text: 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.
target: 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.
feat_title: A bill to amend the Internal Revenue Code of 1986 to provide additional tax incentives for enhancing motor vehicle fuel efficiency, and for other purposes.