E-BIKE Act

Subjects: Taxation

Summary:  <p> <strong>Electric Bicycle Incentive Kickstart for the Environment Act or the E-BIKE Act</strong></p> <p>This bill allows individual taxpayers a new tax credit for 30% of the cost of a qualified electric bicycle. The bill defines <em>qualified electric bicycle</em> to mean a bicycle or tricycle that does not cost more than $8,000 and that is equipped with fully operable pedals, a saddle or seat for the rider, and an electric motor of less than 750 watts designed to assist in propelling the bicycle or tricycle under certain conditions</p> <p>The bill requires the Internal Revenue Service to establish a program to make advance payments of the credit and to publicly report on the number of taxpayers claiming the credit and the aggregate dollar amount of the credit, beginning in 2023 and 2024.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 881 Introduced in Senate (IS)]

&lt;DOC&gt;






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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Electric Bicycle Incentive Kickstart 
for the Environment Act'' or as the ``E-BIKE Act''.

SEC. 2. CREDIT FOR CERTAIN NEW ELECTRIC BICYCLES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36B the following new section:

``SEC. 36C. ELECTRIC BICYCLES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 30 percent of the cost of each 
qualified electric bicycle placed in service by the taxpayer during 
such taxable year.
    ``(b) Limitations.--
            ``(1) Limitation on cost per bicycle taken into account.--
        The amount taken into account under subsection (a) as the cost 
        of any qualified electric bicycle shall not exceed $5,000.
            ``(2) Limitation on number of bicycles.--In the case of any 
        taxpayer for any taxable year, the number of qualified electric 
        bicycles taken into account under subsection (a) shall not 
        exceed the excess (if any) of--
                    ``(A) 1 (2 in the case of a joint return), reduced 
                by
                    ``(B) the aggregate number of qualified electric 
                bicycles taken into account by the taxpayer under 
                subsection (a) for the 2 preceding taxable years.
            ``(3) Phaseout based on income.--
                    ``(A) Phaseout based on modified adjusted gross 
                income.--The credit allowed under subsection (a) shall 
                be reduced by $100 for each $1,000 (or fraction 
                thereof) by which the taxpayer's modified adjusted 
                gross income exceeds--
                            ``(i) $300,000 in the case of a joint 
                        return or a surviving spouse (as defined in 
                        section 2(a)),
                            ``(ii) $225,000 in the case of a head of 
                        household (as defined in section 2(b)), and
                            ``(iii) $150,000 in the case of a taxpayer 
                        not described in clause (i) or (ii).
                    ``(B) Special rule for modified adjusted gross 
                income taken into account.--The modified adjusted gross 
                income of the taxpayer that is taken into account for 
                purposes of subparagraph (A) shall be the lesser of--
                            ``(i) the modified adjusted gross income 
                        for the taxable year with respect to which the 
                        credit is claimed, or
                            ``(ii) the modified adjusted gross income 
                        for the immediately preceding taxable year.
                    ``(C) Modified adjusted gross income.--For purposes 
                of subparagraph (A), the term `modified adjusted gross 
                income' means adjusted gross income increased by any 
                amount excluded from gross income under section 911, 
                931, or 933.
    ``(c) Qualified Electric Bicycle.--For purposes of this section--
            ``(1) In general.--The term `qualified electric bicycle' 
        means a bicycle or tricycle--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is acquired for use by the taxpayer and 
                not for resale,
                    ``(C) which is not property of a character subject 
                to an allowance for depreciation or amortization in the 
                hands of the taxpayer,
                    ``(D) which is made by a qualified manufacturer and 
                is labeled with the qualified vehicle identification 
                number assigned to such bicycle or tricycle by such 
                manufacturer,
                    ``(E) with respect to which the aggregate amount 
                paid for such acquisition does not exceed $8,000,
                    ``(F) which is a class 1 electric bicycle or 
                tricycle, a class 2 electric bicycle or tricycle, or a 
                class 3 electric bicycle or tricycle,
                    ``(G) which is equipped with--
                            ``(i) fully operable pedals,
                            ``(ii) a saddle or seat for the rider, and
                            ``(iii) an electric motor of less than 750 
                        watts which is designed to provide assistance 
                        in propelling the bicycle or tricycle and--
                                    ``(I) does not provide such 
                                assistance if the bicycle or tricycle 
                                is moving in excess of 20 miler per 
                                hour, or
                                    ``(II) if such motor only provides 
                                such assistance when the rider is 
                                pedaling, does not provide such 
                                assistance if the bicycle or tricycle 
                                is moving in excess of 28 miles per 
                                hour,
                    ``(H) which is not equipped with any motor other 
                than the motor described in subparagraph (G)(iii),
                    ``(I) which is not capable of exceeding the speed 
                limitation in paragraph (2) by means of any electronic 
                switch, setting or software modification provided or 
                made available by the manufacturer, and
                    ``(J) which has a drive system that has been 
                certified by an accredited laboratory to Underwriters 
                Laboratory (UL) standard UL 2849, or a battery that has 
                been certified to any of the battery safety standards 
                listed in such standard UL 2849 or such other drive 
                system or battery safety standard as may be recognized 
                by the United States Consumer Product Safety 
                Commission.
            ``(2) Class 1 electric bicycle or tricycle.--The term 
        `class 1 electric bicycle or tricycle' means a two- or three-
        wheeled vehicle equipped with an electric motor that provides 
        assistance only when the rider is pedaling, that is not capable 
        of providing assistance when the speed of the vehicle exceeds 
        20 miles per hour, and that is not a class 3 electric bicycle 
        or tricycle.
            ``(3) Class 2 electric bicycle or tricycle.--The term 
        `class 2 electric bicycle or tricycle' means a two- or three-
        wheeled vehicle equipped with an electric motor that may be 
        used to propel the vehicle without the need of any additional 
        assistance, and that is not capable of providing assistance 
        when the speed of the vehicle exceeds 20 miles per hour.
            ``(4) Class 3 electric bicycle or tricycle.--The term 
        `class 3 electric bicycle or tricycle' means a two- or three-
        wheeled vehicle equipped with an electric motor that provides 
        assistance only when the rider is pedaling, and that is not 
        capable of providing assistance when the speed of the vehicle 
        exceeds 28 miles per hour.
    ``(d) Special Rule for Bicycles Used by an Individual in a Trade or 
Business.--In the case of any bicycle or tricycle with respect to which 
the taxpayer elects (at such time and in such manner as the Secretary 
may provide) the application of this subsection--
            ``(1) subsections (c)(1)(C) and (f)(2) shall not apply with 
        respect to such bicycle or tricycle, and
            ``(2) no deduction (including any deduction for 
        depreciation or amortization) or credit (other than the credit 
        allowed under this section) shall be allowed for the cost of 
        such bicycle or tricycle.
    ``(e) VIN Number Requirement.--
            ``(1) In general.--No credit shall be allowed under 
        subsection (a) with respect to any qualified electric bicycle 
        unless the taxpayer includes the qualified vehicle 
        identification number of such bicycle on the return of tax for 
        the taxable year.
            ``(2) Qualified vehicle identification number.--For 
        purposes of this section, the term `qualified vehicle 
        identification number' means, with respect to any qualified 
        electric bicycle, the vehicle identification number assigned to 
        such bicycle by a qualified manufacturer pursuant to the 
        methodology referred to in paragraph (3)(A).
            ``(3) Qualified manufacturer.--For purposes of this 
        section, the term `qualified manufacturer' means any 
        manufacturer of qualified electric bicycles which enters into 
        an agreement with the Secretary which provides that such 
        manufacturer will--
                    ``(A) assign a vehicle identification number to 
                each qualified electric bicycle produced by such 
                manufacturer utilizing a methodology that will ensure 
                that such number (including any alphanumeric) is unique 
                to such bicycle (by utilizing numbers or letters which 
                are unique to such manufacturer or by such other method 
                as the Secretary may provide),
                    ``(B) label such bicycle with such number in such 
                manner as the Secretary may provide, and
                    ``(C) make periodic written reports to the 
                Secretary (at such times and in such manner as the 
                Secretary may provide) of the vehicle identification 
                numbers so assigned and including such information as 
                the Secretary may require with respect to the qualified 
                electric bicycle to which such number was so assigned.
    ``(f) 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.
            ``(2) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter for a qualified 
        electric bicycle for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of credit allowed 
        under such subsection for such bicycle.
            ``(3) Property used outside united states not qualified.--
        No credit shall be allowable under subsection (a) with respect 
        to any property referred to in section 50(b)(1).
            ``(4) Recapture.--The Secretary shall, by regulations or 
        other guidance, 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 qualified electric bicycle 
        if the taxpayer elects to not have this section apply to such 
        bicycle.
    ``(g) Treatment of Certain Possessions.--
            ``(1) Payments to possessions with mirror code tax 
        systems.--The Secretary shall pay to each possession of the 
        United States which has a mirror code tax system amounts equal 
        to the loss (if any) to that possession by reason of the 
        application of the provisions of this section (determined 
        without regard to this subsection). Such amounts shall be 
        determined by the Secretary based on information provided by 
        the government of the respective possession.
            ``(2) Payments to other possessions.--The Secretary shall 
        pay to each possession of the United States which does not have 
        a mirror code tax system amounts estimated by the Secretary as 
        being equal to the aggregate benefits (if any) that would have 
        been provided to residents of such possession by reason of the 
        provisions of this section if a mirror code tax system had been 
        in effect in such possession. The preceding sentence shall not 
        apply unless the respective possession has a plan which has 
        been approved by the Secretary under which such possession will 
        promptly distribute such payments to its residents.
            ``(3) Mirror code tax system; treatment of payments.--Rules 
        similar to the rules of paragraphs (3), (4), and (5) of section 
        21(h) shall apply for purposes of this section.
    ``(h) Transfer of Credit.--
            ``(1) In general.--Subject to such regulations or other 
        guidance as the Secretary determines necessary or appropriate, 
        if the taxpayer who acquires a qualified electric bicycle is an 
        individual and elects the application of this subsection with 
        respect to such qualified electric bicycle, the credit which 
        would (but for this subsection) be allowed to such taxpayer 
        with respect to such qualified electric bicycle shall be 
        allowed to the eligible entity specified in such election (and 
        not to such taxpayer).
            ``(2) Eligible entity.--For purposes of this paragraph, the 
        term `eligible entity' means, with respect to the qualified 
        electric bicycle for which the credit is allowed under 
        subsection (a), the retailer which sold such qualified electric 
        bicycle to the taxpayer and has--
                    ``(A) subject to paragraph (4), registered with the 
                Secretary for purposes of this paragraph, at such time, 
                and in such form and manner, as the Secretary may 
                prescribe,
                    ``(B) prior to the election described in paragraph 
                (1) and no later than at the time of such sale, 
                disclosed to the taxpayer purchasing such qualified 
                electric bicycle--
                            ``(i) the retail price,
                            ``(ii) the value of the credit allowed or 
                        other incentive available for the purchase of 
                        such qualified electric bicycle,
                            ``(iii) all fees associated with the 
                        purchase of such qualified electric bicycle, 
                        and
                            ``(iv) the amount provided by the retailer 
                        to such taxpayer as a condition of the election 
                        described in paragraph (1),
                    ``(C) made payment to such taxpayer (whether in 
                cash or in the form of a partial payment or down 
                payment for the purchase of such qualified electric 
                bicycle) in an amount equal to the credit otherwise 
                allowable to such taxpayer, and
                    ``(D) with respect to any incentive otherwise 
                available for the purchase of a qualified electric 
                bicycle for which a credit is allowed under this 
                section, including any incentive in the form of a 
                rebate or discount provided by the retailer or 
                manufacturer, ensured that--
                            ``(i) the availability or use of such 
                        incentive shall not limit the ability of a 
                        taxpayer to make an election described in 
                        paragraph (1), and
                            ``(ii) such election shall not limit the 
                        value or use of such incentive.
            ``(3) Timing.--An election described in paragraph (1) shall 
        be made by the taxpayer not later than the date on which the 
        qualified electric bicycle for which the credit is allowed 
        under subsection (a) is purchased.
            ``(4) Revocation of registration.--Upon determination by 
        the Secretary that a retailer has failed to comply with the 
        requirements described in paragraph (2), the Secretary may 
        revoke the registration (as described in subparagraph (A) of 
        such paragraph) of such retailer.
            ``(5) Tax treatment of payments.--With respect to any 
        payment described in paragraph (2)(C), such payment--
                    ``(A) shall not be includible in the gross income 
                of the taxpayer, and
                    ``(B) with respect to the retailer, shall not be 
                deductible under this title.
            ``(6) Application of certain other requirements.--In the 
        case of any election under paragraph (1) with respect to any 
        qualified electric bicycle--
                    ``(A) the amount of the reduction under subsection 
                (b) shall be determined with respect to the modified 
                adjusted gross income of the taxpayer for the taxable 
                year preceding the taxable year in which such qualified 
                electric bicycle was acquired (and not with respect to 
                such income for the taxable year in which such 
                qualified electric bicycle was acquired),
                    ``(B) the requirements of paragraphs (1) and (2) of 
                subsection (f) shall apply to the taxpayer who acquired 
                the qualified electric bicycle in the same manner as if 
                the credit determined under this section with respect 
                to such qualified electric bicycle were allowed to such 
                taxpayer, and
                    ``(C) subsection (f)(5) shall not apply.
            ``(7) Advance payment to registered retailers.--
                    ``(A) In general.--The Secretary shall establish a 
                program to make advance payments to any eligible entity 
                in an amount equal to the cumulative amount of the 
                credits allowed under subsection (a) with respect to 
                any qualified electric bicycles sold by such entity for 
                which an election described in paragraph (1) has been 
                made.
                    ``(B) Excessive payments.--Rules similar to the 
                rules of section 6417(c)(6) shall apply for purposes of 
                this paragraph.
            ``(8) Retailer.--For purposes of this subsection, the term 
        `retailer' means a person engaged in the trade or business of 
        selling qualified electric bicycles in a State, the District of 
        Columbia, the Commonwealth of Puerto Rico, or any other 
        territory or possession of the United States.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) of the Internal Revenue Code of 1986 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 36C(f)(1).''.
            (2) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (3) Section 6213(g)(2) of such Code is amended--
                    (A) in subparagraph (U), by striking ``and'' at the 
                end,
                    (B) in subparagraph (V), by striking the period at 
                the end and inserting ``, and'', and
                    (C) by adding at the end the following:
                    ``(W) an omission of a correct vehicle 
                identification number required under section 36C(e) 
                (relating to electric bicycles credit) to be included 
                on a return.''.
            (4) Section 6501(m) of such Code is amended by inserting 
        ``36C(f)(5),'' after ``35(g)(11),''.
            (5) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36C,'' after ``36B,''.
    (c) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 36C. Electric bicycles.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.
    (e) Treasury Report.--Not later than 3 years after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate) shall make publicly available a written report 
specifying the number of taxpayers claiming the credit allowed under 
section 36C of the Internal Revenue Code of 1986 (as added by this 
section) and the aggregate dollar amount of such credits so allowed. 
Such information shall be stated separately for taxable years beginning 
in 2023 and 2024, and shall be stated separately with respect to each 
such years with respect to taxpayers in each of the income brackets to 
which section 1 of such Code applies.
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