‘‘(a) GENERAL RULE.—For purposes of section 38, the
alternative fuel retail sales credit for any taxable year is
the applicable amount for each gasoline gallon equivalent
of alternative fuel sold at retail by the taxpayer during such
year as a fuel to propel any qualified motor vehicle.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) APPLICABLE AMOUNT.—The term ‘applica-
ble amount’ means the amount determined in accord-
ance with the following table:
‘‘In the case of any taxable year
ending in—
The applicable amount is—
2002 and 2003 ...............................................................................
30 cents
2004 ................................................................................................
40 cents
2005 and 2006 ...............................................................................
50 cents.
‘‘(2) ALTERNATIVE FUEL.—The term ‘alternative
fuel’ means compressed natural gas, liquefied natural
gas, liquefied petroleum gas, hydrogen, and any liq-
uid at least 85 percent of the volume of which consists
of methanol or ethanol.
‘‘(3) GASOLINE GALLON EQUIVALENT.—The term
‘gasoline gallon equivalent’ means, with respect to
any alternative fuel, the amount (determined by the
Secretary) of such fuel having a Btu content of
114,000.
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‘‘(4) QUALIFIED
MOTOR
VEHICLE.—The term
‘qualified motor vehicle’ means any motor vehicle (as
defined in section 30(c)(2)) which meets any applica-
ble Federal or State emissions standards with respect
to each fuel by which such vehicle is designed to be
propelled.
‘‘(5) SOLD AT RETAIL.—
‘‘(A) IN GENERAL.—The term ‘sold at retail’
means the sale, for a purpose other than resale,
after manufacture, production, or importation.
‘‘(B) USE TREATED AS SALE.—If any per-
son uses alternative fuel (including any use after
importation) as a fuel to propel any qualified
alternative fuel motor vehicle (as defined in sec-
tion 30B(d)(4)) before such fuel is sold at retail,
then such use shall be treated in the same man-
ner as if such fuel were sold at retail as a fuel
to propel such a vehicle by such person.
‘‘(c) NO DOUBLE BENEFIT.—The amount of any de-
duction or other credit allowable under this chapter for any
fuel taken into account in computing the amount of the
credit determined under subsection (a) shall be reduced by
the amount of such credit attributable to such fuel.
‘‘(d) PASS-THRU
IN
THE CASE
OF ESTATES
AND
TRUSTS.—Under regulations prescribed by the Secretary,
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(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to fuel sold at retail after September
30, 2002, in taxable years ending after such date.
SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.
(a) ALLOCATION OF ALCOHOL FUELS CREDIT TO PA-
TRONS OF A COOPERATIVE.—Section 40(g) (relating to al-
cohol used as fuel) is amended by adding at the end the
following new paragraph:
‘‘(6) ALLOCATION
OF
SMALL
ETHANOL
PRO-
DUCER CREDIT TO PATRONS OF COOPERATIVE.—
‘‘(A) ELECTION TO ALLOCATE.—
‘‘(i) IN GENERAL.—In the case of a co-
operative organization described in section
1381(a), any portion of the credit deter-
mined under subsection (a)(3) for the tax-
able year may, at the election of the organi-
zation, be apportioned pro rata among pa-
trons of the organization on the basis of the
quantity or value of business done with or
for such patrons for the taxable year.
‘‘(ii) FORM
AND
EFFECT
OF
ELEC-
TION.—An election under clause (i) for any
taxable year shall be made on a timely filed
return for such year. Such election, once
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made, shall be irrevocable for such taxable
year.
‘‘(B) TREATMENT OF ORGANIZATIONS AND
PATRONS.—The amount of the credit apportioned
to patrons under subparagraph (A)—
‘‘(i) shall not be included in the
amount determined under subsection (a)
with respect to the organization for the tax-
able year,
‘‘(ii) shall be included in the amount
determined under subsection (a) for the tax-
able year of each patron for which the pa-
tronage dividends for the taxable year de-
scribed in subparagraph (A) are included in
gross income, and
‘‘(iii) shall be included in gross income
of such patrons for the taxable year in the
manner and to the extent provided in sec-
tion 87.
‘‘(C) SPECIAL
RULES
FOR
DECREASE
IN
CREDITS FOR TAXABLE YEAR.—If the amount of
the credit of a cooperative organization deter-
mined under subsection (a)(3) for a taxable year
is less than the amount of such credit shown on
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the return of the cooperative organization for
such year, an amount equal to the excess of—
‘‘(i) such reduction, over
‘‘(ii) the amount not apportioned to
such patrons under subparagraph (A) for
the taxable year,
shall be treated as an increase in tax imposed by
this chapter on the organization. Such increase
shall not be treated as tax imposed by this chap-
ter for purposes of determining the amount of
any credit under this chapter or for purposes of
section 55.’’.
(b) IMPROVEMENTS TO SMALL ETHANOL PRODUCER
CREDIT.—
(1) DEFINITION
OF
SMALL
ETHANOL
PRO-
DUCER.—Section 40(g) (relating to definitions and
special rules for eligible small ethanol producer cred-
it) is amended by striking ‘‘30,000,000’’ each place it
appears and inserting ‘‘60,000,000’’.
(2) SMALL ETHANOL PRODUCER CREDIT NOT A
PASSIVE
ACTIVITY
CREDIT.—Clause (i) of section
469(d)(2)(A) is amended by striking ‘‘subpart D’’ and
inserting ‘‘subpart D, other than section 40(a)(3),’’.
(3) ALLOWING
CREDIT
AGAINST
ENTIRE
REG-
ULAR TAX AND MINIMUM TAX.—
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(A) IN GENERAL.—Subsection (c) of section
38 (relating to limitation based on amount of
tax), as amended by section 301(b) of the Job
Creation and Worker Assistance Act of 2002, is
amended by redesignating paragraph (4) as
paragraph (5) and by inserting after paragraph
(3) the following new paragraph:
‘‘(4) SPECIAL RULES FOR SMALL ETHANOL PRO-
DUCER CREDIT.—
‘‘(A) IN GENERAL.—In the case of the small
ethanol producer credit—
‘‘(i) this section and section 39 shall be
applied separately with respect to the cred-
it, and
‘‘(ii) in applying paragraph (1) to the
credit—
‘‘(I) the amounts in subpara-
graphs (A) and (B) thereof shall be
treated as being zero, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the tax-
able year (other than the small ethanol
producer credit).
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‘‘(B) SMALL
ETHANOL
PRODUCER
CRED-
IT.—For purposes of this subsection, the term
‘small ethanol producer credit’ means the credit
allowable under subsection (a) by reason of sec-
tion 40(a)(3).’’.
(B) CONFORMING AMENDMENTS.—Subclause
(II) of section 38(c)(2)(A)(ii), as amended by
section 301(b)(2) of the Job Creation and Worker
Assistance Act of 2002, and subclause (II) of sec-
tion 
38(c)(3)(A)(ii), 
as 
added 
by 
section
301(b)(1) of such Act, are each amended by in-
serting ‘‘or the small ethanol producer credit’’
after ‘‘employee credit’’.
(4) SMALL
ETHANOL
PRODUCER
CREDIT
NOT
ADDED BACK TO INCOME UNDER SECTION 87.—Sec-
tion 87 (relating to income inclusion of alcohol fuel
credit) is amended to read as follows:
‘‘SEC. 87. ALCOHOL FUEL CREDIT.
‘‘Gross income includes an amount equal to the sum
of—
‘‘(1) the amount of the alcohol mixture credit de-
termined with respect to the taxpayer for the taxable
year under section 40(a)(1), and