article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Tax Incentives for Fuel Efficient Vehicles Act of 2003''. SEC. 2. MODIFICATIONS TO GAS GUZZLERS TAX TO ENCOURAGE GREATER AUTO FUEL EFFICIENCY. (a) Increase in Tax Rate.--Subsection (a) of section 4064 of the Internal Revenue Code of 1986 (relating to gas guzzlers tax) is amended to read as follows: ``(a) Imposition of Tax.-- ``(1) In general.--There is hereby imposed on the sale by the manufacturer of each automobile a tax determined in accordance with the following table: If the fuel economy for the model year of the model type in which the automobile falls is: The tax is: Less than 5 mpg below the applicable fuel economy $0 standard. At least 5 but less than 6 mpg below such standard. 1,000 At least 6 but less than 7 mpg below such standard. 1,500 At least 7 but less than 8 mpg below such standard. 2,000 At least 8 but less than 9 mpg below such standard. 2,500 At least 9 but less than 10 mpg below such standard 3,100 At least 10 but less than 11 mpg below such 3,800 standard. At least 11 but less than 12 mpg below such 4,600 standard. At least 12 but less than 13 mpg below such 5,500 standard. At least 13 but less than 14 mpg below such 6,500 standard. At least 14 mpg below such standard................ 7,700. ``(2) Inflation Adjustment.-- ``(A) In general.--In the case of any taxable year beginning after 2005, each dollar amount referred to in paragraph (1) shall be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2004' for `1992'. ``(B) Rounding.--If any amount as adjusted under subparagraph (A) is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $50.''. (b) Expansion of Definition of Automobile.-- (1) Increase in weight.--Section 4064(b)(1)(A)(ii) of the Internal Revenue Code of 1986 (defining automobile) is amended by striking ``6,000 pounds'' and inserting ``12,000 pounds''. (2) Exception for certain vehicles.--Subparagraph (B) of section 4064(b)(1) of such Code is amended to read as follows: ``(B) Exception for certain vehicles.--The term `automobile' does not include-- ``(i) a vehicle which has a primary load carrying device or container attached, ``(ii) a vehicle which has a seating capacity of more than 12 persons, ``(iii) a vehicle which has a seating capacity of more than 9 persons behind the driver's seat, or ``(iv) a vehicle which is equipped with a cargo area of at least 6 feet in interior length which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment.''. (c) Additional Definitions.--Section 4064(b) of the Internal Revenue Code of 1986 (relating to definitions) is amended by adding at the end the following new paragraphs: ``(8) Applicable fuel economy standard.--The term `applicable fuel economy standard' means, with respect to any model year, the average fuel economy standard as defined in section 32902 of title 49, United States Code, for passenger automobiles for such model year. ``(9) MPG.--The term `mpg' means miles per gallon.''. (d) Effective Date.--The amendments made by this section shall apply to sales after October 31, 2005. SEC. 3. HIGHLY FUEL-EFFICIENT AUTOMOBILE CREDIT. (a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section: ``SEC. 36. HIGHLY FUEL-EFFICIENT AUTOMOBILE CREDIT. ``(a) Allowance of Credit.--There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the new highly fuel-efficient automobile credit determined under subsection (b). ``(b) New Highly Fuel-Efficient Automobile Credit.--For purposes of subsection (a), the new highly fuel-efficient automobile credit with respect to any new automobile placed in service by the taxpayer during the taxable year is determined in accordance with the following tables: If the fuel economy for the model year of the model type in which the passenger automobile falls is: The credit is: Less than 5 mpg above the applicable fuel economy $0 standard. At least 5 but less than 6 mpg above such standard. 770 At least 6 but less than 7 mpg above such standard. 1,540 At least 7 but less than 8 mpg above such standard. 2,310 At least 8 but less than 9 mpg above such standard. 3,080 At least 9 but less than 10 mpg above such standard 3,850 At least 10 but less than 11 mpg above such 4,620 standard. At least 11 but less than 12 mpg above such 5,390 standard. At least 12 but less than 13 mpg above such 6,160 standard. At least 13 but less than 14 mpg above such 6,930 standard. At least 14 mpg above such standard................ 7,700. If the fuel economy for the model year of the model type in which the non-passenger automobile falls is: The credit is: Less than 5 mpg above the applicable fuel economy $0 standard. At least 5 but less than 6 mpg above such standard. 770 At least 6 but less than 7 mpg above such standard. 1,540 At least 7 but less than 8 mpg above such standard. 2,310 At least 8 but less than 9 mpg above such standard. 3,080 At least 9 but less than 10 mpg above such standard 3,850 At least 10 but less than 11 mpg above such 4,620 standard. At least 11 but less than 12 mpg above such 5,390 standard. At least 12 but less than 13 mpg above such 6,160 standard. At least 13 but less than 14 mpg above such 6,930 standard. At least 14 mpg above such standard................ 7,700. ``(c) New Automobile.--For purposes of this section, the term `new automobile' means a passenger automobile or non-passenger automobile-- ``(1) the original use of which commences with the taxpayer, ``(2) which is acquired for use or lease by the taxpayer and not for resale, and ``(3) which is made by a manufacturer. ``(d) Passenger Automobile; Non-Passenger Automobile.--For purposes of this section-- ``(1) Passenger automobile.--The term `passenger automobile' has the meaning given the term `automobile' by section 4064(b)(1). ``(2) Non-passenger automobile.-- ``(A) In general.--The term `non-passenger automobile' means any automobile (as defined in section 4064(b)(1)(A)), but only if such automobile is described in subparagraph (B). ``(B) Non-passenger automobiles described.--An automobile is described in this subparagraph if such automobile is-- ``(i) a vehicle which has a primary load carrying device or container attached, ``(ii) a vehicle which has a seating capacity of more than 12 persons, ``(iii) a vehicle which has a seating capacity of more than 9 persons behind the driver's seat, or ``(iv) a vehicle which is equipped with a cargo area of at least 6 feet in interior length which does not extend beyond the frame of the vehicle and which is an open area or is designed for use as an open area but is enclosed by a cap and is not readily accessible directly from the passenger compartment. ``(e) Other Definitions.--Except as provided in subsection (d), for purposes of this section, any term used in this section and also in section 4064 shall have the meaning given such term by section 4064. ``(f) Special Rules.--For purposes of this section-- ``(1) 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. ``(2) No double benefit.--The amount of any deduction or other credit allowable under this chapter with respect to an automobile described under subsection (b), shall be reduced by the amount of credit allowed under subsection (a) for such automobile for the taxable year. ``(3) Property used by tax-exempt entities.--In the case of a credit amount which is allowable with respect to an automobile which is acquired by an entity exempt from tax under this chapter, the person which sells or leases such automobile to the entity shall be treated as the taxpayer with respect to the automobile for purposes of this section and the credit shall be allowed to such person, but only if the person clearly discloses to the entity at the time of any sale or lease the specific amount of any credit otherwise allowable to the entity under this section. ``(4) Recapture.--The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit (including recapture in the case of a lease period of less than the economic life of an automobile). ``(5) Property used outside united states, etc., not qualified.--No credit shall be allowed under subsection (a) with respect to any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 179. ``(6) Election to not take credit.--No credit shall be allowed under subsection (a) for any automobile if the taxpayer elects to not have this section apply to such automobile. ``(7) Interaction with air quality and motor vehicle safety standards.--Unless otherwise provided in this section, an automobile shall not be considered eligible for a credit under this section unless such automobile is in compliance with-- ``(A) the applicable provisions of the Clean Air Act for the applicable make and model year of the automobile (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. ``(g) Regulations.-- ``(1) In general.--Except as provided in paragraph (2), the Secretary shall promulgate such regulations as necessary to carry out the provisions of this section. ``(2) Coordination in prescription of certain regulations.--The Secretary of the Treasury, in coordination with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether an automobile meets the requirements to be eligible for a credit under this section.''. (b) Conforming Amendments.-- (1) Section 1016(a) of the Internal Revenue Code of 1986 is amended by striking ``and'' at the end of paragraph (27), by striking the period at the end of paragraph (28) and inserting ``, and'', and by adding at the end the following new paragraph: ``(29) to the extent provided in section 36(f)(1).''. (2) Section 6501(m) of such Code is amended by inserting ``36(f)(6),'' after ``30(d)(4),''. (3) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period ``, or from section 36 of such Code''. (4) The table of sections for subpart C of part IV of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the last item and inserting the following new items: ``Sec. 36. Highly fuel-efficient automobile credit. ``Sec. 37. Overpayments of tax.''. (c) Effective Date.--The amendments made by this section shall apply to property placed in service after October 31, 2005, in taxable years ending after such date.
summary: Tax Incentives for Fuel Efficient Vehicles Act of 2003 - Amends the Internal Revenue Code with respect to the (automotive) gas guzzler manufacturer excise tax to: (1) increase the weight of a covered automobile to12,000 pounds; (2) revise the excise tax table, including the addition of a model-year calculation criteria; (3) revise the exception to such coverage, including elimination of the exception based upon nonpassenger treatment under specified Department of Transportation rules; and (4) apply such provisions to sales after October 31, 2005.Establishes a highly fuel-efficient automobile credit for taxpayer purchases of a new passenger or nonpassenger automobile (as defined by this Act) that exceeds specified fuel economy ratings. Applies such credit to vehicles placed in service after October 31, 2005.