‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) CLEAN DIESEL FUEL.—The term ‘clean 
diesel fuel’ has the meaning given such term by sec-
tion 101(2) of the Clean Diesel Act of 2003. 
‘‘(2) ONLY PRODUCTION WITHIN THE UNITED 
STATES
TAKEN
INTO
ACCOUNT.—Sales shall be 
taken into account under this section only with re-
spect to diesel fuel the production of which is with-
in—
‘‘(A) the United States (within the mean-
ing of section 638(1)); or 
‘‘(B) a possession of the United States 
(within the meaning of section 638(2)). 
‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX-
PAYER.—In the case of a property or facility in 
which more than 1 person has an interest, except to 
the extent provided in regulations prescribed by the 
Secretary, production from the property or facility 
(as the case may be) shall be allocated among such 
persons in proportion to their respective interests in 
the gross sales from such property or facility. 
‘‘(4) BARREL-OF-OIL EQUIVALENT.—The term 
‘barrel-of-oil equivalent’ with respect to any fuel
means that amount of such fuel which has a Btu 
content of 5.8 million. 
‘‘(5) BARREL
DEFINED.—The term ‘barrel’ 
means 42 United States gallons. 
‘‘(6) RELATED
PERSONS.—Persons shall be 
treated as related to each other if such persons 
would be treated as a single employer under the reg-
ulations prescribed under section 52(b). In the case 
of a corporation which is a member of an affiliated 
group of corporations filing a consolidated return, 
such corporation shall be treated as selling clean die-
sel fuel to an unrelated person if such fuel is sold 
to such a person by another member of such group. 
‘‘(7) PASS-THRU IN THE CASE OF ESTATES AND 
TRUSTS.—Under regulations prescribed by the Sec-
retary, rules similar to the rules of subsection (d) of 
section 52 shall apply.
‘‘(e) APPLICATION OF SECTION.—This section shall 
apply with respect to clean diesel fuel which is sold at re-
tail before January 1, 2007.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 53(d)(1)(B)(iii) of such Code is 
amended by striking ‘‘or’’ and inserting before the 
period at the end the following: ‘‘, or under section
30D solely by reason of the application of section 
30D(b)(4)’’. 
(2) Section 55(c)(2) of such Code is amended 
by inserting ‘‘, 30D(b)(4),’’ after ‘‘30(b)(3)’’. 
(3) Section 772 of such Code is amended—
(A) in subsection (a) by striking ‘‘and’’ at 
the end of paragraph (10), by redesignating 
paragraph (11) as paragraph (12), and by in-
serting after paragraph (10) the following new 
paragraph: 
‘‘(11) the credit allowable under section 30D, 
and’’; and 
(B) in subsection (d)(5), by striking 
‘‘and’’, and by inserting before the period the 
following: ‘‘, and the credit allowable under sec-
tion 30D’’. 
(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 30C the following:
‘‘Sec. 30D. Credit for producing clean diesel fuel.’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after December 31, 2002, 
in taxable years beginning after such date.
TITLE 
III—GRANTS 
TO 
IN-
CREASE 
PRODUCTION 
OF 
CLEAN DIESEL MOTOR VEHI-
CLES 
SEC. 301. GRANTS TO INCREASE PRODUCTION OF CLEAN 
DIESEL MOTOR VEHICLES. 
(a) GRANTS.—The Secretary of Commerce (in this 
section referred to as the ‘‘Secretary’’) may award grants 
to States and cities for the purpose of converting old 
plants to produce clean diesel motor vehicles. 
(b) USE OF FUNDS.—The Secretary may not award 
a grant to a State or city under this section unless the 
State or city agrees to use the grant—
(1) to convert an old plant to produce clean die-
sel motor vehicles; or 
(2) to improve infrastructure related to any 
such plant. 
(c) APPLICATION.—To seek a grant under this sec-
tion, a State or city shall submit an application to the 
Secretary at such time, in such manner, and containing 
such information as the Secretary may reasonably require. 
(d) CLEAN DIESEL MOTOR VEHICLE.—For purposes 
of this section, the term ‘‘clean diesel motor vehicle’’ has 
the meaning given to that term in section 201(e)(1).
(e) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated such sums as may be nec-
essary to carry out this section.
Æ