Efficient Vehicle Leadership Act of 2019

I 116TH CONGRESS 2D SESSION H. R. 7862 To amend the Internal Revenue Code of 1986 to provide tax incentives and fees for increasing motor vehicle fuel economy, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 30, 2020 Mr. CASTEN of Illinois introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on En- ergy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to provide tax incentives and fees for increasing motor vehicle fuel economy, 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; AMENDMENT OF 1986 CODE. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Efficient Vehicle Leadership Act of 2019’’. 5 (b) AMENDMENT OF 1986 CODE.—Except as other- 6 wise expressly provided, whenever in this Act an amend- 7 ment or repeal is expressed in terms of an amendment 8 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 7862 IH to, or repeal of, a section or other provision, the reference 1 shall be considered to be made to a section or other provi- 2 sion of the Internal Revenue Code of 1986. 3 SEC. 2. TAX CREDIT FOR FUEL-EFFICIENT MOTOR VEHI- 4 CLES. 5 (a) IN GENERAL.—Subpart B of part IV of sub- 6 chapter A of chapter 1 (relating to other credits) is 7 amended by inserting after section 30D the following new 8 section: 9 ‘‘SEC. 30E. FUEL PERFORMANCE REBATE. 10 ‘‘(a) ALLOWANCE OF CREDIT.— 11 ‘‘(1) IN GENERAL.—There shall be allowed as a 12 credit against the tax imposed by this chapter for 13 the taxable year an amount equal to the amount de- 14 termined under paragraph (2) with respect to any 15 new qualified fuel-efficient motor vehicle placed in 16 service by the taxpayer during the taxable year. 17 ‘‘(2) CREDIT AMOUNT.—With respect to each 18 new qualified fuel-efficient motor vehicle, the amount 19 determined under this paragraph shall be equal to 20 the product of— 21 ‘‘(A) the absolute value of the difference 22 between the fuel-economy rating and the ref- 23 erence fuel-economy rating for such motor vehi- 24 cle for the model year, 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 7862 IH ‘‘(B) 100, and 1 ‘‘(C) the applicable amount. 2 ‘‘(3) APPLICABLE AMOUNT.—For purposes of 3 paragraph (2)(C), the applicable amount is equal 4 to— 5 ‘‘(A) in the case of model year 2021— 6 ‘‘(i) $1,000, or 7 ‘‘(ii) $2,000, if the fuel-economy rat- 8 ing for such motor vehicle is at least 50 9 percent more efficient than the reference 10 fuel-economy rating for such motor vehicle 11 as determined under paragraph (2)(A), 12 and 13 ‘‘(B) in the case of any succeeding model 14 year— 15 ‘‘(i) $1,500, 16 ‘‘(ii) $2,500, if the fuel-economy rat- 17 ing for such motor vehicle is at least 50 18 percent more efficient than the reference 19 fuel-economy rating for such motor vehicle 20 as determined under paragraph (2)(A), or 21 ‘‘(iii) $3,500, if the fuel-economy rat- 22 ing for such motor vehicle is at least 75 23 percent more efficient than the reference 24 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 7862 IH fuel-economy rating for such motor vehicle 1 as determined under paragraph (2)(A). 2 ‘‘(b) NEW QUALIFIED FUEL-EFFICIENT MOTOR VE- 3 HICLE.—For purposes of this section, the term ‘new quali- 4 fied fuel-efficient motor vehicle’ means a passenger auto- 5 mobile or light truck— 6 ‘‘(1) which is treated as a motor vehicle for 7 purposes of title II of the Clean Air Act, 8 ‘‘(2) which achieves a fuel-economy rating that 9 is more efficient than the reference fuel-economy 10 rating for such motor vehicle for the model year, 11 ‘‘(3) for which standards are prescribed pursu- 12 ant to section 32902 of title 49, United States Code, 13 ‘‘(4) the original use of which commences with 14 the taxpayer, 15 ‘‘(5) which is acquired for use or lease by the 16 taxpayer and not for resale, and 17 ‘‘(6) which is made by a manufacturer begin- 18 ning with model year 2021. 19 ‘‘(c) APPLICATION WITH OTHER CREDITS.— 20 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF 21 GENERAL BUSINESS CREDIT.—So much of the credit 22 which would be allowed under subsection (a) for any 23 taxable year (determined without regard to this sub- 24 section) that is attributable to property of a char- 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 7862 IH acter subject to an allowance for depreciation shall 1 be treated as a credit listed in section 38(b) for such 2 taxable year (and not allowed under subsection (a)). 3 ‘‘(2) REFUNDABLE PERSONAL CREDIT.— 4 ‘‘(A) IN GENERAL.—For purposes of this 5 title, the credit allowed under subsection (a) for 6 any taxable year (determined after application 7 of paragraph (1)) shall be treated as a credit 8 allowable under subpart C for such taxable year 9 (and not allowed under subsection (a)). 10 ‘‘(B) REFUNDABLE CREDIT MAY BE 11 TRANSFERRED.— 12 ‘‘(i) IN GENERAL.—A taxpayer may, 13 in connection with the purchase of a new 14 qualified fuel-efficient motor vehicle, trans- 15 fer any refundable credit described in sub- 16 paragraph (A) to any person who is in the 17 trade or business of selling new qualified 18 fuel-efficient motor vehicles and who sold 19 such vehicle to the taxpayer, but only if 20 such person clearly discloses to such tax- 21 payer, through the use of a window sticker 22 attached to the new qualified fuel-efficient 23 vehicle— 24 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 7862 IH ‘‘(I) the amount of the refund- 1 able credit described in subparagraph 2 (A) with respect to such vehicle, and 3 ‘‘(II) a notification that the tax- 4 payer will not be eligible for any cred- 5 it under section 30D with respect to 6 such vehicle unless the taxpayer elects 7 not to have this section apply with re- 8 spect to such vehicle. 9 ‘‘(ii) CERTIFICATION.—A transferee 10 of a refundable credit described in sub- 11 paragraph (A) may not claim such credit 12 unless such claim is accompanied by a cer- 13 tification to the Secretary that the trans- 14 feree reduced the price the taxpayer paid 15 for the new qualified fuel-efficient motor 16 vehicle by the entire amount of such re- 17 fundable credit. 18 ‘‘(iii) CONSENT REQUIRED FOR REV- 19 OCATION.—Any transfer under clause (i) 20 may be revoked only with the consent of 21 the Secretary. 22 ‘‘(iv) REGULATIONS.—The Secretary 23 may prescribe such regulations as nec- 24 essary to ensure that any refundable credit 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 7862 IH described in clause (i) is claimed once and 1 not retransferred by a transferee. 2 ‘‘(d) OTHER DEFINITIONS.—For purposes of this 3 section— 4 ‘‘(1) FUEL-ECONOMY RATING.—The term ‘fuel- 5 economy rating’ means, with respect to any motor 6 vehicle, the combined fuel-economy rating for such 7 motor vehicle, expressed in gallons per mile, deter- 8 mined in accordance with section 32904 of title 49, 9 United States Code. 10 ‘‘(2) MODEL YEAR.—The term ‘model year’ has 11 the meaning given such term under section 32901(a) 12 of such title 49. 13 ‘‘(3) MOTOR VEHICLE.—The term ‘motor vehi- 14 cle’ means any vehicle which is manufactured pri- 15 marily for use on public streets, roads, and highways 16 (not including a vehicle operated exclusively on a rail 17 or rails) and which has at least 4 wheels. 18 ‘‘(4) REFERENCE FUEL-ECONOMY RATING.— 19 The term ‘reference fuel-economy rating’ means, 20 with respect to any motor vehicle, the fuel economy 21 standard for such motor vehicle, expressed in gallons 22 per mile, calculated by applying the relevant vehicle 23 attributes to the mathematical function published 24 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 7862 IH pursuant to section 32902(b)(3)(A) of title 49, 1 United States Code. 2 ‘‘(5) OTHER TERMS.—The terms ‘automobile’, 3 ‘passenger automobile’, ‘light truck’, and ‘manufac- 4 turer’ have the meanings given such terms in regula- 5 tions prescribed by the Administrator of the Envi- 6 ronmental Protection Agency for purposes of the ad- 7 ministration of title II of the Clean Air Act (42 8 U.S.C. 7521 et seq.). 9 ‘‘(e) SPECIAL RULES.— 10 ‘‘(1) BASIS REDUCTION.—For purposes of this 11 subtitle, the basis of any property for which a credit 12 is allowable under subsection (a) shall be reduced by 13 the amount of such credit so allowed (determined 14 without regard to subsection (c)). 15 ‘‘(2) NO DOUBLE BENEFIT.—No other credit 16 shall be allowable under this chapter for a new 17 qualified fuel-efficient motor vehicle with respect to 18 which a credit is allowed under this section. 19 ‘‘(3) PROPERTY USED BY TAX-EXEMPT ENTI- 20 TY.—In the case of a vehicle whose use is described 21 in paragraph (3) or (4) of section 50(b) and which 22 is not subject to a lease, the person who sold such 23 vehicle to the person or entity using such vehicle 24 shall be treated as the taxpayer that placed such ve- 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 7862 IH hicle in service, but only if such person clearly dis- 1 closes to such person or entity in a document the 2 amount of any credit allowable under subsection (a) 3 with respect to such vehicle (determined without re- 4 gard to subsection (c)). For purposes of subsection 5 (c), property to which this paragraph applies shall 6 be treated as of a character subject to an allowance 7 for depreciation. 8 ‘‘(4) PROPERTY USED OUTSIDE UNITED 9 STATES, ETC., NOT QUALIFIED.—No credit shall be 10 allowable under subsection (a) with respect to any 11 property referred to in section 50(b)(1) or with re- 12 spect to the portion of the cost of any property 13 taken into account under section 179. 14 ‘‘(5) RECAPTURE.—The Secretary shall, by reg- 15 ulations, provide for recapturing the benefit of any 16 credit allowable under subsection (a) with respect to 17 any property which ceases to be property eligible for 18 such credit (including recapture in the case of a 19 lease period of less than the economic life of a vehi- 20 cle). 21 ‘‘(6) ELECTION NOT TO TAKE CREDIT.—No 22 credit shall be allowed under subsection (a) for any 23 vehicle if the taxpayer elects to not have this section 24 apply to such vehicle. 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 7862 IH ‘‘(7) INTERACTION WITH AIR QUALITY AND 1 MOTOR VEHICLE SAFETY STANDARDS.—A motor ve- 2 hicle shall not be considered eligible for a credit 3 under this section unless such vehicle is in compli- 4 ance with— 5 ‘‘(A) the applicable provisions of the Clean 6 Air Act for the applicable make and model year 7 of the vehicle (or applicable air quality provi- 8 sions of State law in the case of a State which 9 has adopted such provisions under a waiver 10 under section 209(b) of the Clean Air Act), and 11 ‘‘(B) the motor vehicle safety provisions of 12 sections 30101 through 30169 of title 49, 13 United States Code. 14 ‘‘(8) INFLATION ADJUSTMENT.—In the case of 15 any model year beginning in a calendar year after 16 2021, each dollar amount in subsection (a)(3)(B) 17 shall be increased by an amount equal to— 18 ‘‘(A) such dollar amount, multiplied by 19 ‘‘(B) the cost-of-living adjustment deter- 20 mined under section 1(f)(3) for the calendar 21 year in which the model year begins, deter- 22 mined by substituting ‘2020’ for ‘2016’ in sub- 23 paragraph (A)(ii) thereof. 24 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 7862 IH Any increase determined under the preceding sen- 1 tence shall be rounded to the nearest multiple of 2 $100. 3 ‘‘(f) REGULATIONS.— 4 ‘‘(1) IN GENERAL.—Except as provided in para- 5 graph (2), the Secretary shall promulgate such regu- 6 lations as necessary to carry out the provisions of 7 this section. 8 ‘‘(2) COORDINATION IN PRESCRIPTION OF CER- 9 TAIN REGULATIONS.—The Secretary of the Treas- 10 ury, in coordination with the Secretary of Transpor- 11 tation and the Administrator of the Environmental 12 Protection Agency, shall prescribe such regulations 13 as necessary to determine whether a motor vehicle 14 meets the requirements to be eligible for a credit 15 under this section.’’. 16 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN- 17 IMUM TAX.—Section 38(c)(4)(B) is amended by redesig- 18 nating clauses (i) through (xii) as clauses (ii) through 19 (xiii), respectively, and by inserting before clause (ii) (as 20 so redesignated) the following new clause: 21 ‘‘(i) the credit determined under sec- 22 tion 30E,’’. 23 (c) DISPLAY OF CREDIT.—Section 32908(b)(1) of 24 title 49, United States Code, is amended— 25 VerDate Sep 11 2014 23:35 Aug 17, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7862.IH H7862 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 7862 IH (1) by redesignating subparagraphs (E) and 1 (F) as subparagraphs (F) and (G), and 2 (2) by inserting after subparagraph (D) the fol- 3 lowing new subparagraph: 4 ‘‘(E) the amount of the fuel-efficient motor 5 vehicle credit allowable with respect to the sale 6 of the automobile under section 30E of the In- 7 ternal Revenue Code of 1986 (26 U.S.C. 8 30E).’’. 9 (d) CONFORMING AMENDMENTS.— 10 (1) Section 38(b) is amended by striking ‘‘plus’’ 11 at the end of paragraph (34), by striking the period 12 at the end of paragraph (35) and inserting ‘‘, plus’’, 13 and by adding at the end the following new para- 14 graph: 15 ‘‘(36) the portion of the fuel performance re- 16 bate to which section 30E(c)(1) applies.’’. 17 (2) Section 1016(a) is amended by striking 18 ‘‘and’’ at the end of paragraph (37), by striking the 19 period at the end of paragraph (3 [Text truncated for display. Full text available on Congress.gov.]