I 
118TH CONGRESS 
2D SESSION 
H. R. 9780 
To amend the Internal Revenue Code of 1986 to provide tax incentives 
and fees for increasing motor vehicle fuel economy, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 24, 2024 
Mr. CASTEN (for himself and Ms. MATSUI) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Energy and Commerce, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
tax incentives and fees for increasing motor vehicle fuel 
economy, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Vehicle Energy Performance Act of 2024’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
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to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
SEC. 2. TAX CREDIT FOR VEHICLE ENERGY PERFORMANCE. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 (relating to other credits) is 
amended by inserting after section 30D the following new 
section: 
‘‘SEC. 30E. VEHICLE ENERGY PERFORMANCE REBATE. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—There shall be allowed as a 
credit against the tax imposed by this chapter for 
the taxable year an amount equal to the amount de-
termined under paragraph (2) with respect to any 
new qualified high energy performance motor vehicle 
placed in service by the taxpayer during the taxable 
year. 
‘‘(2) CREDIT AMOUNT.—With respect to each 
new qualified high energy performance motor vehi-
cle, the amount determined under this paragraph 
shall be equal to the amount (not greater than 
$5,000) that bears the same ratio to $5,000 as— 
‘‘(A) the excess of— 
‘‘(i) the vehicle energy performance of 
such vehicle, over 
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‘‘(ii) the median vehicle energy per-
formance for the model year immediately 
preceding the model year of such vehicle, 
bears to 
‘‘(B) the excess of— 
‘‘(i) the best vehicle energy perform-
ance for the model year immediately pre-
ceding the model year of such vehicle, over 
‘‘(ii) the median vehicle energy per-
formance for the model year immediately 
preceding the model year of such vehicle. 
‘‘(b) NEW QUALIFIED HIGH ENERGY PERFORMANCE 
MOTOR VEHICLE.—For purposes of this section, the term 
‘new qualified high energy performance motor vehicle’ 
means a passenger automobile or light truck— 
‘‘(1) which is treated as a motor vehicle for 
purposes of title II of the Clean Air Act, 
‘‘(2) which achieves vehicle energy performance 
that is greater than the median vehicle energy per-
formance for the model year immediately preceding 
the model year of such vehicle, 
‘‘(3) for which standards are prescribed pursu-
ant to section 32902 of title 49, United States Code, 
‘‘(4) the original use of which commences with 
the taxpayer, 
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‘‘(5) which is acquired for use or lease by the 
taxpayer and not for resale, and 
‘‘(6) which is made by a manufacturer begin-
ning with model year 2026. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to property of a char-
acter subject to an allowance for depreciation shall 
be treated as a credit listed in section 38(b) for such 
taxable year (and not allowed under subsection (a)). 
‘‘(2) REFUNDABLE PERSONAL CREDIT.— 
‘‘(A) IN GENERAL.—For purposes of this 
title, the credit allowed under subsection (a) for 
any taxable year (determined after application 
of paragraph (1)) shall be treated as a credit 
allowable under subpart C for such taxable year 
(and not allowed under subsection (a)). 
‘‘(B) 
REFUNDABLE
CREDIT
MAY
BE 
TRANSFERRED.— 
‘‘(i) IN GENERAL.—A taxpayer may, 
in connection with the purchase of a new 
qualified high energy performance motor 
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vehicle, transfer any refundable credit de-
scribed in subparagraph (A) to any person 
who is in the trade or business of selling 
new qualified high energy performance 
motor vehicles and who sold such vehicle to 
the taxpayer, but only if such person clear-
ly discloses to such taxpayer, through the 
use of a window sticker attached to the 
new qualified high energy performance ve-
hicle— 
‘‘(I) the amount of the refund-
able credit described in subparagraph 
(A) with respect to such vehicle, and 
‘‘(II) a notification that the tax-
payer will not be eligible for any cred-
it under section 30D with respect to 
such vehicle unless the taxpayer elects 
not to have this section apply with re-
spect to such vehicle. 
‘‘(ii) CERTIFICATION.—A transferee 
of a refundable credit described in sub-
paragraph (A) may not claim such credit 
unless such claim is accompanied by a cer-
tification to the Secretary that the trans-
feree reduced the price the taxpayer paid 
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for the new qualified high energy perform-
ance motor vehicle by the entire amount of 
such refundable credit. 
‘‘(iii) CONSENT REQUIRED FOR REV-
OCATION.—Any transfer under clause (i) 
may be revoked only with the consent of 
the Secretary. 
‘‘(iv) REGULATIONS.—The Secretary 
may prescribe such regulations as nec-
essary to ensure that any refundable credit 
described in clause (i) is claimed once and 
not retransferred by a transferee. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section: 
‘‘(1) VEHICLE
ENERGY
PERFORMANCE.—The 
term ‘vehicle energy performance’ means, with re-
spect to any vehicle, the combined fuel-economy rat-
ing determined for the model and model year of such 
vehicle. 
‘‘(2) MEDIAN
VEHICLE
ENERGY
PERFORM-
ANCE.—The term ‘median vehicle energy perform-
ance’ means, with respect to any model year, the 
median combined fuel-economy rating for all new 
motor vehicles of such model year sold in the United 
States. 
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‘‘(3) BEST VEHICLE ENERGY PERFORMANCE.— 
The term ‘best vehicle energy performance’ means, 
with respect to any model year, the highest com-
bined fuel-economy rating of any model of motor ve-
hicle of such model year sold the United States. 
‘‘(4) COMBINED FUEL-ECONOMY RATING.—The 
term ‘combined fuel-economy rating’ means the com-
bined fuel-economy rating determined in accordance 
with section 32908 of title 49, United States Code, 
and expressed in miles per gallon of gasoline equiva-
lent. 
‘‘(5) MODEL YEAR.—The term ‘model year’ has 
the meaning given such term under section 32901(a) 
of such title 49. 
‘‘(6) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ means any vehicle which is manufactured pri-
marily for use on public streets, roads, and highways 
(not including a vehicle operated exclusively on a rail 
or rails) and which has at least 4 wheels. 
‘‘(7) OTHER TERMS.—The terms ‘automobile’, 
‘passenger automobile’, ‘light truck’, and ‘manufac-
turer’ have the meanings given such terms in regula-
tions prescribed by the Administrator of the Envi-
ronmental Protection Agency for purposes of the ad-
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ministration of title II of the Clean Air Act (42 
U.S.C. 7521 et seq.). 
‘‘(e) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed (determined 
without regard to subsection (c)). 
‘‘(2) PROPERTY USED BY TAX-EXEMPT ENTI-
TY.—In the case of a vehicle whose use is described 
in paragraph (3) or (4) of section 50(b) and which 
is not subject to a lease, the person who sold such 
vehicle to the person or entity using such vehicle 
shall be treated as the taxpayer that placed such ve-
hicle in service, but only if such person clearly dis-
closes to such person or entity in a document the 
amount of any credit allowable under subsection (a) 
with respect to such vehicle (determined without re-
gard to subsection (c)). For purposes of subsection 
(c), property to which this paragraph applies shall 
be treated as of a character subject to an allowance 
for depreciation. 
‘‘(3) 
PROPERTY
USED
OUTSIDE
UNITED 
STATES, ETC., NOT QUALIFIED.—No credit shall be 
allowable under subsection (a) with respect to any 
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property referred to in section 50(b)(1) or with re-
spect to the portion of the cost of any property 
taken into account under section 179. 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any property which ceases to be property eligible for 
such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) INTERACTION
WITH
AIR
QUALITY
AND 
MOTOR VEHICLE SAFETY STANDARDS.—A motor ve-
hicle shall not be considered eligible for a credit 
under this section unless such vehicle is in compli-
ance with— 
‘‘(A) the applicable provisions of the Clean 
Air Act for the applicable make and model year 
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which 
has adopted such provisions under a waiver 
under section 209(b) of the Clean Air Act), and 
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‘‘(B) the motor vehicle safety provisions of 
sections 30101 through 30169 of title 49, 
United States Code. 
‘‘(7) INFLATION ADJUSTMENT.—In the case of 
any model year beginning in a calendar year after 
2026, each dollar amount in subsection (a)(2) shall 
be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the model year begins, deter-
mined by substituting ‘2025’ for ‘2016’ in sub-
paragraph (A)(ii) thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$100. 
‘‘(8) ONE CREDIT PER VEHICLE.—In the case 
of any vehicle, the credit described in subsection (a) 
shall only be allowed once with respect to such vehi-
cle, as determined based upon the vehicle identifica-
tion number of such vehicle. 
‘‘(f) REPORTING OF VEHICLE ENERGY PERFORM-
ANCE.— 
‘‘(1) VEHICLE
MANUFACTURERS.—Not later 
than November 1 of each calendar year (beginning 
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with calendar year 2025), each vehicle manufacturer 
shall submit to the Secretary a report that in-
cludes— 
‘‘(A) the vehicle energy performance for 
each model of that model year which was manu-
factured by such manufacturer and sold in the 
United States, and 
‘‘(B) with respect to each such model of 
such model year, the number of vehicles of such 
model and model year sold in the United States 
during the 1-year period beginning on October 
1 of the preceding year. 
‘‘(2) PUBLICATION
BY
TREASURY.—Not later 
than December 1 of each calendar year (beginning 
with calendar year 2025), the Secretary shall publish 
the median vehicle energy performance and the best 
vehicle energy performance for that model year. 
‘‘(g) REGULATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary shall promulgate such regu-
lations as necessary to carry out the provisions of 
this section not later than 1 year after the date of 
enactment. 
‘‘(2) COORDINATION IN PRESCRIPTION OF CER-
TAIN REGULATIONS.—The Secretary of the Treas-
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ury, in coordination with the Secretary of Transpor-
tation and the Administrator of the Environmental 
Protection Agency, shall prescribe such regulations 
as necessary to determine whether a motor vehicle 
meets the requirements to be eligible for a credit 
under this section.’’. 
(b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.—Section 38(c)(4)(B) is amended by redesig-
nating clauses (i) through (xii) as clauses (ii) through 
(xiii), respectively, and by inserting before clause (ii) (as 
so redesignated) the following new clause: 
‘‘(i) the credit determined under sec-
tion 30E,’’. 
(c) DISPLAY OF CREDIT.—Section 32908(b) of title 
49, United States Code, is amended— 
(1) in paragraph (1)— 
(A) by redesignating subparagraphs (E) 
and (F) as subparagraphs (F) and (G), and 
(B) by inserting after subparagraph (D) 
the following new subparagraph: 
‘‘(E) the amount of the vehicle energy perform-
ance credit allowable with respect to the sale of the 
automobile under section 30E of the Internal Rev-
enue Code of 1986 (26 U.S.C. 30E).’’, and 
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(2) in paragraph (2), by striking ‘‘paragraph 
(1)(E)’’ and inserting ‘‘paragraph (1)(F)’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 38(b) is amended by striking ‘‘plus’’ 
at the end of paragraph (40), by striking the period 
at the end of paragraph (41) and inserting ‘‘, plus’’, 
and by adding at the end the following new para-
graph: 
‘‘(42) the portion of the vehicle energy perform-
ance rebate to which section 30E(c)(1) applies.’’. 
(2) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (37), by striking the 
period at the end of paragraph (38) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(39) to the extent provided in section 
30E(e)(1).’’. 
(3) Section 6501(m) is amended by inserting 
‘‘30E(e)(6),’’ after ‘‘30D(e)(4),’’. 
(4) The table of section for subpart C of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 30D the 
following new item: 
‘‘Sec. 30E. Vehicle energy performance rebate.’’. 
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SEC. 3. LOW VEHICLE ENERGY PERFORMANCE FEE. 
(a) IN GENERAL.—Section 4064 is amended to read 
as follows: 
‘‘SEC. 4064. LOW VEHICLE ENERGY PERFORMANCE FEE. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
on the sale by the manufacturer of each low energy per-
formance vehicle a tax equal to the product of $5,000, 
multiplied by the quotient of— 
‘‘(1) the excess of— 
‘‘(A) the median vehicle energy perform-
ance for the model year immediately preceding 
the model year of such vehicle, over 
‘‘(B) the vehicle energy performance of 
such vehicle, divided by 
‘‘(2) the excess of— 
‘‘(A) the best vehicle energy performance 
for the model year immediately preceding the 
model year of such vehicle, over 
‘‘(B) the median vehicle energy perform-
ance for the model year immediately preceding 
the model year of such vehicle. 
‘‘(b) LOW ENERGY PERFORMANCE VEHICLE.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘low energy per-
formance vehicle’ means a passenger automobile or 
light truck— 
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‘‘(A) which is treated as a motor vehicle 
for purposes of title II of the Clean Air Act, 
‘‘(B) which achieves vehicle energy per-
formance that is lower than the median vehicle 
energy performance, and 
‘‘(C) which is made by a manufacturer be-
ginning with model year 2028. 
‘‘(2) EXCEPTION
FOR
CERTAIN
VEHICLES.— 
The term ‘low energy performance vehicle’ does not 
include any vehicle— 
‘‘(A) which— 
‘‘(i) has a gross vehicle weight rating 
of more than 8,500 pounds, and 
‘‘(ii) is determined by the Secretary to 
be a vehicle which is designed for commer-
cial use, or 
‘‘(B) sold for use and used— 
‘‘(i) as an ambulance or combination 
ambulance-hearse, 
‘‘(ii) by the United States or by a 
State or local government for police or 
other law enforcement purposes, or 
‘‘(iii) for other emergency uses pre-
scribed by the Secretary by regulations. 
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‘‘(c) OTHER DEFINITIONS.—For purposes of this 
section: 
‘‘(1) VEHICLE
ENERGY
PERFORMANCE.—The 
term ‘vehicle energy performance’ means, with re-
spect to any vehicle, the combined fuel-economy rat-
ing determined for the model and model year of such 
vehicle. 
‘‘(2) MEDIAN
VEHICLE
ENERGY
PERFORM-
ANCE.—The term ‘median vehicle energy perform-
ance’ means, with respect to any model year, the 
median combined fuel-economy rating for all new 
motor vehicles of such model year sold in the United 
States. 
‘‘(3) BEST VEHICLE ENERGY PERFORMANCE.— 
The term ‘best vehicle energy performance’ means, 
with respect to any model year, the highest com-
bined fuel-economy rating of any model of motor ve-
hicle of such model year sold the United States. 
‘‘(4) COMBINED FUEL-ECONOMY RATING.—The 
term ‘combined fuel-economy rating’ means the com-
bined fuel-economy rating determined in accordance 
with section 32908 of title 49, United States Code, 
and expressed in miles per gallon of gasoline equiva-
lent. 
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‘‘(5) MODEL YEAR.—The term ‘model year’ has 
the meaning given such term under section 32901(a) 
of such title 49. 
‘‘(6) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ means any vehicle which is manufactured pri-
marily for use on public streets, roads, and highways 
(not including a vehicle operated exclusively on a rail 
or rails) and which has at least 4 wheels. 
‘‘(7) OTHER TERMS.—The terms ‘automobile’, 
‘passenger automobile’, ‘light truck’, and ‘manufac-
turer’ have the meanings given such terms in regula-
tions prescribed by the Administrator of the Envi-
ronmental Protection Agency for purposes of the ad-
ministration of title II of the Clean Air Act (42 
U.S.C. 7521 et seq.). 
‘‘(d) INFLATION ADJUSTMENT.—In the case of any 
model year beginning in a calendar year after 2028, each 
dollar amount in subsection (a)(2) shall be increased by 
an amount equal to— 
‘‘(1) such dollar amount, multiplied by 
‘‘(2) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the model year begins, determined by substituting 
‘2027’ for ‘2016’ in subparagraph (A)(ii) thereof. 
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Any increase determined under the preceding sentence 
shall be rounded to the nearest multiple of $100.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The heading for part I of subchapter A of 
chapter 32 is amended by striking ‘‘GAS’’ and in-
serting ‘‘FUEL’’. 
(2) The table of parts for subchapter A of chap-
ter 32 is amended by striking ‘‘Gas’’ in the item re-
lating to part I and inserting ‘‘Fuel’’. 
(3) The table of sections for part I of sub-
chapter A of chapter 32 is amended by striking 
‘‘Gas’’ in the item relating to section 4064 and in-
serting ‘‘Fuel’’. 
(4) The heading for subsection (d) of section 
1016 is amended by striking ‘‘GAS GUZZLER TAX’’ 
and inserting ‘‘LOW VEHICLE ENERGY PERFORM-
ANCE FEE’’. 
(5) The heading for subsection (e) of section 
4217 is amended by striking ‘‘GAS GUZZLER TAX’’ 
and inserting ‘‘LOW VEHICLE ENERGY PERFORM-
ANCE FEE’’. 
(6) The heading for subparagraph (B) of sec-
tion 4217(e)(3) is amended by striking ‘‘GAS GUZ-
ZLER TAX’’ and inserting ‘‘LOW VEHICLE ENERGY 
PERFORMANCE FEE’’. 
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(7) Section 4217(e) is amended by striking 
‘‘gas guzzler tax’’ each place it appears and insert-
ing ‘‘low vehicle energy performance fee’’. 
SEC. 4. FUEL ECONOMY OF DUAL FUELED AUTOMOBILES. 
(a) MEASUREMENT OF FUEL ECONOMY FOR ELEC-
TRIC DUAL FUELED AUTOMOBILES.—Section 32905(e) of 
title 49, United States Code, is amended— 
(1) in paragraph (1), in the matter preceding 
subparagraph (A)— 
(A) by striking ‘‘At the request of the 
manufacturer, the Administrator may’’ and in-
serting ‘‘The Administrator shall’’; and 
(B) by striking ‘‘model year 2015’’ and in-
serting ‘‘model year 2025’’; and 
(2) by amending paragraph (2) to read as fol-
lows: 
‘‘(2) REVIEW AND UPDATING OF FORMULA.— 
Not later than 3 years after the date of the enact-
ment of this paragraph, and every 3 years there-
after, the Administrator shall, using real-world data 
if possible, review and update the formula for deter-
mining under paragraph (1) percentage utilization 
on gasoline or diesel fuel and percentage utilization 
on electricity.’’. 
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(b) FUEL
ECONOMY
INFORMATION
FOR
DUAL 
FUELED AUTOMOBILES.— 
(1) 
LABELING
REQUIREMENTS
AND
CON-
TENTS.—Section 32908(b)(3) of title 49, United 
States Code, is amended— 
(A) by redesignating subparagraphs (B), 
(C), and (D) as subparagraphs (D), (E), and 
(F), respectively; and 
(B) by inserting after subparagraph (A) 
the following: 
‘‘(B) indicate the fuel economy of the auto-
mobile when operated primarily on alternative fuel; 
‘‘(C) indicate the multi-day average fuel econ-
omy of the automobile when operated on a combina-
tion of alternative fuel and gasoline or diesel fuel, 
with the percentage utilization of alternative fuel 
and the percentage utilization of gasoline or diesel 
fuel being determined by a formula based on real- 
world data and updated not less frequently than 
every 3 years;’’. 
(2) FUEL ECONOMY INFORMATION BOOKLET.— 
Section 32908(c)(2)(B) of title 49, United States 
Code, is amended— 
(A) in clause (i), by striking ‘‘; and’’ and 
inserting a semicolon; 
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(B) by redesignating clause (ii) as clause 
(iii); and 
(C) by inserting after clause (i) the fol-
lowing: 
‘‘(ii) information on the multi-day average fuel 
economy of the automobile when operated on a com-
bination of alternative fuel and gasoline or diesel 
fuel, as indicated under subsection (b)(3)(C); and’’. 
(c) APPLICABILITY.—The amendments made by this 
section shall apply with respect to automobiles of model 
year 2026 or later. 
Æ 
VerDate Sep 11 2014 
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ssavage on LAPJG3WLY3PROD with BILLS