Clean Fuels Vehicle Act of 2021

II 117TH CONGRESS 1ST SESSION S. 2267 To amend the Internal Revenue Code of 1986 to provide a tax credit for the production of flexible fuel vehicles, and to amend title 49, United States Code, to restore certain flexible fuel vehicle credits. IN THE SENATE OF THE UNITED STATES JUNE 24, 2021 Ms. KLOBUCHAR (for herself and Ms. ERNST) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide a tax credit for the production of flexible fuel vehicles, and to amend title 49, United States Code, to restore certain flexible fuel vehicle credits. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Clean Fuels Vehicle 4 Act of 2021’’. 5 VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS 2 •S 2267 IS SEC. 2. FLEXIBLE FUEL VEHICLE PRODUCTION TAX CRED- 1 IT. 2 (a) IN GENERAL.—Subpart D of part IV of sub- 3 chapter A of chapter 1 of the Internal Revenue Code of 4 1986 is amended by adding at the end the following new 5 section: 6 ‘‘SEC. 45U. FLEXIBLE FUEL VEHICLE PRODUCTION CREDIT. 7 ‘‘(a) IN GENERAL.—For purposes of section 38, in 8 the case of a manufacturer, the flexible fuel vehicle pro- 9 duction credit for any taxable year shall be an amount 10 equal to the product of— 11 ‘‘(1) $200, and 12 ‘‘(2) the number of qualified flexible fuel vehi- 13 cles— 14 ‘‘(A) produced by the taxpayer, and 15 ‘‘(B) sold by the taxpayer to an unrelated 16 person in the United States during the taxable 17 year. 18 ‘‘(b) LIMITATION.—The number of qualified flexible 19 fuel vehicles taken into account for any taxable year shall 20 not exceed 25 percent of the sum of— 21 ‘‘(1) the total number of light duty vehicles pro- 22 duced for model years ending in such taxable year, 23 plus 24 ‘‘(2) the total number of light duty trucks pro- 25 duced for model years ending in such taxable year. 26 VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS 3 •S 2267 IS ‘‘(c) QUALIFIED FLEXIBLE FUEL VEHICLE.—For 1 purposes of this section— 2 ‘‘(1) IN GENERAL.—The term ‘qualified flexible 3 fuel vehicle’ means a motor vehicle— 4 ‘‘(A) which is engineered and designed to 5 be operated— 6 ‘‘(i) on a petroleum fuel and on a 7 methanol or ethanol fuel, or 8 ‘‘(ii) on any mixture of the petroleum 9 fuel and methanol or ethanol, and 10 ‘‘(B) which meets the requirements for a 11 flexible fuel vehicle as are prescribed by the Ad- 12 ministrator of the Environmental Protection 13 Agency for purposes of title of the administra- 14 tion of title II of the Clean Air Act (42 U.S.C. 15 7521 et seq.). 16 ‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi- 17 cle’ means any vehicle which is manufactured pri- 18 marily for use on public streets, roads, and highways 19 (not including a vehicle operated exclusively on a rail 20 or rails) and which has at least 4 wheels. 21 ‘‘(d) OTHER DEFINITIONS AND RULES.— 22 ‘‘(1) MANUFACTURER; OTHER TERMS.—The 23 terms ‘manufacturer’, ‘light duty vehicle’, ‘light duty 24 truck’, and ‘model year’ have the meanings given 25 VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS 4 •S 2267 IS such terms in regulations prescribed by the Adminis- 1 trator of the Environmental Protection Agency for 2 purposes of the administration of title II of the 3 Clean Air Act (42 U.S.C. 7521 et seq.). 4 ‘‘(2) RELATED PERSONS.—Persons shall be 5 treated as related to each other if such persons 6 would be treated as a single employer under the reg- 7 ulations prescribed under section 52(b). In the case 8 of a corporation which is a member of an affiliated 9 group of corporations filing a consolidated return, 10 such corporation shall be treated as selling a vehicle 11 to an unrelated person if such vehicle is sold to such 12 a person by another member of such group. 13 ‘‘(e) TERMINATION.—This section shall not apply to 14 any flexible fuel vehicle produced for any model year end- 15 ing after 2031.’’. 16 (b) PART OF GENERAL BUSINESS CREDIT.—Section 17 38(b) of such Code is amended by striking ‘‘plus’’ at the 18 end of paragraph (32), by striking the period at the end 19 of paragraph (33) and inserting ‘‘, plus’’, and by adding 20 at the end the following new paragraph: 21 ‘‘(34) the flexible fuel vehicle production credit 22 determined under section 45U(a).’’. 23 VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS 5 •S 2267 IS (c) CLERICAL AMENDMENT.—The table of sections 1 for subpart D of part IV of subchapter A of chapter 1 2 is amended by adding at the end the following new item: 3 ‘‘Sec. 45U. Flexible fuel vehicle production credit.’’. (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to vehicles produced and sold after 5 the date of the enactment of this Act, in taxable years 6 ending after such date. 7 SEC. 3. RESTORATION OF CERTAIN FLEXIBLE FUEL VEHI- 8 CLE CREDITS. 9 (a) RESTORATION OF MANUFACTURING INCENTIVES 10 FOR DUAL FUELED AUTOMOBILES.—Section 32905(b) of 11 title 49, United States Code, is amended, in the matter 12 preceding paragraph (1), by striking ‘‘in model years 1993 13 through 2019’’. 14 (b) REPEAL OF MAXIMUM FUEL ECONOMY IN- 15 CREASE FOR ALTERNATIVE FUEL AUTOMOBILES.— 16 (1) IN GENERAL.—Section 32906 of title 49, 17 United States Code, is repealed. 18 (2) CLERICAL AMENDMENT.—The analysis for 19 chapter 329 of part C of subtitle VI of title 49, 20 United States Code, is amended by striking the item 21 relating to section 32906. 22 (c) TESTING PROCEDURES UNDER THE CLEAN AIR 23 ACT.—Section 206 of the Clean Air Act (42 U.S.C. 7525) 24 is amended— 25 VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS 6 •S 2267 IS (1) in subsection (h), by striking ‘‘subsection 1 (a) and (b) of this section’’ and inserting ‘‘sub- 2 sections (a) and (b)’’; and 3 (2) by adding at the end the following: 4 ‘‘(i) Not later than 180 days after the date of enact- 5 ment of this subsection, the Administrator shall review the 6 regulations under subsections (a) and (b) relating to the 7 testing of motor vehicles and motor vehicle engines to en- 8 sure such testing is in accordance with section 32905(b) 9 of title 49, United States Code.’’. 10 (d) CONFORMING AMENDMENTS.— 11 (1) Section 32901(c)(1) of title 49, United 12 States Code, is amended, in the first sentence, by 13 striking ‘‘under sections 32905 and 32906 of this 14 title’’ and inserting ‘‘under section 32905’’. 15 (2) Section 32905 of title 49, United States 16 Code, is amended by striking subsection (g). 17 (3) Section 32908(g)(3) of title 49, United 18 States Code, is amended by striking the second sen- 19 tence. 20 Æ VerDate Sep 11 2014 17:10 Jul 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\S2267.IS S2267 khammond on DSKJM1Z7X2PROD with BILLS