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SEC. 1906. CREDIT FOR ELECTRICITY PRODUCED FROM MU-
NICIPAL BIOSOLIDS AND RECYCLED SLUDGE.
(a) IN GENERAL.—Section 45(c)(1) (defining qualified
energy resources), as amended by this Act, is amended by
striking ‘‘and’’ at the end of subparagraph (F), by striking
the period at the end of subparagraph (G), and by adding
at the end the following new subparagraphs:
‘‘(H) municipal biosolids, and
‘‘(I) recycled sludge.’’.
(b) QUALIFIED FACILITIES.—Section 45(c)(3) (relat-
ing to qualified facility), as amended by this Act, is amend-
ed by adding at the end the following new subparagraphs:
‘‘(G) MUNICIPAL BIOSOLIDS FACILITY.—In
the case of a facility using municipal biosolids
to produce electricity, the term ‘qualified facility’
means any facility owned by the taxpayer which
is originally placed in service after December 31,
2001, and before January 1, 2007.
‘‘(H) RECYCLED SLUDGE FACILITY.—
‘‘(i) IN GENERAL.—In the case of a fa-
cility using recycled sludge to produce elec-
tricity, the term ‘qualified facility’ means
any facility owned by the taxpayer which is
originally placed in service before January
1, 2007.
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‘‘(ii) SPECIAL RULE.—In the case of a
qualified facility described in clause (i), the
10-year period referred to in subsection (a)
shall be treated as beginning no earlier than
the date of the enactment of this subpara-
graph.’’.
(c) DEFINITIONS.—Section 45(c), as amended by this
Act, is amended by redesignating paragraph (8) as para-
graph (10) and by inserting after paragraph (7) the fol-
lowing new paragraphs:
‘‘(8) MUNICIPAL BIOSOLIDS.—The term ‘munic-
ipal biosolids’ means the residue or solids removed by
a municipal wastewater treatment facility.
‘‘(9) RECYCLED SLUDGE.—
‘‘(A) IN
GENERAL.—The term ‘recycled
sludge’ means the recycled residue byproduct cre-
ated in the treatment of commercial, industrial,
municipal, or navigational wastewater.
‘‘(B) 
RECYCLED.—The 
term 
‘recycled’
means the processing of residue into a market-
able product, but does not include incineration
for the purpose of volume reduction.’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to electricity sold after the date of the
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enactment of this Act, in taxable years ending after such
date.
TITLE XX—ALTERNATIVE MOTOR
VEHICLES AND FUELS INCEN-
TIVES
SEC. 2001. 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
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qualified fuel cell motor vehicle placed in service by
the taxpayer during the taxable year is—
‘‘(A) $4,000, if such vehicle has a gross ve-
hicle 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 2000 model year city fuel economy,
‘‘(ii) $1,500, if such vehicle achieves at
least 175 percent but less than 200 percent
of the 2000 model year city fuel economy,