brid motor vehicle with a gross vehicle weight rating 
of not more than 8,500 pounds. 
‘‘(2) INCREASE
FOR
ADDITIONAL
KILOWATT 
HOURS.—The amount determined under paragraph 
(1) shall be increased by $500 for each whole num-
ber of kilowatt hours by which the storage capacity 
of the on-board, rechargeable electricity storage de-
vice used by such vehicle exceeds 2.5 kilowatt hours, 
but does not exceed 49.5 kilowatt hours. 
‘‘(3) NEW QUALIFIED PLUG-IN HYBRID MOTOR 
VEHICLE.—For purposes of this subsection, the term 
‘new qualified plug-in hybrid motor vehicle’ means a 
motor vehicle— 
‘‘(A) which is propelled by an internal 
combustion engine or heat engine using— 
‘‘(i) any combustible fuel, 
‘‘(ii) an on-board, rechargeable stor-
age device with a storage capacity of at 
least 2.5 kilowatt hours, and 
‘‘(iii) a means of using an off-board 
source of electricity, 
‘‘(B) which, in the case of a passenger 
automobile or light truck, has received on or 
after the date of the enactment of this section 
a certificate that such vehicle meets or exceeds 
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the Bin 5 Tier II emission level established in 
regulations prescribed by the Administrator of 
the Environmental Protection Agency under 
section 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.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 30B(a) of such Code is amended by 
striking ‘‘and’’ at the end of paragraph (3), by strik-
ing the period at the end of paragraph (4) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(5) the new plug-in hybrid motor vehicle credit 
determined under subsection (i).’’. 
(2) Section 30B(k)(2) of such Code, as redesig-
nated by subsection (a), is amended— 
(A) by striking ‘‘or’’ and inserting a 
comma, and 
(B) by inserting ‘‘, or a new qualified plug- 
in hybrid motor vehicle (as described in sub-
section (i)(3))’’ after ‘‘subsection (d)(2)(A))’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
Subtitle B—Increase Ridership of 
Public Transportation 
SEC. 321. INCREASED UNIFORM DOLLAR LIMITATION FOR 
ALL TYPES OF TRANSPORTATION FRINGE 
BENEFITS. 
(a) IN GENERAL.—Section 132(f)(2) of the Internal 
Revenue Code of 1986 (relating to limitation on exclusion) 
is amended— 
(1) by striking ‘‘$100’’ in subparagraph (A) 
and inserting ‘‘$200’’, and 
(2) by striking ‘‘$175’’ in subparagraph (B) 
and inserting ‘‘$200’’. 
(b) INFLATION ADJUSTMENT CONFORMING AMEND-
MENTS.—Subparagraph (A) of section 132(f)(6) of such 
Code (relating to inflation adjustment) is amended— 
(1) by striking the last sentence, 
(2) by striking ‘‘1999’’ and inserting ‘‘2008’’, 
and 
(3) by striking ‘‘1998’’ and inserting ‘‘2007’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this subsection shall apply to taxable years beginning after 
December 31, 2006. 
SEC. 322. CREDIT FOR EMPLOYER COSTS OF PROVIDING 
CERTAIN MASS TRANSPORTATION FRINGE 
BENEFITS TO THEIR EMPLOYEES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business-related credits) is amended by 
adding at the end the following new section: 
‘‘SEC. 45O. CREDIT FOR EMPLOYER COSTS OF PROVIDING 
CERTAIN MASS TRANSPORTATION FRINGE 
BENEFITS TO THEIR EMPLOYEES. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
mass transportation fringe credit is an amount equal to 
25 percent of the cost paid or incurred by an employer 
during the taxable year for providing any qualified trans-
portation fringe described in subparagraph (A) or (B) of 
section 132(f)(1) to employees of such employer. 
‘‘(b) LIMITATION.—The amount of the credit under 
subsection (a) for a month may not exceed the dollar 
amount per month to which the amount of the fringe bene-
fits are limited under subparagraph (A) of section 
132(f)(2). 
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