1986 (relating to foreign tax credit, etc.) is amended by
inserting after section 27 the following new section:
‘‘SEC. 28. CREDIT FOR USE OF CLEAN BURNING FUELS AS
MOTOR VEHICLE FUEL.
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 50 cents for each
gasoline gallon equivalent of clean burning fuel used by
the taxpayer during the taxable year as a fuel to propel
any qualified motor vehicle.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) CLEAN BURNING FUEL.—The term ‘clean
burning fuel’ means natural gas, compressed natural
gas, liquefied natural gas, liquefied petroleum gas,
and any liquid at least 85 percent of which consists
of methanol.
‘‘(2) GASOLINE
GALLON
EQUIVALENT.—The
term ‘gasoline gallon equivalent’ means, with respect
to any clean burning fuel, the amount (determined
by the Secretary) of such fuel having a Btu content
of 114,000.
‘‘(3) QUALIFIED MOTOR VEHICLE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
motor vehicle’ means any motor vehicle (as de-
fined in section 179A(e)) which meets any ap-
plicable Federal or State emissions standards
with respect to each fuel by which such vehicle
is designed to be propelled.
‘‘(B) EXCEPTION.—Such term shall not in-
clude any vehicle which is placed in service on
or before December 31, 1997, if such vehicle
was capable of being propelled by a clean burn-
ing fuel at any time before such date.
‘‘(c) SPECIAL RULES.—
‘‘(1) APPLICATION
WITH
OTHER
CREDITS.—
The credit allowed by subsection (a) for any taxable
year shall not exceed the excess (if any) of—
‘‘(A) the regular tax for the taxable year
reduced by the sum of the credits allowable
under subpart A and section 27, over
‘‘(B) the tentative minimum tax for the
taxable year.
‘‘(2) DISALLOWANCE OF DEDUCTION.—Any de-
duction allowable under this chapter for 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.
‘‘(3) ELECTION TO HAVE CREDIT NOT APPLY.—
‘‘(A) IN GENERAL.—A taxpayer may elect
to have this section not apply for any taxable
year.
‘‘(B) TIME FOR MAKING ELECTION.—An
election under subparagraph (A) for any tax-
able year may be made (or revoked) at any time
before the expiration of the 3-year period begin-
ning on the last date prescribed by law for fil-
ing the return for such taxable year (deter-
mined without regard to extensions).
‘‘(d) TERMINATION.—This section shall not apply to
any fuel used after December 31, 2004.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (A) of section 29(b)(6) of
such Code is amended by striking ‘‘section 27’’ and
inserting ‘‘sections 27 and 28’’.
(2) Subparagraph (A) of section 30(b)(3) of
such Code is amended by striking ‘‘sections 27 and
29’’ and inserting ‘‘sections 27, 28, and 29’’.
(3) 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 27 the following new item:
‘‘Sec. 28. Credit for use of clean burning fuels as motor vehicle
fuel.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to fuel used after December 31,
1997, in taxable years ending after such date.
Æ