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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9780 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9780

 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

                           September 24, 2024

Mr. Casten (for himself and Ms. Matsui) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addition 
      to the Committee on Energy 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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Vehicle Energy 
Performance Act of 2024''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. TAX CREDIT FOR VEHICLE ENERGY PERFORMANCE.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to other credits) is amended by inserting after section 30D 
the following new section:

``SEC. 30E. VEHICLE ENERGY PERFORMANCE REBATE.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the amount determined under paragraph (2) with 
        respect to any new qualified high energy performance motor 
        vehicle placed in service by the taxpayer during the taxable 
        year.
            ``(2) Credit amount.--With respect to each new qualified 
        high energy performance motor vehicle, the amount determined 
        under this paragraph shall be equal to the amount (not greater 
        than $5,000) that bears the same ratio to $5,000 as--
                    ``(A) the excess of--
                            ``(i) the vehicle energy performance of 
                        such vehicle, over
                            ``(ii) the median vehicle energy 
                        performance for the model year immediately 
                        preceding the model year of such vehicle, bears 
                        to
                    ``(B) the excess of--
                            ``(i) the best vehicle energy performance 
                        for the model year immediately preceding the 
                        model year of such vehicle, over
                            ``(ii) the median vehicle energy 
                        performance for the model year immediately 
                        preceding the model year of such vehicle.
    ``(b) New Qualified High Energy Performance Motor Vehicle.--For 
purposes of this section, the term `new qualified high energy 
performance motor vehicle' means a passenger automobile or light 
truck--
            ``(1) which is treated as a motor vehicle for purposes of 
        title II of the Clean Air Act,
            ``(2) which achieves vehicle energy performance that is 
        greater than the median vehicle energy performance for the 
        model year immediately preceding the model year of such 
        vehicle,
            ``(3) for which standards are prescribed pursuant to 
        section 32902 of title 49, United States Code,
            ``(4) the original use of which commences with the 
        taxpayer,
            ``(5) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(6) which is made by a manufacturer beginning with model 
        year 2026.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Refundable personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year (determined after application of paragraph (1)) 
                shall be treated as a credit allowable under subpart C 
                for such taxable year (and not allowed under subsection 
                (a)).
                    ``(B) Refundable credit may be transferred.--
                            ``(i) In general.--A taxpayer may, in 
                        connection with the purchase of a new qualified 
                        high energy performance motor vehicle, transfer 
                        any refundable credit described in subparagraph 
                        (A) to any person who is in the trade or 
                        business of selling new qualified high energy 
                        performance motor vehicles and who sold such 
                        vehicle to the taxpayer, but only if such 
                        person clearly discloses to such taxpayer, 
                        through the use of a window sticker attached to 
                        the new qualified high energy performance 
                        vehicle--
                                    ``(I) the amount of the refundable 
                                credit described in subparagraph (A) 
                                with respect to such vehicle, and
                                    ``(II) a notification that the 
                                taxpayer will not be eligible for any 
                                credit under section 30D with respect 
                                to such vehicle unless the taxpayer 
                                elects not to have this section apply 
                                with respect to such vehicle.
                            ``(ii) Certification.--A transferee of a 
                        refundable credit described in subparagraph (A) 
                        may not claim such credit unless such claim is 
                        accompanied by a certification to the Secretary 
                        that the transferee reduced the price the 
                        taxpayer paid for the new qualified high energy 
                        performance motor vehicle by the entire amount 
                        of such refundable credit.
                            ``(iii) Consent required for revocation.--
                        Any transfer under clause (i) may be revoked 
                        only with the consent of the Secretary.
                            ``(iv) Regulations.--The Secretary may 
                        prescribe such regulations as necessary to 
                        ensure that any refundable credit described in 
                        clause (i) is claimed once and not 
                        retransferred by a transferee.
    ``(d) Other Definitions.--For purposes of this section:
            ``(1) Vehicle energy performance.--The term `vehicle energy 
        performance' means, with respect to any vehicle, the combined 
        fuel-economy rating determined for the model and model year of 
        such vehicle.
            ``(2) Median vehicle energy performance.--The term `median 
        vehicle energy performance' means, with respect to any model 
        year, the median combined fuel-economy rating for all new motor 
        vehicles of such model year sold in the United States.
            ``(3) Best vehicle energy performance.--The term `best 
        vehicle energy performance' means, with respect to any model 
        year, the highest combined fuel-economy rating of any model of 
        motor vehicle of such model year sold the United States.
            ``(4) Combined fuel-economy rating.--The term `combined 
        fuel-economy rating' means the combined fuel-economy rating 
        determined in accordance with section 32908 of title 49, United 
        States Code, and expressed in miles per gallon of gasoline 
        equivalent.
            ``(5) Model year.--The term `model year' has the meaning 
        given such term under section 32901(a) of such title 49.
            ``(6) 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.
            ``(7) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
    ``(e) Special Rules.--
            ``(1) Basis reduction.--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 (determined without regard to subsection (c)).
            ``(2) Property used by tax-exempt entity.--In the case of a 
        vehicle whose use is described in paragraph (3) or (4) of 
        section 50(b) and which is not subject to a lease, the person 
        who sold such vehicle to the person or entity using such 
        vehicle shall be treated as the taxpayer that placed such 
        vehicle in service, but only if such person clearly discloses 
        to such person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such vehicle 
        (determined without regard to subsection (c)). For purposes of 
        subsection (c), property to which this paragraph applies shall 
        be treated as of a character subject to an allowance for 
        depreciation.
            ``(3) Property used outside united states, etc., not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(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.
            ``(5) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(6) Interaction with air quality and motor vehicle safety 
        standards.--A motor vehicle shall not be considered eligible 
        for a credit under this section unless such vehicle is in 
        compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provisions 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.
            ``(7) Inflation adjustment.--In the case of any model year 
        beginning in a calendar year after 2026, each dollar amount in 
        subsection (a)(2) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the model year begins, determined by substituting 
                `2025' for `2016' in subparagraph (A)(ii) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $100.
            ``(8) One credit per vehicle.--In the case of any vehicle, 
        the credit described in subsection (a) shall only be allowed 
        once with respect to such vehicle, as determined based upon the 
        vehicle identification number of such vehicle.
    ``(f) Reporting of Vehicle Energy Performance.--
            ``(1) Vehicle manufacturers.--Not later than November 1 of 
        each calendar year (beginning with calendar year 2025), each 
        vehicle manufacturer shall submit to the Secretary a report 
        that includes--
                    ``(A) the vehicle energy performance for each model 
                of that model year which was manufactured by such 
                manufacturer and sold in the United States, and
                    ``(B) with respect to each such model of such model 
                year, the number of vehicles of such model and model 
                year sold in the United States during the 1-year period 
                beginning on October 1 of the preceding year.
            ``(2) Publication by treasury.--Not later than December 1 
        of each calendar year (beginning with calendar year 2025), the 
        Secretary shall publish the median vehicle energy performance 
        and the best vehicle energy performance for that model year.
    ``(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 not later than 1 year 
        after the date of enactment.
            ``(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 a motor vehicle 
        meets the requirements to be eligible for a credit under this 
        section.''.
    (b) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) is amended by redesignating clauses (i) through (xii) as 
clauses (ii) through (xiii), respectively, and by inserting before 
clause (ii) (as so redesignated) the following new clause:
                            ``(i) the credit determined under section 
                        30E,''.
    (c) Display of Credit.--Section 32908(b) of title 49, United States 
Code, is amended--
            (1) in paragraph (1)--
                    (A) by redesignating subparagraphs (E) and (F) as 
                subparagraphs (F) and (G), and
                    (B) by inserting after subparagraph (D) the 
                following new subparagraph:
            ``(E) the amount of the vehicle energy performance credit 
        allowable with respect to the sale of the automobile under 
        section 30E of the Internal Revenue Code of 1986 (26 U.S.C. 
        30E).'', and
            (2) in paragraph (2), by striking ``paragraph (1)(E)'' and 
        inserting ``paragraph (1)(F)''.
    (d) Conforming Amendments.--
            (1) Section 38(b) is amended by striking ``plus'' at the 
        end of paragraph (40), by striking the period at the end of 
        paragraph (41) and inserting ``, plus'', and by adding at the 
        end the following new paragraph:
            ``(42) the portion of the vehicle energy performance rebate 
        to which section 30E(c)(1) applies.''.
            (2) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (37), by striking the period at the end of 
        paragraph (38) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(39) to the extent provided in section 30E(e)(1).''.
            (3) Section 6501(m) is amended by inserting ``30E(e)(6),'' 
        after ``30D(e)(4),''.
            (4) The table of section for subpart C of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30D the following new item:

``Sec. 30E. Vehicle energy performance rebate.''.

SEC. 3. LOW VEHICLE ENERGY PERFORMANCE FEE.

    (a) In General.--Section 4064 is amended to read as follows:

``SEC. 4064. LOW VEHICLE ENERGY PERFORMANCE FEE.

    ``(a) Imposition of Tax.--There is hereby imposed on the sale by 
the manufacturer of each low energy performance vehicle a tax equal to 
the product of $5,000, multiplied by the quotient of--
            ``(1) the excess of--
                    ``(A) the median vehicle energy performance for the 
                model year immediately preceding the model year of such 
                vehicle, over
                    ``(B) the vehicle energy performance of such 
                vehicle, divided by
            ``(2) the excess of--
                    ``(A) the best vehicle energy performance for the 
                model year immediately preceding the model year of such 
                vehicle, over
                    ``(B) the median vehicle energy performance for the 
                model year immediately preceding the model year of such 
                vehicle.
    ``(b) Low Energy Performance Vehicle.--For purposes of this 
section--
            ``(1) In general.--The term `low energy performance 
        vehicle' means a passenger automobile or light truck--
                    ``(A) which is treated as a motor vehicle for 
                purposes of title II of the Clean Air Act,
                    ``(B) which achieves vehicle energy performance 
                that is lower than the median vehicle energy 
                performance, and
                    ``(C) which is made by a manufacturer beginning 
                with model year 2028.
            ``(2) Exception for certain vehicles.--The term `low energy 
        performance vehicle' does not include any vehicle--
                    ``(A) which--
                            ``(i) has a gross vehicle weight rating of 
                        more than 8,500 pounds, and
                            ``(ii) is determined by the Secretary to be 
                        a vehicle which is designed for commercial use, 
                        or
                    ``(B) sold for use and used--
                            ``(i) as an ambulance or combination 
                        ambulance-hearse,
                            ``(ii) by the United States or by a State 
                        or local government for police or other law 
                        enforcement purposes, or
                            ``(iii) for other emergency uses prescribed 
                        by the Secretary by regulations.
    ``(c) Other Definitions.--For purposes of this section:
            ``(1) Vehicle energy performance.--The term `vehicle energy 
        performance' means, with respect to any vehicle, the combined 
        fuel-economy rating determined for the model and model year of 
        such vehicle.
            ``(2) Median vehicle energy performance.--The term `median 
        vehicle energy performance' means, with respect to any model 
        year, the median combined fuel-economy rating for all new motor 
        vehicles of such model year sold in the United States.
            ``(3) Best vehicle energy performance.--The term `best 
        vehicle energy performance' means, with respect to any model 
        year, the highest combined fuel-economy rating of any model of 
        motor vehicle of such model year sold the United States.
            ``(4) Combined fuel-economy rating.--The term `combined 
        fuel-economy rating' means the combined fuel-economy rating 
        determined in accordance with section 32908 of title 49, United 
        States Code, and expressed in miles per gallon of gasoline 
        equivalent.
            ``(5) Model year.--The term `model year' has the meaning 
        given such term under section 32901(a) of such title 49.
            ``(6) 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.
            ``(7) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
    ``(d) Inflation Adjustment.--In the case of any model year 
beginning in a calendar year after 2028, each dollar amount in 
subsection (a)(2) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the model year 
        begins, determined by substituting `2027' for `2016' in 
        subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence shall be rounded 
to the nearest multiple of $100.''.
    (b) Conforming Amendments.--
            (1) The heading for part I of subchapter A of chapter 32 is 
        amended by striking ``gas'' and inserting ``fuel''.
            (2) The table of parts for subchapter A of chapter 32 is 
        amended by striking ``Gas'' in the item relating to part I and 
        inserting ``Fuel''.
            (3) The table of sections for part I of subchapter A of 
        chapter 32 is amended by striking ``Gas'' in the item relating 
        to section 4064 and inserting ``Fuel''.
            (4) The heading for subsection (d) of section 1016 is 
        amended by striking ``Gas Guzzler Tax'' and inserting ``Low 
        Vehicle Energy Performance Fee''.
            (5) The heading for subsection (e) of section 4217 is 
        amended by striking ``Gas Guzzler Tax'' and inserting ``Low 
        Vehicle Energy Performance Fee''.
            (6) The heading for subparagraph (B) of section 4217(e)(3) 
        is amended by striking ``gas guzzler tax'' and inserting ``low 
        vehicle energy performance fee''.
            (7) Section 4217(e) is amended by striking ``gas guzzler 
        tax'' each place it appears and inserting ``low vehicle energy 
        performance fee''.

SEC. 4. FUEL ECONOMY OF DUAL FUELED AUTOMOBILES.

    (a) Measurement of Fuel Economy for Electric Dual Fueled 
Automobiles.--Section 32905(e) of title 49, United States Code, is 
amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A)--
                    (A) by striking ``At the request of the 
                manufacturer, the Administrator may'' and inserting 
                ``The Administrator shall''; and
                    (B) by striking ``model year 2015'' and inserting 
                ``model year 2025''; and
            (2) by amending paragraph (2) to read as follows:
            ``(2) Review and updating of formula.--Not later than 3 
        years after the date of the enactment of this paragraph, and 
        every 3 years thereafter, the Administrator shall, using real-
        world data if possible, review and update the formula for 
        determining under paragraph (1) percentage utilization on 
        gasoline or diesel fuel and percentage utilization on 
        electricity.''.
    (b) Fuel Economy Information for Dual Fueled Automobiles.--
            (1) Labeling requirements and contents.--Section 
        32908(b)(3) of title 49, United States Code, is amended--
                    (A) by redesignating subparagraphs (B), (C), and 
                (D) as subparagraphs (D), (E), and (F), respectively; 
                and
                    (B) by inserting after subparagraph (A) the 
                following:
            ``(B) indicate the fuel economy of the automobile when 
        operated primarily on alternative fuel;
            ``(C) indicate the multi-day average fuel economy of the 
        automobile when operated on a combination of alternative fuel 
        and gasoline or diesel fuel, with the percentage utilization of 
        alternative fuel and the percentage utilization of gasoline or 
        diesel fuel being determined by a formula based on real-world 
        data and updated not less frequently than every 3 years;''.
            (2) Fuel economy information booklet.--Section 
        32908(c)(2)(B) of title 49, United States Code, is amended--
                    (A) in clause (i), by striking ``; and'' and 
                inserting a semicolon;
                    (B) by redesignating clause (ii) as clause (iii); 
                and
                    (C) by inserting after clause (i) the following:
            ``(ii) information on the multi-day average fuel economy of 
        the automobile when operated on a combination of alternative 
        fuel and gasoline or diesel fuel, as indicated under subsection 
        (b)(3)(C); and''.
    (c) Applicability.--The amendments made by this section shall apply 
with respect to automobiles of model year 2026 or later.
                                 <all>
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