‘‘(v) which is certified as meeting the 
requirements of this section by the local air 
pollution control authority in such area. 
‘‘(B) ENGINES IN NEW MOTOR VEHICLES 
INCLUDED.—
‘‘(i) IN
GENERAL.—Such term in-
cludes an engine that otherwise meets the 
requirements of subparagraph (A) and is 
in a new motor vehicle purchased by the 
taxpayer which replaces a motor vehicle 
with a diesel engine (which is not a quali-
fying clean technology engine) used by the 
taxpayer immediately before such new 
motor vehicle is placed in service. 
‘‘(ii) ENGINE
IN
NEW
VEHICLE
RE-
PLACES
ENGINE
IN
OLD
VEHICLE.—For 
purposes of this section, a qualifying clean 
technology engine in a new motor vehicle 
shall be considered to have replaced the en-
gine in the vehicle used by the taxpayer 
immediately before the new motor vehicle 
is placed in service. 
‘‘(2) OLD ENGINE MUST BE DESTROYED.—No 
credit shall be allowed under subsection (a) unless 
the taxpayer destroys or otherwise retires the engine
which is replaced by the qualifying clean technology 
engine. 
‘‘(d) APPLICATION WITH OTHER CREDITS.—The 
credit allowed under subsection (a) for any taxable year 
shall not exceed the excess (if any) of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and sections 27, 29, and 30, over 
‘‘(2) the tentative minimum tax for the taxable 
year. 
‘‘(e) 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). 
‘‘(f) NO DOUBLE BENEFIT.—The amount of any de-
duction or other credit allowable under this chapter for 
any cost taken into account in computing the amount of 
the credit determined under subsection (a) shall be re-
duced by the amount of such credit attributable to such 
cost. 
‘‘(g) CARRYBACK AND CARRYFORWARD ALLOWED.—
‘‘(1) IN
GENERAL.—If the credit allowable 
under subsection (a) for a taxable year exceeds the 
amount of the limitation under subsection (d) for 
such taxable year (in this paragraph referred to as
the ‘unused credit year’), such excess shall be a 
credit carryback to each of the 3 taxable years pre-
ceding the unused credit year and a credit 
carryforward to each of the 20 taxable years fol-
lowing unused credit year, except that no excess may 
be carried to a taxable year beginning before the 
date of the enactment of this paragraph. 
‘‘(2) RULES.—Rules similar to the rules of sec-
tion 39 shall apply with respect to the credit 
carryback and credit carryforward under paragraph 
(1). 
‘‘(h) OTHER SPECIAL RULES.—Rules similar to the 
rules of paragraphs (4) and (5) of section 179A(e) shall 
apply. 
‘‘(i) REGULATIONS.—The Secretary shall, after con-
sulting with the Administrator of the Environmental Pro-
tection Agency and the California Air Resources Board, 
prescribe such regulations as necessary to carry out the 
provisions of this section. 
‘‘(j) TERMINATION.—This section shall not apply to 
any property placed in service after December 31, 2009.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) of such Code is amended 
by striking ‘‘and’’ at the end of paragraph (27), by 
striking the period at the end of paragraph (28) and
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(29) to the extent provided in section 
30B(e).’’. 
(2) Section 55(c)(2) of such Code is amended 
by inserting ‘‘30B(d),’’ after ‘‘30(b)(3),’’. 
(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 new item:
‘‘30B. Credit for qualifying clean technology engines.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date.
Æ