I 
119TH CONGRESS 
1ST SESSION H. R. 1293 
To amend the Internal Revenue Code of 1986 to provide tax incentives 
and fees for increasing motor vehicle fuel economy, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2025 
Mr. CASTEN (for himself and Ms. MATSUI) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Energy and Commerce, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
tax incentives and fees for increasing motor vehicle fuel 
economy, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Vehicle Energy Performance Act of 2025’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
SEC. 2. TAX CREDIT FOR VEHICLE ENERGY PERFORMANCE. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to other credits) is 
amended by inserting after section 30D the following new 
section: 
‘‘SEC. 30E. VEHICLE ENERGY PERFORMANCE REBATE. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—There shall be allowed as a 
credit against the tax imposed by this chapter for 
the taxable year an amount equal to the amount de-
termined under paragraph (2) with respect to any 
new qualified high energy performance motor vehicle 
placed in service by the taxpayer during the taxable 
year. 
‘‘(2) CREDIT AMOUNT.—With respect to each 
new qualified high energy performance motor vehi-
cle, the amount determined under this paragraph 
shall be equal to the amount (not greater than 
$5,000) that bears the same ratio to $5,000 as— 
‘‘(A) the excess of— 
‘‘(i) the vehicle energy performance of 
such vehicle, over 
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‘‘(ii) the median vehicle energy per-
formance for the model year immediately 
preceding the model year of such vehicle, 
bears to 
‘‘(B) the excess of— 
‘‘(i) the best vehicle energy perform-
ance for the model year immediately pre-
ceding the model year of such vehicle, over 
‘‘(ii) the median vehicle energy per-
formance for the model year immediately 
preceding the model year of such vehicle. 
‘‘(b) NEW QUALIFIED HIGH ENERGY PERFORMANCE 
MOTOR VEHICLE.—For purposes of this section, the term 
‘new qualified high energy performance motor vehicle’ 
means a passenger automobile or light truck— 
‘‘(1) which is treated as a motor vehicle for 
purposes of title II of the Clean Air Act, 
‘‘(2) which achieves vehicle energy performance 
that is greater than the median vehicle energy per-
formance for the model year immediately preceding 
the model year of such vehicle, 
‘‘(3) for which standards are prescribed pursu-
ant to section 32902 of title 49, United States Code, 
‘‘(4) the original use of which commences with 
the taxpayer, 
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‘‘(5) which is acquired for use or lease by the 
taxpayer and not for resale, and 
‘‘(6) which is made by a manufacturer begin-
ning with model year 2027. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter subject to an allowance for depreciation shall 
be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) REFUNDABLE PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the credit allowed under subsection (a) for 
any taxable year (determined after application 
of paragraph (1)) shall be treated as a credit 
allowable under subpart C for such taxable year 
(and not allowed under subsection (a)). 
‘‘(B) 
REFUNDABLE
CREDIT
MAY
BE 
TRANSFERRED.— 
‘‘(i) IN GENERAL.—A taxpayer may, 
in connection with the purchase of a new 
qualified high energy performance motor 
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vehicle, transfer any refundable credit de-
scribed in subparagraph (A) to any person 
who is in the trade or business of selling 
new qualified high energy performance 
motor vehicles and who sold such vehicle to 
the taxpayer, but only if such person clear-
ly discloses to such taxpayer, through the 
use of a window sticker attached to the 
new qualified high energy performance ve-
hicle— 
‘‘(I) the amount of the refund-
able credit described in subparagraph 
(A) with respect to such vehicle, and 
‘‘(II) a notification that the tax-
payer will not be eligible for any cred-
it under section 30D with respect to 
such vehicle unless the taxpayer elects 
not to have this section apply with re-
spect to such vehicle. 
‘‘(ii) CERTIFICATION.—A transferee 
of a refundable credit described in sub-
paragraph (A) may not claim such credit 
unless such claim is accompanied by a cer-
tification to the Secretary that the trans-
feree reduced the price the taxpayer paid 
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for the new qualified high energy perform-
ance motor vehicle by the entire amount of 
such refundable credit. 
‘‘(iii) CONSENT REQUIRED FOR REV-
OCATION.—Any transfer under clause (i) 
may be revoked only with the consent of 
the Secretary. 
‘‘(iv) REGULATIONS.—The Secretary 
may prescribe such regulations as nec-
essary to ensure that any refundable credit 
described in clause (i) is claimed once and 
not retransferred by a transferee. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section: 
‘‘(1) VEHICLE
ENERGY
PERFORMANCE.—The 
term ‘vehicle energy performance’ means, with re-
spect to any vehicle, the combined fuel-economy rat-
ing determined for the model and model year of such 
vehicle. 
‘‘(2) MEDIAN
VEHICLE
ENERGY
PERFORM-
ANCE.—The term ‘median vehicle energy perform-
ance’ means, with respect to any model year, the 
median combined fuel-economy rating for all new 
motor vehicles of such model year sold in the United 
States. 
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‘‘(3) BEST VEHICLE ENERGY PERFORMANCE.— 
The term ‘best vehicle energy performance’ means, 
with respect to any model year, the highest com-
bined fuel-economy rating of any model of motor ve-
hicle of such model year sold the United States. 
‘‘(4) COMBINED FUEL-ECONOMY RATING.—The 
term ‘combined fuel-economy rating’ means the com-
bined fuel-economy rating determined in accordance 
with section 32908 of title 49, United States Code, 
and expressed in miles per gallon of gasoline equiva-
lent. 
‘‘(5) MODEL YEAR.—The term ‘model year’ has 
the meaning given such term under section 32901(a) 
of such title 49. 
‘‘(6) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ means any vehicle which is manufactured pri-
marily for use on public streets, roads, and highways 
(not including a vehicle operated exclusively on a rail 
or rails) and which has at least 4 wheels. 
‘‘(7) OTHER TERMS.—The terms ‘automobile’, 
‘passenger automobile’, ‘light truck’, and ‘manufac-
turer’ have the meanings given such terms in regula-
tions prescribed by the Administrator of the Envi-
ronmental Protection Agency for purposes of the ad-
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ministration of title II of the Clean Air Act (42 
U.S.C. 7521 et seq.). 
‘‘(e) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed (determined 
without regard to subsection (c)). 
‘‘(2) PROPERTY USED BY TAX-EXEMPT ENTI-
TY.—In the case of a vehicle whose use is described 
in paragraph (3) or (4) of section 50(b) and which 
is not subject to a lease, the person who sold such 
vehicle to the person or entity using such vehicle 
shall be treated as the taxpayer that placed such ve-
hicle in service, but only if such person clearly dis-
closes to such person or entity in a document the 
amount of any credit allowable under subsection (a) 
with respect to such vehicle (determined without re-
gard to subsection (c)). For purposes of subsection 
(c), property to which this paragraph applies shall 
be treated as of a character subject to an allowance 
for depreciation. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowable under subsection (a) with respect to any 
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property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) INTERACTION
WITH
AIR
QUALITY
AND 
MOTOR VEHICLE SAFETY STANDARDS.—A motor ve-
hicle shall not be considered eligible for a credit 
under this section unless such vehicle is in compli-
ance with— 
‘‘(A) the applicable provisions of the Clean 
Air Act for the applicable make and model year 
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which 
has adopted such provisions under a waiver 
under section 209(b) of the Clean Air Act), and 
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‘‘(B) the motor vehicle safety provisions of 
sections 30101 through 30169 of title 49, 
United States Code. 
‘‘(7) INFLATION ADJUSTMENT.—In the case of 
any model year beginning in a calendar year after 
2027, each dollar amount in subsection (a)(2) shall 
be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the model year begins, deter-
mined by substituting ‘2026’ for ‘2016’ in sub-
paragraph (A)(ii) thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$100. 
‘‘(8) ONE CREDIT PER VEHICLE.—In the case 
of any vehicle, the credit described in subsection (a) 
shall only be allowed once with respect to such vehi-
cle, as determined based upon the vehicle identifica-
tion number of such vehicle. 
‘‘(f) REPORTING OF VEHICLE ENERGY PERFORM-
ANCE.— 
‘‘(1) VEHICLE
MANUFACTURERS.—Not later 
than November 1 of each calendar year (beginning 
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with calendar year 2026), each vehicle manufacturer 
shall submit to the Secretary a report that in-
cludes— 
‘‘(A) the vehicle energy performance for 
each model of that model year which was manu-
factured by such manufacturer and sold in the 
United States, and 
‘‘(B) with respect to each such model of 
such model year, the number of vehicles of such 
model and model year sold in the United States 
during the 1-year period beginning on October 
1 of the preceding year. 
‘‘(2) PUBLICATION
BY
TREASURY.—Not later 
than December 1 of each calendar year (beginning 
with calendar year 2026), the Secretary shall publish 
the median vehicle energy performance and the best 
vehicle energy performance for that model year. 
‘‘(g) REGULATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall promulgate such regu-
lations as necessary to carry out the provisions of 
this section not later than 1 year after the date of 
enactment. 
‘‘(2) COORDINATION IN PRESCRIPTION OF CER-
TAIN REGULATIONS.—The Secretary of the Treas-
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