H. R. 1—147 
dependent of such individual pursuant to a scholarship for qualified 
elementary or secondary education expenses of an eligible student 
which is provided by a scholarship granting organization. 
‘‘(b) DEFINITIONS.—In this section, the terms ‘qualified 
elementary or secondary education expense’, ‘eligible student’, and 
‘scholarship granting organization’ have the same meaning given 
such terms under section 25F(c).’’. 
(2) CONFORMING AMENDMENT.—The table of sections for 
part III of subchapter B of chapter 1 is amended by inserting 
before the item relating to section 140 the following new item: 
‘‘Sec. 139K. Scholarships for qualified elementary or secondary education expenses 
of eligible students.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to 
taxable years ending after December 31, 2026. 
(2) EXCLUSION
FROM
GROSS
INCOME.—The amendments 
made by subsection (b) shall apply to amounts received after 
December 31, 2026, in taxable years ending after such date. 
SEC. 70412. EXCLUSION FOR EMPLOYER PAYMENTS OF STUDENT 
LOANS. 
(a) IN GENERAL.—Section 127(c)(1)(B) is amended by striking 
‘‘in the case of payments made before January 1, 2026,’’. 
(b) INFLATION ADJUSTMENT.—Section 127 is amended— 
(1) by redesignating subsection (d) as subsection (e), and 
(2) by inserting after subsection (c) the following new sub-
section: 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable year beginning 
after 2026, both of the $5,250 amounts in subsection (a)(2) 
shall each 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 taxable 
year begins, determined by substituting ‘calendar year 
2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any increase under paragraph (1) is 
not a multiple of $50, such increase shall be rounded to the 
nearest multiple of $50.’’. 
(c) EFFECTIVE DATE.—The amendment made by this section 
shall apply to payments made after December 31, 2025. 
SEC. 70413. ADDITIONAL EXPENSES TREATED AS QUALIFIED HIGHER 
EDUCATION 
EXPENSES 
FOR 
PURPOSES 
OF 
529 
ACCOUNTS. 
(a) IN GENERAL.— 
(1) IN GENERAL.—Section 529(c)(7) is amended to read as 
follows: 
‘‘(7) TREATMENT
OF
ELEMENTARY
AND
SECONDARY
TUI-
TION.—Any reference in this section to the term ‘qualified 
higher education expense’ shall include a reference to the fol-
lowing expenses in connection with enrollment or attendance 
at, or for students enrolled at or attending, an elementary 
or secondary public, private, or religious school: 
‘‘(A) Tuition.
H. R. 1—148 
‘‘(B) Curriculum and curricular materials. 
‘‘(C) Books or other instructional materials. 
‘‘(D) Online educational materials. 
‘‘(E) Tuition for tutoring or educational classes outside 
of the home, including at a tutoring facility, but only if 
the tutor or instructor is not related to the student and— 
‘‘(i) is licensed as a teacher in any State, 
‘‘(ii) has taught at an eligible educational institu-
tion, or 
‘‘(iii) is a subject matter expert in the relevant 
subject. 
‘‘(F) Fees for a nationally standardized norm-referenced 
achievement test, an advanced placement examination, or 
any examinations related to college or university admission. 
‘‘(G) Fees for dual enrollment in an institution of higher 
education. 
‘‘(H) Educational therapies for students with disabil-
ities provided by a licensed or accredited practitioner or 
provider, including occupational, behavioral, physical, and 
speech-language therapies.’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to distributions made after the date of 
the enactment of this Act. 
(b) INCREASE IN LIMITATION.— 
(1) IN
GENERAL.—The last sentence of section 529(e)(3) 
is amended by striking ‘‘$10,000’’ and inserting ‘‘$20,000’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to taxable years beginning after December 
31, 2025. 
SEC. 70414. CERTAIN POSTSECONDARY CREDENTIALING EXPENSES 
TREATED AS QUALIFIED HIGHER EDUCATION EXPENSES 
FOR PURPOSES OF 529 ACCOUNTS. 
(a) IN GENERAL.—Section 529(e)(3) is amended by adding at 
the end the following new subparagraph: 
‘‘(C) 
CERTAIN
POSTSECONDARY
CREDENTIALING 
EXPENSES.—The term ‘qualified higher education expenses’ 
includes qualified postsecondary credentialing expenses (as 
defined in subsection (f)).’’. 
(b) QUALIFIED POSTSECONDARY CREDENTIALING EXPENSES.— 
Section 529 is amended by redesignating subsection (f) as subsection 
(g) and by inserting after subsection (e) the following new sub-
section: 
‘‘(f) QUALIFIED POSTSECONDARY CREDENTIALING EXPENSES.— 
For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified postsecondary 
credentialing expenses’ means— 
‘‘(A) tuition, fees, books, supplies, and equipment 
required for the enrollment or attendance of a designated 
beneficiary in a recognized postsecondary credential pro-
gram, or any other expense incurred in connection with 
enrollment in or attendance at a recognized postsecondary 
credential program if such expense would, if incurred in 
connection with enrollment or attendance at an eligible 
educational institution, be covered under subsection 
(e)(3)(A),
H. R. 1—149 
‘‘(B) fees for testing if such testing is required to obtain 
or maintain a recognized postsecondary credential, and 
‘‘(C) fees for continuing education if such education 
is required to maintain a recognized postsecondary creden-
tial. 
‘‘(2) RECOGNIZED POSTSECONDARY CREDENTIAL PROGRAM.— 
The term ‘recognized postsecondary credential program’ means 
any program to obtain a recognized postsecondary credential 
if— 
‘‘(A) such program is included on a State list prepared 
under section 122(d) of the Workforce Innovation and 
Opportunity Act (29 U.S.C. 3152(d)), 
‘‘(B) such program is listed in the public directory 
of the Web Enabled Approval Management System 
(WEAMS) of the Veterans Benefits Administration, or suc-
cessor directory such program, 
‘‘(C) an examination (developed or administered by an 
organization widely recognized as providing reputable 
credentials in the occupation) is required to obtain or main-
tain such credential and such organization recognizes such 
program as providing training or education which prepares 
individuals to take such examination, or 
‘‘(D) such program is identified by the Secretary, after 
consultation with the Secretary of Labor, as being a rep-
utable program for obtaining a recognized postsecondary 
credential for purposes of this subparagraph. 
‘‘(3) RECOGNIZED POSTSECONDARY CREDENTIAL.—The term 
‘recognized postsecondary credential’ means— 
‘‘(A) any postsecondary employment credential that is 
industry recognized and is— 
‘‘(i) any postsecondary employment credential 
issued by a program that is accredited by the Institute 
for Credentialing Excellence, the National Commission 
on Certifying Agencies, or the American National 
Standards Institute, 
‘‘(ii) any postsecondary employment credential that 
is included in the Credentialing Opportunities On-Line 
(COOL) directory of credentialing programs (or suc-
cessor directory) maintained by the Department of 
Defense or by any branch of the Armed Forces, or 
‘‘(iii) any postsecondary employment credential 
identified for purposes of this clause by the Secretary, 
after consultation with the Secretary of Labor, as being 
industry recognized, 
‘‘(B) any certificate of completion of an apprenticeship 
that is registered and certified with the Secretary of Labor 
under the Act of August 16, 1937 (commonly known as 
the ‘National Apprenticeship Act’; 50 Stat. 664, chapter 
663; 29 U.S.C. 50 et seq.), 
‘‘(C) any occupational or professional license issued 
or recognized by a State or the Federal Government (and 
any certification that satisfies a condition for obtaining 
such a license), and 
‘‘(D) any recognized postsecondary credential as defined 
in section 3(52) of the Workforce Innovation and Oppor-
tunity Act (29 U.S.C. 3102(52)), provided through a pro-
gram described in paragraph (2)(A).’’.
H. R. 1—150 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions made after the date of the enactment 
of this Act. 
SEC. 70415. MODIFICATION OF EXCISE TAX ON INVESTMENT INCOME 
OF CERTAIN PRIVATE COLLEGES AND UNIVERSITIES. 
(a) IN GENERAL.—Section 4968 is amended to read as follows: 
‘‘SEC. 4968. EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE 
COLLEGES AND UNIVERSITIES. 
‘‘(a) TAX IMPOSED.—There is hereby imposed on each applicable 
educational institution for the taxable year a tax equal to the 
applicable percentage of the net investment income of such institu-
tion for the taxable year. 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of this section, 
the term ‘applicable percentage’ means— 
‘‘(1) 1.4 percent in the case of an institution with a student 
adjusted endowment of at least $500,000, and not in excess 
of $750,000, 
‘‘(2) 4 percent in the case of an institution with a student 
adjusted endowment in excess of $750,000, and not in excess 
of $2,000,000, and 
‘‘(3) 8 percent in the case of an institution with a student 
adjusted endowment in excess of $2,000,000. 
‘‘(c) APPLICABLE EDUCATIONAL INSTITUTION.—For purposes of 
this subchapter, the term ‘applicable educational institution’ means 
an eligible educational institution (as defined in section 25A(f)(2))— 
‘‘(1) which had at least 3,000 tuition-paying students during 
the preceding taxable year, 
‘‘(2) more than 50 percent of the tuition-paying students 
of which are located in the United States, 
‘‘(3) the student adjusted endowment of which is at least 
$500,000, and 
‘‘(4) which is not described in the first sentence of section 
511(a)(2)(B) (relating to State colleges and universities). 
‘‘(d) STUDENT ADJUSTED ENDOWMENT.—For purposes of this 
section, the term ‘student adjusted endowment’ means, with respect 
to any institution for any taxable year— 
‘‘(1) the aggregate fair market value of the assets of such 
institution (determined as of the end of the preceding taxable 
year), other than those assets which are used directly in car-
rying out the institution’s exempt purpose, divided by 
‘‘(2) the number of students of such institution. 
‘‘(e) DETERMINATION OF NUMBER OF STUDENTS.—For purposes 
of subsections (c) and (d), the number of students of an institution 
(including for purposes of determining the number of students 
at a particular location) shall be based on the daily average number 
of full-time students attending such institution (with part-time stu-
dents taken into account on a full-time student equivalent basis). 
‘‘(f) NET INVESTMENT INCOME.—For purposes of this section— 
‘‘(1) IN GENERAL.—Net investment income shall be deter-
mined under rules similar to the rules of section 4940(c). 
‘‘(2) OVERRIDE OF CERTAIN REGULATORY EXCEPTIONS.— 
‘‘(A) STUDENT LOAN INTEREST.—Net investment income 
shall be determined by taking into account any interest 
income from a student loan made by the applicable edu-
cational institution (or any related organization) as gross 
investment income.
H. R. 1—151 
‘‘(B) FEDERALLY-SUBSIDIZED ROYALTY INCOME.— 
‘‘(i) IN GENERAL.—Net investment income shall be 
determined by taking into account any Federally-sub-
sidized royalty income as gross investment income. 
‘‘(ii) FEDERALLY-SUBSIDIZED ROYALTY INCOME.—For 
purposes of this subparagraph— 
‘‘(I) IN
GENERAL.—The term ‘Federally-sub-
sidized royalty income’ means any otherwise-regu-
latory-exempt royalty income if any Federal funds 
were used in the research, development, or cre-
ation of the patent, copyright, or other intellectual 
or intangible property from which such royalty 
income is derived. 
‘‘(II) OTHERWISE-REGULATORY-EXEMPT ROYALTY 
INCOME.—For purposes of this subparagraph, the 
term ‘otherwise-regulatory-exempt royalty income’ 
means royalty income which (but for this subpara-
graph) would not be taken into account as gross 
investment income by reason of being derived from 
patents, copyrights, or other intellectual or intan-
gible property which resulted from the work of 
students or faculty members in their capacities 
as such with the applicable educational institution. 
‘‘(III) FEDERAL
FUNDS.—The term ‘Federal 
funds’ includes any grant made by, and any pay-
ment made under any contract with, any Federal 
agency to the applicable educational institution, 
any related organization, or any student or faculty 
member referred to in subclause (II). 
‘‘(g) ASSETS
AND
NET
INVESTMENT
INCOME
OF
RELATED 
ORGANIZATIONS.— 
‘‘(1) IN GENERAL.—For purposes of subsections (d) and (f), 
assets and net investment income of any related organization 
with respect to an educational institution shall be treated as 
assets and net investment income, respectively, of the edu-
cational institution, except that— 
‘‘(A) no such amount shall be taken into account with 
respect to more than 1 educational institution, and 
‘‘(B) unless such organization is controlled by such 
institution or is described in section 509(a)(3) with respect 
to such institution for the taxable year, assets and net 
investment income which are not intended or available 
for the use or benefit of the educational institution shall 
not be taken into account. 
‘‘(2) RELATED
ORGANIZATION.—For purposes of this sub-
section, the term ‘related organization’ means, with respect 
to an educational institution, any organization which— 
‘‘(A) controls, or is controlled by, such institution, 
‘‘(B) is controlled by 1 or more persons which also 
control such institution, or 
‘‘(C) is a supported organization (as defined in section 
509(f)(3)), or an organization described in section 509(a)(3), 
during the taxable year with respect to such institution. 
‘‘(h) REGULATIONS.—The Secretary shall prescribe such regula-
tions or other guidance as may be necessary to prevent avoidance 
of the tax under this section, including regulations or other guidance
H. R. 1—152 
to prevent avoidance of such tax through the restructuring of endow-
ment funds or other arrangements designed to reduce or eliminate 
the value of net investment income or assets subject to the tax 
imposed by this section.’’. 
(b) REQUIREMENT
TO REPORT CERTAIN INFORMATION WITH 
RESPECT TO APPLICATION OF EXCISE TAX BASED ON INVESTMENT 
INCOME OF PRIVATE COLLEGES AND UNIVERSITIES.—Section 6033 
is amended by redesignating subsection (o) as subsection (p) and 
by inserting after subsection (n) the following new subsection: 
‘‘(o) REQUIREMENT
TO REPORT CERTAIN INFORMATION WITH 
RESPECT TO EXCISE TAX BASED ON INVESTMENT INCOME OF PRIVATE 
COLLEGES AND UNIVERSITIES.—Each applicable educational institu-
tion described in section 4968(c) which is subject to the require-
ments of subsection (a) shall include on the return required under 
subsection (a)— 
‘‘(1) the number of tuition-paying students taken into 
account under section 4968(c), and 
‘‘(2) the number of students of such institution (determined 
under the rules of section 4968(e)).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70416. EXPANDING APPLICATION OF TAX ON EXCESS COMPENSA-
TION WITHIN TAX-EXEMPT ORGANIZATIONS. 
(a) IN GENERAL.—Section 4960(c)(2) is amended to read as 
follows: 
‘‘(2) COVERED EMPLOYEE.—For purposes of this section, the 
term ‘covered employee’ means any employee of an applicable 
tax-exempt organization (or any predecessor of such an 
organization) and any former employee of such an organization 
(or predecessor) who was such an employee during any taxable 
year beginning after December 31, 2016.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to taxable years beginning after December 31, 2025. 
Subchapter C—Permanent Investments in Community 
Development 
SEC. 70421. PERMANENT RENEWAL AND ENHANCEMENT OF OPPOR-
TUNITY ZONES. 
(a) DECENNIAL DESIGNATIONS.— 
(1) DETERMINATION
PERIOD.—Section 1400Z-1(c)(2)(B) is 
amended by striking ‘‘beginning on the date of the enactment 
of the Tax Cuts and Jobs Act’’ and inserting ‘‘beginning on 
the decennial determination date’’. 
(2) DECENNIAL
DETERMINATION
DATE.—Section 1400Z- 
1(c)(2) is amended by adding at the end the following new 
subparagraph: 
‘‘(C) DECENNIAL
DETERMINATION
DATE.—The term 
‘decennial determination date’ means— 
‘‘(i) July 1, 2026, and 
‘‘(ii) each July 1 of the year that is 10 years after 
the preceding decennial determination date under this 
subparagraph.’’. 
(3) REPEAL OF SPECIAL RULE FOR PUERTO RICO.—Section 
1400Z-1(b) is amended by striking paragraph (3).
H. R. 1—153 
(4) LIMITATION
ON
NUMBER
OF
DESIGNATIONS.—Section 
1400Z-1(d)(1) is amended— 
(A) in paragraph (1)— 
(i) by striking ‘‘and subsection (b)(3)’’, and 
(ii) by inserting ‘‘during any period’’ after ‘‘the 
number of population census tracts in a State that 
may be designated as qualified opportunity zones 
under this section’’, and 
(B) in paragraph (2), by inserting ‘‘during any period’’ 
before the period at the end. 
(5) EFFECTIVE DATES.— 
(A) IN GENERAL.—Except as provided in subparagraph 
(B), the amendments made by this subsection shall take 
effect on the date of the enactment of this Act. 
(B) PUERTO
RICO.—The amendment made by para-
graph (3) shall take effect on December 31, 2026. 
(b) QUALIFICATION FOR DESIGNATIONS.— 
(1) DETERMINATION OF LOW-INCOME COMMUNITIES.—Section 
1400Z-1(c) is amended by striking all that precedes paragraph 
(2) and inserting the following: 
‘‘(c) OTHER DEFINITIONS.—For purposes of this section— 
‘‘(1) LOW-INCOME
COMMUNITIES.—The term ‘low-income 
community’ means any population census tract if— 
‘‘(A) such population census tract has a median family 
income that— 
‘‘(i) in the case of a population census tract not 
located within a metropolitan area, does not exceed 
70 percent of the statewide median family income, 
or 
‘‘(ii) in the case of a population census tract located 
within a metropolitan area, does not exceed 70 percent 
of the metropolitan area median family income, or 
‘‘(B) such population census tract— 
‘‘(i) has a poverty rate of at least 20 percent, and 
‘‘(ii) has a median family income that— 
‘‘(I) in the case of a population census tract 
not located within a metropolitan area, does not 
exceed 125 percent of the statewide median family 
income, or 
‘‘(II) in the case of a population census tract 
located within a metropolitan area, does not exceed 
125 percent of the metropolitan area median 
family income.’’. 
(2) REPEAL OF RULE FOR CONTIGUOUS CENSUS TRACTS.— 
Section 1400Z-1 is amended by striking subsection (e) and 
by redesignating subsection (f) as subsection (e). 
(3) PERIOD FOR WHICH DESIGNATION IS IN EFFECT.—Section 
1400Z-1(e), as redesignated by paragraph (2), is amended to 
read as follows: 
‘‘(e) PERIOD FOR WHICH DESIGNATION IS IN EFFECT.— 
‘‘(1) IN GENERAL.—A designation as a qualified opportunity 
zone shall remain in effect for the period beginning on the 
applicable start date and ending on the day before the date 
that is 10 years after the applicable start date. 
‘‘(2) APPLICABLE START DATE.—For purposes of this section, 
the term ‘applicable start date’ means, with respect to any 
qualified opportunity zone designated under this section, the
H. R. 1—154 
January 1 following the date on which such qualified oppor-
tunity zone was certified and designated by the Secretary under 
subsection (b)(1)(B).’’. 
(4) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to areas designated under section 1400Z- 
1 of the Internal Revenue Code of 1986 after the date of 
the enactment of this Act. 
(c) APPLICATION OF SPECIAL RULES FOR CAPITAL GAINS.— 
(1) REPEAL OF SUNSET ON ELECTION.—Section 1400Z-2(a)(2) 
is amended to read as follows: 
‘‘(2) ELECTION.—No election may be made under paragraph 
(1) with respect to a sale or exchange if an election previously 
made with respect to such sale or exchange is in effect.’’. 
(2) MODIFICATION OF RULES FOR DEFERRAL OF GAIN.—Sec-
tion 1400Z-2(b) is amended to read as follows: 
‘‘(b) DEFERRAL OF GAIN INVESTED IN OPPORTUNITY ZONE PROP-
ERTY.— 
‘‘(1) YEAR
OF
INCLUSION.—Gain to which subsection 
(a)(1)(B) applies shall be included in gross income in the taxable 
year which includes the earlier of— 
‘‘(A) the date on which such investment is sold or 
exchanged, or 
‘‘(B) the date which is 5 years after the date the invest-
ment in the qualified opportunity fund was made. 
‘‘(2) AMOUNT INCLUDIBLE.— 
‘‘(A) IN
GENERAL.—The amount of gain included in 
gross income under subsection (a)(1)(B) shall be the excess 
of— 
‘‘(i) the lesser of the amount of gain excluded under 
subsection (a)(1)(A) or the fair market value of the 
investment as determined as of the date described 
in paragraph (1), over 
‘‘(ii) the taxpayer’s basis in the investment. 
‘‘(B) DETERMINATION OF BASIS.— 
‘‘(i) IN
GENERAL.—Except as otherwise provided 
in this subparagraph or subsection (c), the taxpayer’s 
basis in the investment shall be zero. 
‘‘(ii) INCREASE FOR GAIN RECOGNIZED UNDER SUB-
SECTION (a)(1)(B).—The basis in the investment shall 
be increased by the amount of gain recognized by rea-
son of subsection (a)(1)(B) with respect to such invest-
ment. 
‘‘(iii) INVESTMENTS HELD FOR 5 YEARS.— 
‘‘(I) IN GENERAL.—In the case of any invest-
ment held for at least 5 years, the basis of such 
investment shall be increased by an amount equal 
to 10 percent (30 percent in the case of any invest-
ment in a qualified rural opportunity fund) of the 
amount of gain deferred by reason of subsection 
(a)(1)(A). 
‘‘(II) APPLICATION OF INCREASE.—For purposes 
of this subsection, any increase in basis under 
this clause shall be treated as occurring before 
the date described in paragraph (1)(B). 
‘‘(C) QUALIFIED RURAL OPPORTUNITY FUND.—For pur-
poses of subparagraph (B)(iii)—
H. R. 1—155 
‘‘(i) QUALIFIED
RURAL
OPPORTUNITY
FUND.—The 
term ‘qualified rural opportunity fund’ means a quali-
fied opportunity fund that holds at least 90 percent 
of its assets in qualified opportunity zone property 
which— 
‘‘(I) is qualified opportunity zone business 
property substantially all of the use of which, 
during substantially all of the fund’s holding period 
for such property, was in a qualified opportunity 
zone comprised entirely of a rural area, or 
‘‘(II) is qualified opportunity zone stock, or 
a qualified opportunity zone partnership interest, 
in a qualified opportunity zone business in which 
substantially all of the tangible property owned 
or leased is qualified opportunity zone business 
property described in subsection (d)(3)(A)(i) and 
substantially all the use of which is in a qualified 
opportunity zone comprised entirely of a rural 
area. 
For purposes of the preceding sentence, property held 
in the fund shall be measured under rules similar 
to the rules of subsection (d)(1). 
‘‘(ii) RURAL AREA.—The term ‘rural area’ means 
any area other than— 
‘‘(I) a city or town that has a population of 
greater than 50,000 inhabitants, and 
‘‘(II) any urbanized area contiguous and adja-
cent to a city or town described in subclause (I).’’. 
(3) SPECIAL
RULE
FOR
INVESTMENTS
HELD
AT
LEAST
YEARS.—Section 1400Z-2(c) is amended by striking ‘‘makes an 
election under this clause’’ and all that follows and inserting 
‘‘makes an election under this subsection, the basis of such 
investment shall be equal to— 
‘‘(A) in the case of an investment sold before the date 
that is 30 years after the date of the investment, the 
fair market value of such investment on the date such 
investment is sold or exchanged, or 
‘‘(B) in any other case, the fair market value of such 
investment on the date that is 30 years after the date 
of the investment.’’. 
(4) DETERMINATION OF QUALIFIED OPPORTUNITY ZONE PROP-
ERTY.— 
(A) QUALIFIED
OPPORTUNITY
ZONE
BUSINESS
PROP-
ERTY.—Section 1400Z-2(d)(2)(D)(i)(I) is amended by striking 
‘‘December 31, 2017’’ and inserting ‘‘the applicable start 
date (as defined in section 1400Z-1(e)(2)) with respect to 
the qualified opportunity zone described in subclause (III)’’. 
(B) QUALIFIED OPPORTUNITY ZONE STOCK AND PARTNER-
SHIP INTERESTS.—Section 1400Z-2(d)(2) is amended— 
(i) by striking ‘‘December 31, 2017,’’ each place 
it appears in subparagraphs (B)(i)(I) and (C)(i) and 
inserting ‘‘the applicable date’’, and 
(ii) by adding at the end the following new 
subparagraph: 
‘‘(E) APPLICABLE DATE.—For purposes of this subpara-
graph, the term ‘applicable date’ means, with respect to
H. R. 1—156 
any corporation or partnership which is a qualified oppor-
tunity zone business, the earliest date described in subpara-
graph (D)(i)(I) with respect to the qualified opportunity 
zone business property held by such qualified opportunity 
zone business.’’. 
(C) SPECIAL
RULE
FOR
IMPROVEMENT
OF
EXISTING 
STRUCTURES IN RURAL AREAS.—Section 1400Z–2(d)(2)(D)(ii) 
is amended by inserting ‘‘(50 percent of such adjusted basis 
in the case of property in a qualified opportunity zone 
comprised entirely of a rural area (as defined in subsection 
(b)(2)(C)(ii))’’ after ‘‘the adjusted basis of such property’’. 
(5) EFFECTIVE DATES.— 
(A) IN GENERAL.—Except as otherwise provided in this 
paragraph, the amendments made by this subsection shall 
apply to amounts invested in qualified opportunity funds 
after December 31, 2026. 
(B) ACQUISITION
OF
QUALIFIED
OPPORTUNITY
ZONE 
PROPERTY.—The amendments made by subparagraphs (A) 
and (B) of paragraph (4) shall apply to property acquired 
after December 31, 2026. 
(C) 
SUBSTANTIAL
IMPROVEMENT.—The 
amendment 
made by paragraph (4)(C) shall take effect on the date 
of the enactment of this Act. 
(d) INFORMATION
REPORTING
ON
QUALIFIED
OPPORTUNITY 
FUNDS AND QUALIFIED RURAL OPPORTUNITY FUNDS.— 
(1) FILING
REQUIREMENTS
FOR
FUNDS
AND
INVESTORS.— 
Subpart A of part III of subchapter A of chapter 61 is amended 
by inserting after section 6039J the following new sections: 
‘‘SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OPPORTUNITY 
FUNDS AND QUALIFIED RURAL OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—Every qualified opportunity fund shall file 
an annual return (at such time and in such manner as the Secretary 
may prescribe) containing the information described in subsection 
(b). 
‘‘(b) INFORMATION FROM QUALIFIED OPPORTUNITY FUNDS.—The 
information described in this subsection is— 
‘‘(1) the name, address, and taxpayer identification number 
of the qualified opportunity fund, 
‘‘(2) whether the qualified opportunity fund is organized 
as a corporation or a partnership, 
‘‘(3) the value of the total assets held by the qualified 
opportunity fund as of each date described in section 1400Z– 
2(d)(1), 
‘‘(4) the value of all qualified opportunity zone property 
held by the qualified opportunity fund on each such date, 
‘‘(5) with respect to each investment held by the qualified 
opportunity fund in qualified opportunity zone stock or a quali-
fied opportunity zone partnership interest— 
‘‘(A) the name, address, and taxpayer identification 
number of the corporation in which such stock is held 
or the partnership in which such interest is held, as the 
case may be, 
‘‘(B) each North American Industry Classification 
System (NAICS) code that applies to the trades or 
businesses conducted by such corporation or partnership,
H. R. 1—157 
‘‘(C) the population census tract or population census 
tracts in which the qualified opportunity zone business 
property of such corporation or partnership is located, 
‘‘(D) the amount of the investment in such stock or 
partnership interest as of each date described in section 
1400Z–2(d)(1), 
‘‘(E) the value of tangible property held by such cor-
poration or partnership on each such date which is owned 
by such corporation or partnership, 
‘‘(F) the value of tangible property held by such cor-
poration or partnership on each such date which is leased 
by such corporation or partnership, 
‘‘(G) the approximate number of residential units (if 
any) for any real property held by such corporation or 
partnership, and 
‘‘(H) the approximate average monthly number of full- 
time equivalent employees of such corporation or partner-
ship for the year (within numerical ranges identified by 
the Secretary) or such other indication of the employment 
impact of such corporation or partnership as determined 
appropriate by the Secretary, 
‘‘(6) with respect to the items of qualified opportunity zone 
business property held by the qualified opportunity fund— 
‘‘(A) the North American Industry Classification 
System (NAICS) code that applies to the trades or 
businesses in which such property is held, 
‘‘(B) the population census tract in which the property 
is located, 
‘‘(C) whether the property is owned or leased, 
‘‘(D) the aggregate value of the items of qualified oppor-
tunity zone property held by the qualified opportunity fund 
as of each date described in section 1400Z–2(d)(1), and 
‘‘(E) in the case of real property, the number of residen-
tial units (if any), 
‘‘(7) the approximate average monthly number of full-time 
equivalent employees for the year of the trades or businesses 
of the qualified opportunity fund in which qualified opportunity 
zone business property is held (within numerical ranges identi-
fied by the Secretary) or such other indication of the employ-
ment impact of such trades or businesses as determined appro-
priate by the Secretary, 
‘‘(8) with respect to each person who disposed of an invest-
ment in the qualified opportunity fund during the year— 
‘‘(A) the name, address, and taxpayer identification 
number of such person, 
‘‘(B) the date or dates on which the investment disposed 
was acquired, and 
‘‘(C) the date or dates on which any such investment 
was disposed and the amount of the investment disposed, 
and 
‘‘(9) such other information as the Secretary may require. 
‘‘(c) STATEMENT REQUIRED TO BE FURNISHED TO INVESTORS.— 
Every person required to make a return under subsection (a) shall 
furnish to each person whose name is required to be set forth 
in such return by reason of subsection (b)(8) (at such time and 
in such manner as the Secretary may prescribe) a written statement 
showing—
H. R. 1—158 
‘‘(1) the name, address, and phone number of the informa-
tion contact of the person required to make such return, and 
‘‘(2) the information required to be shown on such return 
by reason of subsection (b)(8) with respect to the person whose 
name is required to be so set forth. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Any term used in this section which 
is also used in subchapter Z of chapter 1 shall have the meaning 
given such term under such subchapter. 
‘‘(2) FULL-TIME EQUIVALENT EMPLOYEES.—The term ‘full- 
time equivalent employees’ means, with respect to any month, 
the sum of— 
‘‘(A) the number of full-time employees (as defined 
in section 4980H(c)(4)) for the month, plus 
‘‘(B) the number of employees determined (under rules 
similar to the rules of section 4980H(c)(2)(E)) by dividing 
the aggregate number of hours of service of employees 
who are not full-time employees for the month by 120. 
‘‘(e) APPLICATION TO QUALIFIED RURAL OPPORTUNITY FUNDS.— 
Every qualified rural opportunity fund (as defined in section 1400Z– 
2(b)(2)(C)) shall file the annual return required under subsection 
(a), and the statements required under subsection (c), applied— 
‘‘(1) by substituting ‘qualified rural opportunity’ for ‘quali-
fied opportunity’ each place it appears, 
‘‘(2) by substituting ‘section 1400Z–2(b)(2)(C)’ for ‘section 
1400Z–2(d)(1)’ each place it appears, and 
‘‘(3) by treating any reference (after the application of para-
graph (1)) to qualified rural opportunity zone stock, a qualified 
rural opportunity zone partnership interest, a qualified rural 
opportunity zone business, or qualified opportunity zone busi-
ness property as stock, an interest, a business, or property, 
respectively, described in subclause (I) or (II), as the case 
may be, of section 1400Z–2(b)(2)(C)(i). 
‘‘SEC. 6039L. INFORMATION REQUIRED FROM QUALIFIED OPPOR-
TUNITY ZONE BUSINESSES AND QUALIFIED RURAL 
OPPORTUNITY ZONE BUSINESSES. 
‘‘(a) IN GENERAL.—Every applicable qualified opportunity zone 
business shall furnish to the qualified opportunity fund described 
in subsection (b) a written statement at such time, in such manner, 
and setting forth such information as the Secretary may by regula-
tions prescribe for purposes of enabling such qualified opportunity 
fund to meet the requirements of section 6039K(b)(5). 
‘‘(b) APPLICABLE QUALIFIED OPPORTUNITY ZONE BUSINESS.— 
For purposes of subsection (a), the term ‘applicable qualified oppor-
tunity zone business’ means any qualified opportunity zone busi-
ness— 
‘‘(1) which is a trade or business of a qualified opportunity 
fund, 
‘‘(2) in which a qualified opportunity fund holds qualified 
opportunity zone stock, or 
‘‘(3) in which a qualified opportunity fund holds a qualified 
opportunity zone partnership interest. 
‘‘(c) OTHER TERMS.—Any term used in this section which is 
also used in subchapter Z of chapter 1 shall have the meaning 
given such term under such subchapter.
H. R. 1—159 
‘‘(d) 
APPLICATION
TO
QUALIFIED
RURAL
OPPORTUNITY 
BUSINESSES.—Every applicable qualified rural opportunity zone 
business (as defined in subsection (b) determined after application 
of the substitutions described in this sentence) shall furnish the 
written statement required under subsection (a), applied— 
‘‘(1) by substituting ‘qualified rural opportunity’ for ‘quali-
fied opportunity’ each place it appears, and 
‘‘(2) by treating any reference (after the application of para-
graph (1)) to qualified rural opportunity zone stock, a qualified 
rural opportunity zone partnership interest, or a qualified rural 
opportunity zone business as stock, an interest, or a business, 
respectively, described in subclause (I) or (II), as the case 
may be, of section 1400Z–2(b)(2)(C)(i).’’. 
(2) PENALTIES.— 
(A) IN GENERAL.—Part II of subchapter B of chapter 
68 is amended by inserting after section 6725 the following 
new section: 
‘‘SEC. 6726. FAILURE TO COMPLY WITH INFORMATION REPORTING 
REQUIREMENTS RELATING TO QUALIFIED OPPORTUNITY 
FUNDS AND QUALIFIED RURAL OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—If any person required to file a return under 
section 6039K fails to file a complete and correct return under 
such section in the time and in the manner prescribed therefor, 
such person shall pay a penalty of $500 for each day during which 
such failure continues. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The maximum penalty under this section 
on failures with respect to any 1 return shall not exceed 
$10,000. 
‘‘(2) LARGE QUALIFIED OPPORTUNITY FUNDS.—In the case 
of any failure described in subsection (a) with respect to a 
fund the gross assets of which (determined on the last day 
of the taxable year) are in excess of $10,000,000, paragraph 
(1) shall be applied by substituting ‘$50,000’ for ‘$10,000’. 
‘‘(c) PENALTY IN CASES OF INTENTIONAL DISREGARD.—If a failure 
described in subsection (a) is due to intentional disregard, then— 
‘‘(1) subsection (a) shall be applied by substituting ‘$2,500’ 
for ‘$500’, 
‘‘(2) subsection (b)(1) shall be applied by substituting 
‘$50,000’ for ‘$10,000’, and 
‘‘(3) subsection (b)(2) shall be applied by substituting 
‘$250,000’ for ‘$50,000’. 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any failure relating to 
a return required to be filed in a calendar year beginning 
after 2025, each of the dollar amounts in subsections (a), (b), 
and (c) 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 determined by sub-
stituting ‘calendar year 2024’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.— 
‘‘(A) IN GENERAL.—If the $500 dollar amount in sub-
section (a) and (c)(1) or the $2,500 amount in subsection 
(c)(1), after being increased under paragraph (1), is not
H. R. 1—160 
a multiple of $10, such dollar amount shall be rounded 
to the next lowest multiple of $10. 
‘‘(B) ASSET
THRESHOLD.—If the $10,000,000 dollar 
amount in subsection (b)(2), after being increased under 
paragraph (1), is not a multiple of $10,000, such dollar 
amount shall be rounded to the next lowest multiple of 
$10,000. 
‘‘(C) OTHER DOLLAR AMOUNTS.—If any dollar amount 
in subsection (b) or (c) (other than any amount to which 
subparagraph (A) or (B) applies), after being increased 
under paragraph (1), is not a multiple of $1,000, such 
dollar amount shall be rounded to the next lowest multiple 
of $1,000.’’. 
(B) INFORMATION REQUIRED TO BE SENT TO OTHER TAX-
PAYERS.—Section 6724(d)(2), as amended by the preceding 
provisions of this Act, is amended— 
(i) by striking ‘‘or’’ at the end of subparagraph 
(LL), 
(ii) by striking the period at the end of subpara-
graph (MM) and inserting a comma, and 
(iii) by inserting after subparagraph (MM) the fol-
lowing new subparagraphs: 
‘‘(NN) section 6039K(c) (relating to disposition of quali-
fied opportunity fund investments), or 
‘‘(OO) section 6039L (relating to information required 
from certain qualified opportunity zone businesses and 
qualified rural opportunity zone businesses).’’. 
(3) ELECTRONIC FILING.—Section 6011(e) is amended by 
adding at the end the following new paragraph: 
‘‘(8) QUALIFIED OPPORTUNITY FUNDS AND QUALIFIED RURAL 
OPPORTUNITY FUNDS.—Notwithstanding paragraphs (1) and (2), 
any return filed by a qualified opportunity fund or qualified 
rural opportunity fund under section 6039K shall be filed on 
magnetic media or other machine-readable form.’’. 
(4) CLERICAL AMENDMENTS.— 
(A) The table of sections for subpart A of part III 
of subchapter A of chapter 61 is amended by inserting 
after the item relating to section 6039J the following new 
items: 
‘‘Sec. 6039K. Returns with respect to qualified opportunity funds and qualified 
rural opportunity funds. 
‘‘Sec. 6039L. Information required from qualified opportunity zone businesses and 
qualified rural opportunity zone businesses.’’. 
(B) The table of sections for part II of subchapter 
B of chapter 68 is amended by inserting after the item 
relating to section 6725 the following new item: 
‘‘Sec. 6726. Failure to comply with information reporting requirements relating to 
qualified opportunity funds and qualified rural opportunity funds.’’. 
(5) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
(e) SECRETARY REPORTING
OF DATA
ON OPPORTUNITY ZONE 
AND RURAL OPPORTUNITY ZONE TAX INCENTIVES.— 
(1) IN GENERAL.—In addition to amounts otherwise avail-
able, there is appropriated, out of any money in the Treasury 
not otherwise appropriated, $15,000,000, to remain available 
until September 30, 2028, for necessary expenses of the Internal
H. R. 1—161 
Revenue Service to make the reports described in paragraph 
(2). 
(2) REPORTS.—As soon as practical after the date of the 
enactment of this Act, and annually thereafter, the Secretary 
of the Treasury, or the Secretary’s delegate (referred to in 
this section as the ‘‘Secretary’’) shall make publicly available 
a report on qualified opportunity funds. 
(3) INFORMATION
INCLUDED.—The report required under 
paragraph (2) shall include, to the extent available, the fol-
lowing information: 
(A) The number of qualified opportunity funds. 
(B) The aggregate dollar amount of assets held in 
qualified opportunity funds. 
(C) The aggregate dollar amount of investments made 
by qualified opportunity funds in qualified opportunity fund 
property, stated separately for each North American 
Industry Classification System (NAICS) code. 
(D) The percentage of population census tracts des-
ignated as qualified opportunity zones that have received 
qualified opportunity fund investments. 
(E) For each population census tract designated as 
a qualified opportunity zone, the approximate average 
monthly number of full-time equivalent employees of the 
qualified opportunity zone businesses in such qualified 
opportunity zone for the preceding 12-month period (within 
numerical ranges identified by the Secretary) or such other 
indication of the employment impact of such qualified 
opportunity fund businesses as determined appropriate by 
the Secretary. 
(F) The percentage of the total amount of investments 
made by qualified opportunity funds in— 
(i) qualified opportunity zone property which is 
real property; and 
(ii) other qualified opportunity zone property. 
(G) For each population census tract, the aggregate 
approximate number of residential units resulting from 
investments made by qualified opportunity funds in real 
property. 
(H) The aggregate dollar amount of investments made 
by qualified opportunity funds in each population census 
tract. 
(4) ADDITIONAL INFORMATION.— 
(A) IN GENERAL.—Beginning with the report submitted 
under paragraph (2) for the 6th year after the date of 
the enactment of this Act, the Secretary shall include in 
such report the impacts and outcomes of a designation 
of a population census tract as a qualified opportunity 
zone as measured by economic indicators, such as job cre-
ation, poverty reduction, new business starts, and other 
metrics as determined by the Secretary. 
(B) SEMI-DECENNIAL INFORMATION.— 
(i) IN GENERAL.—In the case of any report sub-
mitted under paragraph (2) in the 6th year or the 
11th year after the date of the enactment of this Act, 
the Secretary shall include the following information: 
(I) For population census tracts designated as 
a qualified opportunity zone, a comparison (based
H. R. 1—162 
on aggregate information) of the factors listed in 
clause (iii) between the 5-year period ending on 
the date of the enactment of Public Law 115– 
97 and the most recent 5-year period for which 
data is available. 
(II) For population census tracts designated 
as a qualified opportunity zone, a comparison 
(based on aggregate information) of the factors 
listed in clause (iii) for the most recent 5-year 
period for which data is available between such 
population census tracts and similar population 
census tracts that were not designated as a quali-
fied opportunity zone. 
(ii) CONTROL GROUPS.—For purposes of clause (i), 
the Secretary may combine population census tracts 
into such groups as the Secretary determines appro-
priate for purposes of making comparisons. 
(iii) FACTORS LISTED.—The factors listed in this 
clause are the following: 
(I) The unemployment rate. 
(II) The number of persons working in the 
population census tract, including the percentage 
of such persons who were not residents in the 
population census tract in the preceding year. 
(III) Individual, family, and household poverty 
rates. 
(IV) Median family income of residents of the 
population census tract. 
(V) Demographic information on residents of 
the population census tract, including age, income, 
education, race, and employment. 
(VI) The average percentage of income of resi-
dents of the population census tract spent on rent 
annually. 
(VII) The number of residences in the popu-
lation census tract. 
(VIII) The rate of home ownership in the popu-
lation census tract. 
(IX) The average value of residential property 
in the population census tract. 
(X) The number of affordable housing units 
in the population census tract. 
(XI) The number of new business starts in 
the population census tract. 
(XII) The distribution of employees in the 
population census tract by North American 
Industry Classification System (NAICS) code. 
(5) PROTECTION OF IDENTIFIABLE RETURN INFORMATION.— 
In making reports required under this subsection, the Sec-
retary— 
(A) shall establish appropriate procedures to ensure 
that any amounts reported do not disclose taxpayer return 
information that can be associated with any particular 
taxpayer or competitive or proprietary information, and
H. R. 1—163 
(B) if necessary to protect taxpayer return information, 
may combine information required with respect to indi-
vidual population census tracts into larger geographic 
areas. 
(6) DEFINITIONS.—Any term used in this subsection which 
is also used in subchapter Z of chapter 1 of the Internal Revenue 
Code of 1986 shall have the meaning given such term under 
such subchapter. 
(7) REPORTS ON QUALIFIED RURAL OPPORTUNITY FUNDS.— 
The Secretary shall make publicly available, with respect to 
qualified rural opportunity funds, separate reports as required 
under this subsection, applied— 
(A) by substituting ‘‘qualified rural opportunity’’ for 
‘‘qualified opportunity’’ each place it appears, 
(B) by substituting a reference to this Act for ‘‘Public 
Law 115–97’’, and 
(C) by treating any reference (after the application 
of subparagraph (A)) to qualified rural opportunity zone 
stock, qualified rural opportunity zone partnership interest, 
qualified rural opportunity zone business, or qualified 
opportunity zone business property as stock, interest, busi-
ness, or property, respectively, described in subclause (I) 
or (II), as the case may be, of section 1400Z–2(b)(2)(C)(i) 
of the Internal Revenue Code of 1986. 
SEC. 70422. PERMANENT ENHANCEMENT OF LOW-INCOME HOUSING 
TAX CREDIT. 
(a) PERMANENT STATE HOUSING CREDIT CEILING INCREASE FOR 
LOW-INCOME HOUSING CREDIT.— 
(1) IN GENERAL.—Section 42(h)(3)(I) is amended— 
(A) by striking ‘‘2018, 2019, 2020, and 2021,’’ and 
inserting ‘‘beginning after December 31, 2025,’’, 
(B) by striking ‘‘1.125’’ and inserting ‘‘1.12’’, and 
(C) by striking ‘‘2018, 2019, 2020, AND 2021’’ in the heading 
and inserting ‘‘CALENDAR YEARS AFTER 2025’’. 
(2) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to calendar years beginning after December 
31, 2025. 
(b) TAX-EXEMPT BOND FINANCING REQUIREMENT.— 
(1) IN GENERAL.—Section 42(h)(4) is amended by striking 
subparagraph (B) and inserting the following: 
‘‘(B) SPECIAL
RULE
WHERE
MINIMUM
PERCENT
OF 
BUILDINGS IS FINANCED WITH TAX-EXEMPT BONDS SUBJECT 
TO VOLUME CAP.—For purposes of subparagraph (A), para-
graph (1) shall not apply to any portion of the credit allow-
able under subsection (a) with respect to a building if— 
‘‘(i) 50 percent or more of the aggregate basis of 
such building and the land on which the building is 
located is financed by 1 or more obligations described 
in subparagraph (A), or 
‘‘(ii)(I) 25 percent or more of the aggregate basis 
of such building and the land on which the building 
is located is financed by 1 or more obligations described 
in subparagraph (A), and 
‘‘(II) 1 or more of such obligations— 
‘‘(aa) are part of an issue the issue date of 
which is after December 31, 2025, and
H. R. 1—164 
‘‘(bb) provide the financing for not less than 
5 percent of the aggregate basis of such building 
and the land on which the building is located.’’. 
(2) EFFECTIVE DATE.— 
(A) IN GENERAL.—The amendment made by this sub-
section shall apply to buildings placed in service in taxable 
years beginning after December 31, 2025. 
(B) REHABILITATION EXPENDITURES TREATED AS SEPA-
RATE NEW BUILDING.—In the case of any building with 
respect to which any expenditures are treated as a separate 
new building under section 42(e) of the Internal Revenue 
Code of 1986, for purposes of subparagraph (A), both the 
existing building and the separate new building shall be 
treated as having been placed in service on the date such 
expenditures are treated as placed in service under section 
42(e)(4) of such Code. 
SEC. 70423. PERMANENT EXTENSION OF NEW MARKETS TAX CREDIT. 
(a) IN GENERAL.—Section 45D(f)(1)(H) is amended by striking 
‘‘for for each of calendar years 2020 through 2025’’ and inserting 
‘‘ for each calendar year after 2019’’. 
(b) CARRYOVER OF UNUSED LIMITATION.—Section 45D(f)(3) is 
amended— 
(1) by striking ‘‘If the’’ and inserting the following: 
‘‘(A) IN GENERAL.—If the’’, and 
(2) by striking the second sentence and inserting the fol-
lowing: 
‘‘(B) LIMITATION.—No amount may be carried under 
subparagraph (A) to any calendar year afer the fifth cal-
endar year after the calendar year in which the excess 
described in such subparagraph occurred. For purposes 
of this subparagraph, any excess described in subparagraph 
(A) with respect to any calendar year before 2026 shall 
be treated as occurring in calendar year 2025.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to calendar years beginning after December 31, 2025. 
SEC. 70424. PERMANENT AND EXPANDED REINSTATEMENT OF PAR-
TIAL DEDUCTION FOR CHARITABLE CONTRIBUTIONS OF 
INDIVIDUALS WHO DO NOT ELECT TO ITEMIZE. 
(a) IN GENERAL.—Section 170(p) is amended— 
(1) by striking ‘‘$300 ($600’’ and inserting ‘‘$1,000 ($2,000’’, 
and 
(2) by striking ‘‘beginning in 2021’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70425. 0.5 PERCENT FLOOR ON DEDUCTION OF CONTRIBUTIONS 
MADE BY INDIVIDUALS. 
(a) IN GENERAL.— 
(1) IN
GENERAL.—Paragraph (1) of section 170(b) is 
amended by adding at the end the following new subparagraph: 
‘‘(I) 0.5-PERCENT FLOOR.—Any charitable contribution 
otherwise allowable (without regard to this subparagraph) 
as a deduction under this section shall be allowed only 
to the extent that the aggregate of such contributions 
exceeds 0.5 percent of the taxpayer’s contribution base
H. R. 1—165 
for the taxable year. The preceding sentence shall be 
applied— 
‘‘(i) first, by taking into account charitable con-
tributions to which subparagraph (D) applies to the 
extent thereof, 
‘‘(ii) second, by taking into account charitable con-
tributions to which subparagraph (C) applies to the 
extent thereof, 
‘‘(iii) third, by taking into account charitable con-
tributions to which subparagraph (B) applies to the 
extent thereof, 
‘‘(iv) fourth, by taking into account charitable con-
tributions to which subparagraph (E) applies to the 
extent thereof, 
‘‘(v) fifth, by taking into account charitable con-
tributions to which subparagraph (A) applies to the 
extent thereof, and 
‘‘(vi) sixth, by taking into account charitable con-
tributions to which subparagraph (G) applies to the 
extent thereof.’’. 
(2) APPLICATION OF CARRYFORWARD.—Paragraph (1) of sec-
tion 170(d) is amended by adding at the end the following 
new subparagraph: 
‘‘(C) CONTRIBUTIONS DISALLOWED BY 0.5-PERCENT FLOOR 
CARRIED FORWARD ONLY FROM YEARS IN WHICH LIMITATION 
IS EXCEEDED.— 
‘‘(i) IN GENERAL.—In the case of any taxable year 
from which an excess is carried forward (determined 
without regard to this subparagraph) under any carry-
over rule, the applicable carryover rule shall be applied 
by increasing the excess determined under such 
applicable carryover rule for the contribution year 
(before the application of subparagraph (B)) by the 
amount attributable to the charitable contributions to 
which such rule applies which is not allowed as a 
deduction for the contribution year by reason of sub-
section (b)(1)(I). 
‘‘(ii) CARRYOVER
RULE.—For purposes of this 
subparagraph, the term ‘carryover rule’ means— 
‘‘(I) subparagraph (A) of this paragraph, 
‘‘(II) subparagraphs (C)(ii), (D)(ii), (E)(ii), and 
(G)(ii) of subsection (b)(1), and 
‘‘(III) the second sentence of subsection 
(b)(1)(B). 
‘‘(iii) APPLICABLE CARRYOVER RULE.—For purposes 
of this subparagraph, the term ‘applicable carryover 
rule’ means any carryover rule applicable to charitable 
contributions which were (in whole or in part) not 
allowed as a deduction for the contribution year by 
reason of subsection (b)(1)(I).’’. 
(3) COORDINATION WITH DEDUCTION FOR NONITEMIZERS.— 
Section 170(p), as amended by this Act, is further amended 
by inserting ‘‘, (b)(1)(I),’’ after ‘‘subsections (b)(1)(G)(ii)’’. 
(b) MODIFICATION OF LIMITATION FOR CASH CONTRIBUTIONS.— 
(1) IN
GENERAL.—Clause (i) of section 170(b)(1)(G) is 
amended to read as follows:
H. R. 1—166 
‘‘(i) IN
GENERAL.—For taxable years beginning 
after December 31, 2017, any contribution of cash to 
an organization described in subparagraph (A) shall 
be allowed as a deduction under subsection (a) to the 
extent that the aggregate of such contributions does 
not exceed the excess of— 
‘‘(I) 60 percent of the taxpayer’s contribution 
base for the taxable year, over 
‘‘(II) the aggregate amount of contributions 
taken into account under subparagraph (A) for 
such taxable year.’’. 
(2) COORDINATION WITH OTHER LIMITATIONS.— 
(A) IN GENERAL.—Clause (iii) of section 170(b)(1)(G) 
is amended— 
(i) by striking ‘‘SUBPARAGRAPHS (A) AND (B)’’ in the 
heading and inserting ‘‘SUBPARAGRAPH (A)’’, and 
(ii) in subclause (II), by striking ‘‘, and subpara-
graph (B)’’ and all that follows through ‘‘this subpara-
graph’’. 
(B) OTHER CONTRIBUTIONS.—Subparagraph (B) of sec-
tion 170(b)(1) is amended— 
(i) by striking ‘‘to which subparagraph (A)’’ both 
places it appears and inserting ‘‘to which subparagraph 
(A) or (G)’’, and 
(ii) in clause (ii), by striking ‘‘over the amount’’ 
and all that follows through ‘‘subparagraph (C)).’’ and 
inserting ‘‘over— 
‘‘(I) the amount of charitable contributions 
allowable under subparagraph (A) (determined 
without regard to subparagraph (C)) and subpara-
graph (G), reduced by 
‘‘(II) so much of the contributions taken into 
account under subparagraph (G) as does not exceed 
10 percent of the taxpayer’s contribution base.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70426. 1-PERCENT FLOOR ON DEDUCTION OF CHARITABLE CON-
TRIBUTIONS MADE BY CORPORATIONS. 
(a) IN GENERAL.—Section 170(b)(2)(A) is amended to read as 
follows: 
‘‘(A) IN GENERAL.—Any charitable contribution other-
wise allowable (without regard to this subparagraph) as 
a deduction under this section for any taxable year, other 
than any contribution to which subparagraph (B) or (C) 
applies, shall be allowed only to the extent that the aggre-
gate of such contributions— 
‘‘(i) exceeds 1 percent of the taxpayer’s taxable 
income for the taxable year, and 
‘‘(ii) does not exceed 10 percent of the taxpayer’s 
taxable income for the taxable year.’’. 
(b) APPLICATION
OF
CARRYFORWARD.—Section 170(d)(2) is 
amended to read as follows: 
‘‘(2) CORPORATIONS.— 
‘‘(A) IN GENERAL.—Any charitable contribution taken 
into account under subsection (b)(2)(A) for any taxable 
year which is not allowed as a deduction by reason of
H. R. 1—167 
clause (ii) thereof shall be taken into account as a charitable 
contribution for the succeeding taxable year, except that, 
for purposes of determining under this subparagraph 
whether such contribution is allowed in such succeeding 
taxable year, contributions in such succeeding taxable year 
(determined without regard to this paragraph) shall be 
taken into account under subsection (b)(2)(A) before any 
contribution taken into account by reason of this paragraph. 
‘‘(B) 5-YEAR CARRYFORWARD.—No charitable contribu-
tion may be carried forward under subparagraph (A) to 
any taxable year following the fifth taxable year after the 
taxable year in which the charitable contribution was first 
taken into account. For purposes of the preceding sentence, 
contributions shall be treated as allowed on a first-in first- 
out basis. 
‘‘(C) CONTRIBUTIONS DISALLOWED BY 1-PERCENT FLOOR 
CARRIED FORWARD ONLY FROM YEARS IN WHICH 10 PERCENT 
LIMITATION IS EXCEEDED.—In the case of any taxable year 
from which a charitable contribution is carried forward 
under subparagraph (A) (determined without regard this 
subparagraph), subparagraph (A) shall be applied by sub-
stituting ‘clause (i) or (ii)’ for ‘clause (ii)’. 
‘‘(D) 
SPECIAL
RULE
FOR
NET
OPERATING
LOSS 
CARRYOVERS.—The amount of charitable contributions car-
ried forward under subparagraph (A) shall be reduced to 
the extent that such carryfoward would (but for this 
subparagraph) reduce taxable income (as computed for pur-
poses of the second sentence of section 172(b)(2)) and 
increase a net operating loss carryover under section 172 
to a succeeding taxable year.’’. 
(c) CONFORMING
AMENDMENTS.—Subparagraphs (B)(ii) and 
(C)(ii) of section 170(b)(2) are each amended by inserting ‘‘other 
than subparagraph (C) thereof’’ after ‘‘subsection (d)(2)’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70427. PERMANENT INCREASE IN LIMITATION ON COVER OVER 
OF TAX ON DISTILLED SPIRITS. 
(a) IN GENERAL.—Paragraph (1) of section 7652(f) is amended 
to read as follows: 
‘‘(1) $13.25, or’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to distilled spirits brought into the United States after 
December 31, 2025. 
SEC. 70428. NONPROFIT COMMUNITY DEVELOPMENT ACTIVITIES IN 
REMOTE NATIVE VILLAGES. 
(a) IN GENERAL.—For purposes of subchapter F of chapter 
1 of the Internal Revenue Code of 1986, any activity substantially 
related to participation or investment in fisheries in the Bering 
Sea and Aleutian Islands statistical and reporting areas (as 
described in Figure 1 of section 679 of title 50, Code of Federal 
Regulations) carried on by an entity identified in section 305(i)(1)(D) 
of the Magnuson-Stevens Fishery Conservation and Management 
Act (16 U.S.C. 1855(i)(1)(D)) (as in effect on the date of enactment 
of this section) shall be considered substantially related to the 
exercise or performance of the purpose constituting the basis of 
such entity’s exemption under section 501(a) of such Code if the
H. R. 1—168 
conduct of such activity is in furtherance of 1 or more of the 
purposes specified in section 305(i)(1)(A) of such Act (as so in 
effect). For purposes of this paragraph, activities substantially 
related to participation or investment in fisheries include the har-
vesting, processing, transportation, sales, and marketing of fish 
and fish products of the Bering Sea and Aleutian Islands statistical 
and reporting areas. 
(b) APPLICATION TO CERTAIN WHOLLY OWNED SUBSIDIARIES.— 
If the assets of a trade or business relating to an activity described 
in subsection (a) of any subsidiary wholly owned by an entity 
identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery 
Conservation and Management Act (16 U.S.C. 1855(i)(1)(D)) (as 
in effect on the date of enactment of this section) are transferred 
to such entity (including in liquidation of such subsidiary) not 
later than 18 months after the date of the enactment of this Act— 
(1) no gain or income resulting from such transfer shall 
be recognized to either such subsidiary or such entity under 
such Code, and 
(2) all income derived from such subsidiary from such 
transferred trade or business shall be exempt from taxation 
under such Code. 
(c) EFFECTIVE DATE.—This section shall take effect on the date 
of the enactment of this Act and shall remain effective during 
the existence of the western Alaska community development quota 
program established by Section 305(i)(1) of the Magnuson-Stevens 
Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)), 
as amended. 
SEC. 70429. ADJUSTMENT OF CHARITABLE DEDUCTION FOR CERTAIN 
EXPENSES INCURRED IN SUPPORT OF NATIVE ALASKAN 
SUBSISTENCE WHALING. 
(a) IN GENERAL.—Section 170(n)(1) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘$10,000’’ and inserting 
‘‘$50,000’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70430. EXCEPTION TO PERCENTAGE OF COMPLETION METHOD 
OF 
ACCOUNTING 
FOR 
CERTAIN 
RESIDENTIAL 
CONSTRUCTION CONTRACTS. 
(a) IN GENERAL.—Section 460(e) is amended— 
(1) in paragraph (1)— 
(A) by striking ‘‘home construction contract’’ both places 
it appears and inserting ‘‘residential construction contract’’, 
and 
(B) by inserting ‘‘(determined by substituting ‘3-year’ 
for ‘2-year’ in subparagraph (B)(i) for any residential 
construction contract which is not a home construction 
contract)’’ after ‘‘the requirements of clauses (i) and (ii) 
of subparagraph (B)’’, 
(2) by striking paragraph (4) and redesignating paragraph 
(5) as paragraph (4), and 
(3) in subparagraph (A) of paragraph (4), as so redesig-
nated, by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraph 
(3)’’. 
(b) APPLICATION OF EXCEPTION FOR PURPOSES OF ALTERNATIVE 
MINIMUM TAX.—Section 56(a)(3) is amended by striking ‘‘any home 
construction contract (as defined in section 460(e)(6))’’ and inserting
H. R. 1—169 
‘‘any residential construction contract (as defined in section 
460(e)(4))’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to contracts entered into in taxable years beginning 
after the date of the enactment of this Act. 
Subchapter D—Permanent Investments in Small Business 
and Rural America 
SEC. 70431. EXPANSION OF QUALIFIED SMALL BUSINESS STOCK GAIN 
EXCLUSION. 
(a) PHASED INCREASE IN EXCLUSION FOR GAIN FROM QUALIFIED 
SMALL BUSINESS STOCK.— 
(1) IN GENERAL.—Section 1202(a)(1) is amended to read 
as follows: 
‘‘(1) IN GENERAL.— In the case of a taxpayer other than 
a corporation, gross income shall not include— 
‘‘(A) except as provided in paragraphs (3) and (4), 50 
percent of any gain from the sale or exchange of qualified 
small business stock acquired on or before the applicable 
date and held for more than 5 years, and 
‘‘(B) the applicable percentage of any gain from the 
sale or exchange of qualified small business stock acquired 
after the applicable date and held for at least 3 years.’’. 
(2) APPLICABLE PERCENTAGE.—Section 1202(a) is amended 
by adding at the end the following new paragraph: 
‘‘(5) APPLICABLE PERCENTAGE.—The applicable percentage 
under paragraph (1) shall be determined under the following 
table: 
‘‘Years stock held: 
Applicable 
percentage: 
3 years .......................................................................
50%
4 years .......................................................................
75%
5 years or more ........................................................
100%’’. 
(3) APPLICABLE DATE; ACQUISITION DATE.—Section 1202(a), 
as amended by paragraph (2), is amended by adding at the 
end the following new paragraph: 
‘‘(6) APPLICABLE DATE; ACQUISITION DATE.—For purposes 
of this section— 
‘‘(A) APPLICABLE
DATE.—The term ‘applicable date’ 
means the date of the enactment of this paragraph. 
‘‘(B) ACQUISITION DATE.—In the case of any stock which 
would (but for this paragraph) be treated as having been 
acquired before, on, or after the applicable date, whichever 
is applicable, the acquisition date for purposes of this sec-
tion shall be the first day on which such stock was held 
by the taxpayer determined after the application of section 
1223.’’. 
(4) CONTINUED
TREATMENT
AS
NOT
ITEM
OF
TAX
PREF-
ERENCE.— 
(A) IN
GENERAL.—Section 57(a)(7) is amended by 
striking ‘‘An amount’’ and inserting ‘‘In the case of stock
H. R. 1—170 
acquired on or before the date of the enactment of the 
Creating Small Business Jobs Act of 2010, an amount’’. 
(B) CONFORMING
AMENDMENT.—Section 1202(a)(4) is 
amended— 
(i) by striking ‘‘, and’’ at the end of subparagraph 
(B) and inserting a period, and 
(ii) by striking subparagraph (C). 
(5) OTHER CONFORMING AMENDMENTS.— 
(A) Paragraphs (3)(A) and (4)(A) of section 1202(a) 
are each amended by striking ‘‘paragraph (1)’’ and inserting 
‘‘paragraph (1)(A)’’. 
(B) Paragraph (4)(A) of section 1202(a) is amended 
by inserting ‘‘and on or before the applicable date’’ after 
‘‘2010’’. 
(C) Sections 1202(b)(2), 1202(g)(2)(A), and 1202(j)(1)(A) 
are each amended by striking ‘‘more than 5 years’’ and 
inserting ‘‘at least 3 years (more than 5 years in the case 
of stock acquired on or before the applicable date)’’. 
(6) EFFECTIVE DATES.— 
(A) IN GENERAL.—Except as provided in subparagraph 
(B), the amendments made by this subsection shall apply 
to taxable years beginning after the date of the enactment 
of this Act. 
(B) CONTINUED TREATMENT AS NOT ITEM OF TAX PREF-
ERENCE.—The amendments made by paragraph (4) shall 
take effect as if included in the enactment of section 2011 
of the Creating Small Business Jobs Act of 2010. 
(b) INCREASE IN PER ISSUER LIMITATION.— 
(1) IN GENERAL.—Subparagraph (A) of section 1202(b)(1) 
is amended to read as follows: 
‘‘(A) the applicable dollar limit for the taxable year, 
or’’. 
(2) APPLICABLE DOLLAR LIMIT.—Section 1202 (b) is amended 
by adding at the end the following: 
‘‘(4) APPLICABLE DOLLAR LIMIT.—For purposes of paragraph 
(1)(A), the applicable dollar limit for any taxable year with 
respect to eligible gain from 1 or more dispositions by a tax-
payer of qualified business stock of a corporation is— 
‘‘(A) if such stock was acquired by the taxpayer on 
or before the applicable date, $10,000,000, reduced by the 
aggregate amount of eligible gain taken into account by 
the taxpayer under subsection (a) for prior taxable years 
and attributable to dispositions of stock issued by such 
corporation and acquired by the taxpayer before, on, or 
after the applicable date, and 
‘‘(B) if such stock was acquired by the taxpayer after 
the applicable date, $15,000,000, reduced by the sum of— 
‘‘(i) the aggregate amount of eligible gain taken 
into account by the taxpayer under subsection (a) for 
prior taxable years and attributable to dispositions 
of stock issued by such corporation and acquired by 
the taxpayer before, on, or after the applicable date, 
plus 
‘‘(ii) the aggregate amount of eligible gain taken 
into account by the taxpayer under subsection (a) for 
the taxable year and attributable to dispositions of
H. R. 1—171 
stock issued by such corporation and acquired by the 
taxpayer on or before the applicable date. 
‘‘(5) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any taxable year 
beginning after 2026, the $15,000,000 amount in paragraph 
(4)(B) shall be increased by an amount equal to — 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
‘calendar year 2025’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
If any increase under this subparagraph is not a multiple 
of $10,000, such increase shall be rounded to the nearest 
multiple of $10,000. 
‘‘(B) NO INCREASE ONCE LIMIT REACHED.—If, for any 
taxable year, the eligible gain attributable to dispositions 
of stock issued by a corporation and acquired by the tax-
payer after the applicable date exceeds the applicable dollar 
limit, then notwithstanding any increase under subpara-
graph (A) for any subsequent taxable year, the applicable 
dollar limit for such subsequent taxable year shall be zero.’’. 
(3) SEPARATE
RETURNS.—Subparagraph (A) of section 
1202(b)(3) is amended to read as follows: 
‘‘(A) SEPARATE RETURNS.—In the case of a separate 
return by a married individual for any taxable year— 
‘‘(i) paragraph (4)(A) shall be applied by sub-
stituting ‘$5,000,000’ for ‘$10,000,000’, and 
‘‘(ii) paragraph (4)(B) shall be applied by sub-
stituting one-half of the dollar amount in effect under 
such paragraph for the taxable year for the amount 
so in effect.’’. 
(4) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
(c) INCREASE IN LIMIT IN AGGREGATE GROSS ASSETS.— 
(1) IN
GENERAL.—Subparagraphs (A) and (B) of section 
1202(d)(1) are each amended by striking ‘‘$50,000,000’’ and 
inserting ‘‘$75,000,000’’. 
(2) INFLATION ADJUSTMENT.—Section 1202(b) is amended 
by adding at the end the following: 
‘‘(4) INFLATION ADJUSTMENT.—In the case of any taxable 
year beginning after 2026, the $75,000,000 amounts in para-
graphs (1)(A) and (1)(B) shall each 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 taxable 
year begins, determined by substituting ‘calendar year 
2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
If any increase under this paragraph is not a multiple of 
$10,000, such increase shall be rounded to the nearest multiple 
of $10,000.’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to stock issued after the date of the enact-
ment of this Act.
H. R. 1—172 
SEC. 70432. REPEAL OF REVISION TO DE MINIMIS RULES FOR THIRD 
PARTY NETWORK TRANSACTIONS. 
(a) REINSTATEMENT OF EXCEPTION FOR DE MINIMIS PAYMENTS 
AS IN EFFECT PRIOR TO ENACTMENT OF AMERICAN RESCUE PLAN 
ACT OF 2021.— 
(1) IN
GENERAL.—Section 6050W(e) is amended to read 
as follows: 
‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY THIRD PARTY 
SETTLEMENT ORGANIZATIONS.—A third party settlement organiza-
tion shall be required to report any information under subsection 
(a) with respect to third party network transactions of any partici-
pating payee only if— 
‘‘(1) the amount which would otherwise be reported under 
subsection (a)(2) with respect to such transactions exceeds 
$20,000, and 
‘‘(2) the aggregate number of such transactions exceeds 
200.’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall take effect as if included in section 9674 of the 
American Rescue Plan Act. 
(b) APPLICATION OF DE MINIMIS RULE FOR THIRD PARTY NET-
WORK TRANSACTIONS TO BACKUP WITHHOLDING.— 
(1) IN GENERAL.—Section 3406(b) is amended by adding 
at the end the following new paragraph: 
‘‘(8) OTHER REPORTABLE PAYMENTS INCLUDE PAYMENTS IN 
SETTLEMENT
OF
THIRD
PARTY
NETWORK
TRANSACTIONS
ONLY 
WHERE
AGGREGATE
TRANSACTIONS
EXCEED
REPORTING 
THRESHOLD FOR THE CALENDAR YEAR.— 
‘‘(A) IN GENERAL.—Any payment in settlement of a 
third party network transaction required to be shown on 
a return required under section 6050W which is made 
during any calendar year shall be treated as a reportable 
payment only if— 
‘‘(i) the aggregate number of transactions with 
respect to the participating payee during such calendar 
year exceeds the number of transactions specified in 
section 6050W(e)(2), and 
‘‘(ii) the aggregate amount of transactions with 
respect to the participating payee during such calendar 
year exceeds the dollar amount specified in section 
6050W(e)(1) at the time of such payment. 
‘‘(B) EXCEPTION
IF
THIRD
PARTY
NETWORK
TRANS-
ACTIONS MADE IN PRIOR YEAR WERE REPORTABLE.—Subpara-
graph (A) shall not apply with respect to payments to 
any participating payee during any calendar year if one 
or more payments in settlement of third party network 
transactions made by the payor to the participating payee 
during the preceding calendar year were reportable pay-
ments.’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to calendar years beginning after December 
31, 2024. 
SEC. 70433. INCREASE IN THRESHOLD FOR REQUIRING INFORMATION 
REPORTING WITH RESPECT TO CERTAIN PAYEES. 
(a) IN GENERAL.—Section 6041(a) is amended by striking ‘‘$600’’ 
and inserting ‘‘$2,000’’.
H. R. 1—173 
(b) INFLATION ADJUSTMENT.—Section 6041 is amended by 
adding at the end the following new subsection: 
‘‘(h) INFLATION ADJUSTMENT.—In the case of any calendar year 
after 2026, the dollar amount in subsection (a) 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 such calendar year, determined by substituting ‘cal-
endar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
If any increase under the preceding sentence is not a multiple 
of $100, such increase shall be rounded to the nearest multiple 
of $100.’’. 
(c) APPLICATION TO REPORTING ON REMUNERATION FOR SERV-
ICES.—Section 6041A(a)(2) is amended by striking ‘‘is $600 or more’’ 
and inserting ‘‘equals or exceeds the dollar amount in effect for 
such calendar year under section 6041(a)’’. 
(d) APPLICATION TO BACKUP WITHHOLDING.—Section 3406(b)(6) 
is amended— 
(1) by striking ‘‘$600’’ in subparagraph (A) and inserting 
‘‘the dollar amount in effect for such calendar year under section 
6041(a)’’, and 
(2) by striking ‘‘ONLY WHERE AGGREGATE FOR CALENDAR 
YEAR IS $600 OR MORE’’ in the heading and inserting ‘‘ONLY 
WHERE IN EXCESS OF THRESHOLD’’. 
(e) CONFORMING AMENDMENTS.— 
(1) The heading of section 6041(a) is amended by striking 
‘‘OF $600 OR MORE’’ and inserting ‘‘EXCEEDING THRESHOLD’’. 
(2) Section 6041(a) is amended by striking ‘‘taxable year’’ 
and inserting ‘‘calendar year’’. 
(f) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to payments made after December 31, 
2025. 
SEC. 70434. TREATMENT OF CERTAIN QUALIFIED SOUND RECORDING 
PRODUCTIONS. 
(a) ELECTION TO TREAT COSTS AS EXPENSES.—Section 181(a)(1) 
is amended by striking ‘‘qualified film or television production, 
and any qualified live theatrical production,’’ and inserting ‘‘quali-
fied film or television production, any qualified live theatrical 
production, and any qualified sound recording production’’. 
(b) DOLLAR LIMITATION.—Section 181(a)(2) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) QUALIFIED SOUND RECORDING PRODUCTION.—Para-
graph (1) shall not apply to so much of the aggregate 
cost of any qualified sound recording production, or to 
so much of the aggregate, cumulative cost of all such quali-
fied sound recording productions in the taxable year, as 
exceeds $150,000.’’. 
(c) NO OTHER DEDUCTION OR AMORTIZATION DEDUCTION ALLOW-
ABLE.—Section 181(b) is amended by striking ‘‘qualified film or 
television production or any qualified live theatrical production’’ 
and inserting ‘‘qualified film or television production, any qualified 
live theatrical production, or any qualified sound recording produc-
tion’’. 
(d) ELECTION.—Section 181(c)(1) is amended by striking ‘‘quali-
fied film or television production or any qualified live theatrical
H. R. 1—174 
production’’ and inserting ‘‘qualified film or television production, 
any qualified live theatrical production, or any qualified sound 
recording production’’. 
(e) QUALIFIED SOUND RECORDING PRODUCTION DEFINED.—Sec-
tion 181 is amended by redesignating subsections (f) and (g) as 
subsections (g) and (h), respectively, and by inserting after sub-
section (e) the following new subsection: 
‘‘(f) QUALIFIED SOUND RECORDING PRODUCTION.—For purposes 
of this section, the term ‘qualified sound recording production’ 
means a sound recording (as defined in section 101 of title 17, 
United States Code) produced and recorded in the United States.’’. 
(f) APPLICATION OF TERMINATION.—Section 181(h), as redesig-
nated by subsection (e), is amended by striking ‘‘qualified film 
and television productions or qualified live theatrical productions’’ 
and inserting ‘‘qualified film and television productions, qualified 
live theatrical productions, or qualified sound recording produc-
tions’’. 
(g) BONUS DEPRECIATION.— 
(1) QUALIFIED SOUND RECORDING PRODUCTION AS QUALIFIED 
PROPERTY.—Section 168(k)(2)(A)(i) is amended— 
(A) by striking ‘‘or’’ at the end of subclause (IV), by 
inserting ‘‘or’’ at the end of subclause (V), and by inserting 
after subclause (V) the following: 
‘‘(VI) which is a qualified sound recording 
production (as defined in subsection (f) of section 
181) for which a deduction would have been allow-
able under section 181 without regard to sub-
sections (a)(2) and (h) of such section or this sub-
section, and’’, and 
(B) in subclauses (IV) and (V) (as so amended) by 
striking ‘‘without regard to subsections (a)(2) and (g)’’ both 
places it appears and inserting ‘‘without regard to sub-
sections (a)(2) and (h)’’. 
(2) PRODUCTION PLACED IN SERVICE.—Section 168(k)(2)(H) 
is amended by striking ‘‘and’’ at the end of clause (i), by striking 
the period at the end of clause (ii) and inserting ‘‘, and’’, 
and by adding after clause (ii) the following: 
‘‘(iii) a qualified sound recording production shall 
be considered to be placed in service at the time of 
initial release or broadcast.’’. 
(h) CONFORMING AMENDMENTS.— 
(1) The heading for section 181 is amended to read as 
follows: ‘‘TREATMENT OF CERTAIN QUALIFIED PRODUCTIONS.’’. 
(2) The table of sections for part VI of subchapter B of 
chapter 1 is amended by striking the item relating to section 
181 and inserting the following new item: 
‘‘Sec. 181. Treatment of certain qualified productions.’’. 
(i) EFFECTIVE DATE.—The amendments made by this section 
shall apply to productions commencing in taxable years ending 
after the date of the enactment of this Act. 
SEC. 70435. EXCLUSION OF INTEREST ON LOANS SECURED BY RURAL 
OR AGRICULTURAL REAL PROPERTY. 
(a) IN GENERAL.—Part III of subchapter B of chapter 1, as 
amended by the preceding provisions of this Act, is amended by 
inserting after section 139K the following new section:
H. R. 1—175 
‘‘SEC. 139L. INTEREST ON LOANS SECURED BY RURAL OR AGRICUL-
TURAL REAL PROPERTY. 
‘‘(a) IN GENERAL.—Gross income shall not include 25 percent 
of the interest received by a qualified lender on any qualified 
real estate loan. 
‘‘(b) QUALIFIED LENDER.—For purposes of this section, the term 
‘qualified lender’ means— 
‘‘(1) any bank or savings association the deposits of which 
are insured under the Federal Deposit Insurance Act (12 U.S.C. 
1811 et seq.), 
‘‘(2) any State- or federally-regulated insurance company, 
‘‘(3) any entity wholly owned, directly or indirectly, by 
a company that is treated as a bank holding company for 
purposes of section 8 of the International Banking Act of 1978 
(12 U.S.C. 3106) if— 
‘‘(A) such entity is organized, incorporated, or estab-
lished under the laws of the United States or any State, 
and 
‘‘(B) the principal place of business of such entity is 
in the United States (including any territory of the United 
States), 
‘‘(4) any entity wholly owned, directly or indirectly, by 
a company that is considered an insurance holding company 
under the laws of any State if such entity satisfies the require-
ments described in subparagraphs (A) and (B) of paragraph 
(3), and 
‘‘(5) with respect to interest received on a qualified real 
estate loan secured by real estate described in subsection 
(c)(3)(A), any federally chartered instrumentality of the United 
States established under section 8.1(a) of the Farm Credit 
Act of 1971 (12 U.S.C. 2279aa-1(a)). 
‘‘(c) QUALIFIED REAL ESTATE LOAN.—For purposes of this sec-
tion— 
‘‘(1) IN
GENERAL.—The term ‘qualified real estate loan’ 
means any loan— 
‘‘(A) secured by— 
‘‘(i) rural or agricultural real estate, or 
‘‘(ii) a leasehold mortgage (with a status as a lien) 
on rural or agricultural real estate, 
‘‘(B) made to a person other than a specified foreign 
entity (as defined in section 7701(a)(51)), and 
‘‘(C) made after the date of the enactment of this 
section. 
For purposes of the preceding sentence, the determination of 
whether property securing such loan is rural or agricultural 
real estate shall be made as of the time the interest income 
on such loan is accrued. 
‘‘(2) REFINANCINGS.—For purposes of subparagraphs (A) 
and (C) of paragraph (1), a loan shall not be treated as made 
after the date of the enactment of this section to the extent 
that the proceeds of such loan are used to refinance a loan 
which was made on or before the date of the enactment of 
this section (or, in the case of any series of refinancings, the 
original loan was made on or before such date). 
‘‘(3) RURAL
OR
AGRICULTURAL
REAL
ESTATE.—The term 
‘rural or agricultural real estate’ means—
H. R. 1—176 
‘‘(A) any real property which is substantially used for 
the production of one or more agricultural products, 
‘‘(B) any real property which is substantially used in 
the trade or business of fishing or seafood processing, and 
‘‘(C) any aquaculture facility. 
Such term shall not include any property which is not located 
in a State or a possession of the United States. 
‘‘(4) 
AQUACULTURE
FACILITY.—The 
term 
‘aquaculture 
facility’ means any land, structure, or other appurtenance that 
is used for aquaculture (including any hatchery, rearing pond, 
raceway, pen, or incubator). 
‘‘(d) COORDINATION WITH SECTION 265.—In the case of any 
qualified real estate loan, section 265 shall be applied— 
‘‘(1) by treating any qualified real estate loan for purposes 
of subsection (a)(2) thereof as an obligation the interest on 
which is wholly exempt from the taxes imposed by this subtitle, 
‘‘(2) by substituting ‘25 percent of the interest on indebted-
ness’ for ‘Interest on indebtedness’ in such subsection (a)(2), 
‘‘(3) by treating 25 percent of the adjusted basis of any 
qualified real estate loan as adjusted basis of a tax-exempt 
obligation described in subsection (b)(4)(B) thereof, and 
‘‘(4) by substituting ‘25 percent of the amount of such 
indebtedness’ for ‘the amount of such indebtedness’ in sub-
section (b)(6)(A)(a)(ii) thereof.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for part III 
of subchapter B of chapter 1, as amended by the preceding provi-
sions of this Act, is amended by inserting after the item relating 
to section 139K the following new item: 
‘‘Sec. 139L. Interest on loans secured by rural or agricultural real property.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years ending after the date of the enactment 
of this Act. 
SEC. 70436. REDUCTION OF TRANSFER AND MANUFACTURING TAXES 
FOR CERTAIN DEVICES. 
(a) TRANSFER TAX.—Section 5811(a) is amended to read as 
follows: 
‘‘(a) RATE.—There shall be levied, collected, and paid on fire-
arms transferred a tax at the rate of— 
‘‘(1) $200 for each firearm transferred in the case of a 
machinegun or a destructive device, and 
‘‘(2) $0 for any firearm transferred which is not described 
in paragraph (1).’’. 
(b) MAKING TAX.—Section 5821(a) is amended to read as follows: 
‘‘(a) RATE.—There shall be levied, collected, and paid upon 
the making of a firearm a tax at the rate of— 
‘‘(1) $200 for each firearm made in the case of a machinegun 
or a destructive device, and 
‘‘(2) $0 for any firearm made which is not described in 
paragraph (1).’’. 
(c) CONFORMING AMENDMENT.—Section 4182(a) is amended by 
adding at the end the following: ‘‘For purposes of the preceding 
sentence, any firearm described in section 5811(a)(2) shall be 
deemed to be a firearm on which the tax provided by section 
5811 has been paid.’’
H. R. 1—177 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to calendar quarters beginning more than 90 days 
after the date of the enactment of this Act. 
SEC. 70437. TREATMENT OF CAPITAL GAINS FROM THE SALE OF CER-
TAIN FARMLAND PROPERTY. 
(a) IN GENERAL.—Part IV of subchapter O of chapter 1 is 
amended by redesignating section 1062 as section 1063 and by 
inserting after section 1061 the following new section: 
‘‘SEC. 1062. GAIN FROM THE SALE OR EXCHANGE OF QUALIFIED FARM-
LAND PROPERTY TO QUALIFIED FARMERS. 
‘‘(a) ELECTION TO PAY TAX IN INSTALLMENTS.—In the case of 
gain from the sale or exchange of qualified farmland property 
to a qualified farmer, at the election of the taxpayer, the portion 
of the net income tax of such taxpayer for the taxable year of 
the sale or exchange which is equal to the applicable net tax 
liability shall be paid in 4 equal installments. 
‘‘(b) RULES RELATING TO INSTALLMENT PAYMENTS.— 
‘‘(1) DATE FOR PAYMENT OF INSTALLMENTS.—If an election 
is made under subsection (a), the first installment shall be 
paid on the due date (determined without regard to any exten-
sion of time for filing the return) for the return of tax for 
the taxable year in which the sale or exchange occurs and 
each succeeding installment shall be paid on the due date 
(as so determined) for the return of tax for the taxable year 
following the taxable year with respect to which the preceding 
installment was made. 
‘‘(2) ACCELERATION OF PAYMENT.— 
‘‘(A) IN GENERAL.—If there is an addition to tax for 
failure to timely pay any installment required under this 
section, then the unpaid portion of all remaining install-
ments shall be due on the date of such failure. 
‘‘(B) INDIVIDUALS.—In the case of an individual, if the 
individual dies, then the unpaid portion of all remaining 
installment shall be paid on the due date for the return 
of tax for the taxable year in which the taxpayer dies. 
‘‘(C) C CORPORATIONS.—In the case of a taxpayer which 
is a C corporation, trust, or estate, if there is a liquidation 
or sale of substantially all the assets of the taxpayer 
(including in a title 11 or similar case), a cessation of 
business by the taxpayer (in the case of a C corporation), 
or any similar circumstance, then the unpaid portion of 
all remaining installments shall be due on the date of 
such event (or in the case of a title 11 or similar case, 
the day before the petition is filed). The preceding sentence 
shall not apply to the sale of substantially all the assets 
of a taxpayer to a buyer if such buyer enters into an 
agreement with the Secretary under which such buyer 
is liable for the remaining installments due under this 
subsection in the same manner as if such buyer were 
the taxpayer. 
‘‘(3) PRORATION OF DEFICIENCY TO INSTALLMENTS.—If an 
election is made under subsection (a) to pay the applicable 
net tax liability in installments and a deficiency has been 
assessed with respect to such applicable net tax liability, the 
deficiency shall be prorated to the installments payable under 
subsection (a). The part of the deficiency so prorated to any
H. R. 1—178 
installment the date for payment of which has not arrived 
shall be collected at the same time as, and as a part of, 
such installment. The part of the deficiency so prorated to 
any installment the date for payment of which has arrived 
shall be paid upon notice and demand from the Secretary. 
This section shall not apply if the deficiency is due to neg-
ligence, to intentional disregard of rules and regulations, or 
to fraud with intent to evade tax. 
‘‘(c) ELECTION.— 
‘‘(1) IN GENERAL.—Any election under subsection (a) shall 
be made not later than the due date for the return of tax 
for the taxable year described in subsection (a). 
‘‘(2) PARTNERSHIPS AND S CORPORATIONS.—In the case of 
a sale or exchange described in subsection (a) by a partnership 
or S corporation, the election under subsection (a) shall be 
made at the partner or shareholder level. The Secretary may 
prescribe such regulations or other guidance as necessary to 
carry out the purposes of this paragraph. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) APPLICABLE NET TAX LIABILITY.— 
‘‘(A) IN GENERAL.—The applicable net tax liability with 
respect to the sale or exchange of any property described 
in subsection (a) is the excess (if any) of— 
‘‘(i) such taxpayer’s net income tax for the taxable 
year, over 
‘‘(ii) such taxpayer’s net income tax for such tax-
able year determined without regard to any gain recog-
nized from the sale or exchange of such property. 
‘‘(B) NET
INCOME
TAX.—The term ‘net income tax’ 
means the regular tax liability reduced by the credits 
allowed under subparts A, B, and D of part IV of subchapter 
A. 
‘‘(2) QUALIFIED FARMLAND PROPERTY.— 
‘‘(A) IN GENERAL.—The term ‘qualified farmland prop-
erty’ means real property located in the United States— 
‘‘(i) which— 
‘‘(I) has been used by the taxpayer as a farm 
for farming purposes, or 
‘‘(II) leased by the taxpayer to a qualified 
farmer for farming purposes, 
during substantially all of the 10-year period ending 
on the date of the qualified sale or exchange, and 
‘‘(ii) which is subject to a covenant or other legally 
enforceable restriction which prohibits the use of such 
property other than as a farm for farming purposes 
for any period before the date that is 10 years after 
the date of the sale or exchange described in subsection 
(a). 
For purposes of clause (i), property which is used or leased 
by a partnership or S corporation in a manner described 
in such clause shall be treated as used or leased in such 
manner by each person who holds a direct or indirect 
interest in such partnership or S corporation. 
‘‘(B) FARM; FARMING PURPOSES.—The terms ‘farm’ and 
‘farming purposes’ have the respective meanings given such 
terms under section 2032A(e).
H. R. 1—179 
‘‘(3) QUALIFIED FARMER.—The term ‘qualified farmer’ means 
any individual who is actively engaged in farming (within the 
meaning of subsections (b) and (c) of section 1001 of the Food 
Security Act of 1986 (7 U.S.C. 1308–1(b) and (c))). 
‘‘(e) RETURN REQUIREMENT.—A taxpayer making an election 
under subsection (a) shall include with the return for the taxable 
year of the sale or exchange described in subsection (a) a copy 
of the covenant or other legally enforceable restriction described 
in subsection (d)(2)(A)(ii).’’. 
(b) CLERICAL AMENDMENT.—The table of sections for part IV 
of subchapter O of chapter 1 is amended by redesignating the 
item relating to section 1062 as relating to section 1063 and by 
inserting after the item relating to section 1061 the following new 
item: 
‘‘Sec. 1062. Gain from the sale or exchange of qualified farmland property to quali-
fied farmers.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to sales or exchanges in taxable years beginning after 
the date of the enactment of this Act. 
SEC. 70438. EXTENSION OF RULES FOR TREATMENT OF CERTAIN DIS-
ASTER-RELATED PERSONAL CASUALTY LOSSES. 
For purposes of applying section 304(b) of the Taxpayer Cer-
tainty and Disaster Tax Relief Act of 2020 (division EE of Public 
Law 116–260), section 301 of such Act shall be applied by sub-
stituting the date of the enactment of this section for ‘‘the date 
of the enactment of this Act’’ each place it appears. 
SEC. 70439. RESTORATION OF TAXABLE REIT SUBSIDIARY ASSET TEST. 
(a) IN GENERAL.—Section 856(c)(4)(B)(ii) is amended by striking 
‘‘20 percent’’ and inserting ‘‘25 percent’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
CHAPTER 5—ENDING GREEN NEW DEAL SPENDING, 
PROMOTING AMERICA-FIRST ENERGY, AND OTHER 
REFORMS 
Subchapter A—Termination of Green New Deal Subsidies 
SEC. 70501. TERMINATION OF PREVIOUSLY-OWNED CLEAN VEHICLE 
CREDIT. 
Section 25E(g) is amended by striking ‘‘December 31, 2032’’ 
and inserting ‘‘September 30, 2025’’. 
SEC. 70502. TERMINATION OF CLEAN VEHICLE CREDIT. 
(a) IN GENERAL.—Section 30D(h) is amended by striking ‘‘placed 
in service after December 31, 2032’’ and inserting ‘‘acquired after 
September 30, 2025’’. 
(b) CONFORMING AMENDMENTS.—Section 30D(e) is amended— 
(1) in paragraph (1)(B)— 
(A) in clause (iii), by inserting ‘‘and’’ after the comma 
at the end, 
(B) in clause (iv), by striking ‘‘, and’’ and inserting 
a period, and 
(C) by striking clause (v), and 
(2) in paragraph (2)(B)—
H. R. 1—180 
(A) in clause (ii), by inserting ‘‘and’’ after the comma 
at the end, 
(B) in clause (iii), by striking the comma at the end 
and inserting a period, and 
(C) by striking clauses (iv) through (vi). 
SEC. 70503. TERMINATION OF QUALIFIED COMMERCIAL CLEAN 
VEHICLES CREDIT. 
Section 45W(g) is amended by striking ‘‘December 31, 2032’’ 
and inserting ‘‘September 30, 2025’’. 
SEC. 
70504. 
TERMINATION 
OF 
ALTERNATIVE 
FUEL 
VEHICLE 
REFUELING PROPERTY CREDIT. 
Section 30C(i) is amended by striking ‘‘December 31, 2032’’ 
and inserting ‘‘June 30, 2026’’. 
SEC. 70505. TERMINATION OF ENERGY EFFICIENT HOME IMPROVE-
MENT CREDIT. 
(a) IN GENERAL.—Section 25C(h) is amended by striking ‘‘placed 
in service’’ and all that follows through ‘‘December 31, 2032’’ and 
inserting ‘‘placed in service after December 31, 2025’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
25C(d)(2)(C) 
is 
amended to read as follows: 
‘‘(C) Any oil furnace or hot water boiler which— 
‘‘(i) meets or exceeds 2021 Energy Star efficiency 
criteria, and 
‘‘(ii) is rated by the manufacturer for use with 
fuel blends at least 20 percent of the volume of which 
consists of an eligible fuel.’’. 
SEC. 70506. TERMINATION OF RESIDENTIAL CLEAN ENERGY CREDIT. 
(a) IN GENERAL.—Section 25D(h) is amended by striking ‘‘to 
property placed in service after December 31, 2034’’ and inserting 
‘‘with respect to any expenditures made after December 31, 2025’’. 
(b) CONFORMING AMENDMENTS.—Section 25D(g) is amended— 
(1) in paragraph (2), by inserting ‘‘and’’ after the comma 
at the end, 
(2) in paragraph (3), by striking ‘‘ and before January 
1, 2033, 30 percent,’’ and inserting ‘‘30 percent.’’, and 
(3) by striking paragraphs (4) and (5). 
SEC. 70507. TERMINATION OF ENERGY EFFICIENT COMMERCIAL 
BUILDINGS DEDUCTION. 
Section 179D is amended by adding at the end the following 
new subsection: 
‘‘(i) TERMINATION.—This section shall not apply with respect 
to property the construction of which begins after June 30, 2026.’’. 
SEC. 70508. TERMINATION OF NEW ENERGY EFFICIENT HOME CREDIT. 
Section 45L(h) is amended by striking ‘‘December 31, 2032’’ 
and inserting ‘‘June 30, 2026’’. 
SEC. 70509. TERMINATION OF COST RECOVERY FOR ENERGY PROP-
ERTY. 
(a) ENERGY PROPERTY.—Section 168(e)(3)(B)(vi), as amended 
by section 13703 of Public Law 117–169, is amended— 
(1) by striking subclause (I), and 
(2) by redesignating subclauses (II) and (III) as subclauses 
(I) and (II), respectively.
H. R. 1—181 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to property the construction of which begins after 
December 31, 2024. 
SEC. 70510. MODIFICATIONS OF ZERO-EMISSION NUCLEAR POWER 
PRODUCTION CREDIT. 
(a) RESTRICTIONS RELATING
TO PROHIBITED FOREIGN ENTI-
TIES.—Section 45U(c) is amended by adding at the end the following 
new paragraph: 
‘‘(3) RESTRICTIONS RELATING TO PROHIBITED FOREIGN ENTI-
TIES.— 
‘‘(A) IN GENERAL.—No credit shall be determined under 
subsection (a) for any taxable year beginning after the 
date of enactment of this paragraph if the taxpayer is 
a 
specified 
foreign 
entity 
(as 
defined 
in 
section 
7701(a)(51)(B)). 
‘‘(B) OTHER PROHIBITED FOREIGN ENTITIES.—No credit 
shall be determined under subsection (a) for any taxable 
year beginning after the date which is 2 years after the 
date of enactment of this paragraph if the taxpayer is 
a 
foreign-influenced 
entity 
(as 
defined 
in 
section 
7701(a)(51)(D), without regard to clause (i)(II) thereof).’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after the date of enactment 
of this Act. 
SEC. 70511. TERMINATION OF CLEAN HYDROGEN PRODUCTION 
CREDIT. 
Section 45V(c)(3)(C) is amended by striking ‘‘January 1, 2033’’ 
and inserting ‘‘January 1, 2028’’. 
SEC. 70512. TERMINATION AND RESTRICTIONS ON CLEAN ELEC-
TRICITY PRODUCTION CREDIT. 
(a) TERMINATION FOR WIND AND SOLAR FACILITIES.—Section 
45Y(d) is amended— 
(1) in paragraph (1), by striking ‘‘The amount of’’ and 
inserting ‘‘Subject to paragraph (4), the amount of’’, and 
(2) by striking paragraph (3) and inserting the following 
new paragraphs: 
‘‘(3) APPLICABLE YEAR.—For purposes of this subsection, 
the term ‘applicable year’ means calendar year 2032. 
‘‘(4) TERMINATION FOR WIND AND SOLAR FACILITIES.— 
‘‘(A) IN GENERAL.—This section shall not apply with 
respect to any applicable facility placed in service after 
December 31, 2027. 
‘‘(B) APPLICABLE FACILITY.—For purposes of this para-
graph, the term ‘applicable facility’ means a qualified 
facility which— 
‘‘(i) uses wind to produce electricity (within the 
meaning of such term as used in section 45(d)(1), as 
determined without regard to any requirement under 
such section with respect to the date on which construc-
tion of property begins), or 
‘‘(ii) uses solar energy to produce electricity (within 
the meaning of such term as used in section 45(d)(4), 
as determined without regard to any requirement 
under such section with respect to the date on which 
construction of property begins).’’.
H. R. 1—182 
(b) RESTRICTIONS RELATING
TO PROHIBITED FOREIGN ENTI-
TIES.—Section 45Y is amended— 
(1) in subsection (b)(1), by adding at the end the following 
new subparagraph: 
‘‘(E) MATERIAL ASSISTANCE FROM PROHIBITED FOREIGN 
ENTITIES.—The term ‘qualified facility’ shall not include 
any facility for which construction begins after December 
31, 2025, if the construction of such facility includes any 
material assistance from a prohibited foreign entity (as 
defined in section 7701(a)(52)).’’, and 
(2) in subsection (g), by adding at the end the following 
new paragraph: 
‘‘(13) RESTRICTIONS RELATING TO PROHIBITED FOREIGN ENTI-
TIES.— 
‘‘(A) IN GENERAL.—No credit shall be determined under 
subsection (a) for any taxable year if the taxpayer is— 
‘‘(i) a specified foreign entity (as defined in section 
7701(a)(51)(B)), or 
‘‘(ii) a foreign-influenced entity (as defined in sec-
tion 7701(a)(51)(D), without regard to clause (i)(II) 
thereof). 
‘‘(B) EFFECTIVE CONTROL.—In the case of a taxpayer 
for which section 7701(a)(51)(D)(i)(II) is determined to 
apply for any taxable year, no credit shall be determined 
under subsection (a) for such taxable year if such deter-
mination relates to a qualified facility described in sub-
section (b)(1).’’. 
(c) DEFINITIONS RELATING TO PROHIBITED FOREIGN ENTITIES.— 
Section 7701(a) is amended by adding at the end the following 
new paragraphs: 
‘‘(51) PROHIBITED FOREIGN ENTITY.— 
‘‘(A) IN GENERAL.— 
‘‘(i) DEFINITION.—The term ‘prohibited foreign 
entity’ means a specified foreign entity or a foreign- 
influenced entity. 
‘‘(ii) DETERMINATION.— 
‘‘(I) IN
GENERAL.—Subject to subclause (II), 
for any taxable year, the determination as to 
whether an entity is a specified foreign entity or 
foreign-influenced entity shall be made as of the 
last day of such taxable year. 
‘‘(II) INITIAL TAXABLE YEAR.—For purposes of 
the first taxable year beginning after the date 
of enactment of this paragraph, the determination 
as to whether an entity is a specified foreign entity 
described in clauses (i) through (iv) of subpara-
graph (B) shall be made as of the first day of 
such taxable year. 
‘‘(B) SPECIFIED FOREIGN ENTITY.—For purposes of this 
paragraph, the term ‘specified foreign entity’ means— 
‘‘(i) a foreign entity of concern described in 
subparagraph (A), (B), (D), or (E) of section 9901(8) 
of the William M. (Mac) Thornberry National Defense 
Authorization Act for Fiscal Year 2021 (Public Law 
116–283; 15 U.S.C. 4651), 
‘‘(ii) an entity identified as a Chinese military com-
pany operating in the United States in accordance
H. R. 1—183 
with section 1260H of the William M. (Mac) Thornberry 
National Defense Authorization Act for Fiscal Year 
2021 (Public Law 116–283; 10 U.S.C. 113 note), 
‘‘(iii) an entity included on a list required by clause 
(i), (ii), (iv), or (v) of section 2(d)(2)(B) of Public Law 
117–78 (135 Stat. 1527), 
‘‘(iv) an entity specified under section 154(b) of 
the National Defense Authorization Act for Fiscal Year 
2024 (Public Law 118–31; 10 U.S.C. note prec. 4651), 
or 
‘‘(v) a foreign-controlled entity. 
‘‘(C) FOREIGN-CONTROLLED
ENTITY.—For purposes of 
subparagraph (B), the term ‘foreign-controlled entity’ 
means— 
‘‘(i) the government (including any level of govern-
ment below the national level) of a covered nation, 
‘‘(ii) an agency or instrumentality of a government 
described in clause (i), 
‘‘(iii) a person who is a citizen or national of a 
covered nation, provided that such person is not an 
individual who is a citizen, national, or lawful perma-
nent resident of the United States, 
‘‘(iv) an entity or a qualified business unit (as 
defined in section 989(a)) incorporated or organized 
under the laws of, or having its principal place of 
business in, a covered nation, or 
‘‘(v) an entity (including subsidiary entities) con-
trolled (as determined under subparagraph (G)) by an 
entity described in clause (i), (ii), (iii), or (iv). 
‘‘(D) FOREIGN-INFLUENCED ENTITY.— 
‘‘(i) IN GENERAL.—For purposes of subparagraph 
(A), the term ‘foreign-influenced entity’ means an 
entity— 
‘‘(I) with respect to which, during the taxable 
year— 
‘‘(aa) a specified foreign entity has the 
direct authority to appoint a covered officer 
of such entity, 
‘‘(bb) a single specified foreign entity owns 
at least 25 percent of such entity, 
‘‘(cc) one or more specified foreign entities 
own in the aggregate at least 40 percent of 
such entity, or 
‘‘(dd) at least 15 percent of the debt of 
such entity has been issued, in the aggregate, 
to 1 or more specified foreign entities, or 
‘‘(II) which, during the previous taxable year, 
made a payment to a specified foreign entity pursu-
ant to a contract, agreement, or other arrangement 
which entitles such specified foreign entity (or an 
entity related to such specified foreign entity) to 
exercise effective control over— 
‘‘(aa) any qualified facility or energy stor-
age technology of the taxpayer (or any person 
related to the taxpayer), or
H. R. 1—184 
‘‘(bb) with respect to any eligible compo-
nent produced by the taxpayer (or any person 
related to the taxpayer)— 
‘‘(AA) the extraction, processing, or 
recycling of any applicable critical min-
eral, or 
‘‘(BB) the production of an eligible 
component which is not an applicable crit-
ical mineral. 
‘‘(ii) EFFECTIVE CONTROL.— 
‘‘(I) IN GENERAL.— 
‘‘(aa) GENERAL
RULE.—Subject to sub-
clause (II), for purposes of clause (i)(II), the 
term ‘effective control’ means 1 or more agree-
ments or arrangements similar to those 
described in subclauses (II) and (III) which 
provide 1 or more contractual counterparties 
of a taxpayer with specific authority over key 
aspects of the production of eligible compo-
nents, energy generation in a qualified facility, 
or energy storage which are not included in 
the measures of control through authority, 
ownership, or debt held which are described 
in clause (i)(I). 
‘‘(bb) GUIDANCE.—The Secretary shall 
issue such guidance as is necessary to carry 
out the purposes of this clause, including the 
establishment of rules to prevent entities from 
evading, 
circumventing, 
or 
abusing 
the 
application 
of 
the 
restrictions 
described 
subparagraph (C) and subclauses (II) and (III) 
of this clause through a contract, agreement, 
or other arrangement. 
‘‘(II) APPLICATION OF RULES PRIOR TO ISSUANCE 
OF GUIDANCE.—During any period prior to the date 
that the guidance described in subclause (I)(bb) 
is issued by the Secretary, for purposes of clause 
(i)(II), the term ‘effective control’ means the unre-
stricted 
contractual 
right 
of 
a 
contractual 
counterparty to— 
‘‘(aa) determine the quantity or timing of 
production of an eligible component produced 
by the taxpayer, 
‘‘(bb) determine the amount or timing of 
activities related to the production of elec-
tricity undertaken at a qualified facility of the 
taxpayer or the storage of electrical energy 
in energy storage technology of the taxpayer, 
‘‘(cc) determine which entity may purchase 
or use the output of a production unit of the 
taxpayer that produces eligible components, 
‘‘(dd) determine which entity may pur-
chase or use the output of a qualified facility 
of the taxpayer, 
‘‘(ee) restrict access to data critical to 
production or storage of energy undertaken 
at a qualified facility of the taxpayer, or to
H. R. 1—185 
the site of production or any part of a qualified 
facility or energy storage technology of the 
taxpayer, to the personnel or agents of such 
contractual counterparty, or 
‘‘(ff) on an exclusive basis, maintain, 
repair, or operate any plant or equipment 
which is necessary to the production by the 
taxpayer of eligible components or electricity. 
‘‘(III) LICENSING
AND
OTHER
AGREEMENTS.— 
‘‘(aa) IN
GENERAL.—In addition to sub-
clause (II), for purposes of clause (i)(II), the 
term ‘effective control’ means, with respect to 
a licensing agreement for the provision of 
intellectual property (or any other contract, 
agreement or other arrangement entered into 
with a contractual counterparty related to 
such licensing agreement) with respect to a 
qualified facility, energy storage technology, 
or the production of an eligible component, 
any of the following: 
‘‘(AA) A contractual right retained by 
the contractual counterparty to specify or 
otherwise direct 1 or more sources of 
components, subcomponents, or applicable 
critical minerals utilized in a qualified 
facility, energy storage technology, or in 
the production of an eligible component. 
‘‘(BB) A contractual right retained by 
the contractual counterparty to direct the 
operation of any qualified facility, any 
energy storage technology, or any produc-
tion unit that produces an eligible compo-
nent. 
‘‘(CC) A contractual right retained by 
the contractual counterparty to limit the 
taxpayer’s utilization of intellectual prop-
erty related to the operation of a qualified 
facility or energy storage technology, or 
in the production of an eligible component. 
‘‘(DD) A contractual right retained by 
the contractual counterparty to receive 
royalties under the licensing agreement 
or any similar agreement (or payments 
under any related agreement) beyond the 
10th year of the agreement (including 
modifications or extensions thereof). 
‘‘(EE) A contractual right retained by 
the contractual counterparty to direct or 
otherwise require the taxpayer to enter 
into an agreement for the provision of 
services for a duration longer than 2 years 
(including any modifications or extensions 
thereof). 
‘‘(FF) Such contract, agreement, or 
other arrangement does not provide the 
licensee with all the technical data, 
information, and know-how necessary to
H. R. 1—186 
enable the licensee to produce the eligible 
component or components subject to the 
contract, agreement, or other arrangement 
without further involvement from the 
contractual counterparty or a specified for-
eign entity. 
‘‘(GG) Such contract, agreement, or 
other arrangement was entered into (or 
modified) on or after the date of enactment 
of this paragraph. 
‘‘(bb) EXCEPTION.— 
‘‘(AA) IN
GENERAL.—Item (aa) shall 
not apply in the case of a bona fide pur-
chase or sale of intellectual property. 
‘‘(BB) 
BONA
FIDE
PURCHASE
OR 
SALE.—For purposes of item (aa), any pur-
chase or sale of intellectual property 
where the agreement provides that owner-
ship of the intellectual property reverts 
to the contractual counterparty after a 
period of time shall not be considered a 
bona-fide purchase or sale. 
‘‘(IV) PERSONS RELATED TO THE TAXPAYER.— 
For purposes of subclauses (I), (II), and (III), the 
term ‘taxpayer’ shall include any person related 
to the taxpayer. 
‘‘(V) CONTRACTUAL COUNTERPARTY.—For pur-
poses of this clause, the term ‘contractual 
counterparty’ means an entity with which the tax-
payer has entered into a contract, agreement, or 
other arrangement. 
‘‘(iii) GUIDANCE.—Not later than December 31, 
2026, the Secretary shall issue such guidance as is 
necessary to carry out the purposes of this subpara-
graph, including establishment of rules to prevent enti-
ties from evading, circumventing, or abusing the 
application of the restrictions against impermissible 
technology licensing arrangements with specified for-
eign entities, such as through temporary transfers of 
intellectual property, retention by a specified foreign 
entity of a reversionary interest in transferred intellec-
tual property, or otherwise. 
‘‘(E) PUBLICLY TRADED ENTITIES.— 
‘‘(i) IN GENERAL.— 
‘‘(I) NONAPPLICATION
OF
CERTAIN
FOREIGN- 
CONTROLLED ENTITY RULES.—Subparagraph (C)(v) 
shall not apply in the case of any entity the securi-
ties of which are regularly traded on— 
‘‘(aa) a national securities exchange which 
is registered with the Securities and Exchange 
Commission, 
‘‘(bb) the national market system estab-
lished pursuant to section 11A of the Securi-
ties and Exchange Act of 1934, or 
‘‘(cc) any other exchange or other market 
which the Secretary has determined in guid-
ance issued under section 1296(e)(1)(A)(ii) has
H. R. 1—187 
rules adequate to carry out the purposes of 
part VI of subchapter P of chapter 1 of subtitle 
A. 
‘‘(II) NONAPPLICATION
OF
CERTAIN
FOREIGN- 
INFLUENCED
ENTITY
RULES.—Subparagraph 
(D)(i)(I) shall not apply in the case of any entity— 
‘‘(aa) the securities of which are regularly 
traded in a manner described in subclause 
(I), or 
‘‘(bb) for which not less than 80 percent 
of the equity securities of such entity are 
owned directly or indirectly by an entity which 
is described in item (aa). 
‘‘(III) EXCLUSION OF EXCHANGES OR MARKETS 
IN COVERED NATIONS.—Subclause (I)(cc) shall not 
apply with respect to any exchange or market 
which— 
‘‘(aa) is incorporated or organized under 
the laws of a covered nation, or 
‘‘(bb) has its principal place of business 
in a covered nation. 
‘‘(ii) 
ADDITIONAL
FOREIGN-CONTROLLED
ENTITY 
REQUIREMENTS FOR PUBLICLY TRADED COMPANIES.—In 
the case of an entity described in clause (i)(I), such 
entity shall be deemed to be a foreign-controlled entity 
under subparagraph (C)(v) if such entity is controlled 
(as determined under subparagraph (G)) by— 
‘‘(I) 1 or more specified foreign entities (as 
determined without regard to subparagraph (B)(v)) 
that are each required to report their beneficial 
ownership pursuant to a rule described in clause 
(iii)(I)(bb), or 
‘‘(II) 1 or more foreign-controlled entities (as 
determined without regard to subparagraph (C)(v)) 
that are each required to report their beneficial 
ownership pursuant to a rule described in such 
clause. 
‘‘(iii) ADDITIONAL
FOREIGN-INFLUENCED
ENTITY 
REQUIREMENTS FOR PUBLICLY TRADED COMPANIES.—In 
the case of an entity described in clause (i)(II), such 
entity shall be deemed to be a foreign-influenced entity 
under subparagraph (D)(i)(I) if— 
‘‘(I) during the taxable year— 
‘‘(aa) a specified foreign entity has the 
authority to appoint a covered officer of such 
entity, 
‘‘(bb) a single specified foreign entity 
required to report its beneficial ownership 
under Rule 13d-3 of the Securities and 
Exchange Act of 1934 (or, in the case of an 
exchange or market described in clause 
(i)(I)(cc), an equivalent rule) owns not less 
than 25 percent of such entity, or 
‘‘(cc) 1 or more specified foreign entities 
that are each required to report their bene-
ficial ownership under Rule 13d-3 of the Secu-
rities and Exchange Act of 1934 own, in the
H. R. 1—188 
aggregate, not less than 40 percent of such 
entity, or 
‘‘(II) such entity has issued debt, as part of 
an original issuance, in excess of 15 percent of 
its publicly-traded debt to 1 or more specified for-
eign entities. 
‘‘(F) COVERED
OFFICER.—For purposes of this para-
graph, the term ‘covered officer’ means, with respect to 
an entity— 
‘‘(i) a member of the board of directors, board of 
supervisors, or equivalent governing body, 
‘‘(ii) an executive-level officer, including the presi-
dent, chief executive officer, chief operating officer, 
chief financial officer, general counsel, or senior vice 
president, or 
‘‘(iii) an individual having powers or responsibil-
ities similar to those of officers or members described 
in clause (i) or (ii). 
‘‘(G) DETERMINATION
OF
CONTROL.—For purposes of 
subparagraph (C)(v), the term ‘control’ means— 
‘‘(i) in the case of a corporation, ownership (by 
vote or value) of more than 50 percent of the stock 
in such corporation, 
‘‘(ii) in the case of a partnership, ownership of 
more than 50 percent of the profits interests or capital 
interests in such partnership, or 
‘‘(iii) in any other case, ownership of more than 
50 percent of the beneficial interests in the entity. 
‘‘(H) DETERMINATION OF OWNERSHIP.—For purposes of 
this paragraph, section 318(a)(2) shall apply for purposes 
of determining ownership of stock in a corporation. Similar 
principles shall apply for purposes of determining owner-
ship of interests in any other entity. 
‘‘(I) OTHER DEFINITIONS.—For purposes of this para-
graph— 
‘‘(i) APPLICABLE
CRITICAL
MINERAL.—The term 
‘applicable critical mineral’ has the same meaning 
given such term under section 45X(c)(6). 
‘‘(ii) COVERED NATION.—The term ‘covered nation’ 
has the same meaning given such term under section 
4872(f)(2) of title 10, United States Code. 
‘‘(iii) ELIGIBLE
COMPONENT.—The term ‘eligible 
component’ has the same meaning given such term 
under section 45X(c)(1). 
‘‘(iv) ENERGY
STORAGE
TECHNOLOGY.—The term 
‘energy storage technology’ has the same meaning 
given such term under section 48E(c)(2). 
‘‘(v) QUALIFIED
FACILITY.—The term ‘qualified 
facility’ means— 
‘‘(I) a qualified facility, as defined in section 
45Y(b)(1), and 
‘‘(II) a qualified facility, as defined in section 
48E(b)(3). 
‘‘(vi) RELATED.—The term ‘related’ shall have the 
same meaning given such term under sections 267(b) 
and 707(b).
H. R. 1—189 
‘‘(J) BEGINNING
OF
CONSTRUCTION.—For purposes of 
applying any provision under this paragraph, the beginning 
of construction with respect to any property shall be deter-
mined pursuant to rules similar to the rules under Internal 
Revenue Service Notice 2013–29 and Internal Revenue 
Service Notice 2018-59 (as well as any subsequently issued 
guidance clarifying, modifying, or updating either such 
Notice), as in effect on January 1, 2025. 
‘‘(K) REGULATIONS AND GUIDANCE.—The Secretary may 
prescribe such regulations and guidance as may be nec-
essary or appropriate to carry out the provisions of this 
paragraph, including rules to prevent the circumvention 
of any rules or restrictions with respect to prohibited for-
eign entities. 
‘‘(52) MATERIAL ASSISTANCE FROM A PROHIBITED FOREIGN 
ENTITY.— 
‘‘(A) IN GENERAL.—The term ‘material assistance from 
a prohibited foreign entity’ means— 
‘‘(i) with respect to any qualified facility or energy 
storage technology, a material assistance cost ratio 
which is less than the threshold percentage applicable 
under subparagraph (B), or 
‘‘(ii) with respect to any facility which produces 
eligible components, a material assistance cost ratio 
which is less than the threshold percentage applicable 
under subparagraph (C). 
‘‘(B) THRESHOLD PERCENTAGE FOR QUALIFIED FACILITIES 
AND
ENERGY
STORAGE
TECHNOLOGY.—For purposes of 
subparagraph (A)(i), the threshold percentage shall be— 
‘‘(i) in the case of a qualified facility the construc-
tion of which begins— 
‘‘(I) during calendar year 2026, 40 percent, 
‘‘(II) during calendar year 2027, 45 percent, 
‘‘(III) during calendar year 2028, 50 percent, 
‘‘(IV) during calendar year 2029, 55 percent, 
and 
‘‘(V) after December 31, 2029, 60 percent, and 
‘‘(ii) in the case of energy storage technology the 
construction of which begins— 
‘‘(I) during calendar year 2026, 55 percent, 
‘‘(II) during calendar year 2027, 60 percent, 
‘‘(III) during calendar year 2028, 65 percent, 
‘‘(IV) during calendar year 2029, 70 percent, 
and 
‘‘(V) after December 31, 2029, 75 percent. 
‘‘(C) THRESHOLD
PERCENTAGE
FOR
ELIGIBLE
COMPO-
NENTS.— 
‘‘(i) IN GENERAL.—For purposes of subparagraph 
(A)(ii), the threshold percentage shall be— 
‘‘(I) in the case of any solar energy component 
(as such term is defined in section 45X(c)(3)(A)) 
which is sold— 
‘‘(aa) during calendar year 2026, 50 per-
cent, 
‘‘(bb) during calendar year 2027, 60 per-
cent,
H. R. 1—190 
‘‘(cc) during calendar year 2028, 70 per-
cent, 
‘‘(dd) during calendar year 2029, 80 per-
cent, and 
‘‘(ee) after December 31, 2029, 85 percent, 
‘‘(II) in the case of any wind energy component 
(as such term is defined in section 45X(c)(4)(A)) 
which is sold— 
‘‘(aa) during calendar year 2026, 85 per-
cent, and 
‘‘(bb) during calendar year 2027, 90 per-
cent, 
‘‘(III) in the case of any inverter described 
in subparagraphs (B) through (G) of section 
45X(c)(2) which is sold— 
‘‘(aa) during calendar year 2026, 50 per-
cent, 
‘‘(bb) during calendar year 2027, 55 per-
cent, 
‘‘(cc) during calendar year 2028, 60 per-
cent, 
‘‘(dd) during calendar year 2029, 65 per-
cent, and 
‘‘(ee) after December 31, 2029, 70 percent, 
‘‘(IV) in the case of any qualifying battery 
component (as such term is defined in section 
45X(c)(5)(A)) which is sold— 
‘‘(aa) during calendar year 2026, 60 per-
cent, 
‘‘(bb) during calendar year 2027, 65 per-
cent, 
‘‘(cc) during calendar year 2028, 70 per-
cent, 
‘‘(dd) during calendar year 2029, 80 per-
cent, and 
‘‘(ee) after December 31, 2029, 85 percent, 
and 
‘‘(V) subject to clause (ii), in the case of any 
applicable critical mineral (as such term is defined 
in section 45X(c)(6)) which is sold— 
‘‘(aa) after December 31, 2025, and before 
January 1, 2030, 0 percent, 
‘‘(bb) during calendar year 2030, 25 per-
cent, 
‘‘(cc) during calendar year 2031, 30 per-
cent, 
‘‘(dd) during calendar year 2032, 40 per-
cent, and 
‘‘(ee) after December 31, 2032, 50 percent. 
‘‘(ii) 
ADJUSTED
THRESHOLD
PERCENTAGE
FOR 
APPLICABLE
CRITICAL
MINERALS.—Not 
later 
than 
December 31, 2027, the Secretary shall issue threshold 
percentages for each of the applicable critical minerals 
described in section 45X(c)(6)), which shall— 
‘‘(I) apply in lieu of the threshold percentage 
determined under clause (i)(V) for each calendar 
year, and