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‘‘(i) in the case of qualified fuel cell
property, 15 percent, and
‘‘(ii) in the case of any other energy
property, 10 percent.’’.
(c) QUALIFIED FUEL CELL PROPERTY.—Section 48
(relating to energy credit) is amended—
(1) by redesignating subsection (b) as para-
graph (5) of subsection (a),
(2) by striking ‘‘subsection (a)’’ in paragraph
(5) of subsection (a), as redesignated by paragraph
(1), and inserting ‘‘this subsection’’, and
(3) by adding at the end the following new sub-
section:
‘‘(b) QUALIFIED FUEL CELL PROPERTY.—For pur-
poses of subsection (a)(3)(A)(iii)—
‘‘(1) IN
GENERAL.—The term ‘qualified fuel
cell property’ means a fuel cell power plant which—
‘‘(A) generates at least 0.5 kilowatt of elec-
tricity using an electrochemical process, and
‘‘(B) has an electricity-only generation effi-
ciency greater than 30 percent.
‘‘(2) LIMITATION.—The energy credit with re-
spect to any qualified fuel cell property shall not ex-
ceed an amount equal to $500 for each 0.5 kilowatt
of capacity of such property.
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‘‘(3) FUEL
CELL
POWER
PLANT.—The term
‘fuel cell power plant’ means an integrated system,
comprised of a fuel cell stack assembly and associ-
ated balance of plant components, which converts a
fuel into electricity using electrochemical means.
‘‘(4) TERMINATION.—The term ‘qualified fuel
cell property’ shall not include any property placed
in service after December 31, 2007.’’.
(d) CONFORMING AMENDMENT.—Section 48(a)(1) is
amended by inserting ‘‘except as provided in subsection
(b)(2),’’ before ‘‘the energy’’ the first place it appears.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
April 11, 2005, 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 Rev-
enue Reconciliation Act of 1990).
SEC. 1313. REDUCED MOTOR FUEL EXCISE TAX ON CER-
TAIN MIXTURES OF DIESEL FUEL.
(a) IN GENERAL.—Paragraph (2) of section 4081(a)
is amended by adding at the end the following:
‘‘(D) DIESEL-WATER FUEL EMULSION.—In
the case of diesel-water fuel emulsion at least
16.9 percent of which is water and with respect
to which the emulsion additive is registered by
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a United States manufacturer with the Envi-
ronmental Protection Agency pursuant to sec-
tion 211 of the Clean Air Act (as in effect on
March 31, 2003), subparagraph (A)(iii) shall be
applied by substituting ‘19.7 cents’ for ‘24.3
cents’.’’.
(b) SPECIAL RULES
FOR DIESEL-WATER FUEL
EMULSIONS.—
(1) REFUNDS FOR TAX-PAID PURCHASES.—Sec-
tion 6427 is amended by redesignating subsections
(m) through (p) as subsections (n) through (q), re-
spectively, and by inserting after subsection (l) the
following new subsection:
‘‘(m) DIESEL FUEL USED
TO PRODUCE EMUL-
SION.—
‘‘(1) IN GENERAL.—Except as provided in sub-
section (k), if any diesel fuel on which tax was im-
posed by section 4081 at the regular tax rate is used
by any person in producing an emulsion described in
section 4081(a)(2)(D) which is sold or used in such
person’s trade or business, the Secretary shall pay
(without interest) to such person an amount equal to
the excess of the regular tax rate over the incentive
tax rate with respect to such fuel.
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‘‘(2) DEFINITIONS.—For purposes of paragraph
(1)—
‘‘(A) REGULAR TAX RATE.—The term ‘reg-
ular tax rate’ means the aggregate rate of tax
imposed by section 4081 determined without re-
gard to section 4081(a)(2)(D).
‘‘(B) INCENTIVE
TAX
RATE.—The term
‘incentive tax rate’ means the aggregate rate of
tax imposed by section 4081 determined with
regard to section 4081(a)(2)(D).’’.
(2) LATER
SEPARATION
OF
FUEL.—Section
4081 (relating to imposition of tax) is amended by
inserting after subsection (b) the following new sub-
section:
‘‘(c) LATER SEPARATION OF FUEL FROM DIESEL-
WATER FUEL EMULSION.—If any person separates the
taxable fuel from a diesel-water fuel emulsion on which
tax was imposed under subsection (a) at a rate determined
under subsection (a)(2)(D) (or with respect to which a
credit or payment was allowed or made by reason of sec-
tion 6427), such person shall be treated as the refiner of
such taxable fuel. The amount of tax imposed on any re-
moval of such fuel by such person shall be reduced by the
amount of tax imposed (and not credited or refunded) on
any prior removal or entry of such fuel.’’.