The Center for Sustainable Energy, - Congressman Serrano sponsors ''Clean Fuels Bill''

Congressman Serrano sponsors ''Clean Fuels Bill''

H.L.C

108H185.ih

_________________________
(Original Signature of Member)

109TH CONGRESS
1ST SESSION

H. R. ___________________

To amend the Internal Revenue Code of 1986 to provide a business credit
relating to the use of clean-fuel vehicles by businesses within areas
designated as nonattainment areas under the Clean Air Act.

________________________________________

IN THE HOUSE OF REPRESENTATIVES

Mr. SERRANO introduced the following bill; which was referred to the
Committee on __________________________

________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide
a business credit relating to the use of clean-fuel vehicles
by businesses within areas designated as nonattainment
areas under the Clean Air Act.

1 2	Be it enacted by the Senate and House of Representa- tives of the United States of America in Congress assembled,
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1	SECTION 1. CLEAN-FUEL CREDIT WITH RESPECT TO BUSI-
2	NESSES LOCATED IN NONATTAINMENT
3	AREAS.
4	(a) IN GENERAL.—Subpart D of part IV of sub
5	chapter A of chapter 1 of the Internal Revenue Code of
6	1986 (relating to business-related credits) is amended by
7	adding at the end the following new section:
8	‘‘SEC. 45J. CLEAN-FUEL CREDIT WITH RESPECT TO BUSI-
9	NESSES LOCATED IN NONATTAINMENT
10	AREAS.
11	‘‘(a) IN GENERAL.—For purposes of section 38, in
12	the case of an eligible business the clean-fuel credit deter-
13	mined under this section for the taxable year is the sum
14	of—
15	‘‘(1) the clean-fuel property credit, plus
16	‘‘(2) the clean-burning fuel use credit.
17	‘‘(b) CLEAN-FUEL PROPERTY CREDIT.—
18	‘‘(1) IN GENERAL.—The clean-fuel property
19	credit is the sum of—
20	‘‘(A) qualified vehicle property costs, plus
21	‘‘(B) qualified refueling property costs.
22	‘‘(2) QUALIFIED VEHICLE PROPERTY COSTS.—
23	‘‘(A) IN GENERAL.—For purposes of para-
24	graph (1), the term ‘qualified vehicle property
25	costs’ means the amount paid or incurred by
26	the eligible business for qualified clean-fuel ve-
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1	hicle property which is placed in service during
2	the taxable year by the eligible business and
3	substantially all of the use of which is in a non-
4	attainment area.
5	‘‘(B) LIMITATION.—The amount which
6	may be taken into account under subparagraph
7	(A) with respect to any motor vehicle shall not
8	exceed—
9	‘‘(i) $2,000 in the case of a motor ve-
10	hicle not described in clause (ii) or (iii),
11	‘‘(ii) $5,000 in the case of any truck
12	or van with a gross vehicle weight rating
13	greater than 10,000 pounds but not great-
14	er than 26,000 pounds, or 14
15	‘‘(iii) $50,000 in the case of— 15
16	‘‘(I) a truck or van with a gross 16
17	vehicle weight rating greater than 17
18	26,000 pounds, or 18
19	‘‘(II) any bus which has a seating 19
20	capacity of at least 20 adults (not in- 20
21	cluding the driver). 21
22	‘‘(C) QUALIFIED CLEAN-FUEL VEHICLE 22
23	PROPERTY.—The term ‘qualified clean-fuel ve- 23
24	hicle property’ shall have the meaning given to 24
25	such term by section 179A(c) (without regard 25
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1	to paragraph (3) thereof), except that such
2	term does not include property that is a motor
3	vehicle propelled by a fuel that is not a clean-
4	burning fuel.
5	‘‘(3) QUALIFIED REFUELING PROPERTY
6	COSTS.—
7	‘‘(A) IN GENERAL.—For purposes of para-
8	graph (1), the term ‘qualified refueling property
9	costs’ means amounts paid or incurred by the
10	eligible business for qualified clean-fuel vehicle
11	refueling property (as defined by section M)
12	179A(d)) which is placed in service in a non-
13	attainment area during the taxable year by the
14	eligible business.
15	‘‘(B) LIMITATION.—
16	‘‘(i) IN GENERAL.—The aggregate
17	cost which may be taken into account
18	under subparagraph (A) with respect to
19	qualified clean-fuel vehicle refueling prop-
20	erty placed in service by the eligible busi-
21	ness during the taxable year at a location
22	shall not exceed the lesser of—
23	‘‘(I) $100,000, or
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1	‘‘(II) the cost of such property
2	reduced by the amount described in
3	clause (ii).
4	‘‘(ii) REDUCTION FOR AMOUNTS PRE-
5	VIOUSLY TAKEN INTO ACCOUNT.—For pur-
6	poses of clause (i)(II), the amount de-
7	scribed in this clause is the sum of—
8	‘‘(I) the aggregate amount taken
9	into account under paragraph (1)(B)
10	for all preceding taxable years, and
11	‘‘(II) the aggregate amount taken
12	into account under section
13	179A(a)(1)(B) by the taxpayer (or
14	any related person or predecessor)
15	with respect to property placed in
16	service at such location for all pre-
17	ceding taxable years.
18	‘‘(iii) SPECIAL RULES.—For purposes
19	of this subparagraph, the provisions of
20	subparagraphs (B) and (C) of section
21	179A(b)(2) shall apply.
22	‘‘(c) CLEAN-BURNING FUEL USE CREDIT.—
23	‘‘(1) IN GENERAL.—For purposes of subsection
24	(a), the clean-burning fuel use credit is the amount
25	equal to 50 cents for each gasoline gallon equivalent
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1	of clean-burning fuel used by an eligible business
2	during the taxable year to propel qualified clean-fuel
3	vehicle property.
4	‘‘(2) CLEAN-BURNING FUEL.—For purposes of
5	paragraph (1), the term ‘clean-burning fuel’ has the
6	meaning given to such term by section 179A, except
7	that such term includes compressed natural gas and
8	biodiesel (as defined by section 40A(d)(1)).
9	‘‘(3) GASOLINE GALLON EQUIVALENT.—For
10	purposes of paragraph (1), the term ‘gasoline gallon
11	equivalent’ means, with respect to any clean burning
12	fuel, the amount (determined by the Secretary) of
13	such fuel having a Btu content of 114,000.
14	‘‘(d) OTHER DEFINITIONS.—For purposes of this
15	section—
16	‘‘(1) ELIGIBLE BUSINESS.—The term ‘eligible
17	business’ means—
18	‘‘(A) a qualified business entity or a quali-
19	fied proprietorship (as such terms are defined
20	by section 1397C, determined by substituting
21	‘nonattainment area’ for ‘empowerment zone’
22	and ‘enterprise zone’ each place it appears),
23	and
24	‘‘(B) a trade or business located outside of
25	a nonattainment area, but only with respect to
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1	“qualified clean-fuel vehicle property used sub-
2	stantially within a nonattainment area.
3	‘‘(2) NONATTAINMENT AREA.—The term ‘non-
4	attainment area’ shall have the meaning given to
5	such term by section 171 of the Clean Air Act (42
6	U.S.C. 7501)).
7	‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall
8	be allowed under subsection (a) for any expense for which
9	a deduction or credit is allowed under any other provision
10	of this chapter.’’.
11	(c) CREDIT MADE PART OF GENERAL BUSINESS
12	CREDIT.—Subsection (b) of section 38 of such Code (re-
13	lating to current year business credit) is amended by strik-
14	ing ‘‘plus’’ at the end of paragraph (18), by striking the
15	period at the end of paragraph (19) and inserting ‘‘, plus’’,
16	and by adding at the end thereof the following new para-
17	graph:
18	‘‘(20) the clean-fuel credit determined under
19	section 45J.’’.
20	(d) DENIAL OF DOUBLE BENEFIT.—Section 280C of 20
21	such Code (relating to certain expenses for which credits
22	are allowable) is amended by adding at the end thereof
23	the following new subsection:
24	‘‘(e) ZONE CLEAN FUELS EXPENSES.—No deduction
25	shall be allowed for that portion of expenses for clean- 25
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1	burning fuel otherwise allowable as a deduction for the
2	taxable year which is equal to the amount of the credit
3	determined for such taxable year under section 45J.’’.
4	(e) CREDIT ALLOWED AGAINST REGULAR AND MIN-
5	IMUM TAX.—
6	(1) IN GENERAL.—Subsection (c) of section 38
7	of such Code (relating to limitation based on amount
8	of tax) is amended by redesignating paragraph (5)
9	as paragraph (6) and by inserting after paragraph
10	(4) the following new paragraph:
11	‘‘(5) SPECIAL RULES FOR CLEAN FUELS CRED-
12	IT.—
13	‘‘(A) IN GENERAL.—In the case of the
14	clean fuels credit—
15	‘‘(i) this section and section 39 shall
16	be applied separately with respect to the
17	credit, and
18	‘‘(ii) in applying paragraph (1) to the
19	credit—
20	‘‘(I) subparagraph (A) thereof
21	shall not apply, and
22	‘‘(II) the limitation under para-
23	graph (1) (as modified by subclause
24	(I)) shall be reduced by the credit al-
25	lowed under subsection (a) for the
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1	taxable year (other than the clean
2	fuels credit).
3	‘‘(B) CLEAN FUELS CREDIT.—For pur-
4	poses of this subsection, the term ‘clean fuels
5	credit’ means the credit allowable under sub-
6	section (a) by reason of section 45J.’’.
7	(2) CONFORMING AMENDMENTS.—
8	(A) Subclause (II) of section
9	38(c)(2)(A)(ii) of such Code is amended by
10	striking ‘‘or the New York Liberty Zone busi-
11	ness employee credit’’ and inserting ‘‘, the New
12	York Liberty Zone business employee credit, or
13	the clean fuels credit’’.
14	(B) Subclause (II) of section
15	38(c)(3)(A)(ii) of such Code is amended by in-
16	serting ‘‘or the clean fuels credit’’ after ‘‘em-
17	ployee credit’’.
18	(C) Subclause (II) of section
19	38(c)(4)(A)(ii) of such Code is amended by in-
20	serting ‘‘or the clean fuels credit’’ after ‘‘speci-
21	fied credits’’.
22	(f) DEDUCTION FOR CERTAIN UNUSED BUSINESS
23	CREDITS.—Subsection (c) of section 196 of such Code is
24	amended by striking ‘‘and’’ at the end of paragraph (11),
25	by striking the period at the end of paragraph (12) and
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1	inserting ‘‘, and’’, and by adding after paragraph (12) the
2	following new paragraph:
3	‘‘(13) the clean fuels credit determined under
4	section 45J.’’.
5	(g) CONFORMING AMENDMENT.—The table of sec-
6	tions for subpart D of part IV of subchapter A of chapter
7	1 of such Code is amended by inserting after the item
8	relating to section 45I the following new item: ‘‘Sec. 45J. Clean-fuel credit with respect to businesses located in nonattainment areas.’’.
9	(h) EFFECTIVE DATE.—The amendments made by
10	this section shall apply to property placed in service after
11	December 31, 2004.
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