In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Q: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Energy Efficient and Environmentally
Friendly Automobile Tax Credit Act of 2008''.

SEC. 2. CREDIT FOR REPLACING AN AUTOMOBILE WITH A MORE FUEL-EFFICIENT
AUTOMOBILE.

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

''SEC. 30D. CREDIT FOR REPLACING AN AUTOMOBILE WITH A MORE FUEL-
EFFICIENT AUTOMOBILE.

''(a) In General.--In the case of an eligible purchase by an
eligible taxpayer of a passenger automobile, there shall be allowed as
a credit against the tax imposed by this chapter an amount equal to the
lesser of--
''(1) the cost of the passenger automobile, or
''(2) $2,000.
''(b) Eligible Purchase.--For purposes of this section--
''(1) In general.--The term 'eligible purchase' means any
purchase of a passenger automobile if--
''(A) the taxpayer sells another passenger
automobile within a reasonable period surrounding such
purchase, and
''(B) the average fuel economy of the purchased
automobile is at least 20 percent better than the
average fuel economy of the sold automobile.
''(2) Passenger automobile.--The term 'passenger
automobile' has the meaning given such term in regulations
prescribed by the Administrator of the Environmental Protection
Agency for purposes of the administration of title II of the
Clean Air Act (42 U.S.C. 7521 et seq.). Such term includes a
light truck (within the meaning of such regulations).
''(3) Fuel economy.--Average fuel economy shall be
determined as provided in section 30B(h)(2).
''(c) Eligible Taxpayer.--For purposes of this section--
''(1) In general.--The term 'eligible taxpayer' means--
''(A) any individual, and
''(B) any qualified business.
''(2) Qualified business.--The term 'qualified business'
means any sole proprietorship, partnership, or corporation if--
''(A) at least 40 percent of its total gross income
for the taxable year is derived from the active conduct
of transporting persons or property for hire, and
''(B) in the case of a partnership or corporation,
all of the equity interests in which are held by 1
individual.
''(3) Aggregation rules.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (m) or (o) of section 414, shall be treated as 1
person for purposes of paragraph (2).
''(d) Application With Other Credits.--
''(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without regard
to this subsection) that is attributable to property of a
character subject to an allowance for depreciation shall be
treated as a credit listed in section 38(b) for such taxable
year (and not allowed under subsection (a)).
''(2) Personal credit.--The credit allowed under subsection
(a) (after the application of paragraph (1)) for any taxable
year shall not exceed the excess (if any) of--
''(A) the regular tax liability (as defined in
section 26(b)) reduced by the sum of the credits
allowable under subpart A and sections 27, 30, 30B, and
30C, over
''(B) the tentative minimum tax for the taxable
year.
''(e) Special Rules.--
''(1) Exception for business vehicles.--Except in the case
of a qualified business, subsection (a) shall apply only to
passenger automobiles substantially all of the use of which is
for personal, nonbusiness purposes.
''(2) Limitation on vehicles being replaced.--Except in the
case of a qualified business, subsection (b)(1)(A) shall apply
only to passenger vehicles which were substantially and
regularly used by the taxpayer for personal, nonbusiness
purposes.
''(3) Basis reduction.--The basis of any passenger
automobile for which credit is allowed under subsection (a)
shall be reduced by the amount of such credit.''.
(b) Technical Amendments.--
(1) Section 38(b) of such Code is amended by striking
''plus'' at the end of paragraph (31), by striking the period
at the end of paragraph (32) and inserting '', plus'', and by
adding at the end the following new paragraph:
''(33) the portion of the credit under section 30D
(relating to credit for replacing an automobile with a more
fuel-efficient automobile) to which section 30D(d)(1)
applies.''.
(2) Section 55(c)(2) of such Code is amended by inserting
''30D(d)(2),'' after ''30C(d)(2),''.
(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 section 30C the following new item:

''Sec. 30D. Credit for replacing an automobile with a more fuel-
efficient automobile.''.

SEC. 3. DEDUCTION FOR STATE AND LOCAL TAXES IMPOSED ON PURCHASE OF MORE
FUEL-EFFICIENT AUTOMOBILES.

Subsection (a) of section 165 of the Internal Revenue Code of 1986
(relating to deduction for taxes) is amended by adding at the end the
following new paragraph:
''(6) State and local taxes imposed on the purchase of any
passenger automobile (as defined in section 30D(b)(2)) for
which credit is allowed to the taxpayer under section 30D.''.

SEC. 4. DEDUCTION FOR INTEREST ON LOANS USED TO PURCHASE MORE FUEL-
EFFICIENT AUTOMOBILES.

Paragraph (2) of section 163(h) of the Internal Revenue Code of
1986 (defining personal interest) is amended by striking ''and'' at the
end of subparagraph (E), by striking the period at the end of
subparagraph (F) and inserting '', and'', and by adding at the end the
following new subparagraph:
''(G) any interest paid or accrued on indebtedness
incurred to purchase a passenger automobile (as defined
in section 30D(b)(2)) for which credit is allowed to
the taxpayer under section 30D.''.

SEC. 5. EFFECTIVE DATE.

The amendment made by this Act shall apply vehicles purchased after
the date of the enactment of this Act in taxable years ending after
such date.
A:
Energy Efficient and Environmentally Friendly Automobile Tax Credit Act of 2008 - Amends the Internal Revenue Code to allow individual and business taxpayers: (1) a tax credit for up to $2,000 of the cost of replacing a passenger automobile with another passenger automobile that is at least 20% more fuel efficient; and (2) tax deductions for state and local taxes and loan interest for the replacement automobile.