emission level established in regulations 
prescribed by the Administrator of the En-
vironmental Protection Agency under sec-
tion 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 
CREDIT.—
‘‘(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 
qualified hybrid motor vehicle placed in service by 
the taxpayer during the taxable year is the credit 
amount determined under paragraph (2). 
‘‘(2) CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—The credit amount de-
termined under this paragraph shall be deter-
mined in accordance with the following tables: 
‘‘(i) In the case of a new qualified hy-
brid motor vehicle which is a passenger 
automobile, medium duty passenger vehi-
cle, or light truck and which provides the 
following percentage of the maximum 
available power:
‘‘‘‘If percentage of the maximum 
available power is: 
The credit amount is: 
At least 5 percent but less than 10 percent ............................
$250
At least 10 percent but less than 20 percent ..........................
$500
At least 20 percent but less than 30 percent ..........................
$750
At least 30 percent ..................................................................
$1,000.
‘‘(ii) In the case of a new qualified hy-
brid motor vehicle which is a heavy duty 
hybrid motor vehicle and which provides 
the following percentage of the maximum 
available power: 
‘‘(I) If such vehicle has a gross 
vehicle weight rating of not more than 
14,000 pounds:
‘‘‘‘If percentage of the maximum 
available power is: 
The credit amount is: 
At least 20 percent but less than 30 percent ..........................
$1,000
At least 30 percent but less than 40 percent ..........................
$1,750
At least 40 percent but less than 50 percent ..........................
$2,000
At least 50 percent but less than 60 percent ..........................
$2,250
At least 60 percent ..................................................................
$2,500.
‘‘(II) If such vehicle has a gross 
vehicle weight rating of more than 
14,000 but not more than 26,000 
pounds:
‘‘‘‘If percentage of the maximum 
available power is: 
The credit amount is: 
At least 20 percent but less than 30 percent ..........................
$4,000
At least 30 percent but less than 40 percent ..........................
$4,500
At least 40 percent but less than 50 percent ..........................
$5,000
At least 50 percent but less than 60 percent ..........................
$5,500
At least 60 percent ..................................................................
$6,000.
‘‘(III) If such vehicle has a gross 
vehicle weight rating of more than 
26,000 pounds:
‘‘‘‘If percentage of the maximum 
available power is: 
The credit amount is: 
At least 20 percent but less than 30 percent ..........................
$6,000
At least 30 percent but less than 40 percent ..........................
$7,000
At least 40 percent but less than 50 percent ..........................
$8,000
At least 50 percent but less than 60 percent ..........................
$9,000
At least 60 percent ..................................................................
$10,000.
‘‘(B) INCREASE FOR FUEL EFFICIENCY.—
‘‘(i) AMOUNT.—The amount deter-
mined under subparagraph (A)(i) with re-
spect to a new qualified hybrid motor vehi-
cle which is a passenger automobile or 
light truck shall be increased by—
‘‘(I) 
$500, 
if 
such 
vehicle 
achieves at least 125 percent but less 
than 150 percent of the 2002 model 
year city fuel economy, 
‘‘(II) $1,000, if such vehicle 
achieves at least 150 percent but less 
than 175 percent of the 2002 model 
year city fuel economy, 
‘‘(III) $1,500, if such vehicle 
achieves at least 175 percent but less 
than 200 percent of the 2002 model 
year city fuel economy,
‘‘(IV) $2,000, if such vehicle 
achieves at least 200 percent but less 
than 225 percent of the 2002 model 
year city fuel economy, 
‘‘(V) $2,500, if such vehicle 
achieves at least 225 percent but less 
than 250 percent of the 2002 model 
year city fuel economy, and 
‘‘(VI) $3,000, if such vehicle 
achieves at least 250 percent of the 
2002 model year city fuel economy. 
‘‘(ii) 2002 MODEL YEAR CITY FUEL 
ECONOMY.—For purposes of clause (i), the 
2002 model year city fuel economy with re-
spect to a vehicle shall be determined on a 
gasoline gallon equivalent basis as deter-
mined by the Administrator of the Envi-
ronmental Protection Agency using the ta-
bles provided in subsection (b)(2)(B) with 
respect to such vehicle. 
‘‘(C) INCREASE FOR ACCELERATED EMIS-
SIONS
PERFORMANCE.—The amount deter-
mined under subparagraph (A)(ii) with respect 
to an applicable heavy duty hybrid motor vehi-
cle shall be increased by the increased credit
amount determined in accordance with the fol-
lowing tables: 
‘‘(i) In the case of a vehicle which has 
a gross vehicle weight rating of not more 
than 14,000 pounds:
‘‘‘‘If the model year is: 
The increased credit amount is: 
2005 .........................................................................................
$3,000
2006 .........................................................................................
$2,500
2007 .........................................................................................
$2,000
2008 .........................................................................................
$1,500.
‘‘(ii) In the case of a vehicle which 
has a gross vehicle weight rating of more 
than 14,000 pounds but not more than 
26,000 pounds:
‘‘‘‘If the model year is: 
The increased credit amount is: 
2005 .........................................................................................
$7,750
2006 .........................................................................................
$6,500
2007 .........................................................................................
$5,250
2008 .........................................................................................
$4,000.
‘‘(iii) In the case of a vehicle which 
has a gross vehicle weight rating of more 
than 26,000 pounds:
‘‘‘‘If the model year is: 
The increased credit amount is: 
2005 .........................................................................................
$12,000
2006 .........................................................................................
$10,000
2007 .........................................................................................
$8,000
2008 .........................................................................................
$6,000.
‘‘(D) DEFINITIONS RELATING TO CREDIT 
AMOUNT.—
‘‘(i) APPLICABLE
HEAVY
DUTY
HY-
BRID MOTOR VEHICLE.—For purposes of 
subparagraph (C), the term ‘applicable 
heavy duty hybrid motor vehicle’ means a 
heavy duty hybrid motor vehicle which is
powered by an internal combustion or heat 
engine which is certified as meeting the 
emission standards set in the regulations 
prescribed by the Administrator of the En-
vironmental Protection Agency for 2007 
and later model year diesel heavy duty en-
gines, or for 2008 and later model year 
ottocycle heavy duty engines, as applicable. 
‘‘(ii) MAXIMUM AVAILABLE POWER.—
‘‘(I) PASSENGER
AUTOMOBILE, 
MEDIUM DUTY PASSENGER VEHICLE, 
OR LIGHT TRUCK.—For purposes of 
subparagraph (A)(i), the term ‘max-
imum available power’ means the 
maximum power available from the re-
chargeable energy storage system, 
during a standard 10 second pulse 
power or equivalent test, divided by 
such maximum power and the SAE 
net power of the heat engine. 
‘‘(II) 
HEAVY
DUTY
HYBRID 
MOTOR
VEHICLE.—For purposes of 
subparagraph (A)(ii), the term ‘max-
imum available power’ means the 
maximum power available from the re-
chargeable energy storage system, 
during a standard 10 second pulse 
power or equivalent test, divided by 
the vehicle’s total traction power. The 
term ‘total traction power’ means the 
sum of the peak power from the re-
chargeable energy storage system and 
the heat engine peak power of the ve-
hicle, except that if such storage sys-
tem is the sole means by which the ve-
hicle can be driven, the total traction 
power is the peak power of such stor-
age system. 
‘‘(3) NEW
QUALIFIED
HYBRID
MOTOR
VEHI-
CLE.—For purposes of this subsection, the term 
‘new qualified hybrid motor vehicle’ means a motor 
vehicle—
‘‘(A) which draws propulsion energy from 
onboard sources of stored energy which are 
both—
‘‘(i) an internal combustion or heat 
engine using combustible fuel, and 
‘‘(ii) a rechargeable energy storage 
system,
‘‘(B) which, in the case of a passenger 
automobile, medium duty passenger vehicle, or 
light truck—
‘‘(i) for 2002 and later model vehicles, 
has received a certificate of conformity 
under the Clean Air Act and meets or ex-
ceeds the equivalent qualifying California 
low emission vehicle standard under sec-
tion 243(e)(2) of the Clean Air Act for 
that make and model year, and 
‘‘(ii) for 2004 and later model vehi-
cles, has received a certificate that such ve-
hicle meets or exceeds the Bin 5 Tier II 
emission level established in regulations 
prescribed by the Administrator of the En-
vironmental Protection Agency under sec-
tion 202(i) of the Clean Air Act for that 
make and model year vehicle, 
‘‘(C) which, in the case of a heavy duty hy-
brid motor vehicle, the internal combustion or 
heat engine of which has received a certificate 
of conformity under the Clean Air Act as meet-
ing the emission standards set in the regula-
tions prescribed by the Administrator of the 
Environmental Protection Agency for 2004
through 2007 model year diesel heavy duty en-
gines or ottocycle heavy duty engines, as appli-
cable, 
‘‘(D) the original use of which commences 
with the taxpayer, 
‘‘(E) which is acquired for use or lease by 
the taxpayer and not for resale, and 
‘‘(F) which is made by a manufacturer. 
‘‘(4) HEAVY DUTY HYBRID MOTOR VEHICLE.—
For purposes of this subsection, the term ‘heavy 
duty hybrid motor vehicle’ means a new qualified hy-
brid motor vehicle which has a gross vehicle weight 
rating of more than 8,500 pounds. Such term does 
not include a medium duty passenger vehicle. 
‘‘(d) NEW QUALIFIED ALTERNATIVE FUEL MOTOR 
VEHICLE 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 al-
ternative fuel motor vehicle placed in service by the 
taxpayer 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 ve-
hicle 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 
the most stringent standard available for 
certification under the State laws of Cali-
fornia (enacted in accordance with a waiv-
er granted under section 209(b) of the 
Clean Air Act) for that make and model 
year vehicle (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