
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC179A]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
      PART VI--ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
 
Sec. 179A. Deduction for clean-fuel vehicles and certain 
        refueling property
        

(a) Allowance of deduction

                           (1) In general

        There shall be allowed as a deduction an amount equal to the 
    cost of--
            (A) any qualified clean-fuel vehicle property, and
            (B) any qualified clean-fuel vehicle refueling property.

    The deduction under the preceding sentence with respect to any 
    property shall be allowed for the taxable year in which such 
    property is placed in service.

              (2) Incremental cost for certain vehicles

        If a vehicle may be propelled by both a clean-burning fuel and 
    any other fuel, only the incremental cost of permitting the use of 
    the clean-burning fuel shall be taken into account.

(b) Limitations

              (1) Qualified clean-fuel vehicle property

        (A) In general

            The cost which may be taken into account under subsection 
        (a)(1)(A) with respect to any motor vehicle shall not exceed--
                (i) in the case of a motor vehicle not described in 
            clause (ii) or (iii), $2,000,
                (ii) in the case of any truck or van with a gross 
            vehicle weight rating greater than 10,000 pounds but not 
            greater than 26,000 pounds, $5,000, or
                (iii) $50,000 in the case of--
                    (I) a truck or van with a gross vehicle weight 
                rating greater than 26,000 pounds, or
                    (II) any bus which has a seating capacity of at 
                least 20 adults (not including the driver).

        (B) Phaseout

            In the case of any qualified clean-fuel vehicle property 
        placed in service after December 31, 2001, the limit otherwise 
        applicable under subparagraph (A) shall be reduced by--
                (i) 25 percent in the case of property placed in service 
            in calendar year 2002,
                (ii) 50 percent in the case of property placed in 
            service in calendar year 2003, and
                (iii) 75 percent in the case of property placed in 
            service in calendar year 2004.

         (2) Qualified clean-fuel vehicle refueling property

        (A) In general

            The aggregate cost which may be taken into account under 
        subsection (a)(1)(B) with respect to qualified clean-fuel 
        vehicle refueling property placed in service during the taxable 
        year at a location shall not exceed the excess (if any) of--
                (i) $100,000, over
                (ii) the aggregate amount taken into account under 
            subsection (a)(1)(B) by the taxpayer (or any related person 
            or predecessor) with respect to property placed in service 
            at such location for all preceding taxable years.

        (B) Related person

            For purposes of this paragraph, a person shall be treated as 
        related to another person if such person bears a relationship to 
        such other person described in section 267(b) or 707(b)(1).

        (C) Election

            If the limitation under subparagraph (A) applies for any 
        taxable year, the taxpayer shall, on the return of tax for such 
        taxable year, specify the items of property (and the portion of 
        costs of such property) which are to be taken into account under 
        subsection (a)(1)(B).

(c) Qualified clean-fuel vehicle property defined

    For purposes of this section--

                           (1) In general

        The term ``qualified clean-fuel vehicle property'' means 
    property which is acquired for use by the taxpayer and not for 
    resale, the original use of which commences with the taxpayer, with 
    respect to which the environmental standards of paragraph (2) are 
    met, and which is described in either of the following 
    subparagraphs:

        (A) Retrofit parts and components

            Any property installed on a motor vehicle which is propelled 
        by a fuel which is not a clean-burning fuel for purposes of 
        permitting such vehicle to be propelled by a clean-burning 
        fuel--
                (i) if the property is an engine (or modification 
            thereof) which may use a clean-burning fuel, or
                (ii) to the extent the property is used in the storage 
            or delivery to the engine of such fuel, or the exhaust of 
            gases from combustion of such fuel.

        (B) Original equipment manufacturer's vehicles

            A motor vehicle produced by an original equipment 
        manufacturer and designed so that the vehicle may be propelled 
        by a clean-burning fuel, but only to the extent of the portion 
        of the basis of such vehicle which is attributable to an engine 
        which may use such fuel, to the storage or delivery to the 
        engine of such fuel, or to the exhaust of gases from combustion 
        of such fuel.

                     (2) Environmental standards

        Property shall not be treated as qualified clean-fuel vehicle 
    property unless--
            (A) the motor vehicle of which it is a part meets any 
        applicable Federal or State emissions standards with respect to 
        each fuel by which such vehicle is designed to be propelled, or
            (B) in the case of property described in paragraph (1)(A), 
        such property meets applicable Federal and State emissions-
        related certification, testing, and warranty requirements.

            (3) Exception for qualified electric vehicles

        The term ``qualified clean-fuel vehicle property'' does not 
    include any qualified electric vehicle (as defined in section 
    30(c)).

(d) Qualified clean-fuel vehicle refueling property defined

    For purposes of this section, the term ``qualified clean-fuel 
vehicle refueling property'' means any property (not including a 
building and its structural components) if--
        (1) such property is of a character subject to the allowance for 
    depreciation,
        (2) the original use of such property begins with the taxpayer, 
    and
        (3) such property is--
            (A) for the storage or dispensing of a clean-burning fuel 
        into the fuel tank of a motor vehicle propelled by such fuel, 
        but only if the storage or dispensing of the fuel is at the 
        point where such fuel is delivered into the fuel tank of the 
        motor vehicle, or
            (B) for the recharging of motor vehicles propelled by 
        electricity, but only if the property is located at the point 
        where the motor vehicles are recharged.

(e) Other definitions and special rules

    For purposes of this section--

                       (1) Clean-burning fuel

        The term ``clean-burning fuel'' means--
            (A) natural gas,
            (B) liquefied natural gas,
            (C) liquefied petroleum gas,
            (D) hydrogen,
            (E) electricity, and
            (F) any other fuel at least 85 percent of which is 1 or more 
        of the following: methanol, ethanol, any other alcohol, or 
        ether.

                          (2) Motor vehicle

        The term ``motor vehicle'' means any vehicle which is 
    manufactured primarily for use on public streets, roads, and 
    highways (not including a vehicle operated exclusively on a rail or 
    rails) and which has at least 4 wheels.

      (3) Cost of retrofit parts includes cost of installation

        The cost of any qualified clean-fuel vehicle property referred 
    to in subsection (c)(1)(A) shall include the cost of the original 
    installation of such property.

                            (4) Recapture

        The Secretary shall, by regulations, provide for recapturing the 
    benefit of any deduction allowable under subsection (a) with respect 
    to any property which ceases to be property eligible for such 
    deduction.

    (5) Property used outside United States, etc., not qualified

        No deduction 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) Basis reduction

        (A) In general

            For purposes of this title, the basis of any property shall 
        be reduced by the portion of the cost of such property taken 
        into account under subsection (a).

        (B) Ordinary income recapture

            For purposes of section 1245, the amount of the deduction 
        allowable under subsection (a) with respect to any property 
        which is of a character subject to the allowance for 
        depreciation shall be treated as a deduction allowed for 
        depreciation under section 167.

(f) Termination

    This section shall not apply to any property placed in service after 
December 31, 2004.

(Added Pub. L. 102-486, title XIX, Sec. 1913(a)(1), Oct. 24, 1992, 106 
Stat. 3016; amended Pub. L. 104-188, title I, Sec. 1704(j)(2), Aug. 20, 
1996, 110 Stat. 1881.)


                               Amendments

    1996--Subsecs. (f), (g). Pub. L. 104-188 redesignated subsec. (g) as 
(f).


                             Effective Date

    Section applicable to property placed in service after June 30, 
1993, see section 1913(c) of Pub. L. 102-486, set out as a note under 
section 30 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 62, 263, 280F, 312, 1016, 
1245, 4001 of this title.
