‘‘(1) ADVANCED
TECHNOLOGY
MOTOR
VEHI-
CLE.—The term ‘advanced technology motor vehicle’ 
means— 
‘‘(A) any new advanced lean burn tech-
nology motor vehicle (as defined in section 
30B(c)(3)), or 
‘‘(B) any new qualified hybrid motor vehi-
cle (as defined in section 30B(d)(3)(A) and de-
termined without regard to any gross vehicle 
weight rating). 
‘‘(2) ELIGIBLE COMPONENTS.—The term ‘eligi-
ble component’ means any component inherent to 
any advanced technology motor vehicle, including— 
‘‘(A) with respect to any gasoline or diesel- 
electric new qualified hybrid motor vehicle— 
‘‘(i) electric motor or generator, 
‘‘(ii) power split device, 
‘‘(iii) power control unit, 
‘‘(iv) power controls, 
‘‘(v) integrated starter generator, or 
‘‘(vi) battery, 
‘‘(B) with respect to any hydraulic new 
qualified hybrid motor vehicle— 
‘‘(i) hydraulic accumulator vessel, 
‘‘(ii) hydraulic pump, or
‘‘(iii) hydraulic pump-motor assembly, 
‘‘(C) with respect to any new advanced 
lean burn technology motor vehicle— 
‘‘(i) diesel engine, 
‘‘(ii) turbocharger, 
‘‘(iii) fuel injection system, or 
‘‘(iv) after-treatment system, such as 
a particle filter or NOx absorber, and 
‘‘(D) with respect to any advanced tech-
nology motor vehicle, any other component sub-
mitted for approval by the Secretary. 
‘‘(d) ENGINEERING INTEGRATION COSTS.—For pur-
poses of subsection (b)(1)(B), costs for engineering inte-
gration are costs incurred prior to the market introduction 
of advanced technology vehicles for engineering tasks re-
lated to— 
‘‘(1) establishing functional, structural, and 
performance requirements for component and sub-
systems to meet overall vehicle objectives for a spe-
cific application, 
‘‘(2) designing interfaces for components and 
subsystems with mating systems within a specific ve-
hicle application, 
‘‘(3) designing cost effective, efficient, and reli-
able manufacturing processes to produce components
and subsystems for a specific vehicle application, 
and 
‘‘(4) validating functionality and performance of 
components and subsystems for a specific vehicle ap-
plication. 
‘‘(e) ELIGIBLE TAXPAYER.—For purposes of this sec-
tion, the term ‘eligible taxpayer’ means any taxpayer if 
more than 50 percent of its gross receipts for the taxable 
year is derived from the manufacture of motor vehicles 
or any component parts of such vehicles. 
‘‘(f) LIMITATION BASED ON AMOUNT OF TAX.—The 
credit allowed under subsection (a) for the taxable year 
shall not exceed the excess of— 
‘‘(1) the sum of— 
‘‘(A) the regular tax liability (as defined in 
section 26(b)) for such taxable year, plus 
‘‘(B) the tax imposed by section 55 for 
such taxable year and any prior taxable year 
beginning after 1986 and not taken into ac-
count under section 53 for any prior taxable 
year, over 
‘‘(2) the sum of the credits allowable under sub-
part A and sections 27, 30, and 30B for the taxable 
year.
‘‘(g) REDUCTION IN BASIS.—For purposes of this 
subtitle, if a credit is allowed under this section for any 
expenditure with respect to any property, the increase in 
the basis of such property which would (but for this para-
graph) result from such expenditure shall be reduced by 
the amount of the credit so allowed. 
‘‘(h) NO DOUBLE BENEFIT.— 
‘‘(1) COORDINATION WITH OTHER DEDUCTIONS 
AND
CREDITS.—Except as provided in paragraph 
(2), the amount of any deduction or other credit al-
lowable under this chapter for any cost taken into 
account in determining the amount of the credit 
under subsection (a) shall be reduced by the amount 
of such credit attributable to such cost. 
‘‘(2) RESEARCH AND DEVELOPMENT COSTS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any amount described in 
subsection (b)(1)(C) taken into account in de-
termining the amount of the credit under sub-
section (a) for any taxable year shall not be 
taken into account for purposes of determining 
the credit under section 41 for such taxable 
year. 
‘‘(B) COSTS TAKEN INTO ACCOUNT IN DE-
TERMINING
BASE
PERIOD
RESEARCH
EX-
PENSES.—Any amounts described in subsection 
(b)(1)(C) taken into account in determining the 
amount of the credit under subsection (a) for 
any taxable year which are qualified research 
expenses (within the meaning of section 41(b)) 
shall be taken into account in determining base 
period research expenses for purposes of apply-
ing section 41 to subsequent taxable years. 
‘‘(i) BUSINESS CARRYOVERS ALLOWED.—If the cred-
it allowable under subsection (a) for a taxable year exceeds 
the limitation under subsection (f) for such taxable year, 
such excess (to the extent of the credit allowable with re-
spect to property subject to the allowance for depreciation) 
shall be allowed as a credit carryback and carryforward 
under rules similar to the rules of section 39. 
‘‘(j) SPECIAL RULES.—For purposes of this section, 
rules similar to the rules of paragraphs (4) and (5) of sec-
tion 179A(e) and paragraphs (1) and (2) of section 41(f) 
shall apply 
‘‘(k) ELECTION NOT TO TAKE CREDIT.—No credit 
shall be allowed under subsection (a) for any property if 
the taxpayer elects not to have this section apply to such 
property.
‘‘(l) REGULATIONS.—The Secretary shall prescribe 
such regulations as necessary to carry out the provisions 
of this section. 
‘‘(m) TERMINATION.—This section shall not apply to 
any qualified investment after December 31, 2015.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1016(a) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of paragraph (36), by striking the period at the 
end of paragraph (37) and inserting ‘‘, and’’, and by 
adding at the end the following new paragraph: 
‘‘(38) to the extent provided in section 
30D(g).’’. 
(2) Section 6501(m) of such Code is amended 
by inserting ‘‘30D(k),’’ after ‘‘30C(e)(5),’’. 
(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 30C the following new item: 
‘‘Sec. 30D. Advanced technology motor vehicles manufacturing credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts incurred in taxable 
years beginning after December 31, 2005.
SEC. 209. CONSUMER INCENTIVES TO PURCHASE AD-
VANCED TECHNOLOGY VEHICLES. 
(a) NEW QUALIFIED FLEXIBLE FUEL HYBRID AND 
PLUG-IN HYBRID MOTOR VEHICLE CREDIT.— 
(1) 2002 MODEL YEAR CITY FUEL ECONOMY.— 
Section 30B(c)(2)(ii) of Subpart B of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 (relating to foreign tax credit, etc.) is 
amended to read as follows: 
‘‘(ii) 2002 MODEL YEAR CITY FUEL 
ECONOMY.—For purposes of this section, 
the 2002 model year city fuel economy 
with respect to a vehicle shall be deter-
mined on a gasoline equivalent basis as de-
termined by the Administrator of the Envi-
ronmental Protection Agency using the ta-
bles provided in subsection (b)(2)(B) with 
respect to such vehicle. For purposes of 
GEM flexible hybrid vehicles, plug-in hy-
brid electric vehicles, and GEM flexible 
plug-in hybrid vehicles, the Administrator 
of the Environmental Protection Agency 
shall develop a city fuel economy test that 
does not convert the non-petroleum fuel 
use into gasoline gallon equivalent and in-
cludes full electric miles from full daily re-
charging from off-board electricity or a 
probability of daily use of non-petroleum 
fuel. GEM flexible hybrid vehicles, plug-in 
hybrid electric vehicles, and GEM flexible 
plug-in hybrid vehicles have the same 
meaning as provided in section 30E. ’’. 
(2) NEW QUALIFIED FLEXIBLE FUEL HYBRID 
AND PLUG-IN HYBRID MOTOR VEHICLE CREDIT.— 
(A) IN GENERAL.—Subpart B of part IV 
of subchapter A of chapter 1 of the Internal 
Revenue Code of 1986 (relating to foreign tax 
credit, etc.) is amended by adding at the end 
the following new section: 
‘‘SEC. 30E. NEW QUALIFIED FLEXIBLE FUEL HYBRID AND 
PLUG-IN HYBRID MOTOR VEHICLE CREDIT. 
‘‘(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 the sum of the 
new qualified GEM flexible hybrid and plug-in hybrid elec-
tric vehicle credit. 
‘‘(b) NEW QUALIFIED GEM FLEXIBLE HYBRID AND 
PLUG-IN HYBRID ELECTRIC VEHICLE CREDIT.— 
‘‘(1) IN GENERAL.—For the purposes of sub-
section (a), the new qualified GEM flexible hybrid 
and plug-in hybrid electric vehicle credit determined
under this subsection for the taxable year is the 
credit amount determined under paragraph (2) with 
respect to a new qualified hybrid motor vehicle 
placed in service by the taxpayer during the taxable 
year. 
‘‘(2) CREDIT AMOUNT.— 
‘‘(A) IN GENERAL.—In the case of a plug- 
in hybrid electric vehicle or GEM flexible plug- 
in hybrid vehicle, which is a passenger auto-
mobile or light truck and which has a gross ve-
hicle weight rating of not more than 8,500 
pounds, the amount determined under this 
paragraph is the sum of the amounts deter-
mined under clauses (i) and (ii), as follows: 
‘‘(i) FUEL
ECONOMY.—The amount 
determined under this clause is twice the 
amount which would be determined under 
subsection 30B(c)(2)(A) if such vehicle 
were a vehicle referred to in such sub-
section. 
‘‘(ii) CONSERVATION
CREDIT.—The 
amount determined under this clause is 
twice the amount which would be deter-
mined under subsection 30B(c)(2)(B) if
such vehicle were a vehicle referred to in 
such subsection. 
‘‘(B) CREDIT AMOUNT FOR NEW QUALI-
FIED GEM FLEXIBLE VEHICLE.—In the case of 
a new qualified GEM flexible vehicle which is a 
passenger automobile or light truck and which 
has a gross vehicle weight rating of not more 
than 8,500 pounds, the amount shall be $300. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) E85.—The term ‘E85’ means a fuel blend 
containing 85 percent ethanol and 15 percent gaso-
line by volume. 
‘‘(2) M85.—The term ‘M85’ means a fuel blend 
containing 85 percent methanol and 15 percent gas-
oline by volume. 
‘‘(3) GEM
FLEXIBLE
VEHICLE.—The term 
‘GEM flexible vehicle’ means a motor vehicle 
warrantied by its manufacturer to operate on any 
combination of gasoline, E85, and M85. 
‘‘(4) NEW
QUALIFIED
HYBRID
MOTOR
VEHI-
CLE.—The term ‘new qualified hybrid motor’ has 
the same meaning as provided by section 30B(d). 
‘‘(5) GEM
FLEXIBLE
HYBRID
VEHICLE.—The 
term ‘GEM flexible hybrid vehicle’ means a motor
vehicle that is both a GEM flexible vehicle and a 
new qualified hybrid motor vehicle. 
‘‘(6) PLUG-IN
HYBRID
ELECTRIC
VEHICLE.— 
The term ‘plug-in hybrid electric vehicle’ has the 
same meaning as provided in section 213 of the Fuel 
Choices for American Security Act of 2005. 
‘‘(7) GEM
FLEXIBLE
PLUG-IN
HYBRID
VEHI-
CLE.—The term ‘GEM flexible plug-in hybrid vehi-
cle’ means a motor vehicle that is both a GEM flexi-
ble vehicle and a plug-in hybrid electric vehicle. 
‘‘(d) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2010.’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections for subpart B of part IV of subchapter 
A of chapter 1 of the Internal Revenue Code of 
1986 (relating to foreign tax credit, etc.) is 
amended by adding at the end the following 
new item: 
‘‘Sec. 30E. New qualified flexible fuel hybrid and plug-in hybrid motor vehicle 
credit.’’. 
(b) ELIMINATION ON NUMBER OF NEW QUALIFIED 
HYBRID AND ADVANCED LEAN BURN TECHNOLOGY VE-
HICLES ELIGIBLE FOR ALTERNATIVE MOTOR VEHICLE 
CREDIT.— 
(1) IN GENERAL.—Section 30B of the Internal 
Revenue Code of 1986 is amended by striking sub-
section (f) and by redesignating subsections (g) 
through (j) as subsections (f) through (i), respec-
tively. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraphs (4) and (6) of section 
30B(h) of the Internal Revenue Code of 1986 
are each amended by striking ‘‘(determined 
without regard to subsection (g))’’ and inserting 
‘‘determined without regard to subsection (f))’’. 
(B) Section 38(b)(25) of such Code is 
amended by striking ‘‘section 30B(g)(1)’’ and 
inserting ‘‘section 30B(f)(1)’’. 
(C) Section 55(c)(2) of such Code is 
amended by striking ‘‘section 30B(g)(2)’’ and 
inserting ‘‘section 30B(f)(2)’’. 
(D) Section 1016(a)(36) of such Code is 
amended by striking ‘‘section 30B(h)(4)’’ and 
inserting ‘‘section 30B(g)(4)’’. 
(E) Section 6501(m) of such Code is 
amended by striking ‘‘section 30B(h)(9)’’ and 
inserting ‘‘section 30B(g)(9)’’. 
(c) EXTENSION OF ALTERNATIVE VEHICLE CREDIT 
FOR NEW QUALIFIED HYBRID MOTOR VEHICLES.—Para-
graph (3) of section 30B(i) of the Internal Revenue Code 
of 1986 (as redesignated by subsection (a)) is amended
by striking ‘‘December 31, 2009’’ and inserting ‘‘Decem-
ber 31, 2010’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2005, in taxable years ending after such 
date. 
SEC. 210. FEDERAL FLEET REQUIREMENTS. 
(a) REGULATIONS.— 
(1) IN
GENERAL.—The Secretary of Energy 
shall issue regulations for Federal fleets subject to 
the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
seq.) requiring that not later than fiscal year 2015 
each Federal agency achieve at least a 20 percent 
reduction in petroleum consumption, as calculated 
from the baseline established by the Secretary for 
fiscal year 1999. 
(2) REQUIREMENT.—Not later than fiscal year 
2011, of the Federal vehicles required to be alter-
native fueled vehicles under title V of the Energy 
Policy Act of 1992 (42 U.S.C. 13251 et seq.), at 
least 30 percent shall be flexible fuel hybrid motor 
vehicles or flexible fuel plug-in hybrid motor vehicles. 
(3) EXCEPTION.—The regulations issued under 
this subsection shall not apply to ground vehicles of 
the Department of Defense whose primary purpose
is combat or the support of troops in combat oper-
ations. 
(b) INCLUSION
OF ELECTRIC DRIVE
IN ENERGY 
POLICY ACT OF 1992.—Section 508(a) of the Energy Pol-
icy Act of 1992 (42 U.S.C. 13258(a)) is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘The Secretary’’; 
and 
(2) by adding at the end the following: 
‘‘(2) Not later than January 31, 2007, the Secretary 
shall— 
‘‘(A) allocate credit in an amount to be deter-
mined by the Secretary for— 
‘‘(i) acquisition of— 
‘‘(I) a light-duty hybrid electric vehi-
cle; 
‘‘(II) a plug-in hybrid electric vehicle; 
‘‘(III) a fuel cell electric vehicle; 
‘‘(IV) a medium- or heavy-duty hybrid 
electric vehicle; 
‘‘(V) a neighborhood electric vehicle; 
or 
‘‘(VI) a medium- or heavy-duty dedi-
cated vehicle; and
‘‘(ii) investment in qualified alternative 
fuel infrastructure or nonroad equipment, as 
determined by the Secretary; and 
‘‘(B) allocate more than 1, but not to exceed 5, 
credits for investment in an emerging technology re-
lating to any vehicle described in subparagraph (A) 
to encourage— 
‘‘(i) a reduction in petroleum demand; 
‘‘(ii) technological advancement; and 
‘‘(iii) environmental safety.’’. 
(c) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section (in-
cluding the amendments made by subsection (b)) 
$10,000,000 for the period of fiscal years 2007 through 
2012. 
SEC. 211. TAX INCENTIVES FOR PRIVATE FLEETS. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 48B the fol-
lowing new section: 
‘‘SEC. 48C. FUEL-EFFICIENT FLEET CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 46, 
the fuel-efficient fleet credit for any taxable year is 15 per-
cent of the qualified fuel-efficient vehicle investment 
amount of an eligible taxpayer for such taxable year.
‘‘(b) VEHICLE PURCHASE REQUIREMENT.—In the 
case of any eligible taxpayer which places less than 10 
qualified fuel-efficient vehicles in service during the tax-
able year, the qualified fuel-efficient vehicle investment 
amount shall be zero. 
‘‘(c) QUALIFIED FUEL-EFFICIENT VEHICLE INVEST-
MENT AMOUNT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified fuel-ef-
ficient vehicle investment amount’ means the basis 
of any qualified fuel-efficient vehicle placed in serv-
ice by an eligible taxpayer during the taxable year. 
‘‘(2) QUALIFIED FUEL-EFFICIENT VEHICLE.— 
The term ‘qualified fuel-efficient vehicle’ means an 
automobile which has a fuel economy which is at 
least 10 percent greater than the average fuel econ-
omy standard for an automobile of the same class 
and model year. 
‘‘(3) OTHER TERMS.—The terms ‘automobile’, 
‘average fuel economy standard’, ‘fuel economy’, and 
‘model year’ have the meanings given to such terms 
under section 32901 of title 49, United States Code. 
‘‘(d) ELIGIBLE TAXPAYER.—The term ‘eligible tax-
payer’ means, with respect to any taxable year, a taxpayer 
who owns a fleet of 100 or more vehicles which are used
in the trade or business of the taxpayer on the first day 
of such taxable year. 
‘‘(e) TERMINATION.—This section shall not apply to 
any vehicle placed in service after December 31, 2010.’’. 
(b) CREDIT TREATED
AS PART
OF INVESTMENT 
CREDIT.—Section 46 of the Internal Revenue Code of 
1986 is amended by striking ‘‘and’’ at the end of para-
graph (3), by striking the period at the end of paragraph 
(4) and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(5) the fuel-efficient fleet credit.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 49(a)(1)(C) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the 
end of clause (iii), by striking the period at the end 
of clause (iv) and inserting ‘‘, and’’, and by adding 
at the end the following new clause: 
‘‘(v) the basis of any qualified fuel-ef-
ficient vehicle which is taken into account 
under section 48C.’’. 
(2) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 48 the following new item: 
‘‘Sec. 48C. Fuel-efficient fleet credit.’’.
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2005, in taxable years ending after such date, under rules 
similar to the rules of section 48(m) of the Internal Rev-
enue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 
1990). 
SEC. 212. REDUCING INCENTIVES TO GUZZLE GAS. 
(a) INCLUSION OF HEAVY VEHICLES IN LIMITATION 
ON
DEPRECIATION
OF
CERTAIN
LUXURY
AUTO-
MOBILES.— 
(1) IN
GENERAL.—Section 280F(d)(5)(A) of 
the Internal Revenue Code of 1986 (defining pas-
senger automobile) is amended— 
(A) by striking clause (ii) and inserting the 
following new clause: 
‘‘(ii)(I) which is rated at 6,000 
pounds unloaded gross vehicle weight or 
less, or 
‘‘(II) which is rated at more than 
6,000 pounds but not more than 14,000 
pounds gross vehicle weight.’’, 
(B) by striking ‘‘clause (ii)’’ in the second 
sentence and inserting ‘‘clause (ii)(I)’’.
(2) EXCEPTION FOR VEHICLES USED IN FARM-
ING
BUSINESS.—Section 280F(d)(5)(B) of such 
Code (relating to exception for certain vehicles) is 
amended by striking ‘‘and’’ at the end of clause (ii), 
by redesignating clause (iii) as clause (iv), and by in-
serting after clause (ii) the following new clause: 
‘‘(iii) any vehicle used in a farming 
business (as defined in section 263A(e)(4), 
and’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to property placed in 
service after the date of the enactment of this Act. 
(b) UPDATED DEPRECIATION DEDUCTION LIMITS.— 
(1) IN GENERAL.—Subparagraph (A) of section 
280F(a)(1) of the Internal Revenue Code of 1986 
(relating to limitation on amount of depreciation for 
luxury automobiles) is amended to read as follows: 
‘‘(I) LIMITATION.—The amount of the de-
preciation deduction for any taxable year shall 
not exceed for any passenger automobile— 
‘‘(i) for the 1st taxable year in the re-
covery period— 
‘‘(I) 
described 
in 
subsection 
(d)(5)(A)(ii)(I), $4,000,
‘‘(II) described in the second sen-
tence of subsection (d)(5)(A), $5,000, 
and 
‘‘(III) described in subsection 
(d)(5)(A)(ii)(II), $6,000, 
‘‘(ii) for the 2nd taxable year in the 
recovery period— 
‘‘(I) 
described 
in 
subsection 
(d)(5)(A)(ii)(I), $6,400, 
‘‘(II) described in the second sen-
tence of subsection (d)(5)(A), $8,000, 
and 
‘‘(III) described in subsection 
(d)(5)(A)(ii)(II), $9,600, 
‘‘(iii) for the 3rd taxable year in the 
recovery period— 
‘‘(I) 
described 
in 
subsection 
(d)(5)(A)(ii)(I), $3,850, 
‘‘(II) described in the second sen-
tence of subsection (d)(5)(A), $4,800, 
and 
‘‘(III) described in subsection 
(d)(5)(A)(ii)(II), $5,775, and 
‘‘(iv) for each succeeding taxable year 
in the recovery period—
‘‘(I) 
described 
in 
subsection 
(d)(5)(A)(ii)(I), $2,325, 
‘‘(II) described in the second sen-
tence of subsection (d)(5)(A), $2,900, 
and 
‘‘(III) described in subsection 
(d)(5)(A)(ii)(II), $3,475.’’. 
(2) YEARS AFTER RECOVERY PERIOD.—Section 
280F(a)(1)(B)(ii) of such Code is amended to read 
as follows: 
‘‘(ii) LIMITATION.—The amount treat-
ed as an expense under clause (i) for any 
taxable year shall not exceed for any pas-
senger automobile— 
‘‘(I) 
described 
in 
subsection 
(d)(5)(A)(ii)(I), $2,325, 
‘‘(II) described in the second sen-
tence of subsection (d)(5)(A), $2,900, 
and 
‘‘(III) described in subsection 
(d)(5)(A)(ii)(II), $3,475.’’. 
(3) 
INFLATION
ADJUSTMENT.—Section 
280F(d)(7) of such Code (relating to automobile 
price inflation adjustment) is amended—
(A) by striking ‘‘after 1988’’ in subpara-
graph (A) and inserting ‘‘after 2006’’, and 
(B) by striking subparagraph (B) and in-
serting the following new subparagraph: 
‘‘(B) AUTOMOBILE PRICE INFLATION AD-
JUSTMENT.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The automobile 
price inflation adjustment for any calendar 
year is the percentage (if any) by which— 
‘‘(I) the average wage index for 
the preceding calendar year, exceeds 
‘‘(II) the average wage index for 
2005. 
‘‘(ii) AVERAGE
WAGE
INDEX.—The 
term ‘average wage index’ means the aver-
age wage index published by the Social Se-
curity Administration.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to property placed in 
service after the date of the enactment of this Act. 
(c) EXPENSING LIMITATION FOR FARM VEHICLES.— 
(1) IN
GENERAL.—Paragraph (6) of section 
179(b) of the Internal Revenue Code of 1986 (relat-
ing to limitations) is amended to read as follows:
‘‘(6) LIMITATION
ON
COST
TAKEN
INTO
AC-
COUNT FOR FARM VEHICLES.—The cost of any vehi-
cle described in section 280F(d)(5)(B)(iii) for any 
taxable year which may be taken into account under 
this section shall not exceed $30,000.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to property placed in 
service after the date of the enactment of this Act. 
SEC. 213. FUEL CHOICE FOR TRANSPORTATION. 
(a) DEFINITIONS.—In this section: — 
(1) ALTERNATIVE FUEL; ALTERNATIVE FUEL 
AUTOMOBILE.—The terms ‘‘alternative fuel’’ and 
‘‘alternative fuel automobile’’ have the meanings 
given such terms in section 32901 of title 49, United 
States Code. 
(2) E85.—The term ‘‘E85’’ means a fuel blend 
containing 85 percent ethanol and 15 percent gaso-
line by volume. 
(3) M85.—The term ‘‘M85’’ means a fuel blend 
containing 85 percent methanol and 15 percent gas-
oline by volume. 
(4) FLEXIBLE
FUEL
VEHICLE.—The term 
‘‘flexible fuel vehicle’’ means a motor vehicle war-
ranted by its manufacturer to operate on any and all 
blends of gasoline, E85, and M85.
(5) FUEL
CHOICE-ENABLING
MOTOR
VEHI-
CLE.—The term ‘‘fuel choice-enabling motor vehicle’’ 
means— 
(A) a flexible fuel motor vehicle; or 
(B) a vehicle warranted by its manufac-
turer to operate on biodiesel. 
(6) LIGHT0DUTY MOTOR VEHICLE.—The term 
‘‘light-duty motor vehicle’’ means, as defined in reg-
ulations promulgated by the Administrator of the 
Environmental Protection Agency in effect on the 
date of enactment of this Act— 
(A) a light-duty truck; or 
(B) a light-duty vehicle. 
(b) FUEL CHOICE FOR TRANSPORTATION.— 
(1) RULEMAKING.—Not later than 1 year after 
the date of enactment of this Act, the Secretary of 
Transportation shall issue regulations to carry out 
the provisions of this subsection. 
(2) SCHEDULE.—Not less than 80 percent of 
each light-duty motor vehicles manufacturer’s an-
nual production of passenger cars manufactured on 
and after January 1, 2011, and before January 1, 
2012, and no less than 90 percent of each manufac-
turer’s production of passenger cars manufactured 
on and after January 1, 2012 shall be fuel choice
enabling motor vehicles or alternative fuel auto-
mobiles. 
(3) TEMPORARY
EXEMPTION
FROM
REQUIRE-
MENTS.—Upon application by a manufacturer, in 
such manner and containing such information as the 
Secretary shall prescribe in the regulations promul-
gated under this section, the Secretary may at any 
time, under such terms and conditions and to such 
extent as the Secretary deems appropriate, tempo-
rarily exempt or renew the exemption of a motor ve-
hicle from the requirements of subsection (b) if the 
Secretary finds that there has been a disruption in 
the supply of any component required for compliance 
with the regulations, or a disruption in the use and 
installation by the manufacturer of such component 
due to unavoidable events not under the control of 
the manufacturer, that will prevent a manufacturer 
from meeting its anticipated production volume of 
vehicles that meet the requirements of this sub-
section. Each application for such exemption must 
be filed by the manufacturer affected, and must 
specify the models, lines, and types of vehicles actu-
ally affected, although the Secretary may consolidate 
applications of a similar nature of 1 or more manu-
facturers. Any exemption or renewal shall be condi-