II 

118TH CONGRESS 

1ST SESSION S. 881 

To amend the Internal Revenue Code of 1986 to provide a credit for the 

purchase of certain new electric bicycles. 

IN THE SENATE OF THE UNITED STATES 

MARCH 21, 2023 

Mr. SCHATZ (for himself and Mr. MARKEY) 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 credit for the purchase of certain new electric bicycles. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Electric Bicycle Incen5 tive Kickstart for the Environment Act’’ or as the ‘‘E6 BIKE Act’’. 

7 SEC. 2. CREDIT FOR CERTAIN NEW ELECTRIC BICYCLES. 

8 (a) IN GENERAL.—Subpart C of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 36B the fol2 lowing new section: 

3 ‘‘SEC. 36C. ELECTRIC BICYCLES. 

4 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in5 dividual, there shall be allowed as a credit against the tax 

6 imposed by this chapter for the taxable year an amount 

7 equal to 30 percent of the cost of each qualified electric 

8 bicycle placed in service by the taxpayer during such tax9 able year. 

10 ‘‘(b) LIMITATIONS.— 

11 ‘‘(1) LIMITATION ON COST PER BICYCLE TAKEN

12 INTO ACCOUNT.—The amount taken into account 

13 under subsection (a) as the cost of any qualified 

14 electric bicycle shall not exceed $5,000. 

15 ‘‘(2) LIMITATION ON NUMBER OF BICYCLES.— 

16 In the case of any taxpayer for any taxable year, the 

17 number of qualified electric bicycles taken into ac18 count under subsection (a) shall not exceed the ex19 cess (if any) of— 

20 ‘‘(A) 1 (2 in the case of a joint return), re21 duced by 

22 ‘‘(B) the aggregate number of qualified 

23 electric bicycles taken into account by the tax24 payer under subsection (a) for the 2 preceding 

25 taxable years. 


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1 ‘‘(3) PHASEOUT BASED ON INCOME.— 

2 ‘‘(A) PHASEOUT BASED ON MODIFIED AD3 JUSTED GROSS INCOME.—The credit allowed 

4 under subsection (a) shall be reduced by $100 

5 for each $1,000 (or fraction thereof) by which 

6 the taxpayer’s modified adjusted gross income 

7 exceeds— 

8 ‘‘(i) $300,000 in the case of a joint 

9 return or a surviving spouse (as defined in 

10 section 2(a)), 

11 ‘‘(ii) $225,000 in the case of a head 

12 of household (as defined in section 2(b)), 

13 and 

14 ‘‘(iii) $150,000 in the case of a tax15 payer not described in clause (i) or (ii). 

16 ‘‘(B) SPECIAL RULE FOR MODIFIED AD17 JUSTED GROSS INCOME TAKEN INTO AC18 COUNT.—The modified adjusted gross income 

19 of the taxpayer that is taken into account for 

20 purposes of subparagraph (A) shall be the less21 er of— 

22 ‘‘(i) the modified adjusted gross in23 come for the taxable year with respect to 

24 which the credit is claimed, or 


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1 ‘‘(ii) the modified adjusted gross in2 come for the immediately preceding taxable 

3 year. 

4 ‘‘(C) MODIFIED ADJUSTED GROSS IN5 COME.—For purposes of subparagraph (A), the 

6 term ‘modified adjusted gross income’ means 

7 adjusted gross income increased by any amount 

8 excluded from gross income under section 911, 

9 931, or 933. 

10 ‘‘(c) QUALIFIED ELECTRIC BICYCLE.—For purposes 

11 of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘qualified electric 

13 bicycle’ means a bicycle or tricycle— 

14 ‘‘(A) the original use of which commences 

15 with the taxpayer, 

16 ‘‘(B) which is acquired for use by the tax17 payer and not for resale, 

18 ‘‘(C) which is not property of a character 

19 subject to an allowance for depreciation or am20 ortization in the hands of the taxpayer, 

21 ‘‘(D) which is made by a qualified manu22 facturer and is labeled with the qualified vehicle 

23 identification number assigned to such bicycle 

24 or tricycle by such manufacturer, 


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1 ‘‘(E) with respect to which the aggregate 

2 amount paid for such acquisition does not ex3 ceed $8,000, 

4 ‘‘(F) which is a class 1 electric bicycle or 

5 tricycle, a class 2 electric bicycle or tricycle, or 

6 a class 3 electric bicycle or tricycle, 

7 ‘‘(G) which is equipped with— 

8 ‘‘(i) fully operable pedals, 

9 ‘‘(ii) a saddle or seat for the rider, 

10 and 

11 ‘‘(iii) an electric motor of less than 

12 750 watts which is designed to provide as13 sistance in propelling the bicycle or tricycle 

14 and— 

15 ‘‘(I) does not provide such assist16 ance if the bicycle or tricycle is mov17 ing in excess of 20 miler per hour, or 

18 ‘‘(II) if such motor only provides 

19 such assistance when the rider is ped20 aling, does not provide such assistance 

21 if the bicycle or tricycle is moving in 

22 excess of 28 miles per hour, 

23 ‘‘(H) which is not equipped with any motor 

24 other than the motor described in subparagraph 

25 (G)(iii), 


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1 ‘‘(I) which is not capable of exceeding the 

2 speed limitation in paragraph (2) by means of 

3 any electronic switch, setting or software modi4 fication provided or made available by the man5 ufacturer, and 

6 ‘‘(J) which has a drive system that has 

7 been certified by an accredited laboratory to 

8 Underwriters Laboratory (UL) standard UL 

9 2849, or a battery that has been certified to 

10 any of the battery safety standards listed in 

11 such standard UL 2849 or such other drive sys12 tem or battery safety standard as may be recog13 nized by the United States Consumer Product 

14 Safety Commission. 

15 ‘‘(2) CLASS 1 ELECTRIC BICYCLE OR TRI16 CYCLE.—The term ‘class 1 electric bicycle or tri17 cycle’ means a two- or three-wheeled vehicle 

18 equipped with an electric motor that provides assist19 ance only when the rider is pedaling, that is not ca20 pable of providing assistance when the speed of the 

21 vehicle exceeds 20 miles per hour, and that is not a 

22 class 3 electric bicycle or tricycle. 

23 ‘‘(3) CLASS 2 ELECTRIC BICYCLE OR TRI24 CYCLE.—The term ‘class 2 electric bicycle or tri25 cycle’ means a two- or three-wheeled vehicle 


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1 equipped with an electric motor that may be used to 

2 propel the vehicle without the need of any additional 

3 assistance, and that is not capable of providing as4 sistance when the speed of the vehicle exceeds 20 

5 miles per hour. 

6 ‘‘(4) CLASS 3 ELECTRIC BICYCLE OR TRI7 CYCLE.—The term ‘class 3 electric bicycle or tri8 cycle’ means a two- or three-wheeled vehicle 

9 equipped with an electric motor that provides assist10 ance only when the rider is pedaling, and that is not 

11 capable of providing assistance when the speed of 

12 the vehicle exceeds 28 miles per hour. 

13 ‘‘(d) SPECIAL RULE FOR BICYCLES USED BY AN IN14 DIVIDUAL IN A TRADE OR BUSINESS.—In the case of any 

15 bicycle or tricycle with respect to which the taxpayer elects 

16 (at such time and in such manner as the Secretary may 

17 provide) the application of this subsection— 

18 ‘‘(1) subsections (c)(1)(C) and (f)(2) shall not 

19 apply with respect to such bicycle or tricycle, and 

20 ‘‘(2) no deduction (including any deduction for 

21 depreciation or amortization) or credit (other than 

22 the credit allowed under this section) shall be al23 lowed for the cost of such bicycle or tricycle. 

24 ‘‘(e) VIN NUMBER REQUIREMENT.— 


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1 ‘‘(1) IN GENERAL.—No credit shall be allowed 

2 under subsection (a) with respect to any qualified 

3 electric bicycle unless the taxpayer includes the 

4 qualified vehicle identification number of such bicy5 cle on the return of tax for the taxable year. 

6 ‘‘(2) QUALIFIED VEHICLE IDENTIFICATION

7 NUMBER.—For purposes of this section, the term 

8 ‘qualified vehicle identification number’ means, with 

9 respect to any qualified electric bicycle, the vehicle 

10 identification number assigned to such bicycle by a 

11 qualified manufacturer pursuant to the methodology 

12 referred to in paragraph (3)(A). 

13 ‘‘(3) QUALIFIED MANUFACTURER.—For pur14 poses of this section, the term ‘qualified manufac15 turer’ means any manufacturer of qualified electric 

16 bicycles which enters into an agreement with the 

17 Secretary which provides that such manufacturer 

18 will— 

19 ‘‘(A) assign a vehicle identification number 

20 to each qualified electric bicycle produced by 

21 such manufacturer utilizing a methodology that 

22 will ensure that such number (including any al23 phanumeric) is unique to such bicycle (by uti24 lizing numbers or letters which are unique to 


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1 such manufacturer or by such other method as 

2 the Secretary may provide), 

3 ‘‘(B) label such bicycle with such number 

4 in such manner as the Secretary may provide, 

5 and 

6 ‘‘(C) make periodic written reports to the 

7 Secretary (at such times and in such manner as 

8 the Secretary may provide) of the vehicle identi9 fication numbers so assigned and including 

10 such information as the Secretary may require 

11 with respect to the qualified electric bicycle to 

12 which such number was so assigned. 

13 ‘‘(f) SPECIAL RULES.— 

14 ‘‘(1) BASIS REDUCTION.—For purposes of this 

15 subtitle, the basis of any property for which a credit 

16 is allowable under subsection (a) shall be reduced by 

17 the amount of such credit so allowed. 

18 ‘‘(2) NO DOUBLE BENEFIT.—The amount of 

19 any deduction or other credit allowable under this 

20 chapter for a qualified electric bicycle for which a 

21 credit is allowable under subsection (a) shall be re22 duced by the amount of credit allowed under such 

23 subsection for such bicycle. 

24 ‘‘(3) PROPERTY USED OUTSIDE UNITED STATES

25 NOT QUALIFIED.—No credit shall be allowable under 


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1 subsection (a) with respect to any property referred 

2 to in section 50(b)(1). 

3 ‘‘(4) RECAPTURE.—The Secretary shall, by reg4 ulations or other guidance, provide for recapturing 

5 the benefit of any credit allowable under subsection 

6 (a) with respect to any property which ceases to be 

7 property eligible for such credit. 

8 ‘‘(5) ELECTION NOT TO TAKE CREDIT.—No 

9 credit shall be allowed under subsection (a) for any 

10 qualified electric bicycle if the taxpayer elects to not 

11 have this section apply to such bicycle. 

12 ‘‘(g) TREATMENT OF CERTAIN POSSESSIONS.— 

13 ‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR

14 CODE TAX SYSTEMS.—The Secretary shall pay to 

15 each possession of the United States which has a 

16 mirror code tax system amounts equal to the loss (if 

17 any) to that possession by reason of the application 

18 of the provisions of this section (determined without 

19 regard to this subsection). Such amounts shall be 

20 determined by the Secretary based on information 

21 provided by the government of the respective posses22 sion. 

23 ‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 

24 Secretary shall pay to each possession of the United 

25 States which does not have a mirror code tax system 


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1 amounts estimated by the Secretary as being equal 

2 to the aggregate benefits (if any) that would have 

3 been provided to residents of such possession by rea4 son of the provisions of this section if a mirror code 

5 tax system had been in effect in such possession. 

6 The preceding sentence shall not apply unless the re7 spective possession has a plan which has been ap8 proved by the Secretary under which such possession 

9 will promptly distribute such payments to its resi10 dents. 

11 ‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT

12 OF PAYMENTS.—Rules similar to the rules of para13 graphs (3), (4), and (5) of section 21(h) shall apply 

14 for purposes of this section. 

15 ‘‘(h) TRANSFER OF CREDIT.— 

16 ‘‘(1) IN GENERAL.—Subject to such regulations 

17 or other guidance as the Secretary determines nec18 essary or appropriate, if the taxpayer who acquires 

19 a qualified electric bicycle is an individual and elects 

20 the application of this subsection with respect to 

21 such qualified electric bicycle, the credit which would 

22 (but for this subsection) be allowed to such taxpayer 

23 with respect to such qualified electric bicycle shall be 

24 allowed to the eligible entity specified in such elec25 tion (and not to such taxpayer). 


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1 ‘‘(2) ELIGIBLE ENTITY.—For purposes of this 

2 paragraph, the term ‘eligible entity’ means, with re3 spect to the qualified electric bicycle for which the 

4 credit is allowed under subsection (a), the retailer 

5 which sold such qualified electric bicycle to the tax6 payer and has— 

7 ‘‘(A) subject to paragraph (4), registered 

8 with the Secretary for purposes of this para9 graph, at such time, and in such form and 

10 manner, as the Secretary may prescribe, 

11 ‘‘(B) prior to the election described in 

12 paragraph (1) and no later than at the time of 

13 such sale, disclosed to the taxpayer purchasing 

14 such qualified electric bicycle— 

15 ‘‘(i) the retail price, 

16 ‘‘(ii) the value of the credit allowed or 

17 other incentive available for the purchase 

18 of such qualified electric bicycle, 

19 ‘‘(iii) all fees associated with the pur20 chase of such qualified electric bicycle, and 

21 ‘‘(iv) the amount provided by the re22 tailer to such taxpayer as a condition of 

23 the election described in paragraph (1), 

24 ‘‘(C) made payment to such taxpayer 

25 (whether in cash or in the form of a partial 


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1 payment or down payment for the purchase of 

2 such qualified electric bicycle) in an amount 

3 equal to the credit otherwise allowable to such 

4 taxpayer, and 

5 ‘‘(D) with respect to any incentive other6 wise available for the purchase of a qualified 

7 electric bicycle for which a credit is allowed 

8 under this section, including any incentive in 

9 the form of a rebate or discount provided by the 

10 retailer or manufacturer, ensured that— 

11 ‘‘(i) the availability or use of such in12 centive shall not limit the ability of a tax13 payer to make an election described in 

14 paragraph (1), and 

15 ‘‘(ii) such election shall not limit the 

16 value or use of such incentive. 

17 ‘‘(3) TIMING.—An election described in para18 graph (1) shall be made by the taxpayer not later 

19 than the date on which the qualified electric bicycle 

20 for which the credit is allowed under subsection (a) 

21 is purchased. 

22 ‘‘(4) REVOCATION OF REGISTRATION.—Upon 

23 determination by the Secretary that a retailer has 

24 failed to comply with the requirements described in 

25 paragraph (2), the Secretary may revoke the regVerDate Sep 11 2014 22:51 Mar 30, 2023 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S881.IS S881

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1 istration (as described in subparagraph (A) of such 

2 paragraph) of such retailer. 

3 ‘‘(5) TAX TREATMENT OF PAYMENTS.—With 

4 respect to any payment described in paragraph 

5 (2)(C), such payment— 

6 ‘‘(A) shall not be includible in the gross in7 come of the taxpayer, and 

8 ‘‘(B) with respect to the retailer, shall not 

9 be deductible under this title. 

10 ‘‘(6) APPLICATION OF CERTAIN OTHER RE11 QUIREMENTS.—In the case of any election under 

12 paragraph (1) with respect to any qualified electric 

13 bicycle— 

14 ‘‘(A) the amount of the reduction under 

15 subsection (b) shall be determined with respect 

16 to the modified adjusted gross income of the 

17 taxpayer for the taxable year preceding the tax18 able year in which such qualified electric bicycle 

19 was acquired (and not with respect to such in20 come for the taxable year in which such quali21 fied electric bicycle was acquired), 

22 ‘‘(B) the requirements of paragraphs (1) 

23 and (2) of subsection (f) shall apply to the tax24 payer who acquired the qualified electric bicycle 

25 in the same manner as if the credit determined 


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1 under this section with respect to such qualified 

2 electric bicycle were allowed to such taxpayer, 

3 and 

4 ‘‘(C) subsection (f)(5) shall not apply. 

5 ‘‘(7) ADVANCE PAYMENT TO REGISTERED RE6 TAILERS.— 

7 ‘‘(A) IN GENERAL.—The Secretary shall 

8 establish a program to make advance payments 

9 to any eligible entity in an amount equal to the 

10 cumulative amount of the credits allowed under 

11 subsection (a) with respect to any qualified elec12 tric bicycles sold by such entity for which an 

13 election described in paragraph (1) has been 

14 made. 

15 ‘‘(B) EXCESSIVE PAYMENTS.—Rules simi16 lar to the rules of section 6417(c)(6) shall apply 

17 for purposes of this paragraph. 

18 ‘‘(8) RETAILER.—For purposes of this sub19 section, the term ‘retailer’ means a person engaged 

20 in the trade or business of selling qualified electric 

21 bicycles in a State, the District of Columbia, the 

22 Commonwealth of Puerto Rico, or any other terri23 tory or possession of the United States.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 1016(a) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and’’ at the 

3 end of paragraph (37), by striking the period at the 

4 end of paragraph (38) and inserting ‘‘, and’’, and by 

5 adding at the end the following new paragraph: 

6 ‘‘(39) to the extent provided in section 

7 36C(f)(1).’’. 

8 (2) Section 6211(b)(4)(A) of such Code is 

9 amended by inserting ‘‘36C,’’ after ‘‘36B,’’. 

10 (3) Section 6213(g)(2) of such Code is amend11 ed— 

12 (A) in subparagraph (U), by striking 

13 ‘‘and’’ at the end, 

14 (B) in subparagraph (V), by striking the 

15 period at the end and inserting ‘‘, and’’, and 

16 (C) by adding at the end the following: 

17 ‘‘(W) an omission of a correct vehicle iden18 tification number required under section 36C(e) 

19 (relating to electric bicycles credit) to be in20 cluded on a return.’’. 

21 (4) Section 6501(m) of such Code is amended 

22 by inserting ‘‘36C(f)(5),’’ after ‘‘35(g)(11),’’. 

23 (5) Section 1324(b)(2) of title 31, United 

24 States Code, is amended by inserting ‘‘36C,’’ after 

25 ‘‘36B,’’. 


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1 (c) CLERICAL AMENDMENT.—The table of sections 

2 for subpart C of part IV of subchapter A of chapter 1 

3 of the Internal Revenue Code of 1986 is amended by add4 ing at the end the following new item: 

‘‘Sec. 36C. Electric bicycles.’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to property placed in service after 

7 the date of the enactment of this Act, in taxable years 

8 ending after such date. 

9 (e) TREASURY REPORT.—Not later than 3 years 

10 after the date of the enactment of this Act, the Secretary 

11 of the Treasury (or the Secretary’s delegate) shall make 

12 publicly available a written report specifying the number 

13 of taxpayers claiming the credit allowed under section 36C 

14 of the Internal Revenue Code of 1986 (as added by this 

15 section) and the aggregate dollar amount of such credits 

16 so allowed. Such information shall be stated separately for 

17 taxable years beginning in 2023 and 2024, and shall be 

18 stated separately with respect to each such years with re19 spect to taxpayers in each of the income brackets to which 

20 section 1 of such Code applies. 

Æ 


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