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dominantly in the trade or business of the fur-
nishing or sale of telephone service, telegraph 
service by means of domestic telegraph oper-
ations, or other telegraph services (other than 
international telegraph services). 
‘‘(E) TERMINATION.—The term ‘qualified 
fuel cell property’ shall not include any property 
for any period after December 31, 2009. 
‘‘(2) QUALIFIED MICROTURBINE PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
microturbine property’ means a stationary 
microturbine power plant which— 
‘‘(i) has a nameplate capacity of less 
than 2,000 kilowatts, and 
‘‘(ii) has an electricity-only generation 
efficiency of not less than 26 percent at 
International Standard Organization con-
ditions. 
‘‘(B) LIMITATION.—In the case of qualified 
microturbine property placed in service during 
the taxable year, the credit otherwise determined 
under paragraph (1) for such year with respect 
to such property shall not exceed an amount 
equal $200 for each kilowatt of capacity of such 
property.
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‘‘(C) STATIONARY
MICROTURBINE
POWER 
PLANT.—The 
term 
‘stationary 
microturbine 
power plant’ means an integrated system com-
prised of a gas turbine engine, a combustor, a 
recuperator or regenerator, a generator or alter-
nator, and associated balance of plant compo-
nents which converts a fuel into electricity and 
thermal energy. Such term also includes all sec-
ondary components located between the existing 
infrastructure for fuel delivery and the existing 
infrastructure for power distribution, including 
equipment and controls for meeting relevant 
power standards, such as voltage, frequency, and 
power factors. 
‘‘(D) SPECIAL RULE.—The first sentence of 
the matter in subsection (a)(3) which follows 
subparagraph (D) thereof shall not apply to 
qualified microturbine property which is used 
predominantly in the trade or business of the 
furnishing or sale of telephone service, telegraph 
service by means of domestic telegraph oper-
ations, or other telegraph services (other than 
international telegraph services). 
‘‘(E) TERMINATION.—The term ‘qualified 
microturbine property’ shall not include any
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property for any period after December 31, 
2008.’’. 
(c) ENERGY PERCENTAGE.—Section 48(a)(2)(A) (re-
lating to energy percentage) is amended to read as follows: 
‘‘(A) IN GENERAL.—The energy percentage 
is— 
‘‘(i) in the case of qualified fuel cell 
property, 30 percent, and 
‘‘(ii) in the case of any other energy 
property, 10 percent.’’. 
(d) CONFORMING AMENDMENT.— Section 48(a)(1) is 
amended by inserting ‘‘except as provided in paragraph 
(1)(B) or (2)(B) of subsection (d),’’ before ‘‘the energy’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to periods after December 31, 2005, in 
taxable years ending after such date, under rules similar 
to the rules of section 48(m) of the Internal Revenue Code 
of 1986 (as in effect on the day before the date of the enact-
ment of the Revenue Reconciliation Act of 1990). 
SEC. 1529. BUSINESS SOLAR INVESTMENT TAX CREDIT. 
(a) INCREASE
IN ENERGY PERCENTAGE.—Section 
48(a)(2)(A) (relating to energy percentage), as amended by 
this Act, is amended to read as follows: 
‘‘(A) IN GENERAL.—The energy percentage 
is—
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‘‘(i) in the case of energy property de-
scribed in paragraph (3)(A)(i) and quali-
fied fuel cell property, 30 percent, and 
‘‘(ii) in the case of any other energy 
property, 10 percent.’’. 
(b) HYBRID SOLAR LIGHTING SYSTEMS.—Clause (i) 
of section 48(a)(3)(A) is amended to read as follows: 
‘‘(i) equipment which uses solar energy 
to generate electricity, to heat or cool (or 
provide hot water for use in) a structure, to 
illuminate the inside of a structure using 
fiber-optic distributed sunlight or to provide 
solar process heat, excepting property used 
to generate energy for the purposes of heat-
ing a swimming pool,’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to periods after December 31, 2005, in 
taxable years ending after such date, and periods before 
January 1, 2012, under rules similar to the rules of section 
48(m) of the Internal Revenue Code of 1986 (as in effect 
on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990).
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Subtitle D—Alternative Motor 
Vehicles and Fuels Incentives 
SEC. 1531. ALTERNATIVE MOTOR VEHICLE CREDIT. 
(a) IN GENERAL.—Subpart B of part IV of subchapter 
A of chapter 1 (relating to foreign tax credit, etc.) is amend-
ed by adding at the end the following new section: 
‘‘SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be allowed 
as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the sum of— 
‘‘(1) the new qualified fuel cell motor vehicle 
credit determined under subsection (b), 
‘‘(2) the new qualified hybrid motor vehicle cred-
it determined under subsection (c), and 
‘‘(3) the new qualified alternative fuel motor ve-
hicle credit determined under subsection (d). 
‘‘(b) NEW QUALIFIED FUEL CELL MOTOR VEHICLE 
CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the new qualified fuel cell motor vehicle credit de-
termined under this subsection with respect to a new 
qualified fuel cell motor vehicle placed in service by 
the taxpayer during the taxable year is— 
‘‘(A) $8,000 ($4,000 in the case of a vehicle 
placed in service after December 31, 2009), if
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such vehicle has a gross vehicle weight rating of 
not more than 8,500 pounds, 
‘‘(B) $10,000, if such vehicle has a gross ve-
hicle weight rating of more than 8,500 pounds 
but not more than 14,000 pounds, 
‘‘(C) $20,000, if such vehicle has a gross ve-
hicle weight rating of more than 14,000 pounds 
but not more than 26,000 pounds, and 
‘‘(D) $40,000, if such vehicle has a gross ve-
hicle weight rating of more than 26,000 pounds. 
‘‘(2) INCREASE FOR FUEL EFFICIENCY.— 
‘‘(A) IN GENERAL.—The amount determined 
under paragraph (1)(A) with respect to a new 
qualified fuel cell motor vehicle which is a pas-
senger automobile or light truck shall be in-
creased by— 
‘‘(i) $1,000, if such vehicle achieves at 
least 150 percent but less than 175 percent 
of the 2002 model year city fuel economy, 
‘‘(ii) $1,500, if such vehicle achieves at 
least 175 percent but less than 200 percent 
of the 2002 model year city fuel economy, 
‘‘(iii) $2,000, if such vehicle achieves 
at least 200 percent but less than 225 per-
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cent of the 2002 model year city fuel econ-
omy, 
‘‘(iv) $2,500, if such vehicle achieves at 
least 225 percent but less than 250 percent 
of the 2002 model year city fuel economy, 
‘‘(v) $3,000, if such vehicle achieves at 
least 250 percent but less than 275 percent 
of the 2002 model year city fuel economy, 
‘‘(vi) $3,500, if such vehicle achieves at 
least 275 percent but less than 300 percent 
of the 2002 model year city fuel economy, 
and 
‘‘(vii) $4,000, if such vehicle achieves 
at least 300 percent of the 2002 model year 
city fuel economy. 
‘‘(B) 2002 MODEL YEAR CITY FUEL ECON-
OMY.—For purposes of subparagraph (A), the 
2002 model year city fuel economy with respect 
to a vehicle shall be determined in accordance 
with the following tables: 
‘‘(i) In the case of a passenger auto-
mobile: 
The 2002 model year city 
‘‘If vehicle inertia 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
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The 2002 model year city 
‘‘If vehicle inertia weight class is: 
fuel economy is: 
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. 
‘‘(ii) In the case of a light truck: 
The 2002 model year city 
‘‘If vehicle inertia 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
6,500 lbs ..........................................................................................
12.8 mpg
7,000 to 8,500 lbs ...........................................................................
12.1 mpg. 
‘‘(C) VEHICLE INERTIA WEIGHT CLASS.— 
For purposes of subparagraph (B), the term ‘ve-
hicle inertia weight class’ has the same meaning 
as when defined in regulations prescribed by the 
Administrator of the Environmental Protection 
Agency for purposes of the administration of title 
II of the Clean Air Act (42 U.S.C. 7521 et seq.). 
‘‘(3) NEW QUALIFIED FUEL CELL MOTOR VEHI-
CLE.—For purposes of this subsection, the term ‘new 
qualified fuel cell motor vehicle’ means a motor vehi-
cle—
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‘‘(A) which is propelled by power derived 
from 1 or more cells which convert chemical en-
ergy directly into electricity by combining oxy-
gen with hydrogen fuel which is stored on board 
the vehicle in any form and may or may not re-
quire reformation prior to use, 
‘‘(B) which, in the case of a passenger auto-
mobile or light truck, has received on or after the 
date of the enactment of this section a certificate 
that such vehicle meets or exceeds the Bin 5 Tier 
II emission level established in regulations pre-
scribed by the Administrator of the Environ-
mental Protection Agency under section 202(i) of 
the Clean Air Act for that make and model year 
vehicle, 
‘‘(C) the original use of which commences 
with the taxpayer, 
‘‘(D) which is acquired for use or lease by 
the taxpayer and not for resale, and 
‘‘(E) which is made by a manufacturer. 
‘‘(c) NEW QUALIFIED HYBRID MOTOR VEHICLE CRED-
IT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the new qualified hybrid motor vehicle credit de-
termined under this subsection with respect to a new
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qualified hybrid motor vehicle placed in service by the 
taxpayer during the taxable year is the credit amount 
determined under paragraph (2) or (3). 
‘‘(2) CREDIT
AMOUNT
FOR
LIGHTER
VEHI-
CLES.— 
‘‘(A) IN GENERAL.—In the case of a new 
qualified hybrid motor vehicle which is a pas-
senger automobile, medium duty passenger vehi-
cle, or light truck, the credit amount determined 
under this paragraph shall be— 
‘‘(i) $400, if such vehicle achieves at 
least 125 percent but less than 150 percent 
of the 2002 model year city fuel economy, 
‘‘(ii) $800, if such vehicle achieves at 
least 150 percent but less than 175 percent 
of the 2002 model year city fuel economy, 
‘‘(iii) $1,200, if such vehicle achieves 
at least 175 percent but less than 200 per-
cent of the 2002 model year city fuel econ-
omy, 
‘‘(iv) $1,600, if such vehicle achieves at 
least 200 percent but less than 225 percent 
of the 2002 model year city fuel economy, 
‘‘(v) $2,000, if such vehicle achieves at 
least 225 percent but less than 250 percent
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of the 2002 model year city fuel economy, 
and 
‘‘(vi) $2,400, if such vehicle achieves at 
least 250 percent of the 2002 model year 
city fuel economy. 
‘‘(B) 2002 MODEL YEAR CITY FUEL ECON-
OMY.—For purposes of subparagraph (A), the 
2002 model year city fuel economy with respect 
to a vehicle shall be determined on a gasoline 
gallon equivalent basis as determined by the Ad-
ministrator of the Environmental Protection 
Agency using the tables provided in subsection 
(b)(2)(B) with respect to such vehicle. 
‘‘(3) CREDIT
AMOUNT
FOR
HEAVIER
VEHI-
CLES.— 
‘‘(A) IN GENERAL.—In the case of a new 
qualified hybrid motor vehicle which is a heavy 
duty hybrid motor vehicle, the credit amount de-
termined under this paragraph is an amount 
equal to the applicable percentage of the incre-
mental cost of such vehicle placed in service by 
the taxpayer during the taxable year. 
‘‘(B) INCREMENTAL COST.—For purposes of 
this paragraph, the incremental cost of any 
heavy duty hybrid motor vehicle is equal to the
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amount of the excess of the manufacturer’s sug-
gested retail price for such vehicle over such price 
for a comparable gasoline or diesel fuel motor ve-
hicle of the same model, to the extent such 
amount does not exceed— 
‘‘(i) $7,500, if such vehicle has a gross 
vehicle weight rating of more than 8,500 
pounds but not more than 14,000 pounds, 
‘‘(ii) $15,000, if such vehicle has a 
gross vehicle weight rating of more than 
14,000 pounds but not more than 26,000 
pounds, and 
‘‘(iii) $30,000, if such vehicle has a 
gross vehicle weight rating of more than 
26,000 pounds. 
‘‘(C) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage shall be determined in accordance with 
the following table: 
‘‘If percent increase in fuel 
economy of hybrid over 
comparable vehicle is: 
The applicable percentage is: 
At least 30 but less than 40 percent 
20 percent. 
At least 40 but less than 50 percent 
30 percent. 
At least 50 percent ...........................
40 percent. 
‘‘(4) NEW
QUALIFIED
HYBRID
MOTOR
VEHI-
CLE.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘new qualified 
hybrid motor vehicle’ means a motor vehicle—
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‘‘(i) which draws propulsion energy 
from onboard sources of stored energy which 
are both— 
‘‘(I) an internal combustion or 
heat engine using consumable fuel, and 
‘‘(II) a rechargeable energy stor-
age system, 
‘‘(ii) which, in the case of a passenger 
automobile, medium duty passenger vehicle, 
or light truck— 
‘‘(I) has received a certificate that 
such vehicle meets or exceeds the Bin 5 
Tier II emission level established in 
regulations prescribed by the Adminis-
trator of the Environmental Protection 
Agency under section 202(i) of the 
Clean Air Act for that make and model 
year vehicle, and 
‘‘(II) has a maximum available 
power of at least 5 percent, 
‘‘(iii) which, in the case of a heavy 
duty hybrid motor vehicle— 
‘‘(I) which has a gross vehicle 
weight rating of more than 8,500 but 
not more than 14,000 pounds, has a
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maximum available power of at least 
10 percent, and 
‘‘(II) which has a gross vehicle 
weight rating of more than 14,000 
pounds, has a maximum available 
power of at least 15 percent, 
‘‘(iv) the original use of which com-
mences with the taxpayer, 
‘‘(v) which is acquired for use or lease 
by the taxpayer and not for resale, and 
‘‘(vi) which is made by a manufac-
turer. 
‘‘(B) CONSUMABLE FUEL.—For purposes of 
subparagraph (A)(i)(I), the term ‘consumable 
fuel’ means any solid, liquid, or gaseous matter 
which releases energy when consumed by an aux-
iliary power unit. 
‘‘(C) MAXIMUM AVAILABLE POWER.— 
‘‘(i) PASSENGER AUTOMOBILE, MEDIUM 
DUTY
PASSENGER
VEHICLE, 
OR
LIGHT 
TRUCK.—For purposes of subparagraph 
(A)(ii)(II), the term ‘maximum available 
power’ means the maximum power avail-
able from the rechargeable energy storage 
system, during a standard 10 second pulse
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power or equivalent test, divided by such 
maximum power and the SAE net power of 
the heat engine. 
‘‘(ii) HEAVY DUTY HYBRID MOTOR VE-
HICLE.—For purposes of subparagraph 
(A)(iii), the term ‘maximum available 
power’ means the maximum power avail-
able from the rechargeable energy storage 
system, during a standard 10 second pulse 
power or equivalent test, divided by the ve-
hicle’s total traction power. The term ‘total 
traction power’ means the sum of the peak 
power from the rechargeable energy storage 
system and the heat engine peak power of 
the vehicle, except that if such storage sys-
tem is the sole means by which the vehicle 
can be driven, the total traction power is 
the peak power of such storage system. 
‘‘(4) HEAVY DUTY HYBRID MOTOR VEHICLE.— 
For purposes of this subsection, the term ‘heavy duty 
hybrid motor vehicle’ means a new qualified hybrid 
motor vehicle which has a gross vehicle weight rating 
of more than 8,500 pounds. Such term does not in-
clude a medium duty passenger vehicle.
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‘‘(d) NEW QUALIFIED ALTERNATIVE FUEL MOTOR VE-
HICLE CREDIT.— 
‘‘(1) ALLOWANCE OF CREDIT.—Except as pro-
vided in paragraph (5), the new qualified alternative 
fuel motor vehicle credit determined under this sub-
section is an amount equal to the applicable percent-
age of the incremental cost of any new qualified alter-
native fuel motor vehicle placed in service by the tax-
payer during the taxable year. 
‘‘(2) APPLICABLE
PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage with re-
spect to any new qualified alternative fuel motor vehi-
cle is— 
‘‘(A) 50 percent, plus 
‘‘(B) 30 percent, if such vehicle— 
‘‘(i) has received a certificate of con-
formity under the Clean Air Act and meets 
or exceeds the most stringent standard 
available for certification under the Clean 
Air Act for that make and model year vehi-
cle (other than a zero emission standard), or 
‘‘(ii) has received an order certifying 
the vehicle as meeting the same require-
ments as vehicles which may be sold or 
leased in California and meets or exceeds
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the most stringent standard available for 
certification under the State laws of Cali-
fornia (enacted in accordance with a waiver 
granted under section 209(b) of the Clean 
Air Act) for that make and model year vehi-
cle (other than a zero emission standard). 
For purposes of the preceding sentence, in the case of 
any new qualified alternative fuel motor vehicle 
which weighs more than 14,000 pounds gross vehicle 
weight rating, the most stringent standard available 
shall be such standard available for certification on 
the date of the enactment of the Energy Tax Incen-
tives Act. 
‘‘(3) INCREMENTAL COST.—For purposes of this 
subsection, the incremental cost of any new qualified 
alternative fuel motor vehicle is equal to the amount 
of the excess of the manufacturer’s suggested retail 
price for such vehicle over such price for a gasoline 
or diesel fuel motor vehicle of the same model, to the 
extent such amount does not exceed— 
‘‘(A) $5,000, if such vehicle has a gross ve-
hicle weight rating of not more than 8,500 
pounds,