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‘‘(B) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 4 kilograms of CO2e 
per kilogram of hydrogen, and 
‘‘(ii) not less than 2.5 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 20 percent. 
‘‘(C) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 2.5 kilograms of CO2e 
per kilogram of hydrogen, and 
‘‘(ii) not less than 1.5 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 25 percent. 
‘‘(D) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 1.5 kilograms of CO2e 
per kilogram of hydrogen, and 
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‘‘(ii) not less than 0.45 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 33.4 percent. 
‘‘(E) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of less than 0.45 kilograms of CO2e 
per kilogram of hydrogen, the applicable per-
centage shall be 100 percent. 
‘‘(3) INFLATION
ADJUSTMENT.—The $0.60 
amount in paragraph (1) shall be adjusted by multi-
plying such amount by the inflation adjustment fac-
tor (as determined under section 45(e)(2), deter-
mined by substituting ‘2020’ for ‘1992’ in subpara-
graph (B) thereof) for the calendar year in which 
the qualified clean hydrogen is produced. If any 
amount as increased under the preceding sentence is 
not a multiple of 0.1 cent, such amount shall be 
rounded to the nearest multiple of 0.1 cent. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) LIFECYCLE
GREENHOUSE
GAS
EMIS-
SIONS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘lifecycle greenhouse gas 
emissions’ has the same meaning given such 
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term under subparagraph (H) of section 
211(o)(1) of the Clean Air Act (42 U.S.C. 
7545(o)(1)), as in effect on the date of enact-
ment of this section. 
‘‘(B) GREET MODEL.—The term ‘lifecycle 
greenhouse gas emissions’ shall only include 
emissions through the point of production (well- 
to-gate), as determined under the most recent 
Greenhouse gases, Regulated Emissions, and 
Energy use in Transportation model (commonly 
referred to as the ‘GREET model’) developed 
by Argonne National Laboratory, or a successor 
model (as determined by the Secretary). 
‘‘(2) QUALIFIED CLEAN HYDROGEN.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
clean hydrogen’ means hydrogen which is pro-
duced through a process that results in a 
lifecycle greenhouse gas emissions rate of not 
greater than 6 kilograms of CO2e per kilogram 
of hydrogen. 
‘‘(B) ADDITIONAL REQUIREMENTS.—Such 
term shall not include any hydrogen unless such 
hydrogen is produced— 
‘‘(i) in the United States (as defined 
in section 638(1) or a possession of the 
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United States (as defined in section 
638(2)), 
‘‘(ii) in the ordinary course of a trade 
or business of the taxpayer, and 
‘‘(iii) for sale or use, as verified by an 
unrelated third party of such production 
and sale or use in such form or manner as 
the Secretary may prescribe under sub-
section (f)(2). 
‘‘(3) QUALIFIED
CLEAN
HYDROGEN
PRODUC-
TION FACILITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
clean hydrogen production facility’ means a fa-
cility owned by the taxpayer which produces 
qualified clean hydrogen and which meets the 
requirements of subparagraph (B). 
‘‘(B) TERMINATION.—The term ‘qualified 
clean hydrogen production facility’ shall not in-
clude any facility the construction of which be-
gins after December 31, 2028. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) TREATMENT
OF
FACILITIES
OWNED
BY 
MORE
THAN
TAXPAYER.—Rules similar to the 
rules section 45(e)(3) shall apply for purposes of 
this section. 
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‘‘(2) COORDINATION WITH CREDIT FOR CARBON 
OXIDE SEQUESTRATION.—No credit shall be allowed 
under this section with respect to any qualified clean 
hydrogen produced at a facility which includes car-
bon capture equipment for which a credit is allowed 
to any taxpayer under section 45Q for the taxable 
year or any prior taxable year. 
‘‘(e) INCREASED CREDIT AMOUNT FOR QUALIFIED 
CLEAN HYDROGEN PRODUCTION FACILITIES.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
clean hydrogen production facility which satisfies the 
requirements of paragraph (2), the amount of the 
credit determined under subsection (a) with respect 
to qualified clean hydrogen described in subsection 
(b)(2) shall be equal to such amount multiplied by 
5 (determined without regard to this sentence). 
‘‘(2) REQUIREMENTS.—A facility meets the re-
quirements of this subparagraph if it is one of the 
following: 
‘‘(A) A facility— 
‘‘(i) the construction of which begins 
prior to the date that is 60 days after the 
Secretary publishes guidance with respect 
to the requirements of paragraphs (3) and 
(4), and 
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‘‘(ii) which meets the requirements of 
paragraph (3) with respect to construction, 
alteration, or repair of facilities which oc-
curs after such date. 
‘‘(B) A facility which satisfies the require-
ments of paragraphs (3) and (4). 
‘‘(3) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any qualified clean hydrogen production facility 
are that the taxpayer shall ensure that any la-
borers and mechanics employed by contractors 
and subcontractors in— 
‘‘(i) the construction of such facility, 
and 
‘‘(ii) for the period of the taxable year 
which is within the 10-year period begin-
ning on the date the facility was originally 
placed in service, the alteration or repair of 
such facility, 
shall be paid wages at rates not less than the 
prevailing rates for construction, alteration, or 
repair of a similar character in the locality as 
most recently determined by the Secretary of 
Labor, in accordance with subchapter IV of 
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chapter 31 of title 40, United States Code. For 
purposes of determining an increased credit 
amount under paragraph (1) for a taxable year, 
the requirement under clause (ii) of this para-
graph is applied to such taxable year in which 
the alteration or repair of qualified facility oc-
curs. 
‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.—Rules similar to the rules of clauses 
(i) through (iv) of section 45(b)(7)(B) shall 
apply. 
‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection. 
‘‘(f) REGULATIONS.—Not later than 1 year after the 
date of enactment of this section, the Secretary shall issue 
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regulations or other guidance to carry out the purposes 
of this section, including regulations or other guidance— 
‘‘(1) for determining lifecycle greenhouse gas 
emissions, and 
‘‘(2) which require verification by unrelated 
third parties of the production and sale or use of 
qualified clean hydrogen with respect to which credit 
is otherwise allowed under this section.’’. 
(2) ELECTIVE PAYMENT OF CREDIT.— 
(A) IN
GENERAL.—Section 6417(b), as 
amended by the preceding provisions of this 
Act, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) So much of the the credit for production 
of clean hydrogen determined under section 45X as 
is attributable to qualified clean hydrogen produc-
tion facilities which are originally placed in service 
after December 31, 2011, and with respect to which 
an election is made under subsection (c)(3).’’. 
(B) ELECTION.—Section 6417(c)(3), as 
amended by the preceding provisions of this 
Act, is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) CREDIT FOR PRODUCTION OF CLEAN 
HYDROGEN.—In the case of the credit described 
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in subsection (b)(8), any election under this 
subsection shall— 
‘‘(i) apply separately with respect to 
each qualified clean hydrogen production 
facility, 
‘‘(ii) be made for the taxable year in 
which the facility is placed in service (or 
within 90 days of date of enactment in the 
case of facilities placed in service before 
December 31, 2021), 
‘‘(iii) shall apply to such taxable year 
and all subsequent taxable years with re-
spect to such facility.’’. 
(3) 
CREDIT
REDUCED
FOR
TAX-EXEMPT 
BONDS.—Section 45X(d), as added by this section, 
is amended by adding at the end the following new 
paragraph: 
‘‘(3) CREDIT
REDUCED
FOR
TAX-EXEMPT 
BONDS.—Rules similar to the rule under section 
45(b)(3) shall apply for purposes of this section.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Section 38(b) is amended— 
(i) in paragraph (34), by striking 
‘‘plus’’ at the end, 
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(ii) in paragraph (35), by striking the 
period at the end and inserting ‘‘, plus’’, 
and 
(iii) by adding at the end the fol-
lowing new paragraph: 
‘‘(36) the clean hydrogen production credit de-
termined under section 45X(a).’’. 
(B) The table of sections for subpart D of 
part IV of subchapter A of chapter 1 amended 
by adding at the end the following new item: 
‘‘Sec. 45X. Credit for production of clean hydrogen.’’. 
(5) EFFECTIVE DATES.— 
(A) The amendments made by paragraphs 
(1), (2), and (4) of this subsection shall apply 
to hydrogen produced after December 31, 2021. 
(B) The amendment made by paragraph 
(3) shall apply to facilities the construction of 
which begins after December 31, 2021. 
(b) CREDIT FOR ELECTRICITY PRODUCED FROM RE-
NEWABLE RESOURCES ALLOWED
IF ELECTRICITY IS 
USED TO PRODUCE CLEAN HYDROGEN.— 
(1) IN GENERAL.—Section 45(e) is amended by 
adding at the end the following new paragraph: 
‘‘(13) SPECIAL RULE FOR ELECTRICITY USED 
AT
A
QUALIFIED
CLEAN
HYDROGEN
PRODUCTION 
FACILITY.—Electricity produced by the taxpayer 
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shall be treated as sold by such taxpayer to an unre-
lated person during the taxable year if such elec-
tricity is used during such taxable year by the tax-
payer or a person related to the taxpayer at a quali-
fied clean hydrogen production facility (as defined in 
section 45X(c)(3)) to produce qualified clean hydro-
gen (as defined in section 45X(c)(2)) during the 10 
year period after such facility is placed in service. 
The Secretary shall issue such regulations or other 
guidance as the Secretary determines appropriate to 
carry out the purposes of this paragraph, including 
regulations or other guidance to require verification 
by unrelated third parties of the production and use 
of electricity to which this paragraph applies.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to electricity produced 
after December 31, 2021. 
(c) ELECTION TO TREAT CLEAN HYDROGEN PRO-
DUCTION FACILITIES AS ENERGY PROPERTY.— 
(1) IN GENERAL.—Section 48(a) is amended by 
adding at the end the following new paragraph: 
‘‘(16) ELECTION TO TREAT CLEAN HYDROGEN 
PRODUCTION FACILITIES AS ENERGY PROPERTY.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified property (as defined in paragraph 
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(5)(D)) which is part of a specified clean hydro-
gen production facility— 
‘‘(i) such property shall be treated as 
energy property for purposes of this sec-
tion, and 
‘‘(ii) the energy percentage with re-
spect to such property is— 
‘‘(I) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (A) of section 45X(b)(2), 
0.9 percent, 
‘‘(II) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (B) of such section, 1.2 
percent, 
‘‘(III) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (C) of such section, 1.5 
percent, 
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‘‘(IV) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (D) of such section, 2 per-
cent, and 
‘‘(V) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in subpara-
graph (E) of such section, 6 percent. 
‘‘(B) DENIAL OF PRODUCTION CREDIT.— 
No credit shall be allowed under section 45X or 
section 45Q for any taxable year with respect to 
any specified clean hydrogen production facility 
or any carbon capture equipment included at 
such facility. 
‘‘(C) SPECIFIED CLEAN HYDROGEN PRO-
DUCTION FACILITY.—For purposes of this para-
graph, the term ‘specified clean hydrogen pro-
duction facility’ means any qualified clean hy-
drogen production facility (as defined in section 
45X(c)(3)) or any portion of such facility— 
‘‘(i) which is placed in service after 
December 31, 2021, and 
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‘‘(ii) with respect to which— 
‘‘(I) no credit has been allowed 
under section 45X or 45Q, and 
‘‘(II) the taxpayer makes an ir-
revocable election to have this para-
graph apply. 
‘‘(D) QUALIFIED CLEAN HYDROGEN.—For 
purposes of this paragraph, the term ‘qualified 
clean hydrogen’ has the meaning given such 
term by section 45X(c)(2). 
‘‘(E) REGULATIONS.—The Secretary shall 
issue such regulations or other guidance as the 
Secretary determines necessary or appropriate 
to carry out the purposes of this section, includ-
ing regulations or other guidance which— 
‘‘(i) requires verification by one or 
more unrelated third parties that the facil-
ity produces hydrogen which is consistent 
with the hydrogen that such facility was 
designed and expected to produce under 
subparagraph (A)(ii), and 
‘‘(ii) recaptures so much of any credit 
allowed under this section as exceeds the 
amount of the credit which would have 
been allowed if the expected production 
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were consistent with the actual verified 
production (or all of the credit so allowed 
in the absence of such verification).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to property placed in 
service after December 31, 2021 and, for any prop-
erty the construction of which begins prior to Janu-
ary 1, 2022, only to the extent of the basis thereof 
attributable to the construction, reconstruction, or 
erection after December 31, 2021. 
(d) TERMINATION OF EXCISE TAX CREDIT FOR HY-
DROGEN.— 
(1) 
IN
GENERAL.—Section 
6426(d)(2) 
is 
amended by striking subparagraph (D) and by re-
designating subparagraphs (E), (F), and (G) as sub-
paragraphs (D), (E), and (F), respectively. 
(2) 
CONFORMING
AMENDMENT.—Section 
6426(e)(2) is amended by striking ‘‘(F)’’ and insert-
ing ‘‘(E)’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to fuel sold or used 
after December 31, 2021. 
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PART 3—GREEN ENERGY AND EFFICIENCY 
INCENTIVES FOR INDIVIDUALS 
SEC. 136301. EXTENSION, INCREASE, AND MODIFICATIONS 
OF NONBUSINESS ENERGY PROPERTY CRED-
IT. 
(a) EXTENSION OF CREDIT.—Section 25C(g)(2) is 
amended by striking ‘‘December 31, 2021’’ and inserting 
‘‘December 31, 2031’’. 
(b) ALLOWANCE
OF CREDIT.—Section 25C(a) is 
amended to read as follows: 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 30 percent of the sum of— 
‘‘(1) the amount paid or incurred by the tax-
payer for qualified energy efficiency improvements 
installed during such taxable year, and 
‘‘(2) the amount of the residential energy prop-
erty expenditures paid or incurred by the taxpayer 
during such taxable year.’’. 
(c) APPLICATION OF ANNUAL LIMITATION IN LIEU 
OF LIFETIME LIMITATION.—Section 25C(b) is amended 
to read as follows: 
‘‘(b) LIMITATIONS.— 
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‘‘(1) IN GENERAL.—The credit allowed under 
this section with respect to any taxpayer for any tax-
able year shall not exceed $1,200. 
‘‘(2) ENERGY PROPERTY.—The credit allowed 
under this subsection by reason of subsection (a)(1) 
with respect to any taxpayer for any taxable year 
shall not exceed, with respect to any item of quali-
fied energy property, $600. 
‘‘(3) WINDOWS.—The credit allowed under this 
section by reason of subsection (a)(1) with respect to 
any taxpayer for any taxable year shall not exceed, 
in the aggregate with respect to all exterior windows 
and skylights, $600. 
‘‘(4) DOORS.—The credit allowed under this 
section by reason of subsection (a)(1) with respect to 
any taxpayer for any taxable year shall not exceed— 
‘‘(A) $250 in the case of any exterior door, 
and 
‘‘(B) $500 in the aggregate with respect to 
all exterior doors. 
‘‘(5) CERTAIN
PROPERTY
EXCLUDED
FROM 
LIMITATION.—Amounts paid or incurred for prop-
erty described in clause (i) or (ii) of subsection 
(d)(2)(A) or subsection (d)(2)(B) shall not be sub-
ject to the limitations in paragraphs (1) and (2) or 
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factored in for purposes of calculating the limitation 
under such paragraph.’’. 
(d) MODIFICATIONS RELATED TO QUALIFIED EN-
ERGY EFFICIENCY IMPROVEMENTS.— 
(1) 
STANDARDS
FOR
ENERGY
EFFICIENT 
BUILDING
ENVELOPE
COMPONENTS.—Section 
25C(c)(2) is amended by striking ‘‘meets—’’ and all 
that follows through the period at the end and in-
serting the following: ‘‘meets— 
‘‘(A) in the case of an exterior window or 
skylight, Energy Star most efficient certifi-
cation requirements 
‘‘(B) in the case of any other component, 
the prescriptive criteria for such component es-
tablished by the most recent International En-
ergy Conservation Code standard in effect as of 
the beginning of the calendar year which is 2 
years prior to the calendar year in which such 
component is placed in service.’’. 
(2) ROOFS NOT TREATED AS BUILDING ENVE-
LOPE COMPONENTS.—Section 25C(c)(3) is amended 
by adding ‘‘and’’ at the end of subparagraph (B), by 
striking ‘‘, and’’ at the end of subparagraph (C) and 
inserting a period, and by striking subparagraph 
(D). 
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(3) AIR SEALING INSULATION ADDED TO DEFI-
NITION OF BUILDING ENVELOPE COMPONENT.—Sec-
tion 25C(c)(3)(A) is amended by striking ‘‘material 
or system’’ and inserting ‘‘material or system, in-
cluding air sealing material or system,’’. 
(e) MODIFICATION OF RESIDENTIAL ENERGY PROP-
ERTY EXPENDITURES.—Section 25C(d) is amended to 
read as follows: 
‘‘(d) RESIDENTIAL ENERGY PROPERTY EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘residential en-
ergy property expenditures’ means expenditures 
made by the taxpayer for qualified energy property 
which is— 
‘‘(A) installed on or in connection with a 
dwelling unit located in the United States and 
used as a residence by the taxpayer, and 
‘‘(B) originally placed in service by the tax-
payer. 
Such term includes expenditures for labor costs 
properly allocable to the onsite preparation, assem-
bly, or original installation of the property. 
‘‘(2) QUALIFIED
ENERGY
PROPERTY.—The 
term ‘qualified energy property’ means: 
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‘‘(A) Any of the following which meet or 
exceed the highest efficiency tier (not including 
any advanced tier) established by the Consor-
tium for Energy Efficiency which is in effect as 
of the beginning of the calendar year in which 
the property is placed in service: 
‘‘(i) An electric heat pump water heat-
er. 
‘‘(ii) An electric heat pump. 
‘‘(iii) A central air conditioner. 
‘‘(iv) A natural gas, propane, or oil 
water heater. 
‘‘(v) A natural gas, propane, or oil 
furnace or hot water boiler. 
‘‘(B) A biomass stove— 
‘‘(i) which uses the burning of bio-
mass fuel to heat a dwelling unit located in 
the United States and used as a residence 
by the taxpayer, or to heat water for use 
in such a dwelling unit, and 
‘‘(ii) which has a thermal efficiency 
rating of at least 75 percent (measured by 
the higher heating value of the fuel). 
‘‘(C) Any oil furnace or hot water boiler 
which— 
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‘‘(i) is placed in service after Decem-
ber 31, 2021 and before January 1, 2027 
and meets or exceeds 2021 Energy Star ef-
ficiency criteria and is rated by the manu-
facturer for use with eligible fuel blends of 
20 percent or more, or 
‘‘(ii) is placed in service after Decem-
ber 31, 2026 and achieves an annual fuel 
utilization efficiency rate of not less than 
90 and is rated by the manufacturer for 
use with eligible fuel blends of 50 percent 
or more. 
‘‘(3) ELIGIBLE FUEL.—For purposes of para-
graph (2), the term ‘eligible fuel’ means biodiesel 
and renewable diesel (within the meaning of section 
40A) and second generation biofuel (within the 
meaning of section 40).’’. 
(f) HOME ENERGY AUDITS.— 
(1) IN GENERAL.—Section 25C(a) is amended 
by striking ‘‘and’’ at the end of paragraph (1), by 
striking the period at the end of paragraph (2) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
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‘‘(3) 30 percent of the amount paid or incurred 
by the taxpayer during the taxable year for home en-
ergy audits.’’. 
(2) LIMITATION.—Section 25C(b), as amended 
by subsection (c), is amended adding at the end the 
following new paragraph: 
‘‘(5) HOME ENERGY AUDITS.— 
‘‘(A) DOLLAR
LIMITATION.—The amount 
of the credit allowed under this section by rea-
son of subsection (a)(3) shall not exceed $150. 
‘‘(B) SUBSTANTIATION
REQUIREMENT.— 
No credit shall be allowed under this section by 
reason of subsection (a)(3) unless the taxpayer 
includes with the taxpayer’s return of tax such 
information or documentation as the Secretary 
may require.’’. 
(3) HOME ENERGY AUDITS.— 
(A) IN GENERAL.—Section 25C, as amend-
ed by subsection (a), is amended by redesig-
nating subsections (e), (f), and (g), as sub-
sections (f), (g), and (h), respectively, and by 
inserting after subsection (d) the following new 
subsection: 
‘‘(e) HOME ENERGY AUDITS.—For purposes of this 
section, the term ‘home energy audit’ means an inspection 
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and written report with respect to a dwelling unit located 
in the United States and owned or used by the taxpayer 
as the taxpayer’s principal residence (within the meaning 
of section 121) which— 
‘‘(1) identifies the most significant and cost-ef-
fective energy efficiency improvements with respect 
to such dwelling unit, including an estimate of the 
energy and cost savings with respect to each such 
improvement, and 
‘‘(2) is conducted and prepared by a home en-
ergy auditor that meets the certification or other re-
quirements specified by the Secretary (not later than 
365 days after the date of the enactment of this 
subsection) in regulations or other guidance.’’. 
(B) CONFORMING
AMENDMENT.—Section 
1016(a)(33) is amended by striking ‘‘section 
25C(f)’’ and inserting ‘‘section 25C(g)’’. 
(4) LACK
OF
SUBSTANTIATION
TREATED
AS 
MATHEMATICAL
OR
CLERICAL
ERROR.—Section 
6213(g)(2) is amended— 
(A) in subparagraph (P), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (Q), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
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the qualified manufacturer pursuant to the method-
ology referred to in paragraph (3). 
‘‘(3) QUALIFIED
MANUFACTURER.—For pur-
poses of this section, the term ‘qualified manufac-
turer’ means any manufacturer of specified property 
which enters into an agreement with the Secretary 
which provides that such manufacturer will— 
‘‘(A) assign a product identification num-
ber to each item of specified property produced 
by such manufacturer utilizing a methodology 
that will ensure that such number (including 
any alphanumeric) is unique to each such item 
(by utilizing numbers or letters which are 
unique to such manufacturer or by such other 
method as the Secretary may provide), 
‘‘(B) label such item with such number in 
such manner as the Secretary may provide, and 
‘‘(C) make periodic written reports to the 
Secretary (at such times and in such manner as 
the Secretary may provide) of the product iden-
tification numbers so assigned and including 
such information as the Secretary may require 
with respect to the item of specified property to 
which such number was so assigned. 
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‘‘(4) SPECIFIED PROPERTY.—For purposes of 
this subsection, the term ‘specified property’ means 
any qualified energy property and any property de-
scribed in subparagraph (B) or (C) of subsection 
(c)(3).’’. 
(2) OMISSION OF CORRECT PRODUCT IDENTI-
FICATION NUMBER TREATED AS MATHEMATICAL OR 
CLERICAL ERROR.—Section 6213(g)(2), as amended 
by the preceding provisions of this Act, is amend-
ed— 
(A) in subparagraph (Q), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (R), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(S) an omission of a correct product iden-
tification number required under section 25C(h) 
(relating to credit for nonbusiness energy prop-
erty) to be included on a return.’’. 
(h) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided by this subsection, the amendments made by 
this section shall apply to property placed in service 
after December 31, 2021. 
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(2) HOME ENERGY AUDITS.—The amendments 
made by subsection (f) shall apply to amounts paid 
or incurred after December 31, 2021. 
(3) IDENTIFICATION NUMBER REQUIREMENT.— 
The amendments made subsection (g) shall apply to 
property placed in service after December 31, 2023. 
SEC. 136302. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
(a) EXTENSION OF CREDIT.— 
(1) IN GENERAL.—Section 25D(h) is amended 
by striking ‘‘December 31, 2023’’ and inserting 
‘‘December 31, 2033’’. 
(2) 
APPLICATION
OF
PHASEOUT.—Section 
25D(g) is amended— 
(A) by striking ‘‘before January 1, 2023’’ 
in paragraph (2) and inserting ‘‘before January 
1, 2022’’, 
(B) by striking ‘‘and’’ at the end of para-
graph (2), 
(C) by redesignating paragraph (3) as 
paragraph (5) and by inserting after paragraph 
(2) the following new paragraphs: 
‘‘(3) in the case of property placed in service 
after December 31, 2021, and before January 1, 
2032, 30 percent, 
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‘‘(4) in the case of property placed in service 
after December 31, 2031, and before January 1, 
2033, 26 percent, and’’, and 
(D) by striking ‘‘December 31, 2022, and 
before January 1, 2024’’ in paragraph (5) (as 
so redesignated) and inserting ‘‘December 31, 
2032, and before January 1, 2034’’. 
(b) RESIDENTIAL ENERGY EFFICIENT PROPERTY 
CREDIT FOR BATTERY STORAGE TECHNOLOGY.— 
(1) IN GENERAL.—Section 25D(a) is amended 
by striking ‘‘and’’ at the end of paragraph (5) and 
by inserting after paragraph (6) the following new 
paragraph: 
‘‘(7) the qualified battery storage technology ex-
penditures,’’. 
(2) QUALIFIED
BATTERY
STORAGE
TECH-
NOLOGY EXPENDITURE.—Section 25D(d) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(7) QUALIFIED
BATTERY
STORAGE
TECH-
NOLOGY
EXPENDITURE.—The term ‘qualified bat-
tery storage technology expenditure’ means an ex-
penditure for battery storage technology which— 
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‘‘(A) is installed in connection with a 
dwelling unit located in the United States and 
used as a residence by the taxpayer, and 
‘‘(B) has a capacity of not less than 3 kilo-
watt hours.’’. 
(c) CREDIT MADE REFUNDABLE; INSTALLER RE-
QUIREMENTS; TREATMENT OF CERTAIN POSSESSIONS.— 
Section 25D is amended by redesignating subsection (h) 
as subsection (k) and by inserting after subsection (g) the 
following new subsections: 
‘‘(h) CREDIT MADE REFUNDABLE
FOR TAXABLE 
YEARS AFTER 2023.—In the case of any taxable year be-
ginning after December 31, 2023, the credit allowed under 
subsection (a) (excluding any credit carried forward from 
a previous taxable year) shall be treated as a credit al-
lowed under subpart C (and not allowed under this sub-
part). 
‘‘(i) REQUIREMENT FOR QUALIFIED INSTALLER.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under this section with respect to any property de-
scribed in subsection (a) placed in service after De-
cember 31, 2023 unless— 
‘‘(A) such property is installed by a quali-
fied installer, and 
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‘‘(B) the taxpayer includes the qualified in-
stallation identification number described in 
paragraph (3) on the return of tax for the tax-
able year. 
‘‘(2) QUALIFIED INSTALLER.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘qualified installer’ means an 
installer who enters into an agreement with the 
Secretary which provides that such installer 
will, with respect to expenditures described in 
subsection (a) in connection with the residence 
of a taxpayer— 
‘‘(i) provide the taxpayer with a quali-
fied installation identification number and 
a written receipt of the purchase and in-
stallation of such property in a manner 
prescribed by the Secretary, and 
‘‘(ii) make periodic written reports to 
the Secretary (in such manner as the Sec-
retary may provide) of installation identi-
fication numbers assigned by the installer 
corresponding to such expenditures, includ-
ing such information as the Secretary may 
require with respect to such expenditures. 
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‘‘(B) INSTALLER DEEMED TO MEET RE-
QUIREMENT.—For purposes of subparagraph 
(A), to the extent provided by the Secretary, an 
installer may be deemed to meet the require-
ment under clause (ii) of such subparagraph on 
the basis of information available to the Sec-
retary which the Secretary determines is rea-
sonably reliable for purposes of determining the 
amount of qualified expenditures under sub-
section (a) made by a taxpayer in connection 
with a residence of such taxpayer. 
‘‘(3) QUALIFIED
INSTALLATION
IDENTIFICA-
TION NUMBER.—For purposes of this section, the 
term ‘qualified installation identification number’ 
means a unique identification number with respect 
to expenditures described in subsection (a) in con-
nection with a residence of a taxpayer that is in-
stalled by a qualified installer. 
‘‘(4) REGISTRATION.—The Secretary may re-
quire such information or registration of a qualified 
installer as the Secretary deems necessary or appro-
priate for purposes of preventing duplication, fraud, 
or improper claims with respect to property de-
scribed in subsection (a). Under regulations or other 
guidance prescribed by the Secretary, the registra-
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tion of any person under this section may be denied, 
revoked, or suspended if the Secretary determines 
that such denial, revocation, or suspension is nec-
essary to prevent duplication, fraud, or improper 
claims with respect to property described in sub-
section (a). 
‘‘(j) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
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spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section.’’. 
(d) CERTAIN EXPENDITURES DISALLOWED.—Sec-
tion 25D is amended— 
(1) in subsection (a), by adding ‘‘and’’ at the 
end of paragraph (4), by striking the comma at the 
end of paragraph (5) and inserting a period, and by 
striking paragraph (6), and 
(2) in subsection (d), by striking paragraph (6). 
(e) CARRYFORWARD
OF
UNUSED
CREDIT
DIS-
ALLOWED.—Section 25D is amended by striking sub-
section (c). 
(f) CONFORMING AMENDMENT.—Section 6213(g)(2), 
as amended by the preceding provisions of this Act, is 
amended— 
(1) in subparagraph (T), by striking ‘‘and’’ at 
the end, 
(2) in subparagraph (U), by striking the period 
at the end and inserting ‘‘, and’’, and 
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(3) by adding at the end the following: 
‘‘(V) an omission of a correct qualified in-
stallation identification number required under 
section 25D (relating to credit for residential 
energy efficient property) to be included on a 
return.’’. 
(g) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (d), and (f) shall apply to expenditures made 
after December 31, 2021. 
(2) The amendments made by subsections (c) 
and (e) shall apply to expenditures made after De-
cember 31, 2022. 
SEC. 136303. ENERGY EFFICIENT COMMERCIAL BUILDINGS 
DEDUCTION. 
(a) PLACED
IN SERVICE REQUIREMENT.—Section 
179D(c)(2) is amended to read as follows: 
‘‘(2) REFERENCE STANDARD 90.1.—The term 
‘Reference Standard 90.1’ means, with respect to 
any property, the more recent of— 
‘‘(A) Standard 90.1-2007 published by the 
American Society of Heating, Refrigerating, 
and Air Conditioning Engineers and the Illu-
minating Engineering Society of North Amer-
ica, or 
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‘‘(B) the most recent Standard 90.1 pub-
lished by the American Society of Heating, Re-
frigerating, and Air Conditioning Engineers and 
the Illuminating Engineering Society of North 
America for which the Department of Energy 
has issued a final determination and which has 
been affirmed by the Secretary for purposes of 
this section not later than the date that is 4 
years before the date such property is placed in 
service.’’. 
(b) TEMPORARY INCREASE IN DEDUCTION, ETC..— 
Section 179D is amended by adding at the end the fol-
lowing: 
‘‘(i) TEMPORARY RULES.— 
‘‘(1) PERIOD OF APPLICATION.—The provisions 
of this subsection shall apply only to taxable years 
beginning after December 31, 2021, and before Jan-
uary 1, 2032. 
‘‘(2) MODIFICATION
OF
EFFICIENCY
STAND-
ARD.—Subsection (c)(1)(D) shall be applied by sub-
stituting ‘25’ for ‘50’. 
‘‘(3) MAXIMUM AMOUNT OF DEDUCTION.— 
‘‘(A) IN GENERAL.—The deduction under 
subsection (a) with respect to any building for 
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any taxable year shall not exceed the excess (if 
any) of— 
‘‘(i) the product of— 
‘‘(I) the applicable dollar value, 
and 
‘‘(II) the square footage of the 
building, over 
‘‘(ii) the aggregate amount of the de-
ductions under subsection (a) and para-
graph (6) with respect to the building for 
the 3 taxable years immediately preceding 
such taxable year (or, in the case of any 
such deduction allowable to a person other 
than the taxpayer, for any taxable year 
ending during the 4-taxable-year period 
ending with such taxable year). 
‘‘(B) APPLICABLE
DOLLAR
VALUE.—For 
purposes of paragraph (3)(A)(i), the applicable 
dollar value shall be an amount equal to $0.50 
increased (but not above $1.00) by $0.02 for 
each percentage point by which the total annual 
energy and power costs for the building are cer-
tified to be reduced by a percentage greater 
than 25 percent. 
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‘‘(C) APPLICATION OF INFLATION ADJUST-
MENT.—Subsection (g) shall be applied— 
‘‘(i) by substituting ‘2022’ for ‘2020’, 
‘‘(ii) 
by 
substituting 
‘subsection 
(i)(3)(B)’ for ‘subsection (b) or subsection 
(d)(1)(A)’, and 
‘‘(iii) 
by 
substituting 
‘2021’ 
for 
‘2019’. 
‘‘(D) LIMITATION TO APPLY IN LIEU OF 
CURRENT
LIMITATION
AND
PARTIAL
ALLOW-
ANCE.—Subsections (b) and (d)(1) shall not 
apply. 
‘‘(4) INCREASED CREDIT AMOUNT FOR CERTAIN 
PROPERTY.— 
‘‘(A) IN
GENERAL.—In the case of any 
property which satisfies the requirements of 
subparagraph (B), paragraph (3)(B) shall be 
applied by substituting ‘$2.50’ for ‘$0.50’, 
‘$.10’ for ‘$.02’, and ‘$5.00’ for ‘$1.00’. 
‘‘(B) PROJECT REQUIREMENTS.—A project 
meets the requirements of this subparagraph if 
it is one of the following: 
‘‘(i) A building or qualified retrofit 
plan the construction of which begins prior 
to 60 days after the Secretary publishes 
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guidance with respect to the requirements 
of paragraphs (5) and (6). 
‘‘(ii) A building or qualified retrofit 
plan the construction of which satisfies the 
requirements of paragraphs (5) and (6). 
‘‘(5) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any project are that the taxpayer shall ensure 
that any laborers and mechanics employed by 
contractors and subcontractors in the construc-
tion of any property or with respect to building 
modifications made as part of a qualified ret-
rofit plan shall be paid wages at rates not less 
than the prevailing rates for construction, alter-
ation, or repair of a similar character in the lo-
cality as most recently determined by the Sec-
retary of Labor, in accordance with subchapter 
IV of chapter 31 of title 40, United States 
Code. 
‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.—Rules similar to the rules of clauses 
(i) through (iv) of section 45(b)(7)(B) shall 
apply. 
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‘‘(6) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(7) ALLOCATION OF DEDUCTION BY CERTAIN 
TAX-EXEMPT ENTITIES.— 
‘‘(A) IN
GENERAL.—A specified tax-ex-
empt entity shall be treated in the same manner 
as a Federal, State, or local government for 
purposes of applying subsection (d)(4). 
‘‘(B) SPECIFIED
TAX-EXEMPT
ENTITY.— 
For purposes of this paragraph, the term ‘spec-
ified tax-exempt entity’ means— 
‘‘(i) the United States, any State or 
political subdivision thereof, any possession 
of the United States, or any agency or in-
strumentality of any of the foregoing, 
‘‘(ii) an Indian tribal government (as 
defined in section 48(e)(4)(F)(ii)) or Alas-
ka Native Corporation (as defined in sec-
tion 3 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1602(m)), and 
‘‘(iii) any organization exempt from 
tax imposed by this chapter. 
‘‘(8) ALTERNATIVE
DEDUCTION
FOR
ENERGY 
EFFICIENT RETROFIT BUILDING PROPERTY.— 
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‘‘(A) IN GENERAL.—In the case of a tax-
payer which elects (at such time and in such 
manner as the Secretary may provide) the ap-
plication of this paragraph with respect to any 
qualified building, there shall be allowed as a 
deduction for the taxable year which includes 
the date of the qualifying final certification with 
respect to the qualified retrofit plan of such 
building, an amount equal to the lesser of— 
‘‘(i) the excess described in paragraph 
(3) (determined by substituting ‘energy 
usage intensity’ for ‘total annual energy 
and power costs’ in subparagraph (B) 
thereof), or 
‘‘(ii) the aggregate adjusted basis (de-
termined after taking into account all ad-
justments with respect to such taxable year 
other than the reduction under subsection 
(e)) of energy efficient retrofit building 
property placed in service by the taxpayer 
pursuant to such qualified retrofit plan. 
‘‘(B) QUALIFIED
RETROFIT
PLAN.—For 
purposes of this paragraph, the term ‘qualified 
retrofit plan’ means a written plan prepared by 
a qualified professional which specifies modi-
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fications to a building which, in the aggregate, 
are expected to reduce such building’s energy 
usage intensity by 25 percent or more in com-
parison to the baseline energy usage intensity of 
such building. Such plan shall provide for a 
qualified professional to— 
‘‘(i) as of any date during the 1-year 
period ending on the date of the first cer-
tification described in clause (ii), certify 
the energy usage intensity of such building 
as of such date, 
‘‘(ii) certify the status of property in-
stalled pursuant to such plan as meeting 
the requirements of clauses (ii) and (iii) 
subparagraph (C), and 
‘‘(iii) as of any date that is more than 
1 year after completion of the plan, certify 
the energy usage intensity of such building 
as of such date. 
‘‘(C) 
ENERGY
EFFICIENT
RETROFIT 
BUILDING
PROPERTY.—For purposes of this 
paragraph, the term ‘energy efficient retrofit 
building property’ means property— 
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‘‘(i) with respect to which depreciation 
(or amortization in lieu of depreciation) is 
allowable, 
‘‘(ii) which is installed on or in any 
qualified building, 
‘‘(iii) which is installed as part of— 
‘‘(I) the interior lighting systems, 
‘‘(II) the heating, cooling, ven-
tilation, and hot water systems, or 
‘‘(III) the building envelope, and 
‘‘(iv) which is certified in accordance 
with subparagraph (B)(ii) as meeting the 
requirements of clauses (ii) and (iii). 
‘‘(D) QUALIFIED
BUILDING.—For pur-
poses of this paragraph, the term ‘qualified 
building’ means any building which— 
‘‘(i) is located in the United States, 
and 
‘‘(ii) was originally placed in service 
not less than 5 years before the establish-
ment of the qualified retrofit plan with re-
spect to such building. 
‘‘(E) 
QUALIFYING
FINAL
CERTIFI-
CATION.—For purposes of this paragraph, the 
term ‘qualifying final certification’ means, with 
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respect to any qualified retrofit plan, the certifi-
cation described in subparagraph (B)(iii) if the 
energy usage intensity certified in such certifi-
cation is not more than 75 percent of the base-
line energy usage intensity of the building. 
‘‘(F) BASELINE
ENERGY
USAGE
INTEN-
SITY.— 
‘‘(i) IN GENERAL.—The term ‘baseline 
energy usage intensity’ means the energy 
usage intensity certified under subpara-
graph (B)(i), as adjusted to take into ac-
count weather as compared to the energy 
usage intensity determined under subpara-
graph (B)(iii). 
‘‘(ii) DETERMINATION
OF
ADJUST-
MENT.—For purposes of clause (i), the ad-
justments described in such clause shall be 
determined in such manner as the Sec-
retary may provide. 
‘‘(G) OTHER DEFINITIONS.—For purposes 
of this paragraph— 
‘‘(i) ENERGY USAGE INTENSITY.—The 
term ‘energy usage intensity’ means the 
annualized, measured site energy usage in-
tensity determined in accordance with such 
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regulations or other guidance as the Sec-
retary may provide and measured in Brit-
ish thermal units. 
‘‘(ii) 
QUALIFIED
PROFESSIONAL.— 
The term ‘qualified professional’ means an 
individual who is a licensed architect or a 
licenced engineer and meets such other re-
quirements as the Secretary may provide. 
‘‘(H) COORDINATION
WITH
DEDUCTION 
OTHERWISE
ALLOWED
UNDER
SUBSECTION 
(a).— 
‘‘(i) IN GENERAL.—In the case of any 
building with respect to which an election 
is made under subparagraph (A), the term 
‘energy efficient commercial building prop-
erty’ shall not include any energy efficient 
retrofit building property with respect to 
which a deduction is allowable under this 
paragraph. 
‘‘(ii) CERTAIN RULES NOT APPLICA-
BLE.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), subsection 
(d) shall not apply for purposes of 
this paragraph. 
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‘‘(II) ALLOCATION
OF
DEDUC-
TION BY CERTAIN TAX-EXEMPT ENTI-
TIES.—Rules similar to subsection 
(d)(4) (determined after application of 
paragraph (5)) shall apply for pur-
poses of this paragraph.’’. 
(c) APPLICATION
TO REAL ESTATE INVESTMENT 
TRUST EARNINGS AND PROFITS.—Section 312(k)(3)(B) 
is amended— 
(1) by striking ‘‘for purposes of computing the 
earnings and profits of a corporation’’ and inserting 
the following: 
‘‘(i) IN
GENERAL.—For purposes of 
computing the earnings and profits of a 
corporation, except as provided in clause 
(ii)’’, and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) SPECIAL RULE.—In the case of a 
corporation that is a real estate investment 
trust, any amount deductible under section 
179D shall be allowed in the year in which 
the property giving rise to such deduction 
is placed in service.’’. 
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(d) 
CONFORMING
AMENDMENT.—Section 
179D(d)(2) is amended by striking ‘‘not later than the 
date that is 2 years before the date that construction of 
such property begins’’ and inserting ‘‘not later than the 
date that is 4 years before the date such property is placed 
in service’’. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendment made by 
this section shall apply to taxable years beginning 
after December 31, 2021. 
(2) ALTERNATIVE DEDUCTION FOR ENERGY EF-
FICIENT
RETROFIT
BUILDING
PROPERTY.—Para-
graph (8) of section 179D(i) of the Internal Revenue 
Code of 1986 (as added by this section), and any 
other provision of such section solely for purposes of 
applying such paragraph, shall apply to property 
placed in service after December 31, 2021 (in tax-
able years ending after such date) if such property 
is placed in service pursuant to qualified retrofit 
plan (within the meaning of such section) estab-
lished after such date. 
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SEC. 136304. EXTENSION, INCREASE, AND MODIFICATIONS 
OF NEW ENERGY EFFICIENT HOME CREDIT. 
(a) EXTENSION
OF CREDIT.—Section 45L(g) is 
amended by striking ‘‘December 31, 2021’’ and inserting 
‘‘December 31, 2031’’. 
(b) INCREASE
IN
CREDIT
AMOUNTS.—Section 
45L(a)(2) is amended to read as follows: 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
paragraph (1), the applicable amount is an amount 
equal to— 
‘‘(A) in the case of a dwelling unit which 
is eligible to participate in the Energy Star 
Residential New Construction Program or the 
Energy Star Manufactured New Homes pro-
gram— 
‘‘(i) that is described in subsection 
(c)(1)(A) (and not described in subsection 
(c)(1)(B)), $2,500, and 
‘‘(ii) that is described in subsection 
(c)(1)(B), $5000, and 
‘‘(B) in the case of a dwelling unit which 
is part of a building eligible to participate in 
the Energy Star Multifamily New Construction 
Program— 
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‘‘(i) that is described in subsection 
(c)(1)(A) (and not described in subsection 
(c)(1)(B)), $500, and 
‘‘(ii) that is described in subsection 
(c)(1)(B), $1000.’’. 
(c) MODIFICATION OF ENERGY SAVING REQUIRE-
MENTS.—Section 45L(c) is amended to read as follows: 
‘‘(c) ENERGY SAVING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A dwelling unit meets the 
energy saving requirements of this subsection if— 
‘‘(A) such dwelling unit meets the require-
ments of paragraph (2) or (3) (whichever is ap-
plicable), or 
‘‘(B) such dwelling unit is certified as a 
zero energy ready home under the zero energy 
ready home program of the Department of En-
ergy (or any successor program determined by 
the Secretary) as in effect on January 1, 2022. 
‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.— 
A dwelling unit meets the requirements of this para-
graph if— 
‘‘(A) such dwelling unit meets— 
‘‘(i) in the case of a dwelling unit ac-
quired before January 1, 2025, the Energy 
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Star Single-Family New Homes National 
Program Requirements 3.1, and 
‘‘(ii) in the case of a dwelling unit ac-
quired after December 31, 2024, the En-
ergy Star Single-Family New Homes Na-
tional Program Requirements 3.2, 
‘‘(B) such dwelling unit meets the most re-
cent Energy Star Single-Family New Homes 
Program Requirements applicable to the loca-
tion of such dwelling unit (as in effect on the 
latter of January 1, 2022 or January 1 of two 
calendar years prior to the date the dwelling 
unit was acquired), or 
‘‘(C) such dwelling unit meets the most re-
cent Energy Star Manufactured Home National 
program requirements as in effect on the latter 
of January 1, 2022 or January 1 of two cal-
endar years prior to the date such dwelling unit 
is acquired. 
‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A 
dwelling unit meets the requirements of this para-
graph if— 
‘‘(A) such dwelling unit meets the most re-
cent Energy Star Multifamily New Construction 
National Program Requirements (as in effect 
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on either January 1, 2022 or January 1 of 
three calendar years prior to the date the dwell-
ing was acquired, whichever is later), and 
‘‘(B) such dwelling unit meets the most re-
cent Energy Star Multifamily New Construction 
Regional Program Requirements applicable to 
the location of such dwelling unit (as in effect 
on either January 1, 2022 or January 1 of 
three calendar years prior to the date the dwell-
ing was acquired, whichever is later).’’. 
(d) PREVAILING
WAGE
REQUIREMENT.—Section 
45L is amended by redesignating subsection (g) as sub-
section (h) and by inserting after subsection (f) the fol-
lowing new subsection: 
‘‘(g) PREVAILING WAGE REQUIREMENT.— 
‘‘(1) IN GENERAL.—In the case of a qualifying 
residence described in subsection (b)(2)(B) meeting 
the prevailing wage requirements of paragraph (2), 
the credit amount allowed with respect to such resi-
dence shall be— 
‘‘(A) $2,500 in the case of a residence de-
scribed in subparagraph (A) of subsection 
(c)(1) (and not described in subparagraph (B) 
of such subsection), and 
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‘‘(B) $5,000 in the case of a residence de-
scribed in (c)(1)(B). 
‘‘(2) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this paragraph with respect to any 
qualified residence are that the taxpayer shall 
ensure that any laborers and mechanics em-
ployed by contractors and subcontractors in the 
construction of such residence shall be paid 
wages at rates not less than the prevailing rates 
for construction, alteration, or repair of a simi-
lar character in the locality as most recently de-
termined by the Secretary of Labor, in accord-
ance with subchapter IV of chapter 31 of title 
40, United States Code. 
‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.—Rules similar to the rules of clauses 
(i) through (iv) of section 45(b)(7)(B) shall 
apply. 
‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
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requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection.’’. 
(e) EFFECTIVE DATES.—The amendments made by 
this section shall apply to dwelling units acquired after 
December 31, 2021. 
SEC. 136305. MODIFICATIONS TO INCOME EXCLUSION FOR 
CONSERVATION SUBSIDIES. 
(a) IN GENERAL.—Section 136(a) is amended— 
(1) by striking ‘‘any subsidy provided’’ and in-
serting ‘‘any subsidy— 
‘‘(1) provided’’, 
(2) by striking the period at the end and insert-
ing a comma, and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(2) provided (directly or indirectly) by a public 
utility to a customer, or by a State or local govern-
ment to a resident of such State or locality, for the 
purchase or installation of any water conservation or 
efficiency measure, 
‘‘(3) provided (directly or indirectly) by a storm 
water management provider to a customer, or by a 
State or local government to a resident of such State 
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or locality, for the purchase or installation of any 
storm water management measure, or 
‘‘(4) provided (directly or indirectly) by a State 
or local government to a resident of such State or 
locality for the purchase or installation of any waste-
water management measure, but only if such meas-
ure is with respect to the taxpayer’s principal resi-
dence.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) DEFINITION OF WATER CONSERVATION OR 
EFFICIENCY MEASURE AND STORM WATER MANAGE-
MENT MEASURE.—Section 136(c) is amended— 
(A) by striking ‘‘ENERGY CONSERVATION 
MEASURE’’ in the heading thereof and inserting 
‘‘DEFINITIONS’’, 
(B) by striking ‘‘IN
GENERAL’’ in the 
heading of paragraph (1) and inserting ‘‘EN-
ERGY CONSERVATION MEASURE’’, and 
(C) by redesignating paragraph (2) as 
paragraph (5) and by inserting after paragraph 
(1) the following: 
‘‘(2) WATER
CONSERVATION
OR
EFFICIENCY 
MEASURE.—For purposes of this section, the term 
‘water conservation or efficiency measure’ means any 
evaluation of water use, or any installation or modi-
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fication of property, the primary purpose of which is 
to reduce consumption of water or to improve the 
management of water demand with respect to one or 
more dwelling units. 
‘‘(3) STORM WATER MANAGEMENT MEASURE.— 
For purposes of this section, the term ‘storm water 
management measure’ means any installation or 
modification of property primarily designed to re-
duce or manage amounts of storm water with re-
spect to one or more dwelling units. 
‘‘(4) WASTEWATER MANAGEMENT MEASURE.— 
For purposes of this section, the term ‘wastewater 
management measure’ means any installation or 
modification of property primarily designed to man-
age wastewater (including septic tanks and cess-
pools) with respect to one or more dwelling units.’’. 
(2) DEFINITION OF PUBLIC UTILITY.—Section 
136(c)(5) (as redesignated by paragraph (1)(C)) is 
amended by striking subparagraph (B) and inserting 
the following: 
‘‘(B) PUBLIC UTILITY.—The term ‘public 
utility’ means a person engaged in the sale of 
electricity, natural gas, or water to residential, 
commercial, or industrial customers for use by 
such customers. 
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‘‘(C) STORM
WATER
MANAGEMENT
PRO-
VIDER.—The term ‘storm water management 
provider’ means a person engaged in the provi-
sion of storm water management measures to 
the public. 
‘‘(D) PERSON.—For purposes of subpara-
graphs (B) and (C), the term ‘person’ includes 
the Federal Government, a State or local gov-
ernment or any political subdivision thereof, or 
any instrumentality of any of the foregoing.’’. 
(3) CLERICAL AMENDMENTS.— 
(A) The heading for section 136 is amend-
ed— 
(i) by inserting ‘‘AND WATER’’ after 
‘‘ENERGY’’, and 
(ii) by striking ‘‘PROVIDED BY PUB-
LIC UTILITIES’’. 
(B) The item relating to section 136 in the 
table of sections of part III of subchapter B of 
chapter 1 is amended— 
(i) by inserting ‘‘and water’’ after 
‘‘energy’’, and 
(ii) by striking ‘‘provided by public 
utilities’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts received after Decem-
ber 31, 2018. 
(d) NO INFERENCE.—Nothing in this Act or the 
amendments made by this Act shall be construed to create 
any inference with respect to the proper tax treatment of 
any subsidy received directly or indirectly from a public 
utility, a storm water management provider, or a State 
or local government for any water conservation measure 
or storm water management measure before January 1, 
2019. 
SEC. 136306. CREDIT FOR QUALIFIED WILDFIRE MITIGA-
TION EXPENDITURES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 27 the following new section: 
‘‘SEC. 28. QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to 30 percent of the qualified wild-
fire mitigation expenditures paid or incurred by the tax-
payer during such taxable year with respect to real prop-
erty owned or leased by the taxpayer. 
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‘‘(b) QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified wildfire 
mitigation expenditures’ means any specified wildfire 
mitigation expenditure made pursuant to a qualified 
State wildfire mitigation program of a State which 
requires expenditures for wildfire mitigation to be 
paid both by the taxpayer and such State. Such 
term shall not include any item of expenditure un-
less the ratio of the State’s expenditure for such 
item to the sum of the State’s and taxpayer’s ex-
penditures for such item is not less than 25 percent. 
‘‘(2) SPECIFIED
WILDFIRE
MITIGATION
EX-
PENDITURE.—The term ‘specified wildfire mitigation 
expenditure’ means, with respect to any real prop-
erty owned or leased by the taxpayer, any amount 
paid or incurred to reduce the risk of wildfire by re-
moving accumulations of vegetation (including estab-
lishing, expanding, or maintaining fuel breaks to 
serve as fire breaks) on such real property. 
‘‘(3) QUALIFIED STATE WILDFIRE MITIGATION 
PROGRAM.—The term ‘qualified State wildfire miti-
gation program’ means any program of a State the 
primary purpose of which is to mitigate the risk of 
wildfires in such State. 
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‘‘(4) TREATMENT OF REIMBURSEMENTS.—Any 
amount originally paid or incurred by the taxpayer 
which is reimbursed by a State under a qualified 
wildfire mitigation program of such State shall be 
treated as paid by such State (and not by such tax-
payer). 
‘‘(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 expenditures made in 
the ordinary course of the taxpayer’s trade or busi-
ness (or, in the case of expenditures made by a 
State, would have been expenditures made in the or-
dinary course of the taxpayer’s trade or business if 
made by the taxpayer) shall be treated as a credit 
listed in section 38(b) for taxable year (and not al-
lowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year. 
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‘‘(d) REDUCTION OF CREDIT PERCENTAGE WHERE 
TAXPAYER EXPENDITURES LESS THAN 30 PERCENT.— 
‘‘(1) IN GENERAL.—If the expenditure percent-
age with respect to any item of qualified wildfire 
mitigation expenditure is less than 30 percent, sub-
section (a) shall be applied by substituting ‘the ex-
penditure percentage’ for ‘30 percent’ with respect 
to such item of expenditure. 
‘‘(2) EXPENDITURE
PERCENTAGE.—For pur-
poses of this section, the term ‘expenditure percent-
age’ means, with respect to any item of qualified 
wildfire mitigation expenditure any portion of which 
is paid or incurred by a State, the ratio (expressed 
as a percentage) of— 
‘‘(A) the taxpayer’s expenditure for such 
item, divided by 
‘‘(B) the sum of the taxpayer’s and such 
State’s expenditures for such item. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) TREATMENT OF EXPENDITURES RELATED 
TO MARKETABLE TIMBER.—An expenditure shall not 
be taken into account for purposes of this section 
(whether made by the taxpayer or a State pursuant 
to a qualified State wildfire mitigation program of 
such State) if such expenditure is properly allocable 
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to timber which is sold or exchanged by the tax-
payer. The preceding sentence shall not apply to the 
extent that such amount exceeds the gain on such 
sale or exchange. 
‘‘(2) BASIS REDUCTION.—For purposes of this 
subtitle, if the basis of any property would (but for 
this paragraph) be determined by taking into ac-
count any qualified wildfire mitigation expenditure, 
the basis of such property shall be reduced by the 
amount of the credit allowed under subsection (a) 
with respect to such expenditure (determined with-
out regard to subsection (c)). 
‘‘(3) DENIAL
OF
DOUBLE
BENEFIT.—The 
amount of any deduction or other credit allowable 
under this chapter for any expenditure for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such expenditure (determined without 
regard to subsection (c)).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b), as amended by the preceding 
provisions of this Act, is amended by striking ‘‘plus’’ 
at the end of paragraph (35), by striking the period 
at the end of paragraph (36) and inserting ‘‘, plus’’, 
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and by adding at the end the following new para-
graph: 
‘‘(37) the portion of the qualified wildfire miti-
gation expenditures credit to which section 28(c)(1) 
applies.’’. 
(2) Section 1016(a) is amended by redesig-
nating paragraphs (35) through (38) as paragraphs 
(36) through (39), respectively, and by inserting 
after paragraph (34) the following new paragraph: 
‘‘(35) to the extent provided in section 
28(e)(2),’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 27 the fol-
lowing new item: 
‘‘Sec. 28. Qualified wildfire mitigation expenditures.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after the date of the enactment of this Act, in taxable 
years ending after such date. 
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PART 4—GREENING THE FLEET AND 
ALTERNATIVE VEHICLES 
SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELEC-
TRIC DRIVE MOTOR VEHICLE CREDIT FOR IN-
DIVIDUALS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 36B the following new section: 
‘‘SEC. 36C. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the credit amount determined under subsection 
(b) with respect to a new qualified plug-in electric drive 
motor vehicle placed in service by the taxpayer during the 
taxable year. 
‘‘(b) CREDIT AMOUNT.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any new quali-
fied plug-in electric drive motor vehicle is the sum 
of the amounts determined under paragraphs (2) 
through (5) with respect to such vehicle (not to ex-
ceed 50 percent of the purchase price of such vehi-
cle). 
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‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $4,000. 
‘‘(3) BATTERY CAPACITY.—In the case of a new 
qualified plug-in electric drive motor vehicle, the 
amount determined under this paragraph is $3,500 
if— 
‘‘(A) in the case of a vehicle placed in serv-
ice before January 1, 2027, such vehicle draws 
propulsion energy from a battery with not less 
than 40 kilowatt hours of capacity and has a 
gasoline tank capacity not greater than 2.5 gal-
lons, and 
‘‘(B) in the case of a vehicle placed in serv-
ice after December 31, 2026, such vehicle 
draws propulsion energy from a battery with 
not less than 50 kilowatt hours of capacity and 
has a gasoline tank capacity not greater than 
2.5 gallons. 
‘‘(4) DOMESTIC ASSEMBLY.—In the case of a 
new qualified plug-in electric drive motor vehicle 
which satisfies the domestic assembly qualifications, 
the amount determined under this paragraph is 
$4,500. 
‘‘(5) DOMESTIC CONTENT.—In the case of a 
new qualified plug-in electric drive motor vehicle 
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which satisfies domestic content qualifications, the 
amount determined under this paragraph is $500. 
‘‘(c) VEHICLE LIMITATION.—The number of new 
qualified plug-in electric drive motor vehicles taken in ac-
count under subsection (a) shall not exceed 1 per taxpayer 
per taxable year. 
‘‘(d) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) for any taxable year 
shall be reduced (but not below zero) by $200 for 
each $1,000 (or fraction thereof) by which— 
‘‘(A) the lesser of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, or 
‘‘(ii) the taxpayer’s modified adjusted 
gross income for the preceding taxable 
year, exceeds 
‘‘(B) the threshold amount. 
For purposes of the preceding sentence, the term 
‘modified adjusted gross income’ means adjusted 
gross income increased by any amount excluded 
from gross income under section 911, 931, or 933. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
paragraph (1), the term ‘threshold amount’ means— 
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‘‘(A) $500,000 in the case of a joint return 
or surviving spouse (half such amount in the 
case of a married individual filing a separate re-
turn), 
‘‘(B) $375,000 in the case of a head of 
household, and 
‘‘(C) $250,000 in any other case. 
‘‘(e) MANUFACTURER’S SUGGESTED RETAIL PRICE 
LIMITATION.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) for a vehicle with a manufac-
turer’s suggested retail price in excess of the appli-
cable limitation. 
‘‘(2) APPLICABLE LIMITATION.—For purposes 
of paragraph (1), the applicable limitation for each 
vehicle classification is as follows: 
‘‘(A) VANS.—In the case of a van, 
$80,000. 
‘‘(B) SPORT UTILITY VEHICLES.—In the 
case of a sport utility vehicle, $80,000. 
‘‘(C) PICKUP TRUCKS.—In the case of a 
pickup truck, $80,000. 
‘‘(D) OTHER.—In the case of any other ve-
hicle, $55,000. 
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‘‘(3) REGULATIONS AND GUIDANCE.—For pur-
poses of this subsection, the Secretary shall pre-
scribe such regulations or other guidance as the Sec-
retary determines necessary or appropriate for deter-
mining vehicle classifications using criteria similar to 
that employed by the Environmental Protection 
Agency and the Department of the Energy to deter-
mine size and class of vehicles.’’ 
‘‘(f) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘new qualified 
plug-in electric drive motor vehicle’ means a motor 
vehicle— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use by the tax-
payer and not for resale, 
‘‘(C) which is made by a qualified manu-
facturer, 
‘‘(D) which is treated as a motor vehicle 
for purposes of title II of the Clean Air Act, 
‘‘(E) which has a gross vehicle weight rat-
ing of less than 14,000 pounds, 
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‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 10 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity, 
‘‘(G) with respect to which, in the case of 
a vehicle placed in service after December 31, 
2026, final assembly is within the United 
States, 
‘‘(H) is not of a character subject to an al-
lowance for depreciation, and 
‘‘(I) for which the person who sells or 
leases any new qualified plug-in electric drive 
motor vehicle to the taxpayer furnishes a report 
to the taxpayer and to the Secretary, at such 
time and in such manner as the Secretary shall 
provide, containing— 
‘‘(i) the name and taxpayer identifica-
tion number of the taxpayer, 
‘‘(ii) the vehicle identification number 
of the vehicle, unless, in accordance with 
any applicable rules promulgated by the 
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Secretary of Transportation, the vehicle is 
not assigned such a number, 
‘‘(iii) the battery capacity of the vehi-
cle, 
‘‘(iv) in the case of any new qualified 
plug-in 
electric 
drive 
motor 
vehicle, 
verification that original use of the vehicle 
commences with the taxpayer, 
‘‘(v) the maximum credit under this 
section allowable to the taxpayer with re-
spect to the vehicle, and 
‘‘(vi) in the case of a taxpayer who 
makes 
an 
election 
under 
subsection 
(k)(1)— 
‘‘(I) the modified adjusted gross 
income of such taxpayer in the pre-
vious taxable year, as described in 
subsection (k)(6)(A), and 
‘‘(II) any amount described in 
subsection (k)(2)(C) which has been 
provided to such taxpayer. 
‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ means any vehicle which is manufactured pri-
marily for use on public streets, roads, and highways 
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(not including a vehicle operated exclusively on a rail 
or rails) and which has at least 4 wheels. 
‘‘(3) QUALIFIED
MANUFACTURER.—The term 
‘qualified manufacturer’ means any manufacturer 
(within the meaning of the regulations prescribed by 
the Administrator of the Environmental Protection 
Agency for purposes of the administration of title II 
of the Clean Air Act (42 U.S.C. 7521 et seq.)) which 
enters into a written agreement with the Secretary 
under which such manufacturer agrees— 
‘‘(A) to ensure that each vehicle manufac-
tured by such manufacturer after the later of 
the date on which such agreement takes effect 
or December 31, 2021, and that meets the re-
quirements of subsection (d), subparagraphs 
(D), (E), and (F) of paragraph (1), and para-
graph (6) of subsection (f) is labeled with a 
unique vehicle identification number, and 
‘‘(B) to make periodic written reports to 
the Secretary (at such times and in such man-
ner as the Secretary may provide) providing 
such vehicle identification numbers and such 
other information related to such vehicle as the 
Secretary may require. 
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‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
‘‘(g) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(2) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or other credit allowable under this 
chapter for a vehicle for which a credit is allowable 
under subsection (a) shall be reduced by the amount 
of credit allowed under such subsection for such ve-
hicle. 
‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowable under subsection 
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(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 vehicle 
shall not be considered eligible for a credit under 
this section unless such vehicle is in compliance 
with— 
‘‘(A) the applicable provisions of the Clean 
Air Act for the applicable make and model year 
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which 
has adopted such provision under a waiver 
under section 209(b) of the Clean Air Act), and 
‘‘(B) the motor vehicle safety provisions of 
sections 30101 through 30169 of title 49, 
United States Code. 
‘‘(h) CREDIT ALLOWED
FOR 2 AND 3-WHEELED 
PLUG-IN ELECTRIC VEHICLES.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
2- or 3-wheeled plug-in electric vehicle— 
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‘‘(A) there shall be allowed as a credit 
against the tax imposed by this subtitle for the 
taxable year an amount equal to the sum of the 
applicable amount with respect to each such 
qualified 2- or 3-wheeled plug-in electric vehicle 
placed in service by the taxpayer during the 
taxable year, and 
‘‘(B) the amount of the credit allowed 
under subparagraph (A) shall be treated as a 
credit allowed under subsection (a). 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
paragraph (1), the applicable amount is an amount 
equal to the lesser of— 
‘‘(A) 30 percent of the cost of the qualified 
2- or 3-wheeled plug-in electric vehicle, or 
‘‘(B) $7,500. 
‘‘(3) QUALIFIED
2- OR
3-WHEELED
PLUG-IN 
ELECTRIC VEHICLE.—The term ‘qualified 2- or 3- 
wheeled plug-in electric vehicle’ means any vehicle 
which— 
‘‘(A) has 2 or 3 wheels, 
‘‘(B) meets the requirements of— 
‘‘(i) subparagraphs (A), (B), (C), (E), 
(F), (G), and (I) of subsection (e)(1) (de-
termined by substituting ‘2.5 kilowatt 
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hours’ for ‘10 kilowatt hours’ in subpara-
graph (F)(i)), 
‘‘(ii) paragraphs (3) and (4) of sub-
section (e), and 
‘‘(iii) subsections (f), (h), (i), and (k), 
‘‘(C) is manufactured primarily for use on 
public streets, roads, and highways, and 
‘‘(D) is capable of achieving a speed of 45 
miles per hour or greater. 
‘‘(i) VIN NUMBER REQUIREMENT.—No credit shall 
be allowed under this section with respect to any vehicle 
unless the taxpayer includes the vehicle identification 
number of such vehicle on the return of tax for the taxable 
year. 
‘‘(j) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section (determined without 
regard to this subsection). Such amounts shall be 
determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
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‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(k) ASSEMBLY AND CONTENT QUALIFICATIONS.— 
For purposes of this section— 
‘‘(1) DOMESTIC ASSEMBLY QUALIFICATIONS.— 
The term ‘domestic assembly qualifications’ means, 
with respect to any new qualified plug-in electric ve-
hicle, that the final assembly of such vehicle occurs 
at a plant, factory, or other place which is located 
in the United States and operating under a collective 
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bargaining agreement negotiated by an employee or-
ganization (as defined in section 412(c)(4)), deter-
mined 
in 
a 
manner 
consistent 
with 
section 
7701(a)(46). 
‘‘(2) DOMESTIC
CONTENT
QUALIFICATIONS.— 
The term ‘domestic content qualifications’ means, 
with respect to any model of a new qualified plug- 
in electric vehicle, that vehicles of that model are 
powered by battery cells which are manufactured in 
the United States as certified by the manufacturer 
at such time and in such form and manner as the 
Secretary may prescribe. 
‘‘(3) FINAL ASSEMBLY.—The term ‘final assem-
bly’ means the process by which a manufacturer pro-
duces a new qualified plug-in electric drive motor ve-
hicle at, or through the use of, a plant, factory, or 
other place from which the vehicle is delivered to a 
dealer or importer with all component parts nec-
essary for the mechanical operation of the vehicle in-
cluded with the vehicle, whether or not the compo-
nent parts are permanently installed in or on the ve-
hicle. 
‘‘(l) TERMINATION.—No credit shall be allowed under 
this section with respect to any vehicle acquired after De-
cember 31, 2031.’’. 
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(b) TRANSFER OF CREDIT.— 
(1) IN GENERAL.—Section 36C, as added by 
subsection (a), is amended by redesignating sub-
section (k) as subsection (l) and by inserting after 
subsection (j) following new subsection: 
‘‘(k) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
or other guidance as the Secretary determines nec-
essary or appropriate, if the taxpayer who acquires 
a new plug-in electric drive motor vehicle elects the 
application of this subsection with respect to such 
vehicle, the credit which would (but for this sub-
section) be allowed to such taxpayer with respect to 
such vehicle shall be allowed to the eligible entity 
specified in such election (and not to such taxpayer). 
‘‘(2) ELIGIBLE ENTITY.—For purposes of this 
paragraph, the term ‘eligible entity’ means, with re-
spect to the vehicle for which the credit is allowed 
under subsection (a), the dealer which sold such ve-
hicle to the taxpayer and has— 
‘‘(A) subject to paragraph (4), registered 
with the Secretary for purposes of this para-
graph, at such time, and in such form and 
manner, as the Secretary may prescribe, 
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‘‘(B) prior to the election described in 
paragraph (1) and not later than at the time of 
such sale, disclosed to the taxpayer purchasing 
such vehicle— 
‘‘(i) the manufacturer’s suggested re-
tail price, 
‘‘(ii) the value of the credit allowed or 
other incentive available for the purchase 
of such vehicle, 
‘‘(iii) all fees associated with the pur-
chase of such vehicle, and 
‘‘(iv) the amount provided by the deal-
er to such taxpayer as a condition of the 
election described in paragraph (1), 
‘‘(C) made payment to such taxpayer 
(whether in cash or in the form of a partial 
payment or down payment for the purchase of 
such vehicle) in an amount equal to the credit 
otherwise allowable to such taxpayer, and 
‘‘(D) with respect to any incentive other-
wise available for the purchase of a vehicle for 
which a credit is allowed under this section, in-
cluding any incentive in the form of a rebate or 
discount provided by the dealer or manufac-
turer, ensured that— 
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‘‘(i) the availability or use of such in-
centive shall not limit the ability of a tax-
payer to make an election described in 
paragraph (1), and 
‘‘(ii) such election shall not limit the 
value or use of such incentive. 
‘‘(3) TIMING.—An election described in para-
graph (1) shall be made by the taxpayer not later 
than the date on which the vehicle for which the 
credit is allowed under subsection (a) is purchased. 
‘‘(4) REVOCATION
OF
REGISTRATION.—Upon 
determination by the Secretary that a dealer has 
failed to comply with the requirements described in 
paragraph (2), the Secretary may revoke the reg-
istration (as described in subparagraph (A) of such 
paragraph) of such dealer. 
‘‘(5) TAX
TREATMENT
OF
PAYMENTS.—With 
respect to any payment described in paragraph 
(2)(C), such payment— 
‘‘(A) shall not be includible in the gross in-
come of the taxpayer, and 
‘‘(B) with respect to the dealer, shall not 
be deductible under this title. 
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‘‘(6) APPLICATION
OF
CERTAIN
OTHER
RE-
QUIREMENTS.—In the case of any election under 
paragraph (1) with respect to any vehicle— 
‘‘(A) the amount of the reduction under 
subsection (c) shall be determined with respect 
to the modified adjusted gross income of the 
taxpayer for the taxable year preceding the tax-
able year in which such vehicle was acquired 
(and not with respect to such income for the 
taxable year in which such vehicle was ac-
quired), 
‘‘(B) the requirements of paragraphs (1) 
and (2) of subsection (f) shall apply to the tax-
payer who acquired the vehicle in the same 
manner as if the credit determined under this 
section with respect to such vehicle were al-
lowed to such taxpayer, 
‘‘(C) subsection (f)(5) shall not apply, and 
‘‘(D) the requirement of subsection (h) 
shall be treated as satisfied if the eligible entity 
provides the vehicle identification number of 
such vehicle to the Secretary in such manner as 
the Secretary may provide. 
‘‘(7) ADVANCE
PAYMENT
TO
REGISTERED 
DEALERS.— 
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‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to make advance payments 
to any eligible entity in an amount equal to the 
cumulative amount of the credits allowed under 
subsection (a) with respect to any vehicles sold 
by such entity for which an election described 
in paragraph (1) has been made. 
‘‘(B) EXCESSIVE PAYMENTS.—Rules simi-
lar to the rules of section 6417(c)(7) shall apply 
for purposes of this paragraph. 
‘‘(8) DEALER.—For purposes of this sub-
section, the term ‘dealer’ means a person licensed by 
a State, the District of Columbia, the Common-
wealth of Puerto Rico, any other territory or posses-
sion of the United States, an Indian tribal govern-
ment (as defined in section 48(e)(4)(F)(ii)), or any 
Alaska Native Corporation (as defined in section 3 
of the Alaska Native Claims Settlement Act (43 
U.S.C. 1602(m)) to engage in the sale of vehicles.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
36C(g)(3)(iii), as added by subsection (a), is amend-
ed by striking ‘‘, and (k)’’ and inserting ‘‘(k), and 
(l)’’. 
(c) REPEAL OF NONREFUNDABLE NEW QUALIFIED 
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.— 
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Subpart B of part IV of subchapter A of chapter 1 is 
amended by striking section 30D (and by striking the item 
relating to such section in the table of sections of such 
subpart). 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1016(a)(37) is amended by striking 
‘‘section 
30D(f)(1)’’ 
and 
inserting 
‘‘section 
36C(f)(1)’’. 
(2) Section 6211(b)(4)(A) is amended by insert-
ing ‘‘36C,’’ after ‘‘36B,’’. 
(3) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (R), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (S), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(T) an omission of a correct vehicle iden-
tification number required under section 36C(f) 
(relating to credit for new qualified plug-in elec-
tric drive motor vehicles) to be included on a re-
turn.’’. 
(4) Section 6501(m) is amended by striking 
‘‘30D(e)(4)’’ and inserting ‘‘36C(f)(5)’’. 
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(5) Section 166(b)(5)(A)(ii) of title 23, United 
States Code, is amended by striking ‘‘section 
30D(d)(1)’’ and inserting ‘‘section 36C(e)(1)’’. 
(6) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘36C,’’ after 
‘‘36B,’’. 
(7) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 36B the fol-
lowing new item: 
‘‘Sec. 36C. New qualified plug-in electric drive motor vehicles.’’. 
(e) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(c), and (d) of this section shall apply to vehicles ac-
quired after December 31, 2021. 
(2) The amendments made by subsection (b) 
shall apply to vehicles acquired after December 31, 
2022. 
SEC. 136402. CREDIT FOR PREVIOUSLY-OWNED QUALIFIED 
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36C the following new section: 
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‘‘SEC. 36D. PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELEC-
TRIC DRIVE MOTOR VEHICLES. 
‘‘(a) ALLOWANCE
OF CREDIT.—In the case of a 
qualified buyer who during a taxable year places in service 
a previously-owned qualified plug-in electric drive motor 
vehicle, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the sum of— 
‘‘(1) $2,000, plus 
‘‘(2) the supplemental credit amount. 
‘‘(b) SUPPLEMENTAL CREDIT AMOUNT.—For pur-
poses of subsection (a), the term ‘supplemental credit 
amount’ means— 
‘‘(1) $2,000, if— 
‘‘(A) in the case of a vehicle placed in serv-
ice before January 1, 2027, such vehicle draws 
propulsion energy from a battery with not less 
than 40 kilowatt hours of capacity and has a 
gasoline tank capacity not greater than 2.5 gal-
lons, and 
‘‘(B) in the case of a vehicle placed in serv-
ice after December 31, 2026, such vehicle 
draws propulsion energy from a battery with 
not less than 50 kilowatt hours of capacity and 
has a gasoline tank capacity not greater than 
2.5 gallons, and 
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‘‘(2) $0 in any other case. 
‘‘(c) LIMITATIONS.— 
‘‘(1) SALE PRICE.—The credit allowed under 
subsection (a) with respect to sale of a vehicle shall 
not exceed 50 percent of the sale price. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.—The amount which would 
(but for this paragraph) be allowed as a credit under 
subsection (a) shall be reduced (but not below zero) 
by $200 for each $1,000 (or fraction thereof) by 
which the lesser of— 
‘‘(A) the taxpayer’s modified adjusted 
gross income for such taxable year, or 
‘‘(B) the taxpayer’s modified adjusted 
gross income for the preceding taxable year, ex-
ceeds— 
‘‘(i) $150,000 in the case of a joint 
return or a surviving spouse (as defined in 
section 2(a)), 
‘‘(ii) $112,500 in the case of a head 
of household (as defined in section 2(b)), 
and 
‘‘(iii) $75,000 in the case of a tax-
payer not described in paragraph (1) or 
(2). 
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‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) PREVIOUSLY-OWNED QUALIFIED PLUG-IN 
ELECTRIC DRIVE MOTOR VEHICLE.—The term ‘pre-
viously-owned qualified plug-in electric drive motor 
vehicle’ means, with respect to a taxpayer, a motor 
vehicle— 
‘‘(A) the model year of which is at least 2 
years earlier than the calendar year in which 
the taxpayer acquires such vehicle, 
‘‘(B) the original use of which commences 
with a person other than the taxpayer, 
‘‘(C) which is acquired by the taxpayer in 
a qualified sale, and 
‘‘(D) which meets the requirements of sub-
paragraphs (C), (D), (E), (F), (G), (H), and (I) 
of section 36C(e)(1) (determined by applying 
‘previously-owned qualified plug-in electric drive 
motor vehicle’ for ‘new qualified plug-in electric 
drive motor vehicle’), or which is a new quali-
fied fuel cell motor vehicle (as defined in sub-
paragraphs (A) and (B) of section 30B(b)(3)) 
which has a gross vehicle weight rating of less 
than 14,000 pounds. 
‘‘(2) QUALIFIED
SALE.—The term ‘qualified 
sale’ means a sale of a motor vehicle— 
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‘‘(A) by a seller who holds such vehicle in 
inventory (within the meaning of section 471) 
for sale or lease, 
‘‘(B) for a sale price not to exceed 
$25,000, and 
‘‘(C) which is the first transfer since the 
date of the enactment of this section to a per-
son other than the person with whom the origi-
nal use of such vehicle commenced. 
‘‘(3) QUALIFIED BUYER.—The term ‘qualified 
buyer’ means, with respect to a sale of a motor vehi-
cle, a taxpayer— 
‘‘(A) who is an individual, 
‘‘(B) who purchases such vehicle for use 
and not for resale, 
‘‘(C) with respect to whom no deduction is 
allowable with respect to another taxpayer 
under section 151, 
‘‘(D) who has not been allowed a credit 
under this section for any sale during the 3- 
year period ending on the date of the sale of 
such vehicle, and 
‘‘(E) who possesses a certificate issued by 
the seller that certifies— 
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‘‘(i) that the vehicle is a previously- 
owned qualified plug-in electric drive motor 
vehicle, 
‘‘(ii) the vehicle identification number 
of such vehicle, 
‘‘(iii) the capacity of the battery at 
time of sale, and 
‘‘(iv) such other information as the 
Secretary may require. 
‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms 
‘motor vehicle’ and ‘capacity’ have the meaning 
given such terms in paragraphs (2) and (4) of sec-
tion 36C(e), respectively. 
‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall 
be allowed under subsection (a) with respect to any vehicle 
unless the taxpayer includes the vehicle identification 
number of such vehicle on the return of tax for the taxable 
year. 
‘‘(f) APPLICATION OF CERTAIN RULES.—For pur-
poses of this section, rules similar to the rules of para-
graphs (1), (2), (4), (5), and (6) of section 36C(f) shall 
apply for purposes of this section. 
‘‘(g) CERTIFICATE SUBMISSION REQUIREMENT.— 
The Secretary may require that the issuer of the certifi-
cate described in subsection (c)(3)(E) submit such certifi-
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cate to the Secretary at the time and in the manner re-
quired by the Secretary. 
‘‘(h) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
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‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(i) TRANSFER OF CREDIT.—Rules similar to the 
rules of section 36C(k) shall apply. 
‘‘(j) TERMINATION.—No credit shall be allowed 
under this section with respect to any vehicle acquired 
after December 31, 2031.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘36D,’’ after ‘‘36C,’’. 
(2) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (S), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (T), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(U) an omission of a correct vehicle iden-
tification 
number 
required 
under 
section 
36D(d) (relating to credit for previously-owned 
qualified plug-in electric drive motor vehicles) to 
be included on a return.’’. 
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(3) Paragraph (2) of section 1324(b) of title 
31, United States Code, as amended by the pre-
ceding provisions of this Act, is amended by insert-
ing ‘‘36D,’’ after ‘‘36C,’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by inserting after the item relating to section 
36C the following new item: 
‘‘Sec. 36D. Previously-owned qualified plug-in electric drive motor vehicles.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to vehicles acquired after Decem-
ber 31, 2021. 
SEC. 136403. QUALIFIED COMMERCIAL ELECTRIC VEHI-
CLES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45Y. CREDIT FOR QUALIFIED COMMERCIAL ELEC-
TRIC VEHICLES. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
qualified commercial electric vehicle credit for any taxable 
year is an amount equal to the sum of the credit amounts 
determined under subsection (b) with respect to each 
qualified commercial electric vehicle placed in service by 
the taxpayer during the taxable year. 
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‘‘(b) PER VEHICLE AMOUNT.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any qualified 
commercial electric vehicle shall be equal to the less-
er of— 
‘‘(A) 15 percent of the basis of such vehi-
cle (30 percent in the case of a vehicle not pow-
ered by a gasoline or diesel internal combustion 
engine), or 
‘‘(B) the incremental cost of such vehicle. 
‘‘(2) INCREMENTAL
COST.—For purposes of 
paragraph (1)(B), the incremental cost of any quali-
fied commercial electric vehicle is an amount equal 
to the excess of the purchase price for such vehicle 
over such price of a comparable vehicle. 
‘‘(3) COMPARABLE VEHICLE.—For purposes of 
this paragraph, the term ‘comparable vehicle’ means, 
with respect to any qualified commercial electric ve-
hicle, any vehicle which is powered solely by a gaso-
line or diesel internal combustion engine and which 
is comparable in size and use to such vehicle. 
‘‘(4) VEHICLES FOR LEASE TO INDIVIDUALS.— 
‘‘(A) IN GENERAL.—In the case of a com-
mercial electric vehicle which is acquired by the 
taxpayer for the purpose of leasing such vehicle 
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to any individual, the amount determined under 
this subsection with respect to such vehicle 
shall, at the election of such taxpayer, be equal 
to the amount of the credit that would other-
wise be allowed under section 36C(a) with re-
spect to such vehicle, as determined as if such 
vehicle— 
‘‘(i) is a new qualified plug-in electric 
drive motor vehicle, and 
‘‘(ii) has been acquired and placed in 
service by an individual. 
‘‘(B) ELECTION REQUIREMENTS.— 
‘‘(i) IN GENERAL.—An election under 
subparagraph (A) shall be made at such 
time and in such manner as the Secretary 
prescribes by regulations or other guid-
ance. 
‘‘(ii) DISCLOSURE
REQUIREMENT.— 
For purposes of any regulations or other 
guidance prescribed under clause (i), the 
Secretary shall require that, as a condition 
of an election under subparagraph (A), the 
taxpayer making such election shall be re-
quired to disclose to the lessee of the com-
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mercial electric vehicle the value of the 
credit allowed under this section. 
‘‘(c) QUALIFIED
COMMERCIAL
ELECTRIC
VEHI-
CLE.—For purposes of this section, the term ‘qualified 
commercial electric vehicle’ means any vehicle which— 
‘‘(1) meets the requirements of subparagraphs 
(A) and (C) of section 36C(e)(1) without regard to 
any gross vehicle weight rating or the requirements 
of section 36C(d), and is acquired for use or lease 
by the taxpayer and not for resale, 
‘‘(2) either— 
‘‘(A) meets the requirements of subpara-
graph (D) of section 36C(e)(1) and is manufac-
tured primarily for use on public streets, roads, 
and highways (not including a vehicle operated 
exclusively on a rail or rails), or 
‘‘(B) is mobile machinery, as defined in 
section 4053(8) (including vehicles that are not 
designed to perform a function of transporting 
a load over the public highways), 
‘‘(3) either— 
‘‘(A) is propelled to a significant extent by 
an electric motor which draws electricity from a 
battery which has a capacity of not less than 15 
kilowatt hours and is capable of being re-
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charged from an external source of electricity, 
or 
‘‘(B) is a new qualified fuel cell motor ve-
hicle described in subparagraphs (A) and (B) of 
section 30B(b)(3), and 
‘‘(4) is of a character subject to the allowance 
for depreciation. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
rules similar to the rules under subsection (f) of sec-
tion 36C shall apply for purposes of this section. 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowed under subsection 
(a) with respect to any property which ceases to be 
property eligible for such credit, including regula-
tions or other guidance which, in the case of any 
commercial electric vehicle for which an election was 
made under subsection (b)(4)— 
‘‘(A) recaptures the credit allowed under 
subsection (a) if— 
‘‘(i) such vehicle was not leased to an 
individual, or 
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‘‘(ii) the taxpayer failed to comply 
with the requirements described in sub-
section (b)(4)(B)(ii), and 
‘‘(B) in the case of a commercial electric 
vehicle which is leased by an individual whose 
modified adjusted gross income exceeds the 
threshold amount under section 36C(c)(2), re-
captures so much of the credit allowed under 
subsection (a) as exceeds the amount of the 
credit which would have otherwise been allow-
able under such subsection if, for purposes of 
subsection (b)(4)(A), the amount of the credit 
that would otherwise be allowed under section 
36C(a) with respect to such vehicle had been 
determined as if such vehicle was acquired and 
placed in service by such individual and subject 
to reduction under section 36C(c). 
‘‘(3) VEHICLES PLACED IN SERVICE BY TAX- 
EXEMPT
ENTITIES.—Subsection (c)(4) shall not 
apply to any vehicle which is not subject to a lease 
and which is placed in service by a tax-exempt entity 
described in clause (i), (ii), or (iv) of section 
168(h)(2)(A). 
‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall 
be determined under subsection (a) with respect to any 
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vehicle unless the taxpayer includes the vehicle identifica-
tion number of such vehicle on the return of tax for the 
taxable year. 
‘‘(f) TERMINATION.—No credit shall be determined 
under this section with respect to any vehicle acquired 
after December 31, 2031.’’. 
(b) ELECTIVE PAYMENT OF CREDIT IN CASE OF 
CERTAIN TAX-EXEMPT ENTITIES.—Section 6417(b), as 
amended by the preceding provisions of this Act, is amend-
ed by adding at the end the following new paragraph: 
‘‘(9) In the case of a tax-exempt entity de-
scribed in clause (i), (ii), or (iv) of section 
168(h)(2)(A), the credit for qualified commercial ve-
hicles determined under section 45Y by reason of 
subsection (d)(2) thereof.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 38(b) is amended by striking para-
graph (30) and inserting the following: 
‘‘(30) the qualified commercial electric vehicle 
credit determined under section 45Y,’’. 
(2) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (T), by striking 
‘‘and’’ at the end, 
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(B) in subparagraph (U), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(V) an omission of a correct vehicle iden-
tification number required under section 45Y(e) 
(relating to commercial electric vehicle credit) 
to be included on a return.’’. 
(3) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45Y. Qualified commercial electric vehicle credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to vehicles acquired after Decem-
ber 31, 2021. 
SEC. 136404. QUALIFIED FUEL CELL MOTOR VEHICLES. 
(a) IN GENERAL.—Section 30B(k)(1) is amended by 
striking ‘‘December 31, 2021’’ and inserting ‘‘December 
31, 2031’’. 
(b) NEW QUALIFIED FUEL CELL MOTOR VEHI-
CLE.—Section 30B(b) is amended by striking ‘‘and’’ at 
the end of subparagraph (D), by striking the period at 
the end of subparagraph (E) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(F) which is not property of a character 
subject to an allowance for depreciation.’’. 
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(c) CONFORMING AMENDMENT.—Section 30B(g) is 
amended to read as follows: 
‘‘(g) PERSONAL CREDIT.—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 A for such 
taxable year.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2021. 
SEC. 136405. ALTERNATIVE FUEL REFUELING PROPERTY 
CREDIT. 
(a) IN GENERAL.—Section 30C(g) is amended by 
striking ‘‘December 31, 2021’’ and inserting ‘‘December 
31, 2031’’. 
(b) ADDITIONAL CREDIT FOR CERTAIN ELECTRIC 
CHARGING PROPERTY.— 
(1) IN GENERAL.—Section 30C(a) is amend-
ed— 
(A) by striking ‘‘equal to 30 percent’’ and 
inserting the following: ‘‘equal to the sum of— 
‘‘(1) 30 percent (6 percent in the case of prop-
erty of a character subject to depreciation)’’, 
(B) by striking the period at the end and 
inserting ‘‘, plus’’, and 
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(C) by adding at the end the following new 
paragraph: 
‘‘(2) 4 percent of so much of such cost as ex-
ceeds the limitation under subsection (b)(1) that 
does not exceed the amount of cost attributable to 
qualified alternative fuel vehicle refueling property 
(determined without regard to subsection (c)(1) and 
as if only electricity, and fuel at least 85 percent of 
the volume of which consists of hydrogen, were 
treated as clean-burning fuels for purposes of section 
179A(d)) which— 
‘‘(A) is intended for general public use 
with no associated fee or payment arrangement, 
‘‘(B) is intended for general public use and 
accepts payment via a credit card reader, in-
cluding 
a 
credit 
card 
reader 
that 
uses 
contactless technology, or 
‘‘(C) is intended for use exclusively by 
commercial or governmental vehicles.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
30C(b) is amended— 
(A) by striking ‘‘The credit allowed under 
subsection (a)’’ and inserting ‘‘The amount of 
cost taken into account under subsection 
(a)(1)’’, 
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(B) by striking ‘‘$30,000’’ and inserting 
‘‘$100,000’’, and 
(C) by striking ‘‘$1,000’’ and inserting 
‘‘$3,333.33’’. 
(3) BIDIRECTIONAL CHARGING EQUIPMENT IN-
CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI-
CLE
REFUELING
PROPERTY.—Section 30C(c) is 
amended to read as follows: 
‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE RE-
FUELING PROPERTY.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified alter-
native fuel vehicle refueling property’ has the same 
meaning as the term ‘qualified clean-fuel vehicle re-
fueling property’ would have under section 179A 
if— 
‘‘(A) paragraph (1) of section 179A(d) did 
not apply to property installed on property 
which is used as the principal residence (within 
the meaning of section 121) of the taxpayer, 
and 
‘‘(B) only the following were treated as 
clean-burning fuels for purposes of section 
179A(d): 
‘‘(i) Any fuel at least 85 percent of 
the volume of which consists of one or 
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more of the following: ethanol, natural gas, 
compressed natural gas, liquified natural 
gas, liquefied petroleum gas, or hydrogen. 
‘‘(ii) Any mixture— 
‘‘(I) which consists of two or 
more of the following: biodiesel (as de-
fined in section 40A(d)(1)), diesel fuel 
(as defined in section 4083(a)(3)), or 
kerosene, and 
‘‘(II) at least 20 percent of the 
volume of which consists of biodiesel 
(as so defined) determined without re-
gard to any kerosene in such mixture. 
‘‘(iii) Electricity. 
‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.— 
Property shall not fail to be treated as qualified al-
ternative fuel vehicle refueling property solely be-
cause such property— 
‘‘(A) is capable of charging the battery of 
a motor vehicle propelled by electricity, and 
‘‘(B) allows discharging electricity from 
such battery to an electric load external to such 
motor vehicle.’’. 
(c) CERTAIN ELECTRIC CHARGING STATIONS IN-
CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHICLE 
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REFUELING PROPERTY.—Section 30C is amended by re-
designating subsections (f) and (g) as subsections (g) and 
(h), respectively, and by inserting after subsection (e) the 
following: 
‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING STA-
TIONS FOR CERTAIN VEHICLES WITH 2 OR 3 WHEELS.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified alter-
native fuel vehicle refueling property’ includes any 
property described in subsection (c) for the re-
charging of a motor vehicle described in paragraph 
(2) that is propelled by electricity, but only if the 
property— 
‘‘(A) meets the requirements of subsection 
(a)(2), and 
‘‘(B) is of a character subject to deprecia-
tion. 
‘‘(2) MOTOR VEHICLE.—A motor vehicle is de-
scribed in this paragraph if the motor vehicle— 
‘‘(A) is manufactured primarily for use on 
public streets, roads, or highways (not including 
a vehicle operated exclusively on a rail or rails), 
and 
‘‘(B) has at least 2, but not more than 3, 
wheels.’’. 
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(d) WAGE AND APPRENTICESHIP REQUIREMENTS.— 
Section 30C, as amended by this section, is further 
amended by redesignating subsections (g) and (h) as sub-
sections (h) and (i) and by inserting after subsection (f) 
the following new subsection: 
‘‘(g) 
WAGE
AND
APPRENTICESHIP
REQUIRE-
MENTS.— 
‘‘(1) INCREASED CREDIT AMOUNT.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified 
alternative 
fuel 
vehicle 
refueling 
project which satisfies the requirements of sub-
paragraph (C), the amount of the credit deter-
mined under subsection (a) for property of a 
character subject to an allowance for deprecia-
tion shall be equal to such amount multiplied by 
5 (determined without regard to this sentence). 
‘‘(B) QUALIFIED ALTERNATIVE FUEL VE-
HICLE REFUELING PROJECT.—For purposes of 
this subsection, the term ‘qualified alternative 
fuel vehicle refueling project’ means a project 
consisting of multiple properties that are part 
of a single project. The requirements of this 
paragraph shall be applied to such project. 
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‘‘(C) PROJECT REQUIREMENTS.—A project 
meets the requirements of this subparagraph if 
it is one of the following: 
‘‘(i) A project the construction of 
which begins prior to the date that is 60 
days after the Secretary publishes guid-
ance with respect to the requirements of 
paragraphs (2) and (3). 
‘‘(ii) A project which satisfies the re-
quirements of paragraphs (2) and (3). 
‘‘(2) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any qualified alternative fuel vehicle refueling 
project are that the taxpayer shall ensure that 
any laborers and mechanics employed by con-
tractors and subcontractors in the construction 
of such property shall be paid wages at rates 
not less than the prevailing rates for construc-
tion, alteration, or repair of a similar character 
in the locality as most recently determined by 
the Secretary of Labor, in accordance with sub-
chapter IV of chapter 31 of title 40, United 
States Code. 
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‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.—Rules similar to the rules of clauses 
(i) through (iv) of section 45(b)(7)(B) shall 
apply. 
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection.’’. 
(e) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2021. 
SEC. 136406. REINSTATEMENT AND EXPANSION OF EM-
PLOYER-PROVIDED FRINGE BENEFITS FOR 
BICYCLE COMMUTING. 
(a) REPEAL OF SUSPENSION OF EXCLUSION FOR 
QUALIFIED BICYCLE COMMUTING BENEFITS.—Section 
132(f) is amended by striking paragraph (8). 
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(b) EXPANSION
OF BICYCLE COMMUTING BENE-
FITS.—Section 132(f)(5)(F) is amended to read as fol-
lows: 
‘‘(F) DEFINITIONS RELATED TO BICYCLE 
COMMUTING BENEFITS.— 
‘‘(i) QUALIFIED BICYCLE COMMUTING 
BENEFIT.—The term ‘qualified bicycle 
commuting benefit’ means, with respect to 
any calendar year— 
‘‘(I) any employer reimbursement 
during the 15-month period beginning 
with the first day of such calendar 
year for reasonable expenses incurred 
by the employee during such calendar 
year for the purchase (including asso-
ciated finance charges), lease, rental 
(including a bikeshare), improvement, 
repair, or storage of qualified com-
muting property, or 
‘‘(II) the direct or indirect provi-
sion by the employer to the employee 
during such calendar year of the use 
(including a bikeshare), improvement, 
repair, or storage of qualified com-
muting property, 
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if the employee regularly uses such quali-
fied commuting property for travel between 
the employee’s residence, place of employ-
ment, a qualified parking facility, or a 
mass transit facility that connects the em-
ployee to their residence or place of em-
ployment. 
‘‘(ii) QUALIFIED
COMMUTING
PROP-
ERTY.—The term ‘qualified commuting 
property’ means— 
‘‘(I) any bicycle (other than a bi-
cycle equipped with any motor), 
‘‘(II) any electric bicycle which 
meets the requirements of section 
36E(c)(5), 
‘‘(III) any 2- or 3-wheel scooter 
(other than a scooter equipped with 
any motor), and 
‘‘(IV) any 2- or 3-wheel scooter 
propelled by an electric motor if such 
motor does not provide assistance if 
the speed of such scooter exceeds 20 
miler per hour (or if the speed of such 
scooter is not capable of exceeding 20 
miles per hour) and the weight of 
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such scooter does not exceed 100 
pounds. 
‘‘(iii) 
BIKESHARE.—The 
term 
‘bikeshare’ means a rental operation at 
which qualified commuting property is 
made available to customers to pick up and 
drop off for point-to-point use within a de-
fined geographic area.’’. 
(c) 
LIMITATION
ON
EXCLUSION.—Section 
132(f)(2)(C) is amended to read as follows: 
‘‘(C) 30 percent of the dollar amount in ef-
fect under subparagraph (B) per month in the 
case of any qualified bicycle commuting ben-
efit.’’. 
(d) NO CONSTRUCTIVE RECEIPT.—Section 132(f)(4) 
is amended by striking ‘‘(other than a qualified bicycle 
commuting reimbursement)’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 132(f)(1)(D) is amended by striking 
‘‘reimbursement’’ and inserting ‘‘benefit’’. 
(2) Section 274(l) is amended by striking para-
graph (2). 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
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SEC. 136407. CREDIT FOR CERTAIN NEW ELECTRIC BICY-
CLES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36D the following new section: 
‘‘SEC. 36E. ELECTRIC BICYCLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 30 percent of the 
cost of each qualified electric bicycle placed in service by 
the taxpayer during such taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION ON COST PER ELECTRIC BICY-
CLE
TAKEN
INTO
ACCOUNT.—The amount taken 
into account under subsection (a) as the cost of any 
qualified electric bicycle shall not exceed $3,000. 
‘‘(2) BICYCLE LIMITATION WITH RESPECT TO 
CREDIT.— 
‘‘(A) LIMITATION
ON
NUMBER
OF
PER-
SONAL-USE BICYCLES.—In the case of any tax-
payer for any taxable year, the number of per-
sonal-use bicycles taken into account under sub-
section (a) shall not exceed the excess (if any) 
of— 
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‘‘(i) 1 (2 in the case of a joint return), 
reduced by 
‘‘(ii) the aggregate number of bicycles 
taken into account by the taxpayer under 
subsection (a) for the 2 preceding taxable 
years. 
‘‘(B) PHASEOUT BASED ON MODIFIED AD-
JUSTED
GROSS
INCOME.—The credit allowed 
under subsection (a) shall be reduced by $200 
for each $1,000 (or fraction thereof) by which 
the taxpayer’s modified adjusted gross income 
exceeds— 
‘‘(i) $150,000 in the case of a joint 
return or a surviving spouse (as defined in 
section 2(a)), 
‘‘(ii) $112,500 in the case of a head 
of household (as defined in section 2(b)), 
and 
‘‘(iii) $75,000 in the case of a tax-
payer not described in clause (i) or (ii). 
‘‘(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (B), the 
term ‘modified adjusted gross income’ means 
adjusted gross income increased by any amount 
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excluded from gross income under section 911, 
931, or 933. 
‘‘(D) SPECIAL RULE FOR MODIFIED AD-
JUSTED
GROSS
INCOME
TAKEN
INTO
AC-
COUNT.—The modified adjusted gross income 
of the taxpayer that is taken into account for 
purposes of this paragraph shall be the lesser 
of— 
‘‘(i) the modified adjusted gross in-
come for the taxable year in which the 
credit is claimed, or 
‘‘(ii) the modified adjusted gross in-
come for the immediately preceding taxable 
year. 
‘‘(c) QUALIFIED ELECTRIC BICYCLE.—For purposes 
of this section, the term ‘qualified electric bicycle’ means 
a bicycle— 
‘‘(1) the original use of which commences with 
the taxpayer, 
‘‘(2) which is acquired for use by the taxpayer 
and not for resale, 
‘‘(3) which is made by a qualified manufacturer 
and is labeled with the qualified vehicle identification 
number assigned to such bicycle by such manufac-
turer, 
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‘‘(4) with respect to which the aggregate 
amount paid for such acquisition does not exceed 
$4,000, and 
‘‘(5) which is equipped with— 
‘‘(A) fully operable pedals, 
‘‘(B) a saddle or seat for the rider, and 
‘‘(C) an electric motor of less than 750 
watts which is designed to provided assistance 
in propelling the bicycle and— 
‘‘(i) does not provide such assistance 
if the bicycle is moving in excess of 20 
miler per hour, or 
‘‘(ii) if such motor only provides such 
assistance when the rider is pedaling, does 
not provide such assistance if the bicycle is 
moving in excess of 28 miles per hour. 
‘‘(d) VIN NUMBER REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) with respect to any qualified 
electric bicycle unless the taxpayer includes the 
qualified vehicle identification number of such bicy-
cle on the return of tax for the taxable year. 
‘‘(2) 
QUALIFIED
VEHICLE
IDENTIFICATION 
NUMBER.—For purposes of this section, the term 
‘qualified vehicle identification number’ means, with 
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respect to any bicycle, the vehicle identification num-
ber assigned to such bicycle by a qualified manufac-
turer pursuant to the methodology referred to in 
paragraph (3). 
‘‘(3) QUALIFIED
MANUFACTURER.—For pur-
poses of this section, the term ‘qualified manufac-
turer’ means any manufacturer of qualified electric 
bicycles which enters into an agreement with the 
Secretary which provides that such manufacturer 
will— 
‘‘(A) assign a vehicle identification number 
to each qualified electric bicycle produced by 
such manufacturer utilizing a methodology that 
will ensure that such number (including any al-
phanumeric) is unique to such bicycle (by uti-
lizing numbers or letters which are unique to 
such manufacturer or by such other method as 
the Secretary may provide), 
‘‘(B) label such bicycle with such number 
in such manner as the Secretary may provide, 
and 
‘‘(C) make periodic written reports to the 
Secretary (at such times and in such manner as 
the Secretary may provide) of the vehicle identi-
fication numbers so assigned and including 
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such information as the Secretary may require 
with respect to the qualified electric bicycle to 
which such number was so assigned. 
‘‘(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. 
‘‘(2) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or other credit allowable under this 
chapter for a qualified electric bicycle for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such bicycle. 
‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowable under subsection 
(a) with respect to any property which ceases to be 
property eligible for such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
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bicycle if the taxpayer elects to not have this section 
apply to such bicycle. 
‘‘(f) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section (determined without 
regard to this subsection). Such amounts shall be 
determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
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will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(g) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
or other guidance as the Secretary determines nec-
essary or appropriate, if the taxpayer who acquires 
a qualified electric bicycle after December 31, 2022 
elects the application of this subsection with respect 
to such qualified electric bicycle, the credit which 
would (but for this subsection) be allowed to such 
taxpayer with respect to such qualified electric bicy-
cle shall be allowed to the eligible entity specified in 
such election (and not to such taxpayer). 
‘‘(2) ELIGIBLE ENTITY.—For purposes of this 
paragraph, the term ‘eligible entity’ means, with re-
spect to the qualified electric bicycle for which the 
credit is allowed under subsection (a), the retailer 
which sold such qualified electric bicycle to the tax-
payer and has— 
‘‘(A) subject to paragraph (4), registered 
with the Secretary for purposes of this para-
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graph, at such time, and in such form and 
manner, as the Secretary may prescribe, 
‘‘(B) prior to the election described in 
paragraph (1) and no later than at the time of 
such sale, disclosed to the taxpayer purchasing 
such qualified electric bicycle— 
‘‘(i) the retail price, 
‘‘(ii) the value of the credit allowed or 
other incentive available for the purchase 
of such qualified electric bicycle, 
‘‘(iii) all fees associated with the pur-
chase of such qualified electric bicycle, and 
‘‘(iv) the amount provided by the re-
tailer to such taxpayer as a condition of 
the election described in paragraph (1), 
‘‘(C) made payment to such taxpayer 
(whether in cash or in the form of a partial 
payment or down payment for the purchase of 
such qualified electric bicycle) in an amount 
equal to the credit otherwise allowable to such 
taxpayer, and 
‘‘(D) with respect to any incentive other-
wise available for the purchase of a qualified 
electric bicycle for which a credit is allowed 
under this section, including any incentive in 
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the form of a rebate or discount provided by the 
retailer or manufacturer, ensured that— 
‘‘(i) the availability or use of such in-
centive shall not limit the ability of a tax-
payer to make an election described in 
paragraph (1), and 
‘‘(ii) such election shall not limit the 
value or use of such incentive. 
‘‘(3) TIMING.—An election described in para-
graph (1) shall be made by the taxpayer not later 
than the date on which the qualified electric bicycle 
for which the credit is allowed under subsection (a) 
is purchased. 
‘‘(4) REVOCATION
OF
REGISTRATION.—Upon 
determination by the Secretary that a retailer has 
failed to comply with the requirements described in 
paragraph (2), the Secretary may revoke the reg-
istration (as described in subparagraph (A) of such 
paragraph) of such retailer. 
‘‘(5) TAX
TREATMENT
OF
PAYMENTS.—With 
respect to any payment described in paragraph 
(2)(C), such payment— 
‘‘(A) shall not be includible in the gross in-
come of the taxpayer, and 
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‘‘(B) with respect to the retailer, shall not 
be deductible under this title. 
‘‘(6) APPLICATION
OF
CERTAIN
OTHER
RE-
QUIREMENTS.—In the case of any election under 
paragraph (1) with respect to any qualified electric 
bicycle— 
‘‘(A) the amount of the reduction under 
subsection (b) shall be determined with respect 
to the modified adjusted gross income of the 
taxpayer for the taxable year preceding the tax-
able year in which such qualified electric bicycle 
was acquired (and not with respect to such in-
come for the taxable year in which such quali-
fied electric bicycle was acquired), 
‘‘(B) the requirements of paragraphs (1) 
and (2) of subsection (e) shall apply to the tax-
payer who acquired the qualified electric bicycle 
in the same manner as if the credit determined 
under this section with respect to such qualified 
electric bicycle were allowed to such taxpayer, 
and 
‘‘(C) subsection (e)(5) shall not apply. 
‘‘(7) ADVANCE PAYMENT TO REGISTERED RE-
TAILERS.— 
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