Fuel Economy Reform Act - Amends federal transportation law to: (1) revise the definitions of automobile to require including all automobiles up to 10,000 pounds (currently, not all automobiles up to 10,000 pounds are required to be included in the definition) and passenger automobile to eliminate the exclusion of automobiles capable of off-highway operation; and (2) continue applying the current minimum corporate average fuel economy (CAFE) standards for non-passenger and passenger automobiles to automobiles manufactured through model year 2012, but, for passenger automobiles, adds an increase of four percent per year in such standard for model years 2010 through 2012.
Requires an average fuel economy standard of 27.5 miles per gallon for all automobiles manufactured by all manufacturers for model year 2013, with an increase of four percent in the average fuel economy from the level for the prior model year for model year 2014 and beyond.
Subjects each manufacturer of passenger automobiles manufactured in a model year, in addition to such CAFE standards, to an average fuel economy standard equal to 92% of the average fuel economy projected by the Secretary for all passenger automobiles manufactured by all manufacturers in that model year.
Permits lower fuel economy standards if the minimum standards: (1) are technologically unachievable; (2) materially reduce auto safety and no offsetting safety improvements can be implemented; or (3) are not cost effective.
Allows, with specified exceptions, the selling of credits between manufacturers.
Allows a person who has been aggrieved by, or suffers a legal wrong because of (currently, adversely affected by), a CAFE standard to apply for judicial review.
Amends the Internal Revenue Code to: (1) terminate the limitation on the number of new qualified hybrid and advanced lean burn technology vehicles eligible for the alternative motor vehicle credit; (2) extend, through 2011, the alternative vehicle credit for certain new qualified hybrid motor vehicles; and (3) allow an advanced technology motor vehicles manufacturing credit.
[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 768 Introduced in Senate (IS)]
110th CONGRESS
1st Session
S. 768
To increase fuel economy standards for automobiles and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
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 Finance
_______________________________________________________________________
A BILL
To increase fuel economy standards for automobiles and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fuel Economy Reform Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) United States dependence on oil imports imposes
tremendous burdens on the economy, foreign policy, and military
of the United States.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
(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.
SEC. 3. DEFINITION OF AUTOMOBILE AND PASSENGER AUTOMOBILE.
(a) Definition of Automobile.--
(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.''.
(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''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) shall apply to model year 2010 and each subsequent
model year.
(b) Definition of Passenger Automobile.--
(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.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to model year 2012 and each subsequent model year.
SEC. 4. AVERAGE FUEL ECONOMY STANDARDS.
(a) Standards.--Section 32902 of title 49, United States Code, is
amended--
(1) in subsection (a)--
(A) in the heading, by inserting ``Manufactured
Before Model Year 2013'' after ``Non-Passenger
Automobiles''; and
(B) by adding at the end the following: ``This
subsection shall not apply to automobiles manufactured
after model year 2012.'';
(2) in subsection (b)--
(A) in the heading, by inserting ``Manufactured
Before Model Year 2013'' after ``Passenger
Automobiles'';
(B) by inserting ``and before model year 2010''
after ``1984''; and
(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)'';
(3) by amending subsection (c) to read as follows:
``(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--
``(i) an average fuel economy standard for automobiles
manufactured by a manufacturer in that model year; or
``(ii) based on 1 or more vehicle attributes that relate to
fuel economy--
``(I) separate average fuel economy standards for
different classes of automobiles; or
``(II) average fuel economy standards expressed in
the form of a mathematical function.
``(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.
``(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).
``(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.
``(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.
``(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--
``(i) are technologically not achievable;
``(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; or
``(iii) is shown not to be cost effective.
``(B) If a lower standard is prescribed for a model year under
subparagraph (A), such standard shall be the maximum standard that--
``(i) is technologically achievable;
``(ii) can be achieved without materially reducing the
overall safety of automobiles manufactured or sold in the
United States; and
``(iii) is cost effective.
``(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--
``(A) value to consumers;
``(B) economic security;
``(C) national security;
``(D) foreign policy;
``(E) the impact of oil use--
``(i) on sustained cartel rents paid to foreign
suppliers;
``(ii) on long-run potential gross domestic product
due to higher normal-market oil price levels, including
inflationary impacts;
``(iii) on import costs, wealth transfers, and
potential gross domestic product due to increased trade
imbalances;
``(iv) on import costs and wealth transfers during
oil shocks;
``(v) on macroeconomic dislocation and adjustment
costs during oil shocks;
``(vi) on the cost of existing energy security
policies, including the management of the Strategic
Petroleum Reserve;
``(vii) on the timing and severity of the oil
peaking problem;
``(viii) on the risk, probability, size, and
duration of oil supply disruptions;
``(ix) on OPEC strategic behavior and long-run oil
pricing;
``(x) on the short term elasticity of energy demand
and the magnitude of price increases resulting from a
supply shock;
``(xi) on oil imports, military costs, and related
security costs, including intelligence, homeland
security, sea lane security and infrastructure, and
other military activities;
``(xii) on oil imports, diplomatic and foreign
policy flexibility, and connections to geopolitical
strife, terrorism, and international development
activities;
``(xiii) on all relevant environmental hazards
under the jurisdiction of the Environmental Protection
Agency; and
``(xiv) on well-to-wheels urban and local air
emissions of `pollutants' and their uninternalized
costs;
``(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;
``(G) the impact of United States payments for oil imports
on political, economic, and military developments in unstable
or unfriendly oil exporting countries;
``(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; and
``(I) additional relevant factors, as determined by the
Secretary.
``(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--
``(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;
``(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; or
``(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.
``(7) In prescribing standards under this subsection, the Secretary
may prescribe standards for 1 or more model years.
``(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).
``(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.
``(C) The report submitted under subparagraph (A) shall include--
``(i) the study of the National Academy of Sciences
referred to in subparagraph (B); and
``(ii) an assessment by the Secretary of Transportation of
technological opportunities to enhance fuel economy and
opportunities to increase overall fleet safety.
``(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.
``(E) The report submitted under subparagraph (A) shall--
``(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;
``(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; and
``(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.''; and
(4) in subsection (g)(2), by striking ``(and submit the
amendment to Congress when required under subsection (c)(2) of
this section)''.
(b) Conforming Amendments.--
(1) In general.--Chapter 329 of title 49, United States
Code, is amended--
(A) in section 32903--
(i) by striking ``passenger'' each place it
appears;
(ii) by striking ``section 32902(b)-(d) of
this title'' each place it appears and
inserting ``subsection (c) or (d) of section
32902'';
(iii) by striking subsection (e); and
(iv) by redesignating subsection (f) as
subsection (e); and
(B) in section 32904--
(i) in subsection (a)--
(I) by striking ``passenger'' each
place it appears; and
(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''; and
(ii) in subsection (b)(1)(B), by striking
``under this chapter'' and inserting ``under
section 32902(c)(2)''.
(2) Effective date.--The amendments made by this section
shall apply to automobiles manufactured after model year 2012.
SEC. 5. CREDIT TRADING, COMPLIANCE, AND JUDICIAL REVIEW.
(a) Credit Trading.--Section 32903(a) of title 49, United States
Code, is amended--
(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.'';
(2) by striking ``3 consecutive model years immediately''
each place it appears and inserting ``model years''; and
(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''.
(b) Multi-Year Compliance Period.--Section 32904(c) of such title
is amended--
(1) by inserting ``(1)'' before ``The Administrator''; and
(2) by adding at the end the following:
``(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.''.
(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,''.
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.--
(1) In general.--Section 30B of the Internal Revenue Code
of 1986 is amended--
(A) by striking subsection (f); and
(B) by redesignating subsections (g) through (j) as
subsections (f) through (i), respectively.
(2) Conforming amendments.--
(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))''.
(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)''.
(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''.
(c) Computation of Credit.--Section 30B of such Code is amended by
striking ``city'' each place it appears and inserting ``combined''.
(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.
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:
``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.
``(b) Qualified Investment.--For purposes of this section--
``(1) In general.--The qualified investment for any taxable
year is equal to the incremental costs incurred during such
taxable year--
``(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,
``(B) for engineering integration performed in the
United States of such vehicles and components as
described in subsection (d),
``(C) for research and development performed in the
United States related to advanced technology motor
vehicles and eligible components, and
``(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).
``(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.
``(c) Definitions.--In this section:
``(1) Advanced technology motor vehicle.--The term
`advanced technology motor vehicle' means--
``(A) any qualified electric vehicle (as defined in
section 30(c)(1)),
``(B) any new qualified fuel cell motor vehicle (as
defined in section 30B(b)(3)),
``(C) any new advanced lean burn technology motor
vehicle (as defined in section 30B(c)(3)),
``(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),
``(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)), and
``(F) any other motor vehicle using electric drive
transportation technology (as defined in paragraph
(3)).
``(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.
``(3) Eligible components.--The term `eligible 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) accumulator or other energy storage
device;
``(ii) hydraulic pump;
``(iii) hydraulic pump-motor assembly;
``(iv) power control unit; and
``(v) power controls;
``(C) with respect to any new advanced lean burn
technology motor vehicle--
``(i) diesel engine;
``(ii) turbo charger;
``(iii) fuel injection system; or
``(iv) after-treatment system, such as a
particle filter or NOx absorber; and
``(D) with respect to any advanced technology motor
vehicle, any other component submitted for approval by
the Secretary.
``(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.
``(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--
``(1) establishing functional, structural, and performance
requirements for component and subsystems to meet overall
vehicle objectives for a specific application,
``(2) designing interfaces for components and subsystems
with mating systems within a specific vehicle application,
``(3) designing cost effective, efficient, and reliable
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 application.
``(e) 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 account under section 53 for
any prior taxable year, over
``(2) the sum of the credits allowable under subpart A and
sections 27, 30, and 30B for the taxable year.
``(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.
``(g) No Double Benefit.--
``(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.
``(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 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.
``(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.
``(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.
``(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.
``(j) Allocation of Credit to Purchasers.--
``(1) Election to allocate.--
``(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).
``(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).
``(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.
``(2) Treatment of taxpayer and purchasers.--The amount of
the credit apportioned to any purchaser under paragraph (1)--
``(A) shall not be included in the amount
determined under subsection (a) with respect to the
eligible taxpayer for the taxable year; and
``(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.
``(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--
``(A) such reduction, over
``(B) the amount not apportioned to such purchasers
under paragraph (1) for the taxable year,
shall be treated as an increase in tax imposed by this chapter
on the eligible taxpayer.
``(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.
``(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, 2011.''.
(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 section 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,
1999.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S2700-2701)
Read twice and referred to the Committee on Finance. (consideration: CR S2703-2706)
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