‘‘(B) $10,000, if such vehicle has a gross 
vehicle weight rating of more than 8,500 
pounds but not more than 14,000 pounds, 
‘‘(C) $25,000, if such vehicle has a gross 
vehicle 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 
vehicle weight rating of more than 26,000 
pounds. 
‘‘(4) NEW
QUALIFIED
ALTERNATIVE
FUEL 
MOTOR
VEHICLE.—For purposes of this sub-
section— 
‘‘(A) IN GENERAL.—The term ‘new quali-
fied alternative fuel motor vehicle’ means any 
motor vehicle— 
‘‘(i) which is only capable of operating 
on an alternative fuel, 
‘‘(ii) the original use of which com-
mences with the taxpayer, 
‘‘(iii) which is acquired by the tax-
payer for use or lease, but not for resale, 
and 
‘‘(iv) which is made by a manufac-
turer.
‘‘(B) ALTERNATIVE FUEL.—The term ‘al-
ternative fuel’ means compressed natural gas, 
liquefied natural gas, liquefied petroleum gas, 
hydrogen, and any liquid at least 85 percent of 
the volume of which consists of methanol. 
‘‘(5) CREDIT FOR MIXED-FUEL VEHICLES.— 
‘‘(A) IN
GENERAL.—In the case of a 
mixed-fuel vehicle placed in service by the tax-
payer during the taxable year, the credit deter-
mined under this subsection is an amount equal 
to— 
‘‘(i) in the case of a 75/25 mixed-fuel 
vehicle, 70 percent of the credit which 
would have been allowed under this sub-
section if such vehicle was a qualified alter-
native fuel motor vehicle, and 
‘‘(ii) in the case of a 90/10 mixed-fuel 
vehicle, 90 percent of the credit which 
would have been allowed under this sub-
section if such vehicle was a qualified alter-
native fuel motor vehicle. 
‘‘(B) MIXED-FUEL
VEHICLE.—For pur-
poses of this subsection, the term ‘mixed-fuel 
vehicle’ means any motor vehicle described in
subparagraph (C) or (D) of paragraph (3), 
which— 
‘‘(i) is certified by the manufacturer 
as being able to perform efficiently in nor-
mal operation on a combination of an al-
ternative fuel and a petroleum-based fuel, 
‘‘(ii) either— 
‘‘(I) has received a certificate of 
conformity under the Clean Air Act, 
or 
‘‘(II) has received an order certi-
fying the vehicle as meeting the same 
requirements as vehicles which may be 
sold or leased in California and meets 
or exceeds the low emission vehicle 
standard under section 88.105–94 of 
title 40, Code of Federal Regulations, 
for that make and model year vehicle, 
‘‘(iii) the original use of which com-
mences with the taxpayer, 
‘‘(iv) which is acquired by the tax-
payer for use or lease, but not for resale, 
and 
‘‘(v) which is made by a manufac-
turer.
‘‘(C) 75/25 MIXED-FUEL
VEHICLE.—For 
purposes of this subsection, the term ‘75/25 
mixed-fuel vehicle’ means a mixed-fuel vehicle 
which operates using at least 75 percent alter-
native fuel and not more than 25 percent petro-
leum-based fuel. 
‘‘(D) 90/10 MIXED-FUEL
VEHICLE.—For 
purposes of this subsection, the term ‘90/10 
mixed-fuel vehicle’ means a mixed-fuel vehicle 
which operates using at least 90 percent alter-
native fuel and not more than 10 percent petro-
leum-based fuel. 
‘‘(f) LIMITATION ON NUMBER OF NEW QUALIFIED 
HYBRID AND ADVANCED LEAN-BURN TECHNOLOGY VE-
HICLES ELIGIBLE FOR CREDIT.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
vehicle sold during the phaseout period, only the ap-
plicable percentage of the credit otherwise allowable 
under subsection (c) or (d) shall be allowed. 
‘‘(2) PHASEOUT PERIOD.—For purposes of this 
subsection, the phaseout period is the period begin-
ning with the second calendar quarter following the 
calendar quarter which includes the first date on 
which the number of qualified vehicles manufactured 
by the manufacturer of the vehicle referred to in
paragraph (1) sold for use in the United States after 
the date of the enactment of this section is at least 
80,000. 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage is— 
‘‘(A) 50 percent for the first 2 calendar 
quarters of the phaseout period, 
‘‘(B) 25 percent for the 3d and 4th cal-
endar quarters of the phaseout period, and 
‘‘(C) 0 percent for each calendar quarter 
thereafter. 
‘‘(4) CONTROLLED GROUPS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, all persons treated as a single em-
ployer under subsection (a) or (b) of section 52 
or subsection (m) or (o) of section 414 shall be 
treated as a single manufacturer. 
‘‘(B) INCLUSION
OF
FOREIGN
CORPORA-
TIONS.—For purposes of subparagraph (A), in 
applying subsections (a) and (b) of section 52 
to this section, section 1563 shall be applied 
without regard to subsection (b)(2)(C) thereof. 
‘‘(5) QUALIFIED
VEHICLE.—For purposes of 
this subsection, the term ‘qualified vehicle’ means
any new qualified hybrid motor vehicle and any new 
advanced lean burn technology motor vehicle. 
‘‘(g) 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 and 30 for the taxable year. 
‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ has the meaning given such term by section 
30(c)(2). 
‘‘(2) OTHER TERMS.—The terms ‘automobile’, 
‘passenger automobile’, ‘light truck’, and ‘manufac-
turer’ have the meanings given such terms in regula-
tions prescribed by the Administrator of the Envi-
ronmental Protection Agency for purposes of the ad-
ministration of title II of the Clean Air Act (42 
U.S.C. 7521 et seq.). 
‘‘(3) 2002 MODEL
YEAR
CITY
FUEL
ECON-
OMY.—
‘‘(A) IN GENERAL.—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:
‘‘If vehicle inertia 
The 2002 model year 
weight class is:
city 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
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:
‘‘If vehicle inertia 
The 2002 model year 
weight class is: 
city 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.
‘‘(B) VEHICLE INERTIA WEIGHT CLASS.—
For purposes of subparagraph (A), the term 
‘vehicle inertia weight class’ has the same
meaning as when defined in regulations pre-
scribed by the Administrator of the Environ-
mental Protection Agency for purposes of the 
administration of title II of the Clean Air Act 
(42 U.S.C. 7521 et seq.). 
‘‘(4) FUEL ECONOMY.—Fuel economy with re-
spect to any vehicle shall be measured under rules 
similar to the rules under section 4064(c). 
‘‘(5) REDUCTION IN BASIS.—For purposes of 
this subtitle, if a credit is allowed under this section 
for any expenditure with respect to any property, the 
increase in the basis of such property which would 
(but for this paragraph) result from such expendi-
ture shall be reduced by the amount of the credit so 
allowed. 
‘‘(6) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or credit allowable under this chapter 
(other than the credits allowable under this section 
and section 30) shall be reduced by the amount of 
credit allowed under subsection (a) for such vehicle 
for the taxable year. 
‘‘(7) 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). 
‘‘(8) 
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. 
‘‘(9) ELECTION
NOT
TO
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. 
‘‘(10) BUSINESS
CARRYOVERS
ALLOWED.—If 
the credit allowable under subsection (a) for a tax-
able year exceeds the limitation under subsection (g) 
for such taxable year, such excess (to the extent of 
the credit allowable with respect to property subject 
to the allowance for depreciation) shall be allowed as 
a credit carryback and carryforward under rules 
similar to the rules of section 39. 
‘‘(11) INTERACTION
WITH
MOTOR
VEHICLE 
SAFETY STANDARDS.—Unless otherwise provided in 
this section, a motor vehicle shall not be considered 
eligible for a credit under this section unless such
vehicle is in compliance with the motor vehicle safety 
provisions of sections 30101 through 30169 of title 
49, United States Code. 
‘‘(i) REGULATIONS.— 
‘‘(1) IN GENERAL.—The Secretary shall pro-
mulgate such regulations as necessary to carry out 
the provisions of this section. 
‘‘(2) DETERMINATION OF MOTOR VEHICLE ELI-
GIBILITY.—The Secretary, after coordination with 
the Secretary of Transportation and the Adminis-
trator of the Environmental Protection Agency, shall 
prescribe such regulations as necessary to determine 
whether a motor vehicle meets the requirements to 
be eligible for a credit under this section. 
‘‘(j) TERMINATION.—This section shall not apply to 
any property placed in service after— 
‘‘(1) in the case of a new qualified alternative 
fuel motor vehicle, December 31, 2007, 
‘‘(2) in the case of a new advanced lean burn 
technology motor vehicle or a new qualified hybrid 
motor vehicle, December 31, 2009, and 
‘‘(3) in the case of a new qualified fuel cell 
motor vehicle, December 31, 2013.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 30(d) of such Code (relating to spe-
cial rules) is amended by adding at the end the fol-
lowing new paragraphs: 
‘‘(5) NO DOUBLE BENEFIT.—No credit shall be 
allowed under this section for any motor vehicle for 
which a credit is also allowed under section 30B.’’. 
(2) 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 
30B(h)(5).’’. 
(3) Section 6501(m) of such Code is amended 
by inserting ‘‘30B(h)(9),’’ after ‘‘30(d)(4),’’. 
(4) 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. Alternative motor vehicle credit.’’. 
(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. 
(d) STICKER INFORMATION REQUIRED AT RETAIL 
SALE.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall issue regulations under which each quali-
fied vehicle sold at retail shall display a notice— 
(A) that such vehicle is a qualified vehicle, 
and 
(B) that the buyer may not benefit from 
the credit allowed under section 30B of the In-
ternal Revenue Code of 1986 if such buyer has 
insufficient tax liability. 
(2) QUALIFIED
VEHICLE.—For purposes of 
paragraph (1), the term ‘‘qualified vehicle’’ means a 
vehicle with respect to which a credit is allowed 
under section 30B of the Internal Revenue Code of 
1986. 
SEC. 4. MODIFICATIONS OF DEDUCTION FOR CERTAIN RE-
FUELING PROPERTY. 
(a) 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 hydro-
gen, after December 31, 2012, and 
‘‘(2) in the case of any other property, after 
December 31, 2009.’’.
(b) INCENTIVE FOR PRODUCTION OF HYDROGEN AT 
QUALIFIED CLEAN-FUEL VEHICLE REFUELING PROP-
ERTY.—Section 179A(d) of such Code (defining qualified 
clean-fuel vehicle refueling property) is amended by adding 
at the end the following new flush sentence: ‘‘In the case 
of clean-burning fuel which is hydrogen produced from an-
other clean-burning fuel, paragraph (3)(A) shall be ap-
plied by substituting ‘production, storage, or dispensing’ 
for ‘storage or dispensing’ both places it appears.’’. 
(c) INCREASE IN LOCATION EXPENDITURES.—Sec-
tion 179A(b)(2)(A)(i) of such Code is amended by striking 
‘‘$100,000’’ and inserting ‘‘$150,000’’. 
(d) NONBUSINESS USE OF QUALIFIED CLEAN-FUEL 
VEHICLE REFUELING PROPERTY.—Section 179A(d) of 
such Code is amended by striking paragraph (1) and by 
redesignating paragraphs (2) and (3) as paragraphs (1) 
and (2), respectively. 
(e) 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. 
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