S 768 ISCommentsClose CommentsPermalink

To increase fuel economy standards for automobiles and for other purposes.CommentsClose CommentsPermalink

March 6, 2007

Mr. OBAMA (for himself, Mr. LUGAR, Mr. BIDEN, Mr. SMITH, Mr. BINGAMAN, Mr. COLEMAN, and Mr. SPECTER) introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To increase fuel economy standards for automobiles and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fuel Economy Reform Act'.CommentsClose CommentsPermalink

SEC. 2. FINDINGS.

Congress makes the following findings:CommentsClose CommentsPermalink





(1) United States dependence on oil imports imposes tremendous burdens on the economy, foreign policy, and military of the United States.CommentsClose CommentsPermalink





(2) According to the Energy Information Administration, 60 percent of the crude oil and petroleum products consumed in the United States between April 2005 and March 2006 (12,400,000 barrels per day) were imported. At a cost of $75 per barrel of oil, people in the United States remit more than $600,000 per minute to other countries for petroleum.CommentsClose CommentsPermalink





(3) A significant percentage of these petroleum imports originate in countries controlled by regimes that are unstable or openly hostile to the interests of the United States. Dependence on production from these countries contributes to the volatility of domestic and global markets and the `risk premium' paid by consumers in the United States.CommentsClose CommentsPermalink





(4) The Energy Information Administration projects that the total petroleum demand in the United States will increase by 23 percent between 2006 and 2026, while domestic crude production is expected to decrease by 11 percent, resulting in an anticipated 28 percent increase in petroleum imports. Absent significant action, the United States will become more vulnerable to oil price increases, more dependent upon foreign oil, and less able to pursue national interests.CommentsClose CommentsPermalink





(5) Two-thirds of all domestic oil use occurs in the transportation sector, which is 97 percent reliant upon petroleum-based fuels. Passenger vehicles, including light trucks under 10,000 pounds gross vehicle weight, represent over 60 percent of the oil used in the transportation sector.CommentsClose CommentsPermalink





(6) Corporate average fuel economy of all cars and trucks improved by 70 percent between 1975 and 1987. Between 1987 and 2006, fuel economy improvements have stagnated and the fuel economy of the United States is lower than many developed countries and some developing countries.CommentsClose CommentsPermalink





(7) Significant improvements in engine technology occurred between 1986 and 2006. These advances have been used to make vehicles larger and more powerful, and have not focused solely on increasing fuel economy.CommentsClose CommentsPermalink





(8) According to a 2002 fuel economy report by the National Academies of Science, fuel economy can be increased without negatively impacting the safety of cars and trucks in the United States. Some new technologies can increase both safety and fuel economy (such as high strength materials, unibody design, lower bumpers). Design changes related to fuel economy also present opportunities to reduce the incompatibility of tall, stiff, heavy vehicles with the majority of vehicles on the road.CommentsClose CommentsPermalink





(9) Significant change must occur to strengthen the economic competitiveness of the domestic auto industry. According to a recent study by the University of Michigan, a sustained gasoline price of $2.86 per gallon would lead Detroit's Big 3 automakers' profits to shrink by $7,000,000,000 as they absorb 75 percent of the lost vehicle sales. This would put nearly 300,000 people in the United States out of work.CommentsClose CommentsPermalink





(10) Opportunities exist to strengthen the domestic vehicle industry while improving fuel economy. A 2004 study performed by the University of Michigan concludes that providing $1,500,000,000 in tax incentives over a 10-year period to encourage domestic manufacturers and parts facilities to produce clean cars will lead to a gain of nearly 60,000 domestic jobs and pay for itself through the resulting increase in domestic tax receipts.CommentsClose CommentsPermalink

SEC. 3. DEFINITION OF AUTOMOBILE AND PASSENGER AUTOMOBILE.

(a) Definition of Automobile-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (3) of section 32901(a) of title 49, United States Code, is amended by striking `rated at--' and all that follows through the period at the end and inserting `rated at not more than 10,000 pounds gross vehicle weight.'.CommentsClose CommentsPermalink





(2) FUEL ECONOMY INFORMATION- Section 32908(a) of such title is amended, by striking `section--' and all that follows through `(2)' and inserting `section, the term'.CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) shall apply to model year 2010 and each subsequent model year.CommentsClose CommentsPermalink





(b) Definition of Passenger Automobile-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (16) of section 32901(a) of such title is amended by striking `, but does not include' and all that follows through the end and inserting a period.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply to model year 2012 and each subsequent model year.CommentsClose CommentsPermalink

SEC. 4. AVERAGE FUEL ECONOMY STANDARDS.

(a) Standards- Section 32902 of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in the heading, by inserting `Manufactured Before Model Year 2013' after `Non-Passenger Automobiles'; andCommentsClose CommentsPermalink





(B) by adding at the end the following: `This subsection shall not apply to automobiles manufactured after model year 2012.';CommentsClose CommentsPermalink





(2) in subsection (b)--CommentsClose CommentsPermalink





(A) in the heading, by inserting `Manufactured Before Model Year 2013' after `Passenger Automobiles';CommentsClose CommentsPermalink





(B) by inserting `and before model year 2010' after `1984'; andCommentsClose CommentsPermalink





(C) by adding at the end the following: `Such standard shall be increased by 4 percent per year for model years 2010 through 2012 (rounded to the nearest 1/10 mile per gallon)';CommentsClose CommentsPermalink





(3) by amending subsection (c) to read as follows:CommentsClose CommentsPermalink





`(c) Automobiles Manufactured After Model Year 2012- (1)(A) Not later than 18 months before the beginning of each model year after model year 2012, the Secretary of Transportation shall prescribe, by regulation--CommentsClose CommentsPermalink





`(i) an average fuel economy standard for automobiles manufactured by a manufacturer in that model year; orCommentsClose CommentsPermalink





`(ii) based on 1 or more vehicle attributes that relate to fuel economy--CommentsClose CommentsPermalink





`(I) separate average fuel economy standards for different classes of automobiles; orCommentsClose CommentsPermalink





`(II) average fuel economy standards expressed in the form of a mathematical function.CommentsClose CommentsPermalink





`(B)(i) Except as provided under paragraphs (3) and (4) and subsection (d), average fuel economy standards under subparagraph (A) shall attain a projected aggregate level of average fuel economy of 27.5 miles per gallon for all automobiles manufactured by all manufacturers for model year 2013.CommentsClose CommentsPermalink





`(ii) The projected aggregate level of average fuel economy for model year 2014 and each model year thereafter shall be increased by 4 percent over the level of the prior model year (rounded to the nearest 1/10 mile per gallon).CommentsClose CommentsPermalink





`(2) In addition to the average fuel economy standards under paragraph (1), each manufacturer of passenger automobiles shall be subject to an average fuel economy standard for passenger automobiles manufactured by a manufacturer in a model year that shall be equal to 92 percent of the average fuel economy projected by the Secretary for all passenger automobiles manufactured by all manufacturers in that model year. An average fuel economy standard under this subparagraph for a model year shall be promulgated at the same time as the standard under paragraph (1) for such model year.CommentsClose CommentsPermalink





`(3) If the actual aggregate level of average fuel economy achieved by manufacturers for each of 3 consecutive model years is 5 percent or more less than the projected aggregate level of average fuel economy for such model year, the Secretary may make appropriate adjustments to the standards prescribed under this subsection.CommentsClose CommentsPermalink





`(4)(A) Notwithstanding paragraphs (1) through (3) and subsection (b), the Secretary of Transportation may prescribe a lower average fuel economy standard for 1 or more model years if the Secretary of Transportation, in consultation with the Secretary of Energy, finds, by clear and convincing evidence, that the minimum standards prescribed under paragraph (1)(B) or (3) or subsection (b) for each model year--CommentsClose CommentsPermalink





`(i) are technologically not achievable;CommentsClose CommentsPermalink





`(ii) cannot be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States and no offsetting safety improvements can be practicably implemented for that model year; orCommentsClose CommentsPermalink





`(iii) is shown not to be cost effective.CommentsClose CommentsPermalink





`(B) If a lower standard is prescribed for a model year under subparagraph (A), such standard shall be the maximum standard that--CommentsClose CommentsPermalink





`(i) is technologically achievable;CommentsClose CommentsPermalink





`(ii) can be achieved without materially reducing the overall safety of automobiles manufactured or sold in the United States; andCommentsClose CommentsPermalink





`(iii) is cost effective.CommentsClose CommentsPermalink





`(5) In determining cost effectiveness under paragraph (4)(A)(iii), the Secretary of Transportation shall take into account the total value to the United States of reduced petroleum use, including the value of reducing external costs of petroleum use, using a value for such costs equal to 50 percent of the value of a gallon of gasoline saved or the amount determined in an analysis of the external costs of petroleum use that considers--CommentsClose CommentsPermalink





`(A) value to consumers;CommentsClose CommentsPermalink





`(B) economic security;CommentsClose CommentsPermalink





`(C) national security;CommentsClose CommentsPermalink





`(D) foreign policy;CommentsClose CommentsPermalink





`(E) the impact of oil use--CommentsClose CommentsPermalink





`(i) on sustained cartel rents paid to foreign suppliers;CommentsClose CommentsPermalink





`(ii) on long-run potential gross domestic product due to higher normal-market oil price levels, including inflationary impacts;CommentsClose CommentsPermalink





`(iii) on import costs, wealth transfers, and potential gross domestic product due to increased trade imbalances;CommentsClose CommentsPermalink





`(iv) on import costs and wealth transfers during oil shocks;CommentsClose CommentsPermalink





`(v) on macroeconomic dislocation and adjustment costs during oil shocks;CommentsClose CommentsPermalink





`(vi) on the cost of existing energy security policies, including the management of the Strategic Petroleum Reserve;CommentsClose CommentsPermalink





`(vii) on the timing and severity of the oil peaking problem;CommentsClose CommentsPermalink





`(viii) on the risk, probability, size, and duration of oil supply disruptions;CommentsClose CommentsPermalink





`(ix) on OPEC strategic behavior and long-run oil pricing;CommentsClose CommentsPermalink





`(x) on the short term elasticity of energy demand and the magnitude of price increases resulting from a supply shock;CommentsClose CommentsPermalink





`(xi) on oil imports, military costs, and related security costs, including intelligence, homeland security, sea lane security and infrastructure, and other military activities;CommentsClose CommentsPermalink





`(xii) on oil imports, diplomatic and foreign policy flexibility, and connections to geopolitical strife, terrorism, and international development activities;CommentsClose CommentsPermalink





`(xiii) on all relevant environmental hazards under the jurisdiction of the Environmental Protection Agency; andCommentsClose CommentsPermalink





`(xiv) on well-to-wheels urban and local air emissions of `pollutants' and their uninternalized costs;CommentsClose CommentsPermalink





`(F) the impact of the oil or energy intensity of the United States economy on the sensitivity of the economy to oil price changes, including the magnitude of gross domestic product losses in response to short term price shocks or long term price increases;CommentsClose CommentsPermalink





`(G) the impact of United States payments for oil imports on political, economic, and military developments in unstable or unfriendly oil exporting countries;CommentsClose CommentsPermalink





`(H) the uninternalized costs of pipeline and storage oil seepage, and for risk of oil spills from production, handling, and transport, and related landscape damage; andCommentsClose CommentsPermalink





`(I) additional relevant factors, as determined by the Secretary.CommentsClose CommentsPermalink





`(6) When considering the value to consumers of a gallon of gasoline saved, the Secretary of Transportation may not use a value that is less than the greatest of--CommentsClose CommentsPermalink





`(A) the average national cost of a gallon of gasoline sold in the United States during the 12-month period ending on the date on which the new fuel economy standard is proposed;CommentsClose CommentsPermalink





`(B) the most recent weekly estimate by the Energy Information Administration of the Department of Energy of the average national cost of a gallon of gasoline (all grades) sold in the United States; orCommentsClose CommentsPermalink





`(C) the gasoline prices projected by the Energy Information Administration for the 20-year period beginning in the year following the year in which the standards are established.CommentsClose CommentsPermalink





`(7) In prescribing standards under this subsection, the Secretary may prescribe standards for 1 or more model years.CommentsClose CommentsPermalink





`(8)(A) Not later than December 31, 2016, the Secretary of Transportation, the Secretary of Energy, and the Administrator of the Environmental Protection Agency shall submit a joint report to Congress on the state of global automotive efficiency technology development, and on the accuracy of tests used to measure fuel economy of automobiles under section 32904(c), utilizing the study and assessment of the National Academy of Sciences referred to in subparagraph (B).CommentsClose CommentsPermalink





`(B) The Secretary of Transportation shall enter into appropriate arrangements with the National Academy of Sciences to conduct a comprehensive study of the technological opportunities to enhance fuel economy and an analysis and assessment of the accuracy of fuel economy tests used by the Administrator of the Environmental Protection Agency to measure fuel economy for each model under section 32904(c). Such analysis and assessment shall identify any additional factors or methods that should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles. The Secretary of Transportation and the Administrator of the Environmental Protection Agency shall furnish, at the request of the Academy, any information that the Academy determines to be necessary to conduct the study, analysis, and assessment under this subparagraph.CommentsClose CommentsPermalink





`(C) The report submitted under subparagraph (A) shall include--CommentsClose CommentsPermalink





`(i) the study of the National Academy of Sciences referred to in subparagraph (B); andCommentsClose CommentsPermalink





`(ii) an assessment by the Secretary of Transportation of technological opportunities to enhance fuel economy and opportunities to increase overall fleet safety.CommentsClose CommentsPermalink





`(D) The report submitted under subparagraph (A) shall identify and examine additional opportunities to reform the regulatory structure under this chapter, including approaches that seek to merge vehicle and fuel requirements into a single system that achieves equal or greater reduction in petroleum use and environmental benefits than the amount of petroleum use and environmental benefits that have been achieved as of the date of the enactment of this Act.CommentsClose CommentsPermalink





`(E) The report submitted under subparagraph (A) shall--CommentsClose CommentsPermalink





`(i) include conclusions reached by the Administrator of the Environmental Protection Agency, as a result of detailed analysis and public comment, on the accuracy of fuel economy tests as in use during the period beginning on the date that is 5 years before the completion of the report and ends on the date of such completion;CommentsClose CommentsPermalink





`(ii) identify any additional factors that the Administrator determines should be included in tests to measure fuel economy for each model to more accurately reflect actual fuel economy of automobiles; andCommentsClose CommentsPermalink





`(iii) include a description of options, formulated by the Secretary of Transportation and the Administrator, to incorporate such additional factors in fuel economy tests in a manner that will not effectively increase or decrease average fuel economy for any automobile manufacturer.'; andCommentsClose CommentsPermalink





(4) in subsection (g)(2), by striking `(and submit the amendment to Congress when required under subsection (c)(2) of this section)'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) IN GENERAL- Chapter 329 of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(A) in section 32903--CommentsClose CommentsPermalink





(i) by striking `passenger' each place it appears;CommentsClose CommentsPermalink





(ii) by striking `section 32902(b)-(d) of this title' each place it appears and inserting `subsection (c) or (d) of section 32902';CommentsClose CommentsPermalink





(iii) by striking subsection (e); andCommentsClose CommentsPermalink





(iv) by redesignating subsection (f) as subsection (e); andCommentsClose CommentsPermalink





(B) in section 32904--CommentsClose CommentsPermalink





(i) in subsection (a)--CommentsClose CommentsPermalink





(I) by striking `passenger' each place it appears; andCommentsClose CommentsPermalink





(II) in paragraph (1), by striking `subject to' and all that follows through `section 32902(b)-(d) of this title' and inserting `subject to subsection (c) or (d) of section 32902'; andCommentsClose CommentsPermalink





(ii) in subsection (b)(1)(B), by striking `under this chapter' and inserting `under section 32902(c)(2)'.CommentsClose CommentsPermalink





(2) EFFECTIVE DATE- The amendments made by this section shall apply to automobiles manufactured after model year 2012.CommentsClose CommentsPermalink

SEC. 5. CREDIT TRADING, COMPLIANCE, AND JUDICIAL REVIEW.

(a) Credit Trading- Section 32903(a) of title 49, United States Code, is amended--CommentsClose CommentsPermalink





(1) by inserting `Credits earned by a manufacturer under this section may be sold to any other manufacturer and used as if earned by that manufacturer, except that credits earned by a manufacturer described in clause (i) of section 32904(b)(1)(A) may only be sold to a manufacturer described such clause (i) and credits earned by a manufacturer described in clause (ii) of such section may only be sold to a manufacturer described in such clause (ii).' after `earns credits.';CommentsClose CommentsPermalink





(2) by striking `3 consecutive model years immediately' each place it appears and inserting `model years'; andCommentsClose CommentsPermalink





(3) effective for model years after 2012, the sentence added by paragraph (1) of this subsection is amended by inserting `for purposes of compliance with section 32902(c)(2)' after `except that'.CommentsClose CommentsPermalink





(b) Multi-Year Compliance Period- Section 32904(c) of such title is amended--CommentsClose CommentsPermalink





(1) by inserting `(1)' before `The Administrator'; andCommentsClose CommentsPermalink





(2) by adding at the end the following:CommentsClose CommentsPermalink





`(2) The Secretary, by rule, may allow a manufacturer to elect a multi-year compliance period of not more than 4 consecutive model years in lieu of the single model year compliance period otherwise applicable under this chapter.'.CommentsClose CommentsPermalink





(c) Judicial Review of Regulations- Section 32909(a)(1) of such title is amended by striking out `adversely affected by' and inserting `aggrieved or adversely affected by, or suffering a legal wrong because of,'.CommentsClose CommentsPermalink

SEC. 6. CONSUMER TAX CREDIT.

(a) Elimination on Number of New Qualified Hybrid and Advanced Lean Burn Technology Vehicles Eligible for Alternative Motor Vehicle Credit-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 30B of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(A) by striking subsection (f); andCommentsClose CommentsPermalink





(B) by redesignating subsections (g) through (j) as subsections (f) through (i), respectively.CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENTS-CommentsClose CommentsPermalink





(A) Paragraphs (4) and (6) of section 30B(h) of such Code are each amended by striking `(determined without regard to subsection (g))' and inserting `determined without regard to subsection (f))'.CommentsClose CommentsPermalink





(B) Section 38(b)(25) of such Code is amended by striking `section 30B(g)(1)' and inserting `section 30B(f)(1)'.CommentsClose CommentsPermalink





(C) Section 55(c)(2) of such Code is amended by striking `section 30B(g)(2)' and inserting `section 30B(f)(2)'.CommentsClose CommentsPermalink





(D) Section 1016(a)(36) of such Code is amended by striking `section 30B(h)(4)' and inserting `section 30B(g)(4)'.CommentsClose CommentsPermalink





(E) Section 6501(m) of such Code is amended by striking `section 30B(h)(9)' and inserting `section 30B(g)(9)'.CommentsClose CommentsPermalink





(b) Extension of Alternative Vehicle Credit for New Qualified Hybrid Motor Vehicles- Paragraph (3) of section 30B(i) of such Code (as redesignated by subsection (a)) is amended by striking `December 31, 2009' and inserting `December 31, 2011'.CommentsClose CommentsPermalink





(c) Computation of Credit- Section 30B of such Code is amended by striking `city' each place it appears and inserting `combined'.CommentsClose CommentsPermalink





(d) Effective Dates- The amendments made by subsections (a) and (b) of this section shall apply to property placed in service after December 31, 2007, in taxable years ending after such date. The amendments made by subsection (c) shall apply to vehicles acquired after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 7. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING 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:CommentsClose CommentsPermalink

`SEC. 30D. ADVANCED TECHNOLOGY MOTOR VEHICLES MANUFACTURING CREDIT.

`(a) Credit Allowed- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 35 percent of the qualified investment of an eligible taxpayer for such taxable year.CommentsClose CommentsPermalink





`(b) Qualified Investment- For purposes of this section--CommentsClose CommentsPermalink





`(1) IN GENERAL- The qualified investment for any taxable year is equal to the incremental costs incurred during such taxable year--CommentsClose CommentsPermalink





`(A) to re-equip, expand, or establish any manufacturing facility in the United States of the eligible taxpayer to produce advanced technology motor vehicles or to produce eligible components,CommentsClose CommentsPermalink





`(B) for engineering integration performed in the United States of such vehicles and components as described in subsection (d),CommentsClose CommentsPermalink





`(C) for research and development performed in the United States related to advanced technology motor vehicles and eligible components, andCommentsClose CommentsPermalink





`(D) for employee retraining with respect to the manufacturing of such vehicles or components (determined without regard to wages or salaries of such retrained employees).CommentsClose CommentsPermalink





`(2) ATTRIBUTION RULES- In the event a facility of the eligible taxpayer produces both advanced technology motor vehicles and conventional motor vehicles, or eligible and non-eligible components, only the qualified investment attributable to production of advanced technology motor vehicles and eligible components shall be taken into account.CommentsClose CommentsPermalink





`(c) Definitions- In this section:CommentsClose CommentsPermalink





`(1) ADVANCED TECHNOLOGY MOTOR VEHICLE- The term `advanced technology motor vehicle' means--CommentsClose CommentsPermalink





`(A) any qualified electric vehicle (as defined in section 30(c)(1)),CommentsClose CommentsPermalink





`(B) any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)),CommentsClose CommentsPermalink





`(C) any new advanced lean burn technology motor vehicle (as defined in section 30B(c)(3)),CommentsClose CommentsPermalink





`(D) any new qualified hybrid motor vehicle (as defined in section 30B(d)(2)(A) and determined without regard to any gross vehicle weight rating),CommentsClose CommentsPermalink





`(E) any new qualified alternative fuel motor vehicle (as defined in section 30B(e)(4), including any mixed-fuel vehicle (as defined in section 30B(e)(5)(B)), andCommentsClose CommentsPermalink





`(F) any other motor vehicle using electric drive transportation technology (as defined in paragraph (3)).CommentsClose CommentsPermalink





`(2) ELECTRIC DRIVE TRANSPORTATION TECHNOLOGY- The term `electric drive transportation technology' means technology used by vehicles that use an electric motor for all or part of their motive power and that may or may not use off-board electricity, such as battery electric vehicles, fuel cell vehicles, engine dominant hybrid electric vehicles, plug-in hybrid electric vehicles, and plug-in hybrid fuel cell vehicles.CommentsClose CommentsPermalink





`(3) ELIGIBLE COMPONENTS- The term `eligible component' means any component inherent to any advanced technology motor vehicle, including--CommentsClose CommentsPermalink





`(A) with respect to any gasoline or diesel-electric new qualified hybrid motor vehicle--CommentsClose CommentsPermalink





`(i) electric motor or generator;CommentsClose CommentsPermalink





`(ii) power split device;CommentsClose CommentsPermalink





`(iii) power control unit;CommentsClose CommentsPermalink





`(iv) power controls;CommentsClose CommentsPermalink





`(v) integrated starter generator; orCommentsClose CommentsPermalink





`(vi) battery;CommentsClose CommentsPermalink





`(B) with respect to any hydraulic new qualified hybrid motor vehicle--CommentsClose CommentsPermalink





`(i) accumulator or other energy storage device;CommentsClose CommentsPermalink





`(ii) hydraulic pump;CommentsClose CommentsPermalink





`(iii) hydraulic pump-motor assembly;CommentsClose CommentsPermalink





`(iv) power control unit; andCommentsClose CommentsPermalink





`(v) power controls;CommentsClose CommentsPermalink





`(C) with respect to any new advanced lean burn technology motor vehicle--CommentsClose CommentsPermalink





`(i) diesel engine;CommentsClose CommentsPermalink





`(ii) turbo charger;CommentsClose CommentsPermalink





`(iii) fuel injection system; orCommentsClose CommentsPermalink





`(iv) after-treatment system, such as a particle filter or NOx absorber; andCommentsClose CommentsPermalink





`(D) with respect to any advanced technology motor vehicle, any other component submitted for approval by the Secretary.CommentsClose CommentsPermalink





`(4) ELIGIBLE TAXPAYER- The term `eligible taxpayer' means any taxpayer if more than 20 percent of the taxpayer's gross receipts for the taxable year is derived from the manufacture of motor vehicles or any component parts of such vehicles.CommentsClose CommentsPermalink





`(d) Engineering Integration Costs- For purposes of subsection (b)(1)(B), costs for engineering integration are costs incurred prior to the market introduction of advanced technology vehicles for engineering tasks related to--CommentsClose CommentsPermalink





`(1) establishing functional, structural, and performance requirements for component and subsystems to meet overall vehicle objectives for a specific application,CommentsClose CommentsPermalink





`(2) designing interfaces for components and subsystems with mating systems within a specific vehicle application,CommentsClose CommentsPermalink





`(3) designing cost effective, efficient, and reliable manufacturing processes to produce components and subsystems for a specific vehicle application, andCommentsClose CommentsPermalink





`(4) validating functionality and performance of components and subsystems for a specific vehicle application.CommentsClose CommentsPermalink





`(e) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for the taxable year shall not exceed the excess of--CommentsClose CommentsPermalink





`(1) the sum of--CommentsClose CommentsPermalink





`(A) the regular tax liability (as defined in section 26(b)) for such taxable year, plusCommentsClose CommentsPermalink





`(B) the tax imposed by section 55 for such taxable year and any prior taxable year beginning after 1986 and not taken into account under section 53 for any prior taxable year, overCommentsClose CommentsPermalink





`(2) the sum of the credits allowable under subpart A and sections 27, 30, and 30B for the taxable year.CommentsClose CommentsPermalink





`(f) 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 paragraph) result from such expenditure shall be reduced by the amount of the credit so allowed.CommentsClose CommentsPermalink





`(g) No Double Benefit-CommentsClose CommentsPermalink





`(1) COORDINATION WITH OTHER DEDUCTIONS AND CREDITS- Except as provided in paragraph (2), the amount of any deduction or other credit allowable 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.CommentsClose CommentsPermalink





`(2) RESEARCH AND DEVELOPMENT COSTS-CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), any amount described in subsection (b)(1)(C) taken into account in determining the amount of the credit under subsection (a) for any taxable year shall not be taken into account for purposes of determining the credit under section 41 for such taxable year.CommentsClose CommentsPermalink





`(B) COSTS TAKEN INTO ACCOUNT IN DETERMINING BASE PERIOD RESEARCH EXPENSES- 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 applying section 41 to subsequent taxable years.CommentsClose CommentsPermalink





`(h) Business Carryovers Allowed- If the credit allowable under subsection (a) for a taxable year exceeds the limitation under subsection (e) for such taxable year, such excess (to the extent of the credit allowable with respect to property subject to the allowance for depreciation) shall be allowed as a credit carryback to each of the 15 taxable years immediately preceding the unused credit year and as a carryforward to each of the 20 taxable years immediately following the unused credit year.CommentsClose CommentsPermalink





`(i) Special Rules- For purposes of this section, rules similar to the rules of section 179A(e)(4) and paragraphs (1) and (2) of section 41(f) shall apply.CommentsClose CommentsPermalink





`(j) Allocation of Credit to Purchasers-CommentsClose CommentsPermalink





`(1) ELECTION TO ALLOCATE-CommentsClose CommentsPermalink





`(A) IN GENERAL- In the case of an eligible taxpayer, any portion of the credit determined under subsection (a) for the taxable year may, at the election of such taxpayer, be apportioned among purchasers of qualifying vehicles from the taxpayer in the taxable year (or in any year in which the credit may be carried over).CommentsClose CommentsPermalink





`(B) QUALIFYING VEHICLES- For purposes of this subsection, the term `qualifying vehicle' means an advanced technology vehicle manufactured at a facility described in subsection (b)(1)(A).CommentsClose CommentsPermalink





`(C) FORM AND EFFECT OF ELECTION- An election under subparagraph (A) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year.CommentsClose CommentsPermalink





`(2) TREATMENT OF TAXPAYER AND PURCHASERS- The amount of the credit apportioned to any purchaser under paragraph (1)--CommentsClose CommentsPermalink





`(A) shall not be included in the amount determined under subsection (a) with respect to the eligible taxpayer for the taxable year; andCommentsClose CommentsPermalink





`(B) shall be treated as an amount determined under subsection (a) for the taxable year of the purchaser which ends in the calendar year of purchase.CommentsClose CommentsPermalink





`(3) SPECIAL RULES FOR DECREASE IN CREDITS FOR TAXABLE YEAR- If the amount of the credit of an eligible taxpayer determined under subsection (a) for a taxable year is less than the amount of such credit shown on the return of the taxpayer for such year, an amount equal to the excess of--CommentsClose CommentsPermalink





`(A) such reduction, overCommentsClose CommentsPermalink





`(B) the amount not apportioned to such purchasers under paragraph (1) for the taxable year,CommentsClose CommentsPermalink





shall be treated as an increase in tax imposed by this chapter on the eligible taxpayer.CommentsClose CommentsPermalink





`(4) WRITTEN NOTICE TO PURCHASERS- If any portion of the credit available under subsection (a) is allocated to purchasers under paragraph (1), the eligible taxpayer shall provide any purchaser receiving an allocation written notice of the amount of the allocation. Such notice may be provided either at the time of purchase or at any time not later than 60 days after the close of the calendar year in which the vehicle is purchased.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(l) Regulations- The Secretary shall prescribe such regulations as necessary to carry out the provisions of this section.CommentsClose CommentsPermalink





`(m) Termination- This section shall not apply to any qualified investment after December 31, 2011.'.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





`(38) to the extent provided in section 30D(g).'.CommentsClose CommentsPermalink





(2) Section 6501(m) of such Code is amended by inserting `30D(k),' after `30C(e)(5),'.CommentsClose CommentsPermalink





(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:CommentsClose CommentsPermalink





`Sec. 30D. Advanced technology motor vehicles manufacturing credit.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to amounts incurred in taxable years beginning after December 31, 1999.CommentsClose CommentsPermalink