A bill to amend the Internal Revenue Code of 1986 to provide a credit for fuel-efficient motor vehicles and to require major integrated oil companies to amortize intangible drilling and development costs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Oil Independence, Limiting 
Subsidies, and Accelerating Vehicle Efficiency (OILSAVE) Act''.

SEC. 2. TAX CREDIT FOR FUEL-EFFICIENT MOTOR VEHICLES.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by inserting after section 30C the following new section:

``SEC. 30D. FUEL-EFFICIENT MOTOR VEHICLE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
the applicable amount for each new qualified fuel-efficient motor 
vehicle placed in service by the taxpayer during the taxable year.
    ``(b) New Qualified Fuel-Efficient Motor Vehicle.--For purposes of 
this section, the term `new qualified fuel-efficient motor vehicle' 
means a motor vehicle (as defined under section 30(c)(2))--
            ``(1) which is a passenger automobile or a light truck,
            ``(2) which--
                    ``(A) in the case of a passenger automobile, 
                achieves a fuel economy of not less than 34.5 miles per 
                gallon, and
                    ``(B) in the case of a light truck, achieves a fuel 
                economy of not less than 27.5 miles per gallon,
            ``(3) the original use of which commences with the 
        taxpayer,
            ``(4) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(5) which is made by a manufacturer for model year 2007, 
        2008, 2009, 2010, or 2011.
    ``(c) Applicable Amount.--For purposes of this section, the 
applicable amount shall be determined as follows:


 
------------------------------------------------------------------------
                                                In the case
                                                    of a     In the case
                                                 passenger    of a light
``If the motor vehicle achieves a fuel economy  automobile,   truck, the
                      of:                           the       applicable
                                                 applicable   amount is:
                                                 amount is:
------------------------------------------------------------------------
27.5 miles per gallon.........................           $0         $630
28.5..........................................            0          710
29.5..........................................            0          780
30.5..........................................            0          850
31.5..........................................            0          920
32.5..........................................            0          980
33.5..........................................            0        1,040
34.5..........................................          630        1.090
35.5..........................................          700        1,140
36.5..........................................          760        1,190
37.5..........................................          820        1,240
38.5..........................................          880        1,280
39.5..........................................          940        1,320
40.5..........................................          990        1,360
41.5..........................................        1,040        1,400
42.5..........................................        1,090        1,430
43.5..........................................        1,140        1,470
44.5..........................................        1,180        1,500
45.5..........................................        1,220        1,530
46.5..........................................        1,260        1,560
47.5..........................................        1,300        1,590
48.5..........................................        1,340        1,620
49.5..........................................        1,370        1,640
50.5..........................................        1,410        1,670
51.5..........................................        1,440        1,690
52.5..........................................        1,470        1,720
53.5..........................................        1,500        1,740
54.5..........................................        1,530        1,760
55.5..........................................        1,560        1,780
56.5..........................................        1,590        1,800
57.5..........................................        1,610        1,820
58.5..........................................        1,640        1,840
59.5 or more..................................        1,660        1,860
------------------------------------------------------------------------

    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Fuel economy.--The term `fuel economy' has the 
        meaning given such term under section 32901(a)(10) of title 49, 
        United States Code.
            ``(2) Model year.--The term `model year' has the meaning 
        given such term under section 32901(a)(14) of such title.
            ``(3) Other terms.--The terms `passenger automobile', 
        `light truck', and `manufacturer' have the meaning given such 
        terms in regulations prescribed by the Administrator of the 
        Environmental Protection Agency for purposes of the 
        administration of title II of the Clean Air Act.
            ``(4) Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed.
            ``(5) No double benefit.--
                    ``(A) Coordination with other vehicle credits.--No 
                credit shall be allowed under subsection (a) with 
                respect to any new qualified fuel-efficient motor 
                vehicle for any taxable year if a credit is allowed 
                with respect to such motor vehicle for such taxable 
                year under section 30 or 30B.
                    ``(B) Other tax benefits.--The amount of any 
                deduction or credit (other than the credit allowable 
                under this section and any credit described in 
                subparagraph (A)) allowable under this chapter with 
                respect to any new qualified fuel-efficient motor 
                vehicle shall be reduced by the amount of credit 
                allowed under subsection (a) for such motor vehicle for 
                such taxable year.
            ``(6) Property used outside the united states, etc., not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(7) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects not to have this section apply to such vehicle.
            ``(8) Interaction with air quality and motor vehicle safety 
        standards.--Unless otherwise provided in this section, a motor 
        vehicle shall not be considered eligible for a credit under 
        this section 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 provisions 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.
    ``(e) Credit May Be Transferred.--
            ``(1) In general.--A taxpayer may, in connection with the 
        purchase of a new qualified fuel-efficient motor vehicle, 
        transfer any credit allowable under subsection (a) to any 
        person who is in the trade or business of selling new qualified 
        fuel-efficient motor vehicles, but only if such person clearly 
        discloses to such taxpayer, through the use of a window sticker 
        attached to the new qualified fuel-efficient vehicle--
                    ``(A) the amount of any credit allowable under 
                subsection (a) with respect to such vehicle, and
                    ``(B) a notification that the taxpayer will not be 
                eligible for any credit under section 30 or 30B with 
                respect to such vehicle unless the taxpayer elects not 
                to have this section apply with respect to such 
                vehicle.
            ``(2) Consent required for revocation.--Any transfer under 
        paragraph (1) may be revoked only with the consent of the 
        Secretary.
            ``(3) Regulations.--The Secretary may prescribe such 
        regulations as necessary to ensure that any credit described in 
        paragraph (1) is claimed once and not retransferred by a 
        transferee.''.
    (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(d)(4).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``30D(d)(7),'' after ``30C(e)(5),''.
            (3) The table of section for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 30C the following new item:

``Sec. 30D. Fuel-efficient motor vehicle credit.''.
    (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.

SEC. 3. AMORTIZATION OF INTANGIBLE DRILLING AND DEVELOPMENT COSTS FOR 
              MAJOR INTEGRATED OIL COMPANIES.

    (a) In General.--Subsection (i) of section 263 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``Incurred Outside the United States'' in 
        the heading,
            (2) by inserting ``or owned or operated by a major 
        integrated oil company (as defined in section 167(h)(5)(B))'' 
        after ``United States'', and
            (3) by inserting ``located outside the United States'' 
        after ``nonproductive well'' in the last sentence thereof.
    (b) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred after the date of the enactment of this 
Act.

Summary: Oil Independence, Limiting Subsidies, and Accelerating Vehicle Efficiency (OILSAVE) Act - Amends the Internal Revenue Code to allow a tax credit for the purchase of a new qualified fuel-efficient motor vehicle. Defines "new qualified fuel-efficient motor vehicle" as a passenger automobile with a fuel economy rating of not less than 34.5 miles per gallon or a light truck with a 27.5 miles per gallon rating which are manufactured for model years 2007-2011.

Denies major integrated oil companies (companies with an average daily production of crude oil of at least 500,000 barrels and gross receipts in excess of $1 billion for a taxable year) the option to expense intangible drilling and development costs.