I
107TH CONGRESS
1ST SESSION
H. R. 1864
To amend the Internal Revenue Code of 1986 to encourage and accelerate
the nationwide production, retail sale, and consumer use of new motor
vehicles that are powered by fuel cell technology, hybrid technology,
battery electric technology, alternative fuels, or other advanced motor
vehicle technologies, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 16, 2001
Mr. CAMP (for himself, Ms. DUNN of Washington, Mr. RAMSTAD, Mrs. BONO,
and Mr. CANNON) introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to encourage
and accelerate the nationwide production, retail sale, and
consumer use of new motor vehicles that are powered
by fuel cell technology, hybrid technology, battery electric
technology, alternative fuels, or other advanced motor
vehicle technologies, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE;
TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Clean Efficient Automobiles Resulting From Advanced
Car Technologies (CLEAR ACT) Act of 2001’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Alternative motor vehicle credit.
Sec. 4. Modification of credit for qualified electric vehicles.
Sec. 5. Credit for retail sale of alternative fuels as motor vehicle fuel.
Sec. 6. Extension of deduction for certain refueling property.
Sec. 7. Credit for installation of alternative fueling stations.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds the following:
(1) The United States is a large and diverse ge-
ographic area that includes densely populated urban
and suburban areas along with large sparsely popu-
lated rural areas separated by long distances, and,
as a result, Americans require reliable, efficient, and
diversified modes of transportation.
(2) According to the Energy Information Ad-
ministration’s (referred to in this section as the
‘‘EIA’’) March 2000 publication ‘‘International En-
ergy Outlook’’, oil currently provides a larger share
of world energy consumption than any other energy
source and most of the growth in oil consumption in
industrialized countries, including the United States,
is projected for the transportation sector, where few
alternatives are currently economical.
(3) To meet all its national security, economic
development, and public health and welfare needs,
the United States depends on oil as the primary fuel
source for the transportation of people and goods
and services in intrastate and interstate commerce.
(4) Since 1994, the United States has imported
over 50 percent of the oil it has consumed and the
EIA expects North American petroleum imports
from the Persian Gulf to more than double over the
forecast period of 1997–2020, with additional im-
ports from offshore Atlantic Basin producers and re-
finers; this increasingly heavy reliance on imported
oil presents national security risks, contributes nega-
tively to the balance of trade of the United States,
and adversely affects the United States economy,
public health, and the environment.
(5) The United States currently has 121 areas
containing over a third of its population that do not
meet the National Ambient Air Quality Standards
resulting in losses of many billions of dollars in extra
economic costs and lost opportunities, immeasurable
health problems, and a general reduction in the
quality of life for millions of Americans.
(6) Mobile sources have become the top cause
of emissions in the United States.
(7) This heavy reliance on imported oil and fail-
ure to meet the National Ambient Air Quality
Standards demonstrate the need to accelerate devel-
opment of advanced fuel cell technology, hybrid tech-
nology, battery electric technology, and alternative
fuels technology for new motor vehicles in the trans-
portation of people and goods and services as an im-
portant means of helping to reverse the trends of in-
creasing dependence on oil imports and non-attain-
ment of air quality standards, contributing to less-
ening national security risks, improving our balance
of trade with other nations, increasing economic
growth, improving health and quality of life for mil-
lions of Americans, and providing public health, wel-
fare, and economic benefits.
‘‘(b) NEW QUALIFIED FUEL CELL MOTOR VEHICLE
CREDIT.—
‘‘(1) IN GENERAL.—For purposes of subsection
(a), the new qualified fuel cell motor vehicle credit
determined 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) $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
vehicle weight rating of more than 8,500
pounds but not more than 14,000 pounds,
‘‘(C) $20,000, 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.
‘‘(2) INCREASE FOR FUEL EFFICIENCY.—
‘‘(A) IN
GENERAL.—The amount deter-
mined under paragraph (1)(A) with respect to
a new qualified fuel cell motor vehicle which is
a passenger automobile or light truck shall be
increased by—
‘‘(i) $1,000, if such vehicle achieves at
least 150 percent but less than 175 per-
cent of the 2000 model year city fuel econ-
omy,
‘‘(ii) $1,500, if such vehicle achieves
at least 175 percent but less than 200 per-
cent of the 2000 model year city fuel econ-
omy,
‘‘(iii) $2,000, if such vehicle achieves
at least 200 percent but less than 225 per-
cent of the 2000 model year city fuel econ-
omy,
‘‘(iv) $2,500, if such vehicle achieves
at least 225 percent but less than 250 per-
cent of the 2000 model year city fuel econ-
omy,
‘‘(v) $3,000, if such vehicle achieves
at least 250 percent but less than 275 per-
cent of the 2000 model year city fuel econ-
omy,
‘‘(vi) $3,500, if such vehicle achieves
at least 275 percent but less than 300 per-
cent of the 2000 model year city fuel econ-
omy, and
‘‘(vii) $4,000, if such vehicle achieves
at least 300 percent of the 2000 model
year city fuel economy.
‘‘(B) 2000 MODEL YEAR CITY FUEL ECON-
OMY.—For purposes of subparagraph (A), the
2000 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 
weight
class is:
The 2000 model year city fuel
economy is:
1,500 or 1,750 lbs ....................................................................
43.7 mpg
2,000 lbs ..................................................................................
38.3 mpg
2,250 lbs ..................................................................................
34.1 mpg
2,500 lbs ..................................................................................
30.7 mpg
2,750 lbs ..................................................................................
27.9 mpg
3,000 lbs ..................................................................................
25.6 mpg
3,500 lbs ..................................................................................
22.0 mpg
4,000 lbs ..................................................................................
19.3 mpg
4,500 lbs ..................................................................................
17.2 mpg
5,000 lbs ..................................................................................
15.5 mpg
5,500 lbs ..................................................................................
14.1 mpg
6,000 lbs ..................................................................................
12.9 mpg
6,500 lbs ..................................................................................
11.9 mpg
7,000 or 8,500 lbs ....................................................................
11.1 mpg.
‘‘(ii) In the case of a light truck:
‘‘If 
vehicle 
inertia 
weight
class is:
The 2000 model year city fuel
economy is:
1,500 or 1,750 lbs ....................................................................
37.6 mpg
2,000 lbs ..................................................................................
33.7 mpg
2,250 lbs ..................................................................................
30.6 mpg
2,500 lbs ..................................................................................
28.0 mpg
2,750 lbs ..................................................................................
25.9 mpg
3,000 lbs ..................................................................................
24.1 mpg
3,500 lbs ..................................................................................
21.3 mpg
4,000 lbs ..................................................................................
19.0 mpg
4,500 lbs ..................................................................................
17.3 mpg
5,000 lbs ..................................................................................
15.8 mpg
5,500 lbs ..................................................................................
14.6 mpg
6,000 lbs ..................................................................................
13.6 mpg
‘‘If 
vehicle 
inertia 
weight
class is:
The 2000 model year city fuel
economy is:
6,500 lbs ..................................................................................
12.8 mpg
7,000 or 8,500 lbs ....................................................................
12.0 mpg.
‘‘(C) VEHICLE INERTIA WEIGHT CLASS.—
For purposes of subparagraph (B), 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.).
‘‘(3) NEW QUALIFIED FUEL CELL MOTOR VEHI-
CLE.—For purposes of this subsection, the term
‘new qualified fuel cell motor vehicle’ means a motor
vehicle—
‘‘(A) which is propelled by power derived
from one or more cells which convert chemical
energy directly into electricity by combining ox-
ygen with hydrogen fuel which is stored on
board the vehicle in any form and may or may
not require reformation prior to use,
‘‘(B) which, in the case of a passenger
automobile 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) 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 or light truck and which pro-
vides the following percentage of the max-
imum available power:
‘‘If percentage of the max-
imum 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 max-
imum available power is:
The credit amount is:
At least 20 percent but less than 30 percent ..........................
$1,500
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 max-
imum 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 max-
imum 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 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 2000 model
year city fuel economy,
‘‘(II) $1,000, if such vehicle
achieves at least 150 percent but less
than 175 percent of the 2000 model
year city fuel economy,
‘‘(III) $1,500, if such vehicle
achieves at least 175 percent but less
than 200 percent of the 2000 model
year city fuel economy,
‘‘(IV) $2,000, if such vehicle
achieves at least 200 percent but less
than 225 percent of the 2000 model
year city fuel economy,
‘‘(V) $2,500, if such vehicle
achieves at least 225 percent but less
than 250 percent of the 2000 model
year city fuel economy, and
‘‘(VI) $3,000, if such vehicle
achieves at least 250 percent of the
2000 model year city fuel economy.
‘‘(ii) 2000 MODEL YEAR CITY FUEL
ECONOMY.—For purposes of clause (i), the
2000 model year city fuel economy with re-
spect to a vehicle shall be determined using
the tables 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 increase 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 increase credit amount is:
2002 .........................................................................................
$3,500
2003 .........................................................................................
$3,000
2004 .........................................................................................
$2,500
2005 .........................................................................................
$2,000
2006 .........................................................................................
$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 increase credit amount is:
2002 .........................................................................................
$9,000
2003 .........................................................................................
$7,750
2004 .........................................................................................
$6,500
2005 .........................................................................................
$5,250
2006 .........................................................................................
$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 increase credit amount is:
2002 .........................................................................................
$14,000
2003 .........................................................................................
$12,000
2004 .........................................................................................
$10,000
2005 .........................................................................................
$8,000
2006 .........................................................................................
$6,000.
‘‘(D) DEFINITIONS.—
‘‘(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 2008 and later model year
ottocycle heavy duty engines, as applicable.
‘‘(ii) HEAVY DUTY HYBRID MOTOR VE-
HICLE.—For purposes of this paragraph,
the term ‘heavy duty hybrid motor vehicle’
means a new qualified hybrid motor vehicle
which has a gross vehicle weight rating of
more than 10,000 pounds and draws pro-
pulsion energy from both of the following
onboard sources of stored energy:
‘‘(I) An internal combustion or
heat engine using consumable fuel
which, for 2002 and later model vehi-
cles, has received a certificate of con-
formity under the Clean Air Act and
meets or exceeds a level of not greater
than 3.0 grams per brake horse-
power–hour of oxides of nitrogen and
0.01 per brake horsepower–hour of
particulate matter.
‘‘(II) A rechargeable energy stor-
age system.
‘‘(iii) MAXIMUM AVAILABLE POWER.—
‘‘(I) PASSENGER
AUTOMOBILE
OR LIGHT TRUCK.—For purposes of
subparagraph (A)(i), the term ‘max-
imum available power’ means the
maximum power available from the
battery or other electrical storage de-
vice, during a standard 10 second
pulse power test, divided by the sum
of the battery or other electrical stor-
age device 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
battery or other electrical storage de-
vice, during a standard 10 second
pulse power test, divided by the vehi-
cle’s total traction power. The term
‘total traction power’ means the sum
of the electric motor peak power and
the heat engine peak power of the ve-
hicle, except that if the electric motor
is the sole means by which the vehicle
can be driven, the total traction power
is the peak electric motor power.
‘‘(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 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) 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.
‘‘(d) NEW QUALIFIED ALTERNATIVE FUEL MOTOR
VEHICLE CREDIT.—
‘‘(1) ALLOWANCE OF CREDIT.—Except as pro-
vided in paragraph (5), the credit determined under
this subsection is an amount equal to the applicable
percentage of the incremental cost of any new quali-
fied alternative 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 from an
applicable State certifying the vehicle for
sale or lease in California and meets or ex-
ceeds the most stringent standard available
for certification under the State laws of
California (enacted in accordance with a
waiver granted under section 209(b) of the
Clean Air Act) for that make and model
year vehicle (other than a zero emission
standard).
‘‘(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 sug-
gested 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,
‘‘(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) QUALIFIED
ALTERNATIVE
FUEL
MOTOR
VEHICLE
DEFINED.—For 
purposes 
of 
this
subsection—
‘‘(A) IN
GENERAL.—The term ‘qualified
alternative fuel motor vehicle’ means any motor
vehicle—
lations, 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) 95/5 MIXED-FUEL
VEHICLE.—For
purposes of this subsection, the term ‘95/5
mixed-fuel vehicle’ means a mixed-fuel vehicle
which operates using at least 95 percent alter-
native fuel and not more than 5 percent petro-
leum-based fuel.
‘‘(e) APPLICATION WITH OTHER CREDITS.—The
credit allowed under subsection (a) for any taxable year
shall not exceed the excess (if any) of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and sections 27, 29, and 30, over
‘‘(2) the tentative minimum tax for the taxable
year.
‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—
For purposes of this section—
‘‘(1) 
CONSUMABLE
FUEL.—The 
term
‘consumable fuel’ means any solid, liquid, or gaseous
matter which releases energy when consumed by an
auxiliary power unit.
‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ has the meaning given such term by section
30(c)(2).
‘‘(3) 2000 MODEL
YEAR
CITY
FUEL
ECON-
OMY.—The 2000 model year city fuel economy with
respect to any vehicle shall be measured under rules
similar to the rules under section 4064(c).
‘‘(4) 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.).
‘‘(5) REDUCTION IN BASIS.—For purposes of
this subtitle, the basis of any property for which a
credit is allowable under subsection (a) shall be re-
duced by the amount of such credit so allowed (de-
termined without regard to subsection (e)).
‘‘(6) NO
DOUBLE
BENEFIT.—The amount of
any deduction or credit allowable under this
chapter—
‘‘(A) for any incremental cost taken into
account in computing the amount of the credit
determined under subsection (d) shall be re-
duced by the amount of such credit attributable
to such cost, and
‘‘(B) with respect to a vehicle described
under subsection (b) or (c), shall be reduced by
the amount of credit allowed under subsection
(a) for such vehicle for the taxable year.
‘‘(7) PROPERTY USED BY TAX-EXEMPT ENTI-
TIES.—In the case of a credit amount which is al-
lowable with respect to a motor vehicle which is ac-
quired by an entity exempt from tax under this
chapter, the person which sells or leases such vehicle
to the entity shall be treated as the taxpayer with
respect to the vehicle for purposes of this section
and the credit shall be allowed to such person, but
only if the person clearly discloses to the entity in
any sale or lease document the specific amount of
any credit otherwise allowable to the entity under
this section and reduces the sale or lease price of
such vehicle by an equivalent amount of such credit.
‘‘(8) 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).
‘‘(9) 
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.
‘‘(10) ELECTION TO NOT 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.
‘‘(11) CARRYFORWARD ALLOWED.—
‘‘(A) IN GENERAL.—If the credit amount
allowable under subsection (a) for a taxable
year exceeds the amount of the limitation under
subsection (e) for such taxable year (referred to
as the ‘unused credit year’ in this paragraph),
such excess shall be allowed as a credit
carryforward for each of the 20 taxable years
following the unused credit year.
‘‘(B) RULES.—Rules similar to the rules of
section 39 shall apply with respect to the credit
carryforward under subparagraph (A).
‘‘(12) INTERACTION
WITH
AIR
QUALITY
AND
MOTOR VEHICLE SAFETY STANDARDS.—Unless oth-
erwise provided in this section, a motor vehicle shall
not be considered eligible for a credit under this sec-
tion unless such vehicle is in compliance with—
‘‘(A) the applicable provisions of the Clean
Air Act for the applicable make and model year
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which
has adopted such provision under a waiver
under section 209(b) of the Clean Air Act), and
‘‘(B) the motor vehicle safety provisions of
sections 30101 through 30169 of title 49,
United States Code.
‘‘(g) REGULATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall pro-
mulgate such regulations as necessary to carry out
the provisions of this section.
‘‘(2) 
ADMINISTRATOR
OF
ENVIRONMENTAL
PROTECTION
AGENCY.—The Administrator of the
Environmental Protection Agency, in coordination
with the Secretary of Transportation and the Sec-
retary of the Treasury, shall prescribe such regula-
tions as necessary to determine whether a motor ve-
hicle meets the requirements to be eligible for a
credit under this section.
‘‘(h) TERMINATION.—This section shall not apply to
any property placed in service after—
‘‘(1) in the case of a new qualified fuel cell
motor vehicle (as described in subsection (b)), De-
cember 31, 2011, and
‘‘(2) in the case of any other property, Decem-
ber 31, 2007.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a) is amended by striking
‘‘and’’ at the end of paragraph (26), by striking the
period at the end of paragraph (27) and inserting ‘‘,
and’’, and by adding at the end the following:
‘‘(28) to the extent provided in section
30B(f)(4).’’.
(A) by striking paragraphs (1) and (2) and
inserting the following:
‘‘(1) LIMITATION ACCORDING TO TYPE OF VE-
HICLE.—The amount of the credit allowed under
subsection (a) for any vehicle shall not exceed the
greatest of the following amounts applicable to such
vehicle:
‘‘(A) In the case of a vehicle which con-
forms to the Motor Vehicle Safety Standard
500 prescribed by the Secretary of Transpor-
tation, the lesser of—
‘‘(i) 10 percent of the manufacturer’s
suggested retail price of the vehicle, or
‘‘(ii) $4,000.
‘‘(B) In the case of a vehicle with a gross
vehicle weight rating not exceeding 8,500
pounds—
‘‘(i) $4,000, or
‘‘(ii) $6,000, if such vehicle is—
‘‘(I) capable of a driving range of
at least 100 miles on a single charge
of the vehicle’s rechargeable batteries
and measured pursuant to the urban
dynamometer schedules under appen-
dix I to part 86 of title 40, Code of
Federal Regulations, or
‘‘(II) capable of a payload capac-
ity of at least 1000 pounds.
‘‘(C) In the case of a vehicle with a gross
vehicle weight rating exceeding 8,500 but not
exceeding 14,000 pounds, $10,000.
‘‘(D) In the case of a vehicle with a gross
vehicle weight rating exceeding 14,000 but not
exceeding 26,000 pounds, $20,000.
‘‘(E) In the case of a vehicle with a gross
vehicle weight rating exceeding 26,000 pounds,
$40,000.’’, and
(B) by redesignating paragraph (3) as
paragraph (2).
(3) CONFORMING AMENDMENTS.—
(A) Section 53(d)(1)(B)(iii) is amended by
striking ‘‘section 30(b)(3)(B)’’ and inserting
‘‘section 30(b)(2)(B)’’.
(3) Section 55(c)(2) is amended by striking
‘‘30(b)(3)’’ and inserting ‘‘30(b)(2)’’.
(b) QUALIFIED BATTERY ELECTRIC VEHICLE.—
(1) IN GENERAL.—Section 30(c)(1)(A) (defin-
ing qualified electric vehicle) is amended to read as
follows:
‘‘(A) which is—
‘‘(i) operated solely by use of a bat-
tery or battery pack, or
‘‘(ii) powered primarily through the
use of an electric battery or battery pack
using a flywheel or capacitor which stores
energy produced by an electric motor
through regenerative braking to assist in
vehicle operation,’’.
(2) LEASED VEHICLES.—Section 30(c)(1)(C) is
amended by inserting ‘‘or lease’’ after ‘‘use’’.
(3) CONFORMING AMENDMENTS.—
(A) Subsections (a), (b)(2), and (c) of sec-
tion 30 are each amended by inserting ‘‘bat-
tery’’ after ‘‘qualified’’ each place it appears.
(B) The heading of subsection (c) of sec-
tion 30 is amended by inserting ‘‘BATTERY’’
after ‘‘QUALIFIED’’.
(C) The heading of section 30 is amended
by inserting ‘‘BATTERY’’ after ‘‘QUALIFIED’’.
(D) The item relating to section 30 in the
table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by in-
serting ‘‘battery’’ after ‘‘qualified’’.
(E) Section 179A(c)(3) is amended by in-
serting ‘‘battery’’ before ‘‘electric’’.
(F) The heading of paragraph (3) of sec-
tion 179A(c) is amended by inserting ‘‘BAT-
TERY’’ before ‘‘ELECTRIC’’.
(c) ADDITIONAL SPECIAL RULES.—Section 30(d)
(relating to special rules) is amended by adding at the end
the following:
‘‘(5) NO
DOUBLE
BENEFIT.—The amount of
any deduction or credit allowable under this chapter
for any cost taken into account in computing the
amount of the credit determined under subsection
(a) shall be reduced by the amount of such credit at-
tributable to such cost.
‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTI-
TIES.—In the case of a credit amount which is al-
lowable with respect to a vehicle which is acquired
by an entity exempt from tax under this chapter, the
person which sells or leases such vehicle to the entity
shall be treated as the taxpayer with respect to the
vehicle for purposes of this section and the credit
shall be allowed to such person, but only if the per-
son clearly discloses to the entity in any sale or lease
contract the specific amount of any credit otherwise
allowable to the entity under this section and re-
duces the sale or lease price of such vehicle by an
equivalent amount of such credit.’’.
(d) EXTENSION.—Section 30(e) (relating to termi-
nation) is amended by striking ‘‘2004’’ and inserting
‘‘2007’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
December 31, 2001, in taxable years ending after such
date.
SEC. 5. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS
AS MOTOR VEHICLE FUEL.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by inserting after section 40 the following:
‘‘SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE
FUELS AS MOTOR VEHICLE FUEL.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the alternative fuel retail sales credit for any taxable year
is 50 cents for each gasoline gallon equivalent of alter-
native fuel sold at retail by the taxpayer during such year
as a fuel to propel any qualified motor vehicle, but only
if the taxpayer reduces the retail sales price of such fuel
by an equivalent amount of such credit.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) ALTERNATIVE
FUEL.—The term ‘alter-
native 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.
‘‘(2) GASOLINE
GALLON
EQUIVALENT.—The
term ‘gasoline gallon equivalent’ means, with respect
to any alternative fuel, the amount (determined by
the Secretary) of such fuel having a Btu content of
114,000.
‘‘(3) QUALIFIED MOTOR VEHICLE.—The term
‘qualified motor vehicle’ means any motor vehicle (as
defined in section 30(c)(2)) which meets any appli-
cable Federal or State emissions standards with re-
spect to each fuel by which such vehicle is designed
to be propelled.
‘‘(4) SOLD AT RETAIL.—
‘‘(A) IN GENERAL.—The term ‘sold at re-
tail’ means the sale, for a purpose other than
resale, after manufacture, production, or impor-
tation.
‘‘(B) USE TREATED AS SALE.—If any per-
son uses alternative fuel (including any use
after importation) as a fuel to propel any quali-
fied alternative fuel motor vehicle (as defined in
section 30B(d)(4)) before such fuel is sold at
retail, then such use shall be treated in the
same manner as if such fuel were sold at retail
as a fuel to propel such a vehicle by such per-
son.
‘‘(c) NO DOUBLE BENEFIT.—The amount of any de-
duction or credit allowable under this chapter for any fuel
taken into account in computing the amount of the credit
determined under subsection (a) shall be reduced by the
amount of such credit attributable to such fuel.
‘‘(d) PASS-THRU IN THE CASE OF ESTATES AND
TRUSTS.—Under regulations prescribed by the Secretary,
rules similar to the rules of subsection (d) of section 52
shall apply.
‘‘(e) TERMINATION.—This section shall not apply to
any fuel sold at retail after December 31, 2007.’’.
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) (relating to current year business credit) is
amended by striking ‘‘plus’’ at the end of paragraph (12),
by striking the period at the end of paragraph (13) and
inserting ‘‘, plus’’, and by adding at the end the following:
‘‘(14) the alternative fuel retail sales credit de-
termined under section 40A(a).’’.
(c) TRANSITIONAL RULE.—Section 39(d) (relating to
transitional rules) is amended by adding at the end the
following:
‘‘(10) NO CARRYBACK OF SECTION 40A CREDIT
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the alternative fuel retail sales credit
determined under section 40A(a) may be carried
back to a taxable year ending before January 1,
2002.’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
is amended by inserting after the item relating to section
40 the following:
‘‘Sec. 40A. Credit for retail sale of alternative fuels as motor vehicle fuel.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to fuel sold at retail after Decem-
ber 31, 2001, in taxable years ending after such date.
SEC. 6. EXTENSION OF DEDUCTION FOR CERTAIN REFUEL-
ING PROPERTY.
(a) IN GENERAL.—Section 179A(f) (relating to ter-
mination) is amended by striking ‘‘2004’’ and inserting
‘‘2007’’.
(b) CONFORMING AMENDMENT.—Section 179A(c)
(relating to qualified clean-fuel vehicle property defined)
is amended by striking paragraph (3).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
December 31, 2001, in taxable years ending after such
date.
SEC. 7. CREDIT FOR INSTALLATION OF ALTERNATIVE
FUELING STATIONS.
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to foreign tax credit, etc.),
as amended by section 3, is amended by adding at the
end the following:
‘‘SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY
CREDIT.
‘‘(a) CREDIT ALLOWED.—There shall be allowed as
a credit against the tax imposed by this chapter for the
taxable year an amount equal to—
‘‘(1) 50 percent, in the case of retail clean-fuel
vehicle refueling property, and
‘‘(2) 50 percent, in the case of residential clean-
fuel vehicle refueling property,
of the amount paid or incurred by the taxpayer during
the taxable year for the installation of clean-fuel vehicle
refueling property.
‘‘(b) LIMITATION.—The credit allowed under—
‘‘(1) subsection (a)(1) with respect to clean-fuel
vehicle refueling property, shall not exceed $30,000,
and
‘‘(2) subsection (a)(2) with respect to clean-fuel
vehicle refueling property, shall not exceed $1,000.
‘‘(c) YEAR CREDIT ALLOWED.—The credit allowed
under subsection (a) shall be allowed in the taxable year
in which the clean-fuel vehicle refueling property is placed
in service by the taxpayer.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) CLEAN-FUEL VEHICLE REFUELING PROP-
ERTY.—The term ‘clean-fuel vehicle refueling prop-
erty’ has the same meaning given the term ‘qualified
clean-fuel vehicle refueling property’ under section
179A.
‘‘(2) RESIDENTIAL CLEAN-FUEL VEHICLE RE-
FUELING PROPERTY.—The term ‘residential clean-
fuel vehicle refueling property’ means clean-fuel ve-
hicle refueling property which is installed on prop-
erty which is used as the principal residence (within
the meaning of section 121) of the taxpayer.
‘‘(3) RETAIL CLEAN-FUEL VEHICLE REFUELING
PROPERTY.—The term ‘retail clean-fuel vehicle re-
fueling property’ means clean-fuel vehicle refueling
property—
‘‘(A) which is installed on property used in
a trade or business of the taxpayer, and
‘‘(B) if such refueling property—
‘‘(i) is—
‘‘(I) available to the public dur-
ing normal business hours, and
‘‘(II) capable of serving at least 3
motor vehicles at the same time, or
‘‘(ii) regularly serves at least 1 fleet of
10 or more motor vehicles.
‘‘(e) APPLICATION WITH OTHER CREDITS.—The
credit allowed under subsection (a) for any taxable year
shall not exceed the excess (if any) of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and sections 27, 29, 30, and 30B, over
‘‘(2) the tentative minimum tax for the taxable
year.
‘‘(f) BASIS REDUCTION.—For purposes of this title,
the basis of any property shall be reduced by the portion
of the cost of such property taken into account under sub-
section (a).
‘‘(g) NO DOUBLE BENEFIT.—No deduction shall be
allowed under section 179A with respect to any property
with respect to which a credit is allowed under subsection
(a).
‘‘(h) REFUELING PROPERTY INSTALLED FOR TAX-
EXEMPT ENTITIES.—In the case of clean-fuel vehicle re-
fueling property installed on property owned or used by
an entity exempt from tax under this chapter, the person
which installs such refueling property for the entity shall
be treated as the taxpayer with respect to the refueling
property for purposes of this section (and such refueling
property shall be treated as retail clean-fuel vehicle refuel-
ing property) and the credit shall be allowed to such per-
son, but only if the person clearly discloses to the entity
in any installation contract the specific amount of the
credit allowable under this section and modifies the price
of such contract to take into account the amount of such
credit.
‘‘(i) CARRYFORWARD ALLOWED.—
‘‘(1) IN GENERAL.—If the credit amount allow-
able under subsection (a) for a taxable year exceeds
the amount of the limitation under subsection (b)
for such taxable year (referred to as the ‘unused
credit year’ in this subsection), such excess shall be
allowed as a credit carryforward for each of the 20
taxable years following the unused credit year.
‘‘(2) RULES.—Rules similar to the rules of sec-
tion 39 shall apply with respect to the credit
carryforward under paragraph (1).
‘‘(j) SPECIAL RULES.—Rules similar to the rules of
paragraphs (4) and (5) of section 179A(e) shall apply.
‘‘(k) REGULATIONS.—The Secretary shall prescribe
such regulations as necessary to carry out the provisions
of this section.
‘‘(l) TERMINATION.—This section shall not apply to
any property placed in service after December 31, 2007.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1016(a), as amended by section
3(b)(1), is amended by striking ‘‘and’’ at the end of
paragraph (27), by striking the period at the end of
paragraph (28) and inserting ‘‘, and’’, and by add-
ing at the end the following:
‘‘(29) to the extent provided in section
30C(f).’’.
(2) Section 53(d)(1)(B)(iii), as amended by sec-
tion 3(b)(2), is amended by inserting ‘‘, or not al-
lowed under section 30C solely by reason of the ap-
plication of section 30C(e)(2)’’ before the period.
(3) Section 55(c)(2), as amended by section
3(b)(3), is amended by inserting ‘‘30C(e),’’ after
‘‘30B(e)’’.
(4) The table of sections for subpart B of part
IV of subchapter A of chapter 1, as amended by sec-
tion 3(b)(5), is amended by inserting after the item
relating to section 30B the following:
‘‘Sec. 30C. Clean-fuel vehicle refueling property credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
December 31, 2001, in taxable years ending after such
date.
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