I
103D CONGRESS
1ST SESSION
H. R. 113
To amend the Internal Revenue Code of 1986 to allow individuals a temporary
refundable credit for the purchase of a new domestic passenger vehicle.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mr. BURTON of Indiana introduced the following bill; which was referred to
the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow indi-
viduals a temporary refundable credit for the purchase
of a new domestic passenger vehicle.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Buy American Motor
Vehicles Act of 1993’’.
SEC. 2. STATEMENT OF PURPOSE.
It is the purpose of this Act to stimulate economic
growth by encouraging the purchase of new domestic pas-
senger vehicles through the provision of a temporary tax
credit, which a purchaser may assign in exchange for an
equal reduction in the purchase price of the vehicle from
the amount such price would have been if this Act had
not been enacted.
SEC. 3. TEMPORARY REFUNDABLE CREDIT FOR PURCHASE
OF NEW DOMESTIC PASSENGER VEHICLES.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section:
‘‘SEC. 35. PURCHASE OF NEW DOMESTIC PASSENGER VEHI-
CLE.
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN GENERAL.—In the case of an individual
who purchases a new domestic passenger vehicle,
there shall be allowed as a credit against the tax im-
posed by this chapter for the taxable year in which
the purchase is made an amount equal to the appli-
cable percentage of the purchase price of the vehicle.
‘‘(2) APPLICABLE PERCENTAGE.—For purposes
of paragraph (1), the applicable percentage is—
‘‘(A) 15 percent, in the case of a vehicle
purchased in calendar year 1993, and
‘‘(B) 7.5 percent, in the case of a vehicle pur-
chased in calendar year 1994.
‘‘(3) LIMITATION.—The credit allowed by para-
graph (1) for any taxpayer shall not exceed—
‘‘(A) $2,000, in the case of taxable years
ending on or before December 31, 1993, and
‘‘(B) $1,000, in the case of taxable years
ending after such date.
‘‘(b) ASSIGNMENT OF CREDIT.—Under regulations
prescribed by the Secretary—
‘‘(1) an individual qualifying for a credit under
subsection (a) may, at the time of purchase of the
vehicle, assign the right to the credit to the retail
dealer from whom the vehicle is purchased in ex-
change for a purchase price reduction of equal value,
‘‘(2) such retail dealer may assign such right to
the manufacturer of the vehicle, and
‘‘(3) such manufacturer shall be allowed to use
such credit against the tax imposed by this chapter
on such manufacturer.
‘‘(c) NEW DOMESTIC PASSENGER VEHICLE.—For
purposes of this section—
‘‘(1) IN
GENERAL.—The term ‘new domestic
passenger vehicle’ means any domestic vehicle
which—
‘‘(A) is a passenger vehicle (within the
meaning of section 4001(b)), and
‘‘(B) is purchased by the taxpayer in the
1st retail sale of the vehicle (within the mean-
ing of section 4001(a)).
‘‘(2) DOMESTIC VEHICLE.—The term ‘domestic
vehicle’ means any vehicle if—
‘‘(A) the vehicle is produced by a domestic
vehicle manufacturer at a manufacturing facil-
ity located within the United States or Canada,
and
‘‘(B) such manufacturer includes on the
label required by section 3 of the Automobile
Information Disclosure Act (15 U.S.C. 1232)
information concerning—
‘‘(i) whether the vehicle is a domestic
vehicle eligible for the credit allowed by
this section, and
‘‘(ii) the percentage of the value of all
parts used in the production of the vehicle
which is attributable to parts produced by
domestic parts manufacturers.
‘‘(3) DOMESTIC MANUFACTURERS.—
‘‘(A) 
DOMESTIC
VEHICLE
MANUFAC-
TURER.—The term ‘domestic vehicle manufac-
turer’ means a manufacturer (whether or not a
related source) of motor vehicles which—
‘‘(i) has 1 or more motor vehicle man-
ufacturing facilities located within the
United States which produce motor vehi-
cles for interstate sale or export, or both,
and
(ii) with respect to its production of
motor vehicles in the facilities referred to
in clause (i) during the most recently com-
pleted calendar year, utilized motor vehicle
parts produced by domestic manufacturers
which constituted 60 percent or more of
the total value of all motor vehicle parts
used in such production.
‘‘(B) DOMESTIC PARTS MANUFACTURER.—
The term ‘domestic parts manufacturer’ means
a manufacturer of motor vehicle parts which—
‘‘(i) has 1 or more motor vehicle parts
manufacturing facilities located within the
United States or Canada, and
‘‘(ii) either—
‘‘(I) is not a related source,
‘‘(II) is not affiliated with a re-
lated source, or
‘‘(III) is affiliated with a related
source, but with respect to its produc-
tion of motor vehicle parts in the fa-
cilities referred to in clause (i) during
the most recent full calendar year,
utilized materials and components
produced by, or purchased or other-
wise obtained (directly or indirectly)
from, related sources to an extent not
exceeding 25 percent of the total value
of such production.
‘‘(4) RELATED SOURCES, OWNERSHIP, AND AF-
FILIATION.—
‘‘(A) RELATED SOURCE.—The term ‘relat-
ed source’ means—
‘‘(i) a natural person who is a citizen
of Japan, and
‘‘(ii) a corporation or other legal en-
tity, wherever located, if owned or con-
trolled by—
‘‘(I) natural persons who are citi-
zens of Japan, or
‘‘(II) 
another 
corporation 
or
other legal entity which is owned or
controlled by natural persons who are
citizens of Japan, unless such cor-
poration or other legal entity would
qualify as a domestic parts manufac-
turer under paragraph (3)(B).
‘‘(B) OWN OR CONTROL.—The term ‘own
or control’ means—
‘‘(i) in the case of a corporation, the
holding of at least 50 percent (by vote or
value) of the capital structure of the cor-
poration, and
‘‘(ii) in the case of any other kind of
legal entity, the holding of interests rep-
resenting at least 50 percent of the capital
structure of the entity.
‘‘(C) AFFILIATED.—A domestic parts man-
ufacturer shall be considered to be affiliated
with a related source if—
‘‘(i) in the case of a domestic parts
manufacturer which is a corporation, a re-
lated source holds at least 2.5 percent but
less than 50 percent (by vote or value) of
the capital structure of the corporation,
and
‘‘(ii) in the case of a domestic parts
manufacturer which is any other kind of
legal entity, a related source holds inter-
ests representing at least 2.5 percent, but
less than 50 percent, of the capital struc-
ture of the entity.
‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) PURCHASE PRICE.—Purchase price shall
be determined under rules similar to the rules of
section 4011(d)(1).
‘‘(2) VALUE.—The term ‘value’ when applied
to—
‘‘(A) materials and components used in
production of motor vehicles parts, or
‘‘(B) motor vehicle parts used in the pro-
duction of motor vehicles,
refers to the cost of such materials, components, or
parts to the manufacturer of such parts or vehicles
as determined for purposes of applying this title (in-
cluding, in the case of purchases of materials, com-
ponents, and parts involving related sources, entities
owned or controlled by related sources, or entities
affiliated with related sources, determinations based
on the application of the transfer price rules).
‘‘(3) UNITED
STATES.—The term ‘United
States’ includes the Commonwealth of Puerto Rico
and the possessions of the United States.
‘‘(e) REGULATIONS.—Not later than 60 days after
the date of the enactment of this section, the Secretary
shall prescribe any regulations appropriate to carry out
the purposes of this section, including regulations to pre-
vent the avoidance of any limitation or requirement of this
section.
‘‘(f) TERMINATION.—This section shall not apply to
any vehicle purchased after December 31, 1994.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such subpart C is amended by striking the item relat-
ing to section 35 and inserting the following new items:
‘‘Sec. 35. Purchase of new domestic passenger vehicle.
‘‘Sec. 36. Overpayments of tax.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to vehicles purchased after Decem-
ber 31, 1992.
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