Affordable American-made Automobile Act

I 116TH CONGRESS 1ST SESSION H. R. 5393 To amend the Internal Revenue Code of 1986 to revise the incentives for electric vehicles, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 11, 2019 Ms. SPEIER (for herself, Ms. NORTON, Mrs. TORRES of California, Mr. TAKANO, Mr. POCAN, Mr. RYAN, Mrs. WATSON COLEMAN, Ms. MCCOL- LUM, Mr. VARGAS, Ms. MENG, Ms. ROYBAL-ALLARD, Mr. HUFFMAN, Mr. NORCROSS, Mr. GARAMENDI, Mr. QUIGLEY, Mr. DESAULNIER, Ms. KAP- TUR, Mr. SIRES, Mr. MCNERNEY, Ms. MATSUI, Mr. CRIST, Mr. LOWENTHAL, Mr. CUELLAR, Ms. TLAIB, Mrs. DINGELL, Ms. BROWNLEY of California, Mr. ROUDA, Ms. MOORE, Mr. GRIJALVA, Mr. CLEAVER, and Mr. CA´RDENAS) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to revise the incentives for electric vehicles, and for other purposes. 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; FINDINGS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Affordable American-made Automobile Act’’. 5 (b) FINDINGS.—Congress finds the following: 6 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 2 •HR 5393 IH (1) The automobile industry is vital to the na- 1 tional economy and to national security. It employs 2 millions of Americans and develops new technologies 3 with widespread civilian and military application. 4 (2) The global automobile industry is already in 5 the midst of an historic transformation to electric 6 vehicle technology. This transition has profound im- 7 plications for all Americans. 8 (3) In critical measures of the global competi- 9 tion in the electric vehicle industry, the United 10 States is behind China and is projected to fall fur- 11 ther behind. The United States is behind in total ve- 12 hicle sales, behind in the market share of new car 13 sales, behind in investment, behind in battery manu- 14 facturing capacity, and behind in manufacturing ca- 15 pacity. The United States lags China to a great ex- 16 tent, but the United States is in third place in this 17 competition, behind the European Union. 18 (4) China sells half the electric vehicles sold in 19 the world. In addition, China’s percent of new car 20 market share of electric vehicles is twice that of the 21 United States. In a few short years, the Chinese new 22 market share of electric vehicles is expected to be 23 triple the new market share in the United States. 24 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 3 •HR 5393 IH (5) China is predicted to control about 75 per- 1 cent of the global battery capacity. 2 (6) Global investment in electric vehicles is ex- 3 pected to reach $300 billion or even more; half of 4 which is intended for China and only 10 percent for 5 the United States. 6 (7) There are 17 Chinese automobile manufac- 7 turers that have announced or undertaken electric 8 vehicle investment. Even assuming some consolida- 9 tion of the Chinese industry, it will dwarf the num- 10 ber of manufacturers headquartered in the United 11 States which is currently 4. 12 (8) China supports its electric vehicle industry 13 through a wide array of practices including state- 14 owned enterprises, direct subsidies, special access to 15 financing, government guarantees of financing, ex- 16 emptions from various regulatory requirements, pub- 17 lic purchasing, favoritism for Chinese firms, restric- 18 tions on market entry to foreign competition, and 19 regulatory mandates. 20 (9) Chinese domination of the electric vehicle 21 industry will inevitably erode United States auto- 22 mobile manufacturing and the United States supply 23 chain potentially resulting in the loss of hundreds of 24 thousands of jobs. Employment in the innovation 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 4 •HR 5393 IH and research side of the industry has already begun 1 a migration outside the United States. 2 (10) United States communities are also cur- 3 rently suffering from extreme events of flood, wind, 4 and fire, as well as health-threatening air pollution, 5 all of which are related to a warming planet. Electric 6 vehicles will play a critical role in reducing the pollu- 7 tion that contributes to these tragedies. 8 (11) Without changes to public policy, the auto- 9 motive industry in the United States will face ag- 10 gressive competition from foreign companies, chiefly 11 located in China, and will fight a competitive battle 12 on grossly unequal terms due to foreign government 13 policies that unfairly favor overseas manufacturers. 14 (12) Such an unfair fight is unwinnable by pri- 15 vate industry alone and is therefore a national pri- 16 ority for the Government of the United States to 17 enter on behalf of every current and future Amer- 18 ican. 19 (13) The United States faces a moment of crit- 20 ical choice. It either makes the investments nec- 21 essary to achieve global competitive leadership in 22 this key industry, or it will face profound and dire 23 consequences to its economy and its national secu- 24 rity. 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 5 •HR 5393 IH (14) The United States needs to stimulate de- 1 mand for electric vehicles from middle class con- 2 sumers. Tax incentives for the development of con- 3 venient fast charging infrastructure are essential. 4 Investment is needed to support increased electric 5 vehicle and battery manufacturing capacity. 6 SEC. 2. EXPANSION OF TAX CREDIT FOR ELECTRIC DRIVE 7 MOTOR VEHICLES. 8 (a) APPLICATION TO NEW AND USED BATTERY 9 ELECTRIC MOTOR VEHICLES.— 10 (1) IN GENERAL.—Section 30D(a) of the Inter- 11 nal Revenue Code of 1986 is amended by striking 12 ‘‘new qualified plug-in electric drive motor vehicle’’ 13 and inserting ‘‘credit eligible electric motor vehicle’’. 14 (2) PER VEHICLE DOLLAR LIMITATION.—Sec- 15 tion 30D(b) of such Code is amended— 16 (A) in paragraph (1)— 17 (i) by striking ‘‘paragraphs (2) and 18 (3)’’ and inserting ‘‘paragraphs (4) and 19 (5)’’; and 20 (ii) by striking ‘‘IN GENERAL’’ in the 21 heading and inserting ‘‘NEW QUALIFIED 22 PLUG-IN ELECTRIC DRIVE MOTOR VEHI- 23 CLES’’; 24 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 6 •HR 5393 IH (B) by redesignating paragraphs (2) and 1 (3) as paragraphs (4) and (5), respectively, and 2 inserting after paragraph (1) the following new 3 paragraphs: 4 ‘‘(2) NEW BATTERY ELECTRIC MOTOR VEHI- 5 CLES.— 6 ‘‘(A) IN GENERAL.—The amount deter- 7 mined under this subsection with respect to any 8 new battery electric motor vehicle is— 9 ‘‘(i) $12,000 ($15,000 in the case of 10 new battery electric motor vehicles ac- 11 quired after December 31, 2018, and be- 12 fore the date which is 5 years after the 13 date of the enactment of the Affordable 14 American-made Automobile Act) if the 15 price of such vehicle is not more than 16 $35,000, and 17 ‘‘(ii) $7,500 if the price of such vehi- 18 cle is greater than $35,000. 19 ‘‘(B) DETERMINATION OF PRICE.—For 20 purposes of this paragraph, the term ‘price’ 21 means— 22 ‘‘(i) except as provided in clause (ii), 23 the final sales price agreed upon by the 24 taxpayer and the person from whom the 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 7 •HR 5393 IH taxpayer acquires such vehicle (determined 1 without regard to any taxes or fees im- 2 posed by any State or local government), 3 and 4 ‘‘(ii) in the case of a lease, the price 5 of the vehicle stated in the lease agreement 6 between the lessor and lessee (as so deter- 7 mined). 8 ‘‘(3) USED BATTERY ELECTRIC MOTOR VEHI- 9 CLES.—The amount determined under this sub- 10 section with respect to any used battery electric 11 motor vehicle is— 12 ‘‘(A) $5,000 if the taxpayer trades in a ve- 13 hicle that is powered by an internal combustion 14 engine in connection with the taxpayer’s acqui- 15 sition of such used battery electric motor vehi- 16 cle, and 17 ‘‘(B) $0 in any other case.’’; and 18 (C) in paragraph (5) (as so redesignated), 19 by striking ‘‘a vehicle’’ and inserting ‘‘a new 20 qualified plug-in electric drive motor vehicle’’. 21 (3) CREDIT ELIGIBLE ELECTRIC MOTOR VEHI- 22 CLE.—Section 30D(d) of such Code is amended— 23 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 8 •HR 5393 IH (A) by redesignating paragraphs (2), (3), 1 and (4) as paragraphs (5), (6), and (7), respec- 2 tively; 3 (B) by redesignating paragraph (1) as 4 paragraph (2); 5 (C) in paragraph (2) (as so redesig- 6 nated)— 7 (i) in subparagraph (F), by inserting 8 ‘‘utilizes an internal combustion engine 9 and’’ before ‘‘is propelled’’; and 10 (ii) by striking ‘‘IN GENERAL’’ in the 11 heading and inserting ‘‘NEW QUALIFIED 12 PLUG-IN ELECTRIC DRIVE MOTOR VEHI- 13 CLE’’; 14 (D) by striking all that precedes paragraph 15 (2) (as so redesignated) and inserting the fol- 16 lowing: 17 ‘‘(d) CREDIT ELIGIBLE MOTOR VEHICLE.—For pur- 18 poses of this section— 19 ‘‘(1) CREDIT ELIGIBLE MOTOR VEHICLE.—The 20 term ‘credit eligible motor vehicle’ means— 21 ‘‘(A) a new qualified plug-in electric drive 22 motor vehicle, 23 ‘‘(B) a new battery electric motor vehicle, 24 and 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 9 •HR 5393 IH ‘‘(C) a used battery electric motor vehi- 1 cle.’’; and 2 (E) by inserting after paragraph (2) (as so 3 redesignated) the following new paragraphs: 4 ‘‘(3) NEW BATTERY ELECTRIC MOTOR VEHI- 5 CLE.—The term ‘new battery electric motor vehicle’ 6 means a motor vehicle— 7 ‘‘(A) which meets the requirements of sub- 8 paragraphs (A) through (E) of paragraph (2), 9 ‘‘(B) which is powered by a battery electric 10 drive train, 11 ‘‘(C) which produces zero exhaust emis- 12 sions of any criteria pollutant (including any 13 precursor pollutant) or greenhouse gas (other 14 than emissions from air conditioning systems) 15 under any possible operational modes or condi- 16 tions, 17 ‘‘(D) the battery cell, battery pack, battery 18 cooling system, and battery management sys- 19 tem of which are all manufactured in the 20 United States, and 21 ‘‘(E) the assembly of which is in the 22 United States. 23 ‘‘(4) USED BATTERY ELECTRIC MOTOR VEHI- 24 CLE.— 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 10 •HR 5393 IH ‘‘(A) IN GENERAL.—The term ‘used bat- 1 tery electric motor vehicle’ means a motor vehi- 2 cle— 3 ‘‘(i) the original use of which com- 4 mences with a person other than the tax- 5 payer, 6 ‘‘(ii) which meets the requirements of 7 subparagraphs (B) through (E) of para- 8 graph (2), and 9 ‘‘(iii) which meets the requirements of 10 subparagraphs (B) through (E) of para- 11 graph (3). 12 ‘‘(B) ONLY 1 CREDIT PER VEHICLE.—No 13 credit shall be allowed under this section with 14 respect to any used battery electric motor vehi- 15 cle placed in service by the taxpayer if a credit 16 is allowable under this section by reason of such 17 vehicle being placed in service at any time prior 18 to the time that such vehicle is placed in service 19 by the taxpayer (other than a credit which is so 20 allowable by reason of such vehicle being a new 21 battery electric motor vehicle).’’. 22 (b) CARRYOVER OF PERSONAL CREDIT.—Section 23 30D(c)(2) of such Code is amended— 24 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 11 •HR 5393 IH (1) by striking ‘‘For purposes’’ and inserting 1 the following: 2 ‘‘(A) IN GENERAL.—For purposes’’; and 3 (2) by adding at the end the following new sub- 4 paragraph: 5 ‘‘(B) CARRYBACK AND CARRYFORWARD OF 6 UNUSED CREDITS.— 7 ‘‘(i) IN GENERAL.—If the credit de- 8 scribed in subparagraph (A) exceeds the 9 limitation imposed by section 26(a) for the 10 taxable year reduced by the sum of the 11 credits allowable under subpart A (deter- 12 mined without regard to the credit de- 13 scribed in subparagraph (A)), such excess 14 shall be— 15 ‘‘(I) carried back to the taxable 16 year preceding the taxable year in 17 which such amount arose, and 18 ‘‘(II) carried forward to the 5 19 taxable years following the taxable 20 year in which such amount arose. 21 ‘‘(ii) LIMITATION.—For purposes of 22 clause (i), the amount of credit carried 23 back or forward under such clause— 24 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 12 •HR 5393 IH ‘‘(I) shall be taken into account 1 as a credit described in subparagraph 2 (A) for the taxable year to which car- 3 ried (except, in the case of a 4 carryback, such amount shall not be 5 taken into account for purposes of ap- 6 plying clause (i) to such taxable year), 7 and 8 ‘‘(II) such amounts shall be 9 treated as used on a first-in, first-out 10 basis, determined on the basis of the 11 taxable year in which such amount 12 arose.’’. 13 (c) ASSIGNMENT OF CREDIT TO FINANCING ENTI- 14 TY.—Section 30D(f) of such Code is amended by adding 15 at the end the following new paragraph: 16 ‘‘(8) CREDIT MAY BE ASSIGNED TO FINANCING 17 ENTITY.— 18 ‘‘(A) IN GENERAL.—In the case of a credit 19 determined under subsection (a) with respect to 20 a new qualified plug-in electric drive motor ve- 21 hicle or a new battery electric motor vehicle, the 22 taxpayer to whom such credit would (but for 23 this paragraph) be allowed under subsection (a) 24 for any taxable year may assign such credit to 25 VerDate Sep 11 2014 00:33 Dec 19, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5393.IH H5393 dlhill on DSKBBY8HB2PROD with BILLS 13 •HR 5393 IH the person who financed the purchase (or lease 1 of at least 2 years) of such vehicle. Any person 2 to whom such credit is assigned under the pre- 3 ceding sentence shall be treated for purposes of 4 this title as the taxpayer who placed such vehi- 5 cle in service. 6 ‘‘(B) DISCLOSURE REQUIREMENT.—Sub- 7 paragraph (A) shall not apply with respect to 8 any v [Text truncated for display. Full text available on Congress.gov.]