H. R. 1—74 
(2) QUALIFIED APPLICATION.—The term ‘‘qualified applica-
tion’’ means an application for a coal lease pending as of the 
date of enactment of this Act or submitted within 90 days 
thereafter under the lease by application program administered 
by the Bureau of Land Management pursuant to the Mineral 
Leasing Act (30 U.S.C. 181 et seq.) for which any required 
environmental review has commenced or the Director of the 
Bureau of Land Management determines can commence within 
90 days after receiving the application. 
(b) COAL LEASING ACTIVITIES.—Not later than 90 days after 
the date of enactment of this Act, the Secretary of the Interior— 
(1) shall— 
(A) with respect to each qualified application— 
(i) if not previously published for public comment, 
publish any required environmental review; 
(ii) establish the fair market value of the applicable 
coal tract; 
(iii) hold a lease sale with respect to the applicable 
coal tract; and 
(iv) identify the highest bidder at or above the 
fair market value and take all other intermediate 
actions necessary to identify the winning bidder and 
grant the qualified application; and 
(2) may— 
(A) with respect to a previously issued coal lease, grant 
any additional approvals of the Department of the Interior 
required for mining activities to commence; and 
(B) after completing the actions required by clauses 
(i) through (iv) of paragraph (1)(A), grant the qualified 
application and issue the applicable lease to the person 
that submitted the qualified application if that person sub-
mitted the winning bid in the lease sale held under clause 
(iii) of paragraph (1)(A). 
SEC. 50202. COAL ROYALTY. 
(a) RATE.—Section 7(a) of the Mineral Leasing Act (30 U.S.C. 
207(a)) is amended, in the fourth sentence, by striking ‘‘121⁄2 per 
centum’’ and inserting ‘‘121⁄2 percent, except such amount shall 
be not more than 7 percent during the period that begins on 
the date of enactment of the Act entitled ‘An Act to provide for 
reconciliation pursuant to title II of H. Con. Res. 14’ (119th Con-
gress) and ends September 30, 2034,’’. 
(b) APPLICABILITY TO EXISTING LEASES.—The amendment made 
by subsection (a) shall apply to a coal lease— 
(1) issued under section 2 of the Mineral Leasing Act 
(30 U.S.C. 201) before, on, or after the date of the enactment 
of this Act; and 
(2) that has not been terminated. 
(c) ADVANCE ROYALTIES.—With respect to a lease issued under 
section 2 of the Mineral Leasing Act (30 U.S.C. 201) for which 
the lessee has paid advance royalties under section 7(b) of that 
Act (30 U.S.C. 207(b)), the Secretary of the Interior shall provide 
to the lessee a credit for the difference between the amount paid 
by the lessee in advance royalties for the lease before the date 
of the enactment of this Act and the amount the lessee would 
have been required to pay if the amendment made by subsection
H. R. 1—75 
(a) had been made before the lessee paid advance royalties for 
the lease. 
SEC. 50203. LEASES FOR KNOWN RECOVERABLE COAL RESOURCES. 
Notwithstanding section 2(a)(3)(A) of the Mineral Leasing Act 
(30 U.S.C. 201(a)(3)(A)) and section 202(a) of the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 1712(a)), not later 
than 90 days after the date of enactment of this Act, the Secretary 
of the Interior shall make available for lease known recoverable 
coal resources of not less than 4,000,000 additional acres on Federal 
land located in the 48 contiguous States and Alaska subject to 
the jurisdiction of the Secretary, but which shall not include any 
Federal land within— 
(1) a National Monument; 
(2) a National Recreation Area; 
(3) a component of the National Wilderness Preservation 
System; 
(4) a component of the National Wild and Scenic Rivers 
System; 
(5) a component of the National Trails System; 
(6) a National Conservation Area; 
(7) a unit of the National Wildlife Refuge System; 
(8) a unit of the National Fish Hatchery System; or 
(9) a unit of the National Park System. 
SEC. 50204. AUTHORIZATION TO MINE FEDERAL COAL. 
(a) AUTHORIZATION.—In order to provide access to coal reserves 
in adjacent State or private land that without an authorization 
could not be mined economically, Federal coal reserves located 
in Federal land subject to a mining plan previously approved by 
the Secretary of the Interior as of the date of enactment of this 
Act and adjacent to coal reserves in adjacent State or private 
land are authorized to be mined. 
(b) REQUIREMENT.—Not later than 90 days after the date of 
enactment of this Act, the Secretary of the Interior shall, without 
substantial modification, take such steps as are necessary to 
authorize the mining of Federal land described in subsection (a). 
(c) NEPA.—Nothing in this section shall prevent a review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 
et seq.). 
Subtitle C—Lands 
SEC. 50301. TIMBER SALES AND LONG-TERM CONTRACTING FOR THE 
FOREST SERVICE AND THE BUREAU OF LAND MANAGE-
MENT. 
(a) FOREST SERVICE.— 
(1) DEFINITIONS.—In this subsection: 
(A) FOREST PLAN.—The term ‘‘forest plan’’ means a 
land and resource management plan prepared by the Sec-
retary for a unit of the National Forest System pursuant 
to section 6 of the Forest and Rangeland Renewable 
Resources Planning Act of 1974 (16 U.S.C. 1604). 
(B) NATIONAL FOREST SYSTEM.— 
(i) IN
GENERAL.—The term ‘‘National Forest 
System’’ means land of the National Forest System 
(as defined in section 11(a) of the Forest and Rangeland
H. R. 1—76 
Renewable Resources Planning Act of 1974 (16 U.S.C. 
1609(a))) administered by the Secretary. 
(ii) EXCLUSIONS.—The term ‘‘National Forest 
System’’ does not include any forest reserve not created 
from the public domain. 
(C) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of Agriculture, acting through the Chief of the Forest 
Service. 
(2) TIMBER SALES ON PUBLIC DOMAIN FOREST RESERVES.— 
(A) IN GENERAL.—For each of fiscal years 2026 through 
2034, the Secretary shall sell timber annually on National 
Forest System land in a total quantity that is not less 
than 250,000,000 board-feet greater than the quantity of 
board-feet sold in the previous fiscal year. 
(B) LIMITATION.—The timber sales under subparagraph 
(A) shall be subject to the maximum allowable sale quantity 
of timber or the projected timber sale quantity under the 
applicable forest plan in effect on the date of enactment 
of this Act. 
(3) LONG-TERM CONTRACTING FOR THE FOREST SERVICE.— 
(A) LONG-TERM CONTRACTING.—For the period of fiscal 
years 2025 through 2034, the Secretary shall enter into 
not fewer than 40 long-term timber sale contracts with 
private persons or other public or private entities under 
subsection (a) of section 14 of the National Forest Manage-
ment Act of 1976 (16 U.S.C. 472a) for the sale of national 
forest materials (as defined in subsection (e)(1) of that 
section) in the National Forest System. 
(B) CONTRACT LENGTH.—The period of a timber sale 
contract entered into to meet the requirement under 
subparagraph (A) shall be not less than 20 years, with 
options for extensions or renewals, as determined by the 
Secretary. 
(C) RECEIPTS.—Any monies derived from a timber sale 
contract entered into to meet the requirements under sub-
paragraphs (A) and (B) shall be deposited in the general 
fund of the Treasury. 
(b) BUREAU OF LAND MANAGEMENT.— 
(1) DEFINITIONS.—In this subsection: 
(A) PUBLIC LANDS.—The term ‘‘public lands’’ has the 
meaning given the term in section 103 of the Federal 
Land Policy and Management Act of 1976 (43 U.S.C. 1702). 
(B) RESOURCE MANAGEMENT PLAN.—The term ‘‘resource 
management plan’’ means a land use plan prepared for 
public lands under section 202 of the Federal Land Policy 
and Management Act of 1976 (43 U.S.C. 1712). 
(C) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Interior, acting through the Director of the 
Bureau of Land Management. 
(2) TIMBER SALES ON PUBLIC LANDS.— 
(A) IN GENERAL.—For each of fiscal years 2026 through 
2034, the Secretary shall sell timber annually on public 
lands in a total quantity that is not less than 20,000,000 
board-feet greater than the quantity of board-feet sold in 
the previous fiscal year.
H. R. 1—77 
(B) LIMITATION.—The timber sales under subparagraph 
(A) shall be subject to the applicable resource management 
plan in effect on the date of enactment of this Act. 
(3) LONG-TERM CONTRACTING FOR THE BUREAU OF LAND 
MANAGEMENT.— 
(A) LONG-TERM CONTRACTING.—For the period of fiscal 
years 2025 through 2034, the Secretary shall enter into 
not fewer than 5 long-term contracts with private persons 
or other public or private entities under section 1 of the 
Act of July 31, 1947 (commonly known as the ‘‘Materials 
Act of 1947’’) (61 Stat. 681, chapter 406; 30 U.S.C. 601), 
for the disposal of vegetative materials described in that 
section on public lands. 
(B) CONTRACT
LENGTH.—The period of a contract 
entered into to meet the requirement under subparagraph 
(A) shall be not less than 20 years, with options for exten-
sions or renewals, as determined by the Secretary. 
(C) RECEIPTS.—Any monies derived from a contract 
entered into to meet the requirements under subpara-
graphs (A) and (B) shall be deposited in the general fund 
of the Treasury. 
SEC. 50302. RENEWABLE ENERGY FEES ON FEDERAL LAND. 
(a) DEFINITIONS.—In this section: 
(1) ANNUAL
ADJUSTMENT
FACTOR.—The term ‘‘Annual 
Adjustment Factor’’ means 3 percent. 
(2) ENCUMBRANCE
FACTOR.—The term ‘‘Encumbrance 
Factor’’ means— 
(A) 100 percent for a solar energy generation facility; 
and 
(B) an amount determined by the Secretary, but not 
less than 10 percent for a wind energy generation facility. 
(3) NATIONAL FOREST SYSTEM.— 
(A) IN GENERAL.—The term ‘‘National Forest System’’ 
means land of the National Forest System (as defined 
in section 11(a) of the Forest and Rangeland Renewable 
Resources Planning Act of 1974 (16 U.S.C. 1609(a))) 
administered by the Secretary of Agriculture. 
(B) EXCLUSION.—The term ‘‘National Forest System’’ 
does not include any forest reserve not created from the 
public domain. 
(4) PER-ACRE
RATE.—The term ‘‘Per-Acre Rate’’, with 
respect to a right-of-way, means the average of the per-acre 
pastureland rental rates published in the Cash Rents Survey 
by the National Agricultural Statistics Service for the State 
in which the right-of-way is located over the 5 calendar-year 
period preceding the issuance or renewal of the right-of-way. 
(5) PROJECT.—The term ‘‘project’’ means a system described 
in section 2801.9(a)(4) of title 43, Code of Federal Regulations 
(as in effect on the date of enactment of this Act). 
(6) PUBLIC LAND.—The term ‘‘public land’’ means— 
(A) public lands (as defined in section 103 of the Fed-
eral Land Policy and Management Act of 1976 (43 U.S.C. 
1702)); and 
(B) National Forest System land.
H. R. 1—78 
(7) RENEWABLE ENERGY PROJECT.—The term ‘‘renewable 
energy project’’ means a project located on public land that 
uses wind or solar energy to generate energy. 
(8) RIGHT-OF-WAY.—The term ‘‘right-of-way’’ has the 
meaning given the term in section 103 of the Federal Land 
Policy and Management Act of 1976 (43 U.S.C. 1702). 
(9) SECRETARY.—The term ‘‘Secretary’’ means— 
(A) the Secretary of the Interior, with respect to land 
controlled or administered by the Secretary of the Interior; 
and 
(B) the Secretary of Agriculture, with respect to 
National Forest System land. 
(b) ACREAGE RENT FOR WIND AND SOLAR RIGHTS-OF-WAY.— 
(1) IN GENERAL.—Pursuant to section 504(g) of the Federal 
Land Policy and Management Act of 1976 (43 U.S.C. 1764(g)), 
the Secretary shall, subject to paragraph (3) and not later 
than January 1 of each calendar year, collect from the holder 
of a right-of-way for a renewable energy project an acreage 
rent in an amount determined by the equation described in 
paragraph (2). 
(2) CALCULATION OF ACREAGE RENT RATE.— 
(A) EQUATION.—The amount of an acreage rent col-
lected under paragraph (1) shall be determined using the 
following equation: Acreage rent = A × B × ((1 + C)D)). 
(B) DEFINITIONS.—For purposes of the equation 
described in subparagraph (A): 
(i) The letter ‘‘A’’ means the Per-Acre Rate. 
(ii) The letter ‘‘B’’ means the Encumbrance Factor. 
(iii) The letter ‘‘C’’ means the Annual Adjustment 
Factor. 
(iv) The letter ‘‘D’’ means the year in the term 
of the right-of-way. 
(3) PAYMENT UNTIL PRODUCTION.—The holder of a right- 
of-way for a renewable energy project shall pay an acreage 
rent collected under paragraph (1) until the date on which 
energy generation begins. 
(c) CAPACITY FEES.— 
(1) IN GENERAL.—The Secretary shall, subject to paragraph 
(3), annually collect a capacity fee from the holder of a right- 
of-way for a renewable energy project based on the amount 
described in paragraph (2). 
(2) CALCULATION
OF
CAPACITY
FEE.—The amount of a 
capacity fee collected under paragraph (1) shall be equal to 
the greater of— 
(A) an amount equal to the acreage rent described 
in subsection (b); and 
(B) 3.9 percent of the gross proceeds from the sale 
of electricity produced by the renewable energy project. 
(3) MULTIPLE-USE REDUCTION FACTOR.— 
(A) APPLICATION.—The holder of a right-of-way for a 
wind energy generation project may request that the Sec-
retary apply a multiple-use reduction factor of 10-percent 
to the amount of a capacity fee determined under para-
graph (2) by submitting to the Secretary an application 
at such time, in such manner, and containing such informa-
tion as the Secretary may require.
H. R. 1—79 
(B) APPROVAL.—The Secretary may approve an applica-
tion submitted under subparagraph (A) only if not less 
than 25 percent of the land within the area of the right- 
of-way is authorized for use, occupancy, or development 
with respect to an activity other than the generation of 
wind energy for the entirety of the year in which the 
capacity fee is collected. 
(C) LATE DETERMINATION.— 
(i) IN
GENERAL.—If the Secretary approves an 
application under subparagraph (B) for a wind energy 
generation project after the date on which the holder 
of the right-of-way for the project begins paying a 
capacity fee, the Secretary shall apply the multiple- 
use reduction factor described in subparagraph (A) to 
the capacity fee for the first year beginning after the 
date of approval and each year thereafter for the period 
during which the right-of-way remains in effect. 
(ii) REFUND.—The Secretary may not refund the 
holder of a right-of-way for the difference in the amount 
of a capacity fee paid in a previous year. 
(d) LATE PAYMENT FEE; TERMINATION.— 
(1) IN
GENERAL.—The Secretary may charge the holder 
of a right-of-way for a renewable energy project a late payment 
fee if the Secretary does not receive payment for the acreage 
rent under subsection (b) or the capacity fee under subsection 
(c) by the date that is 15 days after the date on which the 
payment was due. 
(2) TERMINATION
OF
RIGHT-OF-WAY.—The Secretary may 
terminate a right-of-way for a renewable energy project if the 
Secretary does not receive payment for the acreage rent under 
subsection (b) or the capacity fee under subsection (c) by the 
date that is 90 days after the date on which the payment 
was due. 
SEC. 50303. RENEWABLE ENERGY REVENUE SHARING. 
(a) DEFINITIONS.—In this section: 
(1) COUNTY.—The term ‘‘county’’ includes a parish, town-
ship, borough, and any other similar, independent unit of local 
government. 
(2) COVERED LAND.—The term ‘‘covered land’’ means land 
that is— 
(A) public land administered by the Secretary; and 
(B) not excluded from the development of solar or 
wind energy under— 
(i) a land use plan; or 
(ii) other Federal law. 
(3) NATIONAL FOREST SYSTEM.— 
(A) IN GENERAL.—The term ‘‘National Forest System’’ 
means land of the National Forest System (as defined 
in section 11(a) of the Forest and Rangeland Renewable 
Resources Planning Act of 1974 (16 U.S.C. 1609(a))) 
administered by the Secretary of Agriculture. 
(B) EXCLUSION.—The term ‘‘National Forest System’’ 
does not include any forest reserve not created from the 
public domain. 
(4) PUBLIC LAND.—The term ‘‘public land’’ means—
H. R. 1—80 
(A) public lands (as defined in section 103 of the Fed-
eral Land Policy and Management Act of 1976 (43 U.S.C. 
1702)); and 
(B) National Forest System land. 
(5) RENEWABLE ENERGY PROJECT.—The term ‘‘renewable 
energy project’’ means a system described in section 2801.9(a)(4) 
of title 43, Code of Federal Regulations (as in effect on the 
date of enactment of this Act), located on covered land that 
uses wind or solar energy to generate energy. 
(6) SECRETARY.—The term ‘‘Secretary’’ means— 
(A) the Secretary of the Interior, with respect to land 
controlled or administered by the Secretary of the Interior; 
and 
(B) the Secretary of Agriculture, with respect to 
National Forest System land. 
(b) DISPOSITION OF REVENUE.— 
(1) DISPOSITION OF REVENUES.—Beginning on January 1, 
2026, the amounts collected from a renewable energy project 
as bonus bids, rentals, fees, or other payments under a right- 
of-way, permit, lease, or other authorization shall— 
(A) be deposited in the general fund of the Treasury; 
and 
(B) without further appropriation or fiscal year limita-
tion, be allocated as follows: 
(i) 25 percent shall be paid from amounts in the 
general fund of the Treasury to the State within the 
boundaries of which the revenue is derived. 
(ii) 25 percent shall be paid from amounts in the 
general fund of the Treasury to each county in a State 
within the boundaries of which the revenue is derived, 
to be allocated among each applicable county based 
on the percentage of county land from which the rev-
enue is derived. 
(2) PAYMENTS TO STATES AND COUNTIES.— 
(A) IN GENERAL.—Amounts paid to States and counties 
under paragraph (1) shall be used in accordance with the 
requirements of section 35 of the Mineral Leasing Act 
(30 U.S.C. 191). 
(B) PAYMENTS
IN
LIEU
OF
TAXES.—A payment to a 
county under paragraph (1) shall be in addition to a pay-
ment in lieu of taxes received by the county under chapter 
69 of title 31, United States Code. 
(C) TIMING.—The amounts required to be paid under 
paragraph (1)(B) for an applicable fiscal year shall be made 
available in the fiscal year that immediately follows the 
fiscal year for which the amounts were collected. 
SEC. 50304. RESCISSION OF NATIONAL PARK SERVICE AND BUREAU 
OF LAND MANAGEMENT FUNDS. 
There are rescinded the unobligated balances of amounts made 
available by the following sections of Public Law 117–169 (com-
monly known as the ‘‘Inflation Reduction Act of 2022’’) (136 Stat. 
1818): 
(1) Section 50221 (136 Stat. 2052). 
(2) Section 50222 (136 Stat. 2052). 
(3) Section 50223 (136 Stat. 2052).
H. R. 1—81 
SEC. 50305. CELEBRATING AMERICA’S 250TH ANNIVERSARY. 
In addition to amounts otherwise available, there is appro-
priated to the Secretary of the Interior (acting through the Director 
of the National Park Service) for fiscal year 2025, out of any 
money in the Treasury not otherwise appropriated, $150,000,000 
for events, celebrations, and activities surrounding the observance 
and commemoration of the 250th anniversary of the founding of 
the United States, to remain available through fiscal year 2028. 
Subtitle D—Energy 
SEC. 50401. STRATEGIC PETROLEUM RESERVE. 
(a) ENERGY POLICY
AND CONSERVATION ACT DEFINITIONS.— 
In this section, the terms ‘‘related facility’’, ‘‘storage facility’’, and 
‘‘Strategic Petroleum Reserve’’ have the meanings given those terms 
in section 152 of the Energy Policy and Conservation Act (42 U.S.C. 
6232). 
(b) APPROPRIATIONS.—In addition to amounts otherwise avail-
able, there is appropriated to the Department of Energy for fiscal 
year 2025, out of any money in the Treasury not otherwise appro-
priated, to remain available until September 30, 2029— 
(1) $218,000,000 for maintenance of, including repairs to, 
storage facilities and related facilities of the Strategic Petro-
leum Reserve; and 
(2) $171,000,000 to acquire, by purchase, petroleum prod-
ucts for storage in the Strategic Petroleum Reserve. 
(c) REPEAL OF STRATEGIC PETROLEUM RESERVE DRAWDOWN AND 
SALE MANDATE.—Section 20003 of Public Law 115–97 (42 U.S.C. 
6241 note) is repealed. 
SEC. 50402. REPEALS; RESCISSIONS. 
(a) REPEAL AND RESCISSION.—Section 50142 of Public Law 117– 
169 (136 Stat. 2044) (commonly known as the ‘‘Inflation Reduction 
Act of 2022’’) is repealed and the unobligated balance of amounts 
made available under that section (as in effect on the day before 
the date of enactment of this Act) is rescinded. 
(b) RESCISSIONS.— 
(1) IN
GENERAL.—The unobligated balances of amounts 
made available under the sections described in paragraph (2) 
are rescinded. 
(2) SECTIONS DESCRIBED.—The sections referred to in para-
graph (1) are the following sections of Public Law 117–169 
(commonly known as the ‘‘Inflation Reduction Act of 2022’’): 
(A) Section 50123 (42 U.S.C. 18795b). 
(B) Section 50141 (136 Stat. 2042). 
(C) Section 50144 (136 Stat. 2044). 
(D) Section 50145 (136 Stat. 2045). 
(E) Section 50151 (42 U.S.C. 18715). 
(F) Section 50152 (42 U.S.C. 18715a). 
(G) Section 50153 (42 U.S.C. 18715b). 
(H) Section 50161 (42 U.S.C. 17113b). 
SEC. 50403. ENERGY DOMINANCE FINANCING. 
(a) IN GENERAL.—Section 1706 of the Energy Policy Act of 
2005 (42 U.S.C. 16517) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘or’’ at the end;
H. R. 1—82 
(B) in paragraph (2), by striking ‘‘avoid’’ and all that 
follows through the period at the end and inserting 
‘‘increase capacity or output; or’’; and 
(C) by adding at the end the following: 
‘‘(3) support or enable the provision of known or 
forecastable electric supply at time intervals necessary to main-
tain or enhance grid reliability or other system adequacy 
needs.’’; 
(2) by striking subsection (c); 
(3) by redesignating subsections (d) through (f) as sub-
sections (c) through (e), respectively; 
(4) in subsection (c) (as so redesignated)— 
(A) in paragraph (1), by adding ‘‘and’’ at the end; 
(B) by striking paragraph (2); and 
(C) by redesignating paragraph (3) as paragraph (2); 
(5) in subsection (e) (as so redesignated), by striking ‘‘for— 
’’ in the matter preceding paragraph (1) and all that follows 
through the period at the end of paragraph (2) and inserting 
‘‘for enabling the identification, leasing, development, produc-
tion, processing, transportation, transmission, refining, and 
generation needed for energy and critical minerals.’’; and 
(6) by adding at the end the following: 
‘‘(f) FUNDING.— 
‘‘(1) IN GENERAL.—In addition to amounts otherwise avail-
able, there is appropriated to the Secretary for fiscal year 
2025, out of any money in the Treasury not otherwise appro-
priated, $1,000,000,000, to remain available through September 
30, 2028, to carry out activities under this section. 
‘‘(2) ADMINISTRATIVE COSTS.—Of the amount made available 
under paragraph (1), the Secretary shall use not more than 
3 percent for administrative expenses.’’. 
(b) COMMITMENT AUTHORITY.—Section 50144(b) of Public Law 
117–169 (commonly known as the ‘‘Inflation Reduction Act of 2022’’) 
(136 Stat. 2045) is amended by striking ‘‘2026’’ and inserting ‘‘2028’’. 
SEC. 50404. TRANSFORMATIONAL ARTIFICIAL INTELLIGENCE MODELS. 
(a) DEFINITIONS.—In this section: 
(1) AMERICAN
SCIENCE
CLOUD.—The term ‘‘American 
science cloud’’ means a system of United States government, 
academic, and private sector programs and infrastructures uti-
lizing cloud computing technologies to facilitate and support 
scientific research, data sharing, and computational analysis 
across various disciplines while ensuring compliance with 
applicable legal, regulatory, and privacy standards. 
(2) ARTIFICIAL INTELLIGENCE.—The term ‘‘artificial intel-
ligence’’ has the meaning given the term in section 5002 of 
the National Artificial Intelligence Initiative Act of 2020 (15 
U.S.C. 9401). 
(b) TRANSFORMATIONAL MODELS.—The Secretary of Energy 
shall— 
(1) mobilize National Laboratories to partner with industry 
sectors within the United States to curate the scientific data 
of the Department of Energy across the National Laboratory 
complex so that the data is structured, cleaned, and 
preprocessed in a way that makes it suitable for use in artificial 
intelligence and machine learning models; and
H. R. 1—83 
(2) initiate seed efforts for self-improving artificial intel-
ligence models for science and engineering powered by the 
data described in paragraph (1). 
(c) USES.— 
(1) MICROELECTRONICS.—The curated data described in 
subsection (b)(1) may be used to rapidly develop next-generation 
microelectronics that have greater capabilities beyond Moore’s 
law while requiring lower energy consumption. 
(2) NEW ENERGY TECHNOLOGIES.—The artificial intelligence 
models developed under subsection (b)(2) shall be provided 
to the scientific community through the American science cloud 
to accelerate innovation in discovery science and engineering 
for new energy technologies. 
(d) APPROPRIATIONS.—There is appropriated, out of any funds 
in the Treasury not otherwise appropriated, $150,000,000, to remain 
available through September 30, 2026, to carry out this section. 
Subtitle E—Water 
SEC. 50501. WATER CONVEYANCE AND SURFACE WATER STORAGE 
ENHANCEMENT. 
In addition to amounts otherwise available, there is appro-
priated to the Secretary of the Interior, acting through the Commis-
sioner of Reclamation, for fiscal year 2025, out of any funds in 
the Treasury not otherwise appropriated, $1,000,000,000, to remain 
available through September 30, 2034, for construction and associ-
ated activities that restore or increase the capacity or use of existing 
conveyance facilities constructed by the Bureau of Reclamation 
or for construction and associated activities that increase the 
capacity of existing Bureau of Reclamation surface water storage 
facilities, in a manner as determined by the Secretary of the 
Interior, acting through the Commissioner of Reclamation: Provided, 
That, for the purposes of section 203 of the Reclamation Reform 
Act of 1982 (43 U.S.C. 390cc) or section 3404(a) of the Reclamation 
Projects Authorization and Adjustment Act of 1992 (Public Law 
102–575; 106 Stat. 4708), a contract or agreement entered into 
pursuant to this section shall not be treated as a new or amended 
contract: Provided further, That none of the funds provided under 
this section shall be reimbursable or subject to matching or cost- 
sharing requirements. 
TITLE VI—COMMITTEE ON 
ENVIRONMENT AND PUBLIC WORKS 
SEC. 60001. RESCISSION OF FUNDING FOR CLEAN HEAVY-DUTY 
VEHICLES. 
The unobligated balances of amounts made available to carry 
out section 132 of the Clean Air Act (42 U.S.C. 7432) are rescinded. 
SEC. 60002. REPEAL OF GREENHOUSE GAS REDUCTION FUND. 
Section 134 of the Clean Air Act (42 U.S.C. 7434) is repealed 
and the unobligated balances of amounts made available to carry 
out that section (as in effect on the day before the date of enactment 
of this Act) are rescinded.
H. R. 1—84 
SEC. 60003. RESCISSION OF FUNDING FOR DIESEL EMISSIONS REDUC-
TIONS. 
The unobligated balances of amounts made available to carry 
out section 60104 of Public Law 117–169 (136 Stat. 2067) are 
rescinded. 
SEC. 60004. RESCISSION OF FUNDING TO ADDRESS AIR POLLUTION. 
The unobligated balances of amounts made available to carry 
out section 60105 of Public Law 117–169 (136 Stat. 2067) are 
rescinded. 
SEC. 60005. RESCISSION OF FUNDING TO ADDRESS AIR POLLUTION 
AT SCHOOLS. 
The unobligated balances of amounts made available to carry 
out section 60106 of Public Law 117–169 (136 Stat. 2069) are 
rescinded. 
SEC. 60006. RESCISSION OF FUNDING FOR THE LOW EMISSIONS ELEC-
TRICITY PROGRAM. 
The unobligated balances of amounts made available to carry 
out section 135 of the Clean Air Act (42 U.S.C. 7435) are rescinded. 
SEC. 60007. RESCISSION OF FUNDING FOR SECTION 211(O) OF THE 
CLEAN AIR ACT. 
The unobligated balances of amounts made available to carry 
out section 60108 of Public Law 117–169 (136 Stat. 2070) are 
rescinded. 
SEC. 60008. RESCISSION OF FUNDING FOR IMPLEMENTATION OF THE 
AMERICAN INNOVATION AND MANUFACTURING ACT. 
The unobligated balances of amounts made available to carry 
out section 60109 of Public Law 117–169 (136 Stat. 2071) are 
rescinded. 
SEC. 60009. RESCISSION OF FUNDING FOR ENFORCEMENT TECH-
NOLOGY AND PUBLIC INFORMATION. 
The unobligated balances of amounts made available to carry 
out section 60110 of Public Law 117–169 (136 Stat. 2071) are 
rescinded. 
SEC. 60010. RESCISSION OF FUNDING FOR GREENHOUSE GAS COR-
PORATE REPORTING. 
The unobligated balances of amounts made available to carry 
out section 60111 of Public Law 117–169 (136 Stat. 2072) are 
rescinded. 
SEC. 60011. RESCISSION OF FUNDING FOR ENVIRONMENTAL PRODUCT 
DECLARATION ASSISTANCE. 
The unobligated balances of amounts made available to carry 
out section 60112 of Public Law 117–169 (42 U.S.C. 4321 note; 
136 Stat. 2072) are rescinded. 
SEC. 60012. RESCISSION OF FUNDING FOR METHANE EMISSIONS AND 
WASTE REDUCTION INCENTIVE PROGRAM FOR PETRO-
LEUM AND NATURAL GAS SYSTEMS. 
(a) RESCISSION.—The unobligated balances of amounts made 
available to carry out subsections (a) and (b) of section 136 of 
the Clean Air Act (42 U.S.C. 7436) are rescinded.
H. R. 1—85 
(b) PERIOD.—Section 136(g) of the Clean Air Act (42 U.S.C. 
7436(g)) is amended by striking ‘‘calendar year 2024’’ and inserting 
‘‘calendar year 2034’’. 
SEC. 60013. RESCISSION OF FUNDING FOR GREENHOUSE GAS AIR 
POLLUTION PLANS AND IMPLEMENTATION GRANTS. 
The unobligated balances of amounts made available to carry 
out section 137 of the Clean Air Act (42 U.S.C. 7437) are rescinded. 
SEC. 60014. RESCISSION OF FUNDING FOR ENVIRONMENTAL PROTEC-
TION AGENCY EFFICIENT, ACCURATE, AND TIMELY 
REVIEWS. 
The unobligated balances of amounts made available to carry 
out section 60115 of Public Law 117–169 (136 Stat. 2077) are 
rescinded. 
SEC. 60015. RESCISSION OF FUNDING FOR LOW-EMBODIED CARBON 
LABELING FOR CONSTRUCTION MATERIALS. 
The unobligated balances of amounts made available to carry 
out section 60116 of Public Law 117–169 (42 U.S.C. 4321 note; 
136 Stat. 2077) are rescinded. 
SEC. 60016. RESCISSION OF FUNDING FOR ENVIRONMENTAL AND CLI-
MATE JUSTICE BLOCK GRANTS. 
The unobligated balances of amounts made available to carry 
out section 138 of the Clean Air Act (42 U.S.C. 7438) are rescinded. 
SEC. 60017. RESCISSION OF FUNDING FOR ESA RECOVERY PLANS. 
The unobligated balances of amounts made available to carry 
out section 60301 of Public Law 117–169 (136 Stat. 2079) are 
rescinded. 
SEC. 60018. RESCISSION OF FUNDING FOR ENVIRONMENTAL AND CLI-
MATE DATA COLLECTION. 
The unobligated balances of amounts made available to carry 
out section 60401 of Public Law 117–169 (136 Stat. 2079) are 
rescinded. 
SEC. 60019. RESCISSION OF NEIGHBORHOOD ACCESS AND EQUITY 
GRANT PROGRAM. 
The unobligated balances of amounts made available to carry 
out section 177 of title 23, United States Code, are rescinded. 
SEC. 60020. RESCISSION OF FUNDING FOR FEDERAL BUILDING ASSIST-
ANCE. 
The unobligated balances of amounts made available to carry 
out section 60502 of Public Law 117–169 (136 Stat. 2083) are 
rescinded. 
SEC. 60021. RESCISSION OF FUNDING FOR LOW-CARBON MATERIALS 
FOR FEDERAL BUILDINGS. 
The unobligated balances of amounts made available to carry 
out section 60503 of Public Law 117–169 (136 Stat. 2083) are 
rescinded. 
SEC. 60022. RESCISSION OF FUNDING FOR GSA EMERGING AND 
SUSTAINABLE TECHNOLOGIES. 
The unobligated balances of amounts made available to carry 
out section 60504 of Public Law 117–169 (136 Stat. 2083) are 
rescinded.
H. R. 1—86 
SEC. 60023. RESCISSION OF ENVIRONMENTAL REVIEW IMPLEMENTA-
TION FUNDS. 
The unobligated balances of amounts made available to carry 
out section 178 of title 23, United States Code, are rescinded. 
SEC. 60024. RESCISSION OF LOW-CARBON TRANSPORTATION MATE-
RIALS GRANTS. 
The unobligated balances of amounts made available to carry 
out section 179 of title 23, United States Code, are rescinded. 
SEC. 60025. JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS. 
(a) IN GENERAL.—In addition to amounts otherwise available, 
there is appropriated for fiscal year 2025, out of any money in 
the Treasury not otherwise appropriated, $256,657,000, to remain 
available until September 30, 2029, for necessary expenses for 
capital repair, restoration, maintenance backlog, and security struc-
tures of the building and site of the John F. Kennedy Center 
for the Performing Arts. 
(b) ADMINISTRATIVE COSTS.—Of the amounts made available 
under subsection (a), not more than 3 percent may be used for 
administrative costs necessary to carry out this section. 
SEC. 60026. PROJECT SPONSOR OPT-IN FEES FOR ENVIRONMENTAL 
REVIEWS. 
Title I of the National Environmental Policy Act of 1969 (42 
U.S.C. 4331 et seq.) is amended by adding at the end the following: 
‘‘SEC. 112. PROJECT SPONSOR OPT-IN FEES FOR ENVIRONMENTAL 
REVIEWS. 
‘‘(a) PROCESS.— 
‘‘(1) PROJECT SPONSOR.—A project sponsor that intends to 
pay a fee under this section for the preparation, or supervision 
of the preparation, of an environmental assessment or environ-
mental impact statement for a project shall submit to the 
Council— 
‘‘(A) a description of the project; and 
‘‘(B) a declaration of whether the project sponsor 
intends to prepare the environmental assessment or 
environmental impact statement under section 107(f). 
‘‘(2) COUNCIL ON ENVIRONMENTAL QUALITY.—Not later than 
15 days after the date on which the Council receives information 
described in paragraph (1) from a project sponsor, the Council 
shall provide to the project sponsor notice of the amount of 
the fee to be paid under this section, as determined under 
subsection (b). 
‘‘(3) PAYMENT OF FEE.—A project sponsor may pay a fee 
under this section after receipt of the notice described in para-
graph (2). 
‘‘(4) DEADLINE FOR ENVIRONMENTAL REVIEWS FOR WHICH 
A FEE IS PAID.—Notwithstanding section 107(g)(1)— 
‘‘(A) an environmental assessment for which a fee is 
paid under this section shall be completed not later than 
180 days after the date on which the fee is paid; and 
‘‘(B) an environmental impact statement for which a 
fee is paid under this section shall be completed not later 
than 1 year after the date of publication of the notice 
of intent to prepare the environmental impact statement.
H. R. 1—87 
‘‘(b) FEE AMOUNT.—The amount of a fee under this section 
shall be— 
‘‘(1) 125 percent of the anticipated costs to prepare the 
environmental assessment or environmental impact statement; 
and 
‘‘(2) in the case of an environmental assessment or environ-
mental impact statement to be prepared in whole or in part 
by a project sponsor under section 107(f), 125 percent of the 
anticipated costs to supervise preparation of, and, as applicable, 
prepare, the environmental assessment or environmental 
impact statement.’’. 
TITLE VII—FINANCE 
Subtitle A—Tax 
SEC. 70001. REFERENCES TO THE INTERNAL REVENUE CODE OF 1986, 
ETC. 
(a) REFERENCES.—Except as otherwise expressly provided, 
whenever in this title, an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986. 
(b) CERTAIN RULES REGARDING EFFECT OF RATE CHANGES NOT 
APPLICABLE.—Section 15 of the Internal Revenue Code of 1986 
shall not apply to any change in rate of tax by reason of any 
provision of, or amendment made by, this title. 
CHAPTER 1—PROVIDING PERMANENT TAX RELIEF FOR 
MIDDLE-CLASS FAMILIES AND WORKERS 
SEC. 70101. EXTENSION AND ENHANCEMENT OF REDUCED RATES. 
(a) IN GENERAL.—Section 1(j) is amended— 
(1) in paragraph (1), by striking ‘‘, and before January 
1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) INFLATION ADJUSTMENT.—Section 1(j)(3)(B)(i) is amended 
by inserting ‘‘solely for purposes of determining the dollar amounts 
at which any rate bracket higher than 12 percent ends and at 
which any rate bracket higher than 22 percent begins,’’ before 
‘‘subsection (f)(3)’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 
70102. 
EXTENSION 
AND 
ENHANCEMENT 
OF 
INCREASED 
STANDARD DEDUCTION. 
(a) IN GENERAL.—Section 63(c)(7) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’ in the matter 
preceding subparagraph (A), and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) ADDITIONAL INCREASE
IN STANDARD DEDUCTION.—Para-
graph (7) of section 63(c) is amended— 
(1) by striking ‘‘$18,000’’ both places it appears in subpara-
graphs (A)(i) and (B)(ii) and inserting ‘‘$23,625’’,
H. R. 1—88 
(2) by striking ‘‘$12,000’’ both places it appears in subpara-
graphs (A)(ii) and (B)(ii) and inserting ‘‘$15,750’’, 
(3) by striking ‘‘2018’’ in subparagraph (B)(ii) and inserting 
‘‘2025’’, and 
(4) by striking ‘‘2017’’ in subparagraph (B)(ii)(II) and 
inserting ‘‘2024’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
SEC. 70103. TERMINATION OF DEDUCTION FOR PERSONAL EXEMP-
TIONS OTHER THAN TEMPORARY SENIOR DEDUCTION. 
(a) IN GENERAL.—Section 151(d)(5) is amended— 
(1) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’, 
(2) by striking ‘‘, and before January 1, 2026’’, and 
(3) by adding at the end the following new subparagraph: 
‘‘(C) DEDUCTION FOR SENIORS.— 
‘‘(i) IN GENERAL.—In the case of a taxable year 
beginning before January 1, 2029, there shall be 
allowed a deduction in an amount equal to $6,000 
for each qualified individual with respect to the tax-
payer. 
‘‘(ii) QUALIFIED
INDIVIDUAL.—For purposes of 
clause (i), the term ‘qualified individual’ means— 
‘‘(I) the taxpayer, if the taxpayer has attained 
age 65 before the close of the taxable year, and 
‘‘(II) in the case of a joint return, the taxpayer’s 
spouse, if such spouse has attained age 65 before 
the close of the taxable year. 
‘‘(iii) LIMITATION
BASED
ON
MODIFIED
ADJUSTED 
GROSS INCOME.— 
‘‘(I) IN GENERAL.—In the case of any taxpayer 
for any taxable year, the $6,000 amount in clause 
(i) shall be reduced (but not below zero) by 6 
percent of so much of the taxpayer’s modified 
adjusted 
gross 
income 
as 
exceeds 
$75,000 
($150,000 in the case of a joint return). 
‘‘(II) MODIFIED ADJUSTED GROSS INCOME.—For 
purposes of this clause, the term ‘modified adjusted 
gross income’ means the adjusted gross income 
of the taxpayer for the taxable year increased by 
any amount excluded from gross income under 
section 911, 931, or 933. 
‘‘(iv) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(I) IN GENERAL.—Clause (i) shall not apply 
with respect to a qualified individual unless the 
taxpayer includes such qualified individual’s social 
security number on the return of tax for the tax-
able year. 
‘‘(II) SOCIAL SECURITY NUMBER.—For purposes 
of subclause (I), the term ‘social security number’ 
has the meaning given such term in section 
24(h)(7). 
‘‘(v) MARRIED INDIVIDUALS.—If the taxpayer is a 
married individual (within the meaning of section
H. R. 1—89 
7703), this subparagraph shall apply only if the tax-
payer and the taxpayer’s spouse file a joint return 
for the taxable year.’’. 
(b) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED 
AS MATHEMATICAL
OR CLERICAL ERROR.—Section 6213(g)(2) is 
amended by striking ‘‘and’’ at the end of subparagraph (U), by 
striking the period at the end of subparagraph (V) and inserting 
‘‘, and’’, and by inserting after subparagraph (V) the following 
new subparagraph: 
‘‘(W) an omission of a correct social security number 
required under section 151(d)(5)(C) (relating to deduction 
for seniors).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
SEC. 70104. EXTENSION AND ENHANCEMENT OF INCREASED CHILD 
TAX CREDIT. 
(a) EXTENSION
AND
INCREASE
OF
EXPANDED
CHILD
TAX 
CREDIT.—Section 24(h) is amended— 
(1) in paragraph (1), by striking ‘‘, and before January 
1, 2026’’, 
(2) in paragraph (2), by striking ‘‘$2,000’’ and inserting 
‘‘$2,200’’, and 
(3) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) SOCIAL SECURITY NUMBER REQUIRED.—Section 24(h)(7) is 
amended to read as follows: 
‘‘(7) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(A) IN GENERAL.—No credit shall be allowed under 
this section to a taxpayer with respect to any qualifying 
child unless the taxpayer includes on the return of tax 
for the taxable year— 
‘‘(i) the taxpayer’s social security number (or, in 
the case of a joint return, the social security number 
of at least 1 spouse), and 
‘‘(ii) the social security number of such qualifying 
child. 
‘‘(B) SOCIAL SECURITY NUMBER.—For purposes of this 
paragraph, the term ‘social security number’ means a social 
security number issued to an individual by the Social Secu-
rity Administration, but only if the social security number 
is issued— 
‘‘(i) to a citizen of the United States or pursuant 
to subclause (I) (or that portion of subclause (III) that 
relates to subclause (I)) of section 205(c)(2)(B)(i) of 
the Social Security Act, and 
‘‘(ii) before the due date for such return.’’. 
(c) INFLATION ADJUSTMENTS.—Section 24(i) is amended to read 
as follows: 
‘‘(i) INFLATION ADJUSTMENTS.— 
‘‘(1) MAXIMUM AMOUNT OF REFUNDABLE CREDIT.—In the 
case of a taxable year beginning after 2024, the $1,400 amount 
in subsection (h)(5) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable
H. R. 1—90 
year begins, determined by substituting ‘2017’ for ‘2016’ 
in subparagraph (A)(ii) thereof. 
‘‘(2) SPECIAL RULE FOR ADJUSTMENT OF CREDIT AMOUNT.— 
In the case of a taxable year beginning after 2025, the $2,200 
amount in subsection (h)(2) shall be increased by an amount 
equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable 
year begins, determined by substituting ‘2024’ for ‘2016’ 
in subparagraph (A)(ii) thereof. 
‘‘(3) ROUNDING.—If any increase under this subsection is 
not a multiple of $100, such increase shall be rounded to 
the next lowest multiple of $100.’’. 
(d) CONFORMING AMENDMENT.—Section 24(h)(5) is amended to 
read as follows: 
‘‘(5) MAXIMUM
AMOUNT
OF
REFUNDABLE
CREDIT.—The 
amount determined under subsection (d)(1)(A) with respect to 
any qualifying child shall not exceed $1,400, and such sub-
section shall be applied without regard to paragraph (4) of 
this subsection.’’. 
(e) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED 
AS MATHEMATICAL OR CLERICAL ERROR.—Section 6213(g)(2)(I) is 
amended by striking ‘‘section 24(e)’’ and inserting ‘‘section 24’’. 
(f) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
SEC. 70105. EXTENSION AND ENHANCEMENT OF DEDUCTION FOR 
QUALIFIED BUSINESS INCOME. 
(a) INCREASE
IN
TAXABLE
INCOME
LIMITATION
PHASE-IN 
AMOUNTS.— 
(1) IN GENERAL.—Subparagraph (B) of section 199A(b)(3) 
is amended by striking ‘‘$50,000 ($100,000 in the case of a 
joint return)’’ each place it appears and inserting ‘‘$75,000 
($150,000 in the case of a joint return)’’. 
(2) CONFORMING
AMENDMENT.—Paragraph (3) of section 
199A(d) is amended by striking ‘‘$50,000 ($100,000 in the case 
of a joint return)’’ each place it appears and inserting ‘‘$75,000 
($150,000 in the case of a joint return)’’. 
(b) MINIMUM DEDUCTION
FOR ACTIVE QUALIFIED BUSINESS 
INCOME.— 
(1) IN GENERAL.—Subsection (i) of section 199A is amended 
to read as follows: 
‘‘(i) MINIMUM DEDUCTION
FOR ACTIVE QUALIFIED BUSINESS 
INCOME.— 
‘‘(1) IN GENERAL.—In the case of an applicable taxpayer 
for any taxable year, the deduction allowed under subsection 
(a) for the taxable year shall be equal to the greater of— 
‘‘(A) the amount of such deduction determined without 
regard to this subsection, or 
‘‘(B) $400. 
‘‘(2) APPLICABLE
TAXPAYER.—For purposes of this sub-
section— 
‘‘(A) IN
GENERAL.—The term ‘applicable taxpayer’ 
means, with respect to any taxable year, a taxpayer whose 
aggregate qualified business income with respect to all
H. R. 1—91 
active qualified trades or businesses of the taxpayer for 
such taxable year is at least $1,000. 
‘‘(B) ACTIVE QUALIFIED TRADE OR BUSINESS.—The term 
‘active qualified trade or business’ means, with respect 
to any taxpayer for any taxable year, any qualified trade 
or business of the taxpayer in which the taxpayer materi-
ally participates (within the meaning of section 469(h)). 
‘‘(3) INFLATION ADJUSTMENT.—In the case of any taxable 
year beginning after 2026, the $400 amount in paragraph (1)(B) 
and the $1,000 amount in paragraph (2)(A) shall each be 
increased by an amount equal to — 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable 
year begins, determined by substituting ‘calendar year 
2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
If any increase under this paragraph is not a multiple of 
$5, such increase shall be rounded to the nearest multiple 
of $5.’’. 
(2) CONFORMING AMENDMENT.—Section 199A(a) is amended 
by inserting ‘‘except as provided in subsection (i),’’ before 
‘‘there’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70106. EXTENSION AND ENHANCEMENT OF INCREASED ESTATE 
AND GIFT TAX EXEMPTION AMOUNTS. 
(a) IN GENERAL.—Section 2010(c)(3) is amended— 
(1) in subparagraph (A) by striking ‘‘$5,000,000’’ and 
inserting ‘‘$15,000,000’’, 
(2) in subparagraph (B)— 
(A) in the matter preceding clause (i), by striking 
‘‘2011’’ and inserting ‘‘2026’’, and 
(B) in clause (ii), by striking ‘‘calendar year 2010’’ 
and inserting ‘‘calendar year 2025’’, and 
(3) by striking subparagraph (C). 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to estates of decedents dying and gifts made after 
December 31, 2025. 
SEC. 70107. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX 
EXEMPTION AMOUNTS AND MODIFICATION OF PHASE-
OUT THRESHOLDS. 
(a) IN GENERAL.—Section 55(d)(4) is amended— 
(1) in subparagraph (A), by striking ‘‘, and before January 
1, 2026’’, and 
(2) by striking ‘‘AND BEFORE 2026’’ in the heading. 
(b) 
MODIFICATION
OF
INFLATION
ADJUSTMENT.—Section 
55(d)(4)(B) is amended— 
(1) by striking ‘‘2018’’ and inserting ‘‘2018 (2026, in the 
case of the $1,000,000 amount in subparagraph (A)(ii)(I))’’, and 
(2) by striking ‘‘determined by substituting ‘calendar year 
2017’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.’’ 
and inserting ‘‘determined by substituting for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof—
H. R. 1—92 
‘‘(1) ‘calendar year 2017’, in the case of the $109,400 amount 
in subparagraph (A)(i)(I) and the $70,300 amount in subpara-
graph (A)(i)(II), and 
‘‘(2) ‘calendar year 2025’, in the case of the $1,000,000 
amount in subparagraph (A)(ii)(I).’’. 
(c) 
MODIFICATION
OF
PHASEOUT
AMOUNT.—Section 
55(d)(4)(A)(ii) is amended by striking ‘‘and’’ at the end of subclause 
(II), and by adding at the end the following new subclause: 
‘‘(IV) by substituting ‘50 percent’ for ‘25 per-
cent’, and’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70108. EXTENSION AND MODIFICATION OF LIMITATION ON 
DEDUCTION FOR QUALIFIED RESIDENCE INTEREST. 
(a) IN GENERAL.—Section 163(h)(3)(F) is amended— 
(1) in clause (i)— 
(A) by striking ‘‘, and before January 1, 2026’’, 
(B) by redesignating subclauses (III) and (IV) as sub-
clauses (IV) and (V), respectively, 
(C) by striking ‘‘subclause (III)’’ in subclause (V), as 
so redesignated, and inserting ‘‘subclause (IV)’’, and 
(D) by inserting after subclause (II) the following new 
subclause: 
‘‘(III) 
MORTGAGE
INSURANCE
PREMIUMS 
TREATED
AS
INTEREST.—Clause (iv) of subpara-
graph (E) shall not apply.’’, 
(2) by striking clause (ii) and redesignating clauses (iii) 
and (iv) as clauses (ii) and (iii), respectively, and 
(3) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70109. EXTENSION AND MODIFICATION OF LIMITATION ON CAS-
UALTY LOSS DEDUCTION. 
(a) IN GENERAL.—Section 165(h)(5) is amended— 
(1) in subparagraph (A), by striking ‘‘, and before January 
1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) EXTENSION TO STATE DECLARED DISASTERS.— 
(1) IN GENERAL.—Subparagraph (A) of section 165(h)(5), 
as amended by subsection (a), is further amended by striking 
‘‘(i)(5))’’ and inserting ‘‘(i)(5)) or a State declared disaster’’. 
(2) EXCEPTION RELATED TO PERSONAL CASUALTY GAINS.— 
Clause (i) of section 165(h)(5)(B) is amended by striking ‘‘(as 
so defined)’’ and inserting ‘‘(as so defined) or a State declared 
disaster’’. 
(3) STATE DECLARED DISASTER.—Paragraph (5) of section 
165(h) is amended by adding at the end the following new 
subparagraph: 
‘‘(C) STATE DECLARED DISASTER.—For purposes of this 
paragraph— 
‘‘(i) IN GENERAL.—The term ‘State declared dis-
aster’ means, with respect to any State, any natural 
catastrophe (including any hurricane, tornado, storm, 
high water, wind-driven water, tidal wave, tsunami,
H. R. 1—93 
earthquake, volcanic eruption, landslide, mudslide, 
snowstorm, or drought), or, regardless of cause, any 
fire, flood, or explosion, in any part of the State, which 
in the determination of the Governor of such State 
(or the Mayor, in the case of the District of Columbia) 
and the Secretary causes damage of sufficient severity 
and magnitude to warrant the application of the rules 
of this section. 
‘‘(ii) STATE.—The term ‘State’ includes the District 
of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70110. TERMINATION OF MISCELLANEOUS ITEMIZED DEDUC-
TIONS OTHER THAN EDUCATOR EXPENSES. 
(a) IN GENERAL.—Section 67(g) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) DEDUCTION FOR EDUCATOR EXPENSES.— 
(1) IN
GENERAL.—Section 67(b) is amended by striking 
‘‘and’’ at the end of paragraph (11), by striking the period 
at the end of paragraph (12) and inserting ‘‘, and’’, and by 
adding at the end the following new paragraph: 
‘‘(13) the deductions allowed by section 162 for educator 
expenses (as defined in subsection (g)).’’. 
(2) INCLUSION
OF
COACHES
AND
CERTAIN
NONATHLETIC 
INSTRUCTIONAL EQUIPMENT.—Section 67 is amended by redesig-
nating subsection (g), as amended by this section, as subsection 
(h), and by inserting after subsection (f) the following new 
section: 
‘‘(g) EDUCATOR EXPENSES.—For purposes of subsection (b)(13), 
the term ‘educator expenses’ means expenses of a type which would 
be described in section 62(a)(2)(D) if— 
‘‘(1) such section were applied— 
‘‘(A) without regard to the dollar limitation, 
‘‘(B) without regard to ‘(other than nonathletic supplies 
for courses of instruction in health or physical education)’ 
in clause (ii) thereof, and 
‘‘(C) by substituting ‘as part of instructional activity’ 
for ‘in the classroom’ in clause (ii) thereof, and 
‘‘(2) section 62(d)(1)(A) were applied by inserting ‘, inter-
scholastic sports administrator or coach,’ after ‘counselor’.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70111. LIMITATION ON TAX BENEFIT OF ITEMIZED DEDUCTIONS. 
(a) IN GENERAL.—Section 68 is amended to read as follows: 
‘‘(a) IN GENERAL.—In the case of an individual, the amount 
of the itemized deductions otherwise allowable for the taxable year 
(determined without regard to this section) shall be reduced by 
2⁄37 of the lesser of— 
‘‘(1) such amount of itemized deductions, or 
‘‘(2) so much of the taxable income of the taxpayer for 
the taxable year (determined without regard to this section 
and increased by such amount of itemized deductions) as
H. R. 1—94 
exceeds the dollar amount at which the 37 percent rate bracket 
under section 1 begins with respect to the taxpayer. 
‘‘(b) COORDINATION WITH OTHER LIMITATIONS.—This section 
shall be applied after the application of any other limitation on 
the allowance of any itemized deduction.’’. 
(b) LIMITATION NOT APPLICABLE TO DETERMINATION OF DEDUC-
TION FOR QUALIFIED BUSINESS INCOME.— 
(1) IN
GENERAL.—Section 199A(e)(1) is amended by 
inserting ‘‘without regard to section 68 and’’ after ‘‘shall be 
computed’’. 
(2) PATRONS
OF
SPECIFIED
AGRICULTURAL
AND
HORTI-
CULTURAL COOPERATIVES.—Section 199A(g)(2)(B) is amended by 
inserting ‘‘section 68 or’’ after ‘‘without regard to’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70112. EXTENSION AND MODIFICATION OF QUALIFIED TRANSPOR-
TATION FRINGE BENEFITS. 
(a) IN GENERAL.—Section 132(f) is amended— 
(1) by striking subparagraph (D) of paragraph (1), 
(2) in paragraph (2), by inserting ‘‘and’’ at the end of 
subparagraph (A), by striking ‘‘, and’’ at the end of subpara-
graph (B) and inserting a period, and by striking subparagraph 
(C), 
(3) by striking ‘‘(other than a qualified bicycle commuting 
reimbursement)’’ in paragraph (4), 
(4) by striking subparagraph (F) of paragraph (5), and 
(5) by striking paragraph (8). 
(b) INFLATION ADJUSTMENT.—Clause (ii) of section 132(f)(6)(A) 
is amended by striking ‘‘1998’’ in clause (ii) and inserting ‘‘1997’’. 
(c) 
COORDINATION
WITH
DISALLOWANCE
OF
CERTAIN 
EXPENSES.—Subsection (l) of section 274 is amended— 
(1) by striking ‘‘BENEFITS.—’’ and all that follows through 
‘‘No deduction’’ and inserting ‘‘BENEFITS.—No deduction’’, and 
(2) by striking paragraph (2). 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70113. EXTENSION AND MODIFICATION OF LIMITATION ON 
DEDUCTION AND EXCLUSION FOR MOVING EXPENSES. 
(a) EXTENSION OF LIMITATION ON DEDUCTION.—Section 217(k) 
is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(b) ALLOWANCE OF DEDUCTION FOR MEMBERS OF THE INTEL-
LIGENCE COMMUNITY.—Section 217(k), as amended by subsection 
(a), is further amended— 
(1) by striking ‘‘2017.—Except in the case’’ and inserting 
‘‘2017.— 
‘‘(1) IN GENERAL.—Except in the case’’, and 
(2) by adding at the end the following new paragraph: 
‘‘(2) MEMBERS
OF
THE
INTELLIGENCE
COMMUNITY.—An 
employee or new appointee of the intelligence community (as 
defined in section 3 of the National Security Act of 1947 (50 
U.S.C. 3003)) (other than a member of the Armed Forces of 
the United States) who moves pursuant to a change in assign-
ment which requires relocation shall be treated for purposes
H. R. 1—95 
of this section in the same manner as an individual to whom 
subsection (g) applies.’’. 
(c) EXTENSION OF LIMITATION ON EXCLUSION.—Section 132(g)(2) 
is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the heading and 
inserting ‘‘BEGINNING AFTER 2017’’. 
(d) ALLOWANCE OF EXCLUSION FOR MEMBERS OF THE INTEL-
LIGENCE COMMUNITY.—Section 132(g)(2) of the Internal Revenue 
Code of 1986 is amended by inserting ‘‘, or an employee or new 
appointee of the intelligence community (as defined in section 3 
of the National Security Act of 1947 (50 U.S.C. 3003)) (other than 
a member of the Armed Forces of the United States) who moves 
pursuant to a change in assignment that requires relocation’’ after 
‘‘change of station’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70114. EXTENSION AND MODIFICATION OF LIMITATION ON 
WAGERING LOSSES. 
(a) IN GENERAL.—Section 165 is amended by striking subsection 
(d) and inserting the following: 
‘‘(d) WAGERING LOSSES.— 
‘‘(1) IN GENERAL.—For purposes of losses from wagering 
transactions, the amount allowed as a deduction for any taxable 
year— 
‘‘(A) shall be equal to 90 percent of the amount of 
such losses during such taxable year, and 
‘‘(B) shall be allowed only to the extent of the gains 
from such transactions during such taxable year. 
‘‘(2) SPECIAL RULE.—For purposes of paragraph (1), the 
term ‘losses from wagering transactions’ includes any deduction 
otherwise allowable under this chapter incurred in carrying 
on any wagering transaction.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70115. EXTENSION AND ENHANCEMENT OF INCREASED LIMITA-
TION ON CONTRIBUTIONS TO ABLE ACCOUNTS. 
(a) IN GENERAL.—Section 529A(b)(2)(B) is amended— 
(1) in clause (i), by inserting ‘‘(determined by substituting 
‘1996’ for ‘1997’ in paragraph (2)(B) thereof)’’ after ‘‘section 
2503(b)’’, and 
(2) in clause (ii), by striking ‘‘before January 1, 2026’’. 
(b) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to 
contributions made after December 31, 2025. 
(2) MODIFIED
INFLATION
ADJUSTMENT.—The amendment 
made by subsection (a)(1) shall apply to taxable years beginning 
after December 31, 2025. 
SEC. 70116. EXTENSION AND ENHANCEMENT OF SAVERS CREDIT 
ALLOWED FOR ABLE CONTRIBUTIONS. 
(a) EXTENSION.— 
(1) IN
GENERAL.—Section 25B(d)(1) is amended to read 
as follows:
H. R. 1—96 
‘‘(1) IN GENERAL.—The term ‘qualified retirement savings 
contributions’ means, with respect to any taxable year, the 
sum of— 
‘‘(A) the amount of contributions made by the eligible 
individual during such taxable year to the ABLE account 
(within the meaning of section 529A) of which such indi-
vidual is the designated beneficiary, and 
‘‘(B) in the case of any taxable year beginning before 
January 1, 2027— 
‘‘(i) the amount of the qualified retirement con-
tributions (as defined in section 219(e)) made by the 
eligible individual, 
‘‘(ii) the amount of— 
‘‘(I) any elective deferrals (as defined in section 
402(g)(3)) of such individual, and 
‘‘(II) any elective deferral of compensation by 
such individual under an eligible deferred com-
pensation plan (as defined in section 457(b)) of 
an 
eligible 
employer 
described 
in 
section 
457(e)(1)(A), and 
‘‘(iii) the amount of voluntary employee contribu-
tions by such individual to any qualified retirement 
plan (as defined in section 4974(c)).’’. 
(2) COORDINATION WITH SECURE 2.0 ACT OF 2022 AMEND-
MENT.—Paragraph (1) of section 103(e) of the SECURE 2.0 
Act of 2022 is repealed, and the Internal Revenue Code of 
1986 shall be applied and administered as though such para-
graph were never enacted. 
(3) EFFECTIVE DATE.—The amendments and repeal made 
by this subsection shall apply to taxable years ending after 
December 31, 2025. 
(b) INCREASE OF CREDIT AMOUNT.— 
(1) IN GENERAL.—Section 25B(a) is amended by striking 
‘‘$2,000’’ and inserting ‘‘$2,100’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to taxable years beginning after December 
31, 2026. 
SEC. 70117. EXTENSION OF ROLLOVERS FROM QUALIFIED TUITION 
PROGRAMS TO ABLE ACCOUNTS PERMITTED. 
(a) IN GENERAL.—Section 529(c)(3)(C)(i)(III) is amended by 
striking ‘‘before January 1, 2026,’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70118. EXTENSION OF TREATMENT OF CERTAIN INDIVIDUALS 
PERFORMING SERVICES IN THE SINAI PENINSULA AND 
ENHANCEMENT TO INCLUDE ADDITIONAL AREAS. 
(a) TREATMENT MADE PERMANENT.—Section 11026(a) of Public 
Law 115–97 is amended by striking ‘‘, with respect to the applicable 
period’’. 
(b) KENYA, MALI, BURKINA FASO, AND CHAD INCLUDED AS HAZ-
ARDOUS DUTY AREAS.—Section 11026(b) of Public Law 115–97 is 
amended to read as follows: 
‘‘(b) QUALIFIED HAZARDOUS DUTY AREA.—For purposes of this 
section, the term ‘qualified hazardous duty area’ means each of 
the following locations, but only during the period for which any 
member of the Armed Forces of the United States is entitled to
H. R. 1—97 
special pay under section 310 of title 37, United States Code 
(relating to special pay; duty subject to hostile fire or imminent 
danger), for services performed in such location: 
‘‘(1) the Sinai Peninsula of Egypt. 
‘‘(2) Kenya. 
‘‘(3) Mali. 
‘‘(4) Burkina Faso. 
‘‘(5) Chad.’’. 
(c) CONFORMING AMENDMENT.—Section 11026 of Public Law 
115–97 is amended by striking subsections (c) and (d). 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall take effect on January 1, 2026. 
SEC. 70119. EXTENSION AND MODIFICATION OF EXCLUSION FROM 
GROSS INCOME OF STUDENT LOANS DISCHARGED ON 
ACCOUNT OF DEATH OR DISABILITY. 
(a) IN GENERAL.—Section 108(f)(5) is amended to read as fol-
lows: 
‘‘(5) DISCHARGES ON ACCOUNT OF DEATH OR DISABILITY.— 
‘‘(A) IN GENERAL.—In the case of an individual, gross 
income does not include any amount which (but for this 
subsection) would be includible in gross income for such 
taxable year by reason of the discharge (in whole or in 
part) of any loan described in subparagraph (B), if such 
discharge was— 
‘‘(i) pursuant to subsection (a) or (d) of section 
437 of the Higher Education Act of 1965 or the parallel 
benefit under part D of title IV of such Act (relating 
to the repayment of loan liability), 
‘‘(ii) pursuant to section 464(c)(1)(F) of such Act, 
or 
‘‘(iii) otherwise discharged on account of death or 
total and permanent disability of the student. 
‘‘(B) LOANS DISCHARGED.—A loan is described in this 
subparagraph if such loan is— 
‘‘(i) a student loan (as defined in paragraph (2)), 
or 
‘‘(ii) a private education loan (as defined in section 
140(a) of the Consumer Credit Protection Act (15 
U.S.C. 1650(a)). 
‘‘(C) SOCIAL SECURITY NUMBER REQUIREMENT.— 
‘‘(i) IN
GENERAL.—Subparagraph (A) shall not 
apply with respect to any discharge during any taxable 
year unless the taxpayer includes the taxpayer’s social 
security number on the return of tax for such taxable 
year. 
‘‘(ii) SOCIAL SECURITY NUMBER.—For purposes of 
this subparagraph, the term ‘social security number’ 
has the meaning given such term in section 24(h)(7).’’. 
(b) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED 
AS MATHEMATICAL
OR CLERICAL ERROR.—Section 6213(g)(2), as 
amended by this Act, is further amended by striking ‘‘and’’ at 
the end of subparagraph (V), by striking the period at the end 
of subparagraph (W) and inserting ‘‘, and’’, and by inserting after 
subparagraph (W) the following new subparagraph:
H. R. 1—98 
‘‘(X) an omission of a correct social security number 
required under section 108(f)(5)(C) (relating to discharges 
on account of death or disability).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to discharges after December 31, 2025. 
SEC. 70120. LIMITATION ON INDIVIDUAL DEDUCTIONS FOR CERTAIN 
STATE AND LOCAL TAXES, ETC. 
(a) IN GENERAL.—Section 164(b)(6) is amended— 
(1) by striking ‘‘and before January 1, 2026’’, and 
(2) by striking ‘‘$10,000 ($5,000 in the case of a married 
individual filing a separate return)’’ and inserting ‘‘the 
applicable limitation amount (half the applicable limitation 
amount in the case of a married individual filing a separate 
return)’’. 
(b) 
APPLICABLE
LIMITATION
AMOUNT.—Section 
164(b) 
is 
amended by adding at the end the following new paragraph: 
‘‘(7) APPLICABLE LIMITATION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (6), the 
term ‘applicable limitation amount’ means— 
‘‘(i) in the case of any taxable year beginning in 
calendar year 2025, $40,000, 
‘‘(ii) in the case of any taxable year beginning 
in calendar year 2026, $40,400, 
‘‘(iii) in the case of any taxable year beginning 
after calendar year 2026 and before 2030, 101 percent 
of the dollar amount in effect under this subparagraph 
for taxable years beginning in the preceding calendar 
year, and 
‘‘(iv) in the case of any taxable year beginning 
after calendar year 2029, $10,000. 
‘‘(B) PHASEDOWN BASED ON MODIFIED ADJUSTED GROSS 
INCOME.— 
‘‘(i) IN
GENERAL.—Except as provided in clause 
(iii), in the case of any taxable year beginning before 
January 1, 2030, the applicable limitation amount shall 
be reduced by 30 percent of the excess (if any) of 
the taxpayer’s modified adjusted gross income over 
the threshold amount (half the threshold amount in 
the case of a married individual filing a separate 
return). 
‘‘(ii) THRESHOLD
AMOUNT.—For purposes of this 
subparagraph, the term ‘threshold amount’ means— 
‘‘(I) in the case of any taxable year beginning 
in calendar year 2025, $500,000, 
‘‘(II) in the case of any taxable year beginning 
in calendar year 2026, $505,000, and 
‘‘(III) in the case of any taxable year beginning 
after calendar year 2026, 101 percent of the dollar 
amount in effect under this subparagraph for tax-
able years beginning in the preceding calendar 
year. 
‘‘(iii) LIMITATION
ON
REDUCTION.—The reduction 
under clause (i) shall not result in the applicable limita-
tion amount being less than $10,000. 
‘‘(iv) MODIFIED ADJUSTED GROSS INCOME.—For pur-
poses of this paragraph, the term ‘modified adjusted
H. R. 1—99 
gross income’ means adjusted gross income increased 
by any amount excluded from gross income under sec-
tion 911, 931, or 933.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
CHAPTER 2—DELIVERING ON PRESIDENTIAL PRIOR-
ITIES TO PROVIDE NEW MIDDLE-CLASS TAX RELIEF 
SEC. 70201. NO TAX ON TIPS. 
(a) DEDUCTION ALLOWED.—Part VII of subchapter B of chapter 
1 is amended by redesignating section 224 as section 225 and 
by inserting after section 223 the following new section: 
‘‘SEC. 224. QUALIFIED TIPS. 
‘‘(a) IN GENERAL.—There shall be allowed as a deduction an 
amount equal to the qualified tips received during the taxable 
year that are included on statements furnished to the individual 
pursuant to section 6041(d)(3), 6041A(e)(3), 6050W(f)(2), or 
6051(a)(18), or reported by the taxpayer on Form 4137 (or suc-
cessor). 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount allowed as a deduction 
under this section for any taxable year shall not exceed $25,000. 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable as a deduc-
tion under subsection (a) (after application of paragraph 
(1)) shall be reduced (but not below zero) by $100 for 
each $1,000 by which the taxpayer’s modified adjusted 
gross income exceeds $150,000 ($300,000 in the case of 
a joint return). 
‘‘(B) MODIFIED ADJUSTED GROSS INCOME.—For purposes 
of this paragraph, the term ‘modified adjusted gross income’ 
means the adjusted gross income of the taxpayer for the 
taxable year increased by any amount excluded from gross 
income under section 911, 931, or 933. 
‘‘(c) TIPS RECEIVED IN COURSE OF TRADE OR BUSINESS.—In 
the case of qualified tips received by an individual during any 
taxable year in the course of a trade or business (other than 
the trade or business of performing services as an employee) of 
such individual, such qualified tips shall be taken into account 
under subsection (a) only to the extent that the gross income for 
the taxpayer from such trade or business for such taxable year 
(including such qualified tips) exceeds the sum of the deductions 
(other than the deduction allowed under this section) allocable 
to the trade or business in which such qualified tips are received 
by the individual for such taxable year. 
‘‘(d) QUALIFIED TIPS.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified tips’ means cash 
tips received by an individual in an occupation which custom-
arily and regularly received tips on or before December 31, 
2024, as provided by the Secretary. 
‘‘(2) EXCLUSIONS.—Such term shall not include any amount 
received by an individual unless— 
‘‘(A) such amount is paid voluntarily without any con-
sequence in the event of nonpayment, is not the subject 
of negotiation, and is determined by the payor,
H. R. 1—100 
‘‘(B) the trade or business in the course of which the 
individual receives such amount is not a specified service 
trade or business (as defined in section 199A(d)(2)), and 
‘‘(C) such other requirements as may be established 
by the Secretary in regulations or other guidance are satis-
fied. 
For purposes of subparagraph (B), in the case of an individual 
receiving tips in the trade or business of performing services 
as an employee, such individual shall be treated as receiving 
tips in the course of a trade or business which is a specified 
service trade or business if the trade or business of the employer 
is a specified service trade or business. 
‘‘(3) CASH TIPS.—For purposes of paragraph (1), the term 
‘cash tips’ includes tips received from customers that are paid 
in cash or charged and, in the case of an employee, tips received 
under any tip-sharing arrangement. 
‘‘(e) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—No deduction shall be allowed under 
this section unless the taxpayer includes on the return of tax 
for the taxable year such individual’s social security number. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of 
paragraph (1), the term ‘social security number’ shall have 
the meaning given such term in section 24(h)(7). 
‘‘(f) MARRIED INDIVIDUALS.—If the taxpayer is a married indi-
vidual (within the meaning of section 7703), this section shall 
apply only if the taxpayer and the taxpayer’s spouse file a joint 
return for the taxable year. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe such regula-
tions or other guidance as may be necessary to prevent reclassifica-
tion of income as qualified tips, including regulations or other 
guidance to prevent abuse of the deduction allowed by this section. 
‘‘(h) TERMINATION.—No deduction shall be allowed under this 
section for any taxable year beginning after December 31, 2028.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Section 63(b) is 
amended by striking ‘‘and’’ at the end of paragraph (3), by striking 
the period at the end of paragraph (4) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(5) the deduction provided in section 224.’’. 
(c) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED 
AS MATHEMATICAL
OR CLERICAL ERROR.—Section 6213(g)(2), as 
amended by the preceding provisions of this Act, is amended by 
striking ‘‘and’’ at the end of subparagraph (W), by striking the 
period at the end of subparagraph (X) and inserting ‘‘, and’’, and 
by inserting after subparagraph (X) the following new subpara-
graph: 
‘‘(Y) an omission of a correct social security number 
required under section 224(e) (relating to deduction for 
qualified tips).’’. 
(d) EXCLUSION FROM QUALIFIED BUSINESS INCOME.—Section 
199A(c)(4) is amended by striking ‘‘and’’ at the end of subparagraph 
(B), by striking the period at the end of subparagraph (C) and 
inserting ‘‘, and’’, and by adding at the end the following new 
subparagraph: 
‘‘(D) any amount with respect to which a deduction 
is allowable to the taxpayer under section 224(a) for the 
taxable year.’’. 
(e) EXTENSION OF TIP CREDIT TO BEAUTY SERVICE BUSINESS.—
H. R. 1—101 
(1) IN
GENERAL.—Section 45B(b)(2) is amended to read 
as follows: 
‘‘(2) APPLICATION ONLY TO CERTAIN LINES OF BUSINESS.— 
In applying paragraph (1) there shall be taken into account 
only tips received from customers or clients in connection with 
the following services: 
‘‘(A) The providing, delivering, or serving of food or 
beverages for consumption, if the tipping of employees 
delivering or serving food or beverages by customers is 
customary. 
‘‘(B) The providing of any of the following services 
to a customer or client if the tipping of employees providing 
such services is customary: 
‘‘(i) Barbering and hair care. 
‘‘(ii) Nail care. 
‘‘(iii) Esthetics. 
‘‘(iv) Body and spa treatments.’’. 
(2) CREDIT DETERMINED WITH RESPECT TO MINIMUM WAGE 
IN EFFECT.—Section 45B(b)(1)(B) is amended— 
(A) by striking ‘‘as in effect on January 1, 2007, and’’, 
and 
(B) by inserting ‘‘, and in the case of food or beverage 
establishments, as in effect on January 1, 2007’’ after ‘‘with-
out regard to section 3(m) of such Act’’. 
(f) REPORTING REQUIREMENTS.— 
(1) RETURNS FOR PAYMENTS MADE IN THE COURSE OF A 
TRADE OR BUSINESS.— 
(A) STATEMENT
FURNISHED
TO
SECRETARY.—Section 
6041(a) is amended by inserting ‘‘(including a separate 
accounting of any such amounts reasonably designated as 
cash tips and the occupation described in section 224(d)(1) 
of the person receiving such tips)’’ after ‘‘such gains, profits, 
and income’’. 
(B) STATEMENT FURNISHED TO PAYEE.—Section 6041(d) 
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 inserting after paragraph 
(2) the following new paragraph: 
‘‘(3) in the case of compensation to non-employees, the 
portion of payments that have been reasonably designated as 
cash tips and the occupation described in section 224(d)(1) 
of the person receiving such tips.’’. 
(2) RETURNS FOR PAYMENTS MADE FOR SERVICES AND DIRECT 
SALES.— 
(A) STATEMENT
FURNISHED
TO
SECRETARY.—Section 
6041A(a) is amended by inserting ‘‘(including a separate 
accounting of any such amounts reasonably designated as 
cash tips and the occupation described in section 224(d)(1) 
of the person receiving such tips)’’ after ‘‘amount of such 
payments’’. 
(B) 
STATEMENT
FURNISHED
TO
PAYEE.—Section 
6041A(e) is amended by striking ‘‘and’’ at the end of para-
graph (1), by striking the period at the end of paragraph 
(2) and inserting ‘‘, and’’, and by inserting after paragraph 
(2) the following new paragraph: 
‘‘(3) in the case of subsection (a), the portion of payments 
that have been reasonably designated as cash tips and the
H. R. 1—102 
occupation described in section 224(d)(1) of the person receiving 
such tips.’’. 
(3) RETURNS
RELATING
TO
THIRD
PARTY
SETTLEMENT 
ORGANIZATIONS.— 
(A) STATEMENT
FURNISHED
TO
SECRETARY.—Section 
6050W(a) is amended by striking ‘‘and’’ at the end of para-
graph (1), by striking the period at the end of paragraph 
(2) and inserting ‘‘and’’, and by adding at the end the 
following new paragraph: 
‘‘(3) in the case of a third party settlement organization, 
the portion of reportable payment transactions that have been 
reasonably designated by payors as cash tips and the occupation 
described in section 224(d)(1) of the person receiving such tips.’’. 
(B) 
STATEMENT
FURNISHED
TO
PAYEE.—Section 
6050W(f)(2) is amended by inserting ‘‘(including a separate 
accounting of any such amounts that have been reasonably 
designated by payors as cash tips and the occupation 
described in section 224(d)(1) of the person receiving such 
tips)’’ after ‘‘reportable payment transactions’’. 
(4) RETURNS
RELATED
TO
WAGES.—Section 6051(a) is 
amended by striking ‘‘and’’ at the end of paragraph (16), by 
striking the period at the end of paragraph (17) and inserting 
‘‘, and’’, and by inserting after paragraph (17) the following 
new paragraph: 
‘‘(18) the total amount of cash tips reported by the employee 
under section 6053(a) and the occupation described in section 
224(d)(1) such person.’’. 
(g) CLERICAL AMENDMENT.—The table of sections for part VII 
of subchapter B of chapter 1 is amended by redesignating the 
item relating to section 224 as relating to section 225 and by 
inserting after the item relating to section 223 the following new 
item: 
‘‘Sec. 224. Qualified tips.’’. 
(h) PUBLISHED LIST OF OCCUPATIONS TRADITIONALLY RECEIVING 
TIPS.—Not later than 90 days after the date of the enactment 
of this Act, the Secretary of the Treasury (or the Secretary’s dele-
gate) shall publish a list of occupations which customarily and 
regularly received tips on or before December 31, 2024, for purposes 
of section 224(d)(1) of the Internal Revenue Code of 1986 (as added 
by subsection (a)). 
(i) WITHHOLDING.—The Secretary of the Treasury (or the Sec-
retary’s delegate) shall modify the procedures prescribed under 
section 3402(a) of the Internal Revenue Code of 1986 for taxable 
years beginning after December 31, 2025, to take into account 
the deduction allowed under section 224 of such Code (as added 
by this Act). 
(j) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
(k) TRANSITION RULE.—In the case of any cash tips required 
to be reported for periods before January 1, 2026, persons required 
to file returns or statements under section 6041(a), 6041(d)(3), 
6041A(a), 6041A(e)(3), 6050W(a), or 6050W(f)(2) of the Internal 
Revenue Code of 1986 (as amended by this section) may approxi-
mate a separate accounting of amounts designated as cash tips 
by any reasonable method specified by the Secretary.
H. R. 1—103 
SEC. 70202. NO TAX ON OVERTIME. 
(a) DEDUCTION ALLOWED.—Part VII of subchapter B of chapter 
1, as amended by the preceding provisions of this Act, is amended 
by redesignating section 225 as section 226 and by inserting after 
section 224 the following new section: 
‘‘SEC. 225. QUALIFIED OVERTIME COMPENSATION. 
‘‘(a) IN GENERAL.—There shall be allowed as a deduction an 
amount equal to the qualified overtime compensation received 
during the taxable year and included on statements furnished to 
the individual pursuant to section 6041(d)(4) or 6051(a)(19). 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount allowed as a deduction 
under this section for any taxable year shall not exceed $12,500 
($25,000 in the case of a joint return). 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable as a deduc-
tion under subsection (a) (after application of paragraph 
(1)) shall be reduced (but not below zero) by $100 for 
each $1,000 by which the taxpayer’s modified adjusted 
gross income exceeds $150,000 ($300,000 in the case of 
a joint return). 
‘‘(B) MODIFIED ADJUSTED GROSS INCOME.—For purposes 
of this paragraph, the term ‘modified adjusted gross income’ 
means the adjusted gross income of the taxpayer for the 
taxable year increased by any amount excluded from gross 
income under section 911, 931, or 933. 
‘‘(c) QUALIFIED OVERTIME COMPENSATION.— 
‘‘(1) IN GENERAL.—For purposes of this section, the term 
‘qualified overtime compensation’ means overtime compensation 
paid to an individual required under section 7 of the Fair 
Labor Standards Act of 1938 that is in excess of the regular 
rate (as used in such section) at which such individual is 
employed. 
‘‘(2) EXCLUSIONS.—Such term shall not include any quali-
fied tip (as defined in section 224(d)). 
‘‘(d) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—No deduction shall be allowed under 
this section unless the taxpayer includes on the return of tax 
for the taxable year such individual’s social security number. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of 
paragraph (1), the term ‘social security number’ shall have 
the meaning given such term in section 24(h)(7). 
‘‘(e) MARRIED INDIVIDUALS.—If the taxpayer is a married indi-
vidual (within the meaning of section 7703), this section shall 
apply only if the taxpayer and the taxpayer’s spouse file a joint 
return for the taxable year. 
‘‘(f) REGULATIONS.—The Secretary shall issue such regulations 
or other guidance as may be necessary or appropriate to carry 
out the purposes of this section, including regulations or other 
guidance to prevent abuse of the deduction allowed by this section. 
‘‘(g) TERMINATION.—No deduction shall be allowed under this 
section for any taxable year beginning after December 31, 2028.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Section 63(b), as 
amended by the preceding provisions of this Act, is amended by 
striking ‘‘and’’ at the end of paragraph (4), by striking the period
H. R. 1—104 
at the end of paragraph (5) and inserting ‘‘, and’’, and by adding 
at the end the following new paragraph: 
‘‘(6) the deduction provided in section 225.’’. 
(c) REPORTING.— 
(1) REQUIREMENT TO INCLUDE OVERTIME COMPENSATION ON 
W-2.—Section 6051(a), as amended by the preceding provision 
of this Act, is amended by striking ‘‘and’’ at the end of para-
graph (17), by striking the period at the end of paragraph 
(18) and inserting ‘‘, and’’, and by inserting after paragraph 
(18) the following new paragraph: 
‘‘(19) the total amount of qualified overtime compensation 
(as defined in section 225(c)).’’. 
(2) PAYMENTS
TO
PERSONS
NOT
TREATED
AS
EMPLOYEES 
UNDER TAX LAWS.— 
(A) STATEMENT
FURNISHED
TO
SECRETARY.—Section 
6041(a), as amended by section 70201(e)(1)(A), is amended 
by inserting ‘‘and a separate accounting of any amount 
of qualified overtime compensation (as defined in section 
225(c))’’ after ‘‘occupation of the person receiving such tips’’. 
(B) STATEMENT FURNISHED TO PAYEE.—Section 6041(d), 
as amended by section 70201(e)(1)(B), is amended by 
striking ‘‘and’’ at the end of paragraph (2), by striking 
the period at the end of paragraph (3) and inserting ‘‘, 
and’’, and by inserting after paragraph (3) the following 
new paragraph: 
‘‘(4) the portion of payments that are qualified overtime 
compensation (as defined in section 225(c)).’’. 
(d) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED 
AS MATHEMATICAL
OR CLERICAL ERROR.—Section 6213(g)(2), as 
amended by the preceding provisions of this Act, is amended by 
striking ‘‘and’’ at the end of subparagraph (X), by striking the 
period at the end of subparagraph (Y) and inserting ‘‘, and’’, and 
by inserting after subparagraph (Y) the following new subpara-
graph: 
‘‘(Z) an omission of a correct social security number 
required under section 225(d) (relating to deduction for 
qualified overtime).’’. 
(e) CLERICAL AMENDMENT.—The table of sections for part VII 
of subchapter B of chapter 1, as amended by the preceding provi-
sions of this Act, is amended by redesignating the item relating 
to section 225 as an item relating to section 226 and by inserting 
after the item relating to section 224 the following new item: 
‘‘Sec. 225. Qualified overtime compensation.’’. 
(f) WITHHOLDING.—The Secretary of the Treasury (or the Sec-
retary’s delegate) shall modify the procedures prescribed under 
section 3402(a) of the Internal Revenue Code of 1986 for taxable 
years beginning after December 31, 2025, to take into account 
the deduction allowed under section 225 of such Code (as added 
by this Act). 
(g) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
(h) TRANSITION RULE.—In the case of qualified overtime com-
pensation required to be reported for periods before January 1, 
2026, persons required to file returns or statements under section 
6051(a)(19), 6041(a), or 6041(d)(4) of the Internal Revenue Code 
of 1986 (as amended by this section) may approximate a separate
H. R. 1—105 
accounting of amounts designated as qualified overtime compensa-
tion by any reasonable method specified by the Secretary. 
SEC. 70203. NO TAX ON CAR LOAN INTEREST. 
(a) IN GENERAL.—Section 163(h) is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph 
(3) the following new paragraph: 
‘‘(4) SPECIAL RULES FOR TAXABLE YEARS 2025 THROUGH 2028 
RELATING TO QUALIFIED PASSENGER VEHICLE LOAN INTEREST.— 
‘‘(A) IN GENERAL.—In the case of taxable years begin-
ning after December 31, 2024, and before January 1, 2029, 
for purposes of this subsection the term ‘personal interest’ 
shall not include qualified passenger vehicle loan interest. 
‘‘(B) QUALIFIED
PASSENGER
VEHICLE
LOAN
INTEREST 
DEFINED.— 
‘‘(i) IN GENERAL.—For purposes of this paragraph, 
the term ‘qualified passenger vehicle loan interest’ 
means any interest which is paid or accrued during 
the taxable year on indebtedness incurred by the tax-
payer after December 31, 2024, for the purchase of, 
and that is secured by a first lien on, an applicable 
passenger vehicle for personal use. 
‘‘(ii) EXCEPTIONS.—Such term shall not include any 
amount paid or incurred on any of the following: 
‘‘(I) A loan to finance fleet sales. 
‘‘(II) A loan incurred for the purchase of a 
commercial vehicle that is not used for personal 
purposes. 
‘‘(III) Any lease financing. 
‘‘(IV) A loan to finance the purchase of a 
vehicle with a salvage title. 
‘‘(V) A loan to finance the purchase of a vehicle 
intended to be used for scrap or parts. 
‘‘(iii) VIN REQUIREMENT.—Interest shall not be 
treated as qualified passenger vehicle loan interest 
under this paragraph unless the taxpayer includes the 
vehicle identification number of the applicable pas-
senger vehicle described in clause (i) on the return 
of tax for the taxable year. 
‘‘(C) LIMITATIONS.— 
‘‘(i) DOLLAR LIMIT.—The amount of interest taken 
into account by a taxpayer under subparagraph (B) 
for any taxable year shall not exceed $10,000. 
‘‘(ii) LIMITATION
BASED
ON
MODIFIED
ADJUSTED 
GROSS INCOME.— 
‘‘(I) IN GENERAL.—The amount which is other-
wise allowable as a deduction under subsection 
(a) as qualified passenger vehicle loan interest 
(determined without regard to this clause and after 
the application of clause (i)) shall be reduced (but 
not below zero) by $200 for each $1,000 (or portion 
thereof) by which the modified adjusted gross 
income of the taxpayer for the taxable year exceeds 
$100,000 ($200,000 in the case of a joint return). 
‘‘(II) MODIFIED ADJUSTED GROSS INCOME.—For 
purposes of this clause, the term ‘modified adjusted 
gross income’ means the adjusted gross income
H. R. 1—106 
of the taxpayer for the taxable year increased by 
any amount excluded from gross income under 
section 911, 931, or 933. 
‘‘(D) APPLICABLE
PASSENGER
VEHICLE.—The term 
‘applicable passenger vehicle’ means any vehicle— 
‘‘(i) the original use of which commences with the 
taxpayer, 
‘‘(ii) which is manufactured primarily for use on 
public streets, roads, and highways (not including a 
vehicle operated exclusively on a rail or rails), 
‘‘(iii) which has at least 2 wheels, 
‘‘(iv) which is a car, minivan, van, sport utility 
vehicle, pickup truck, or motorcycle, 
‘‘(v) which is treated as a motor vehicle for pur-
poses of title II of the Clean Air Act, and 
‘‘(vi) which has a gross vehicle weight rating of 
less than 14,000 pounds. 
Such term shall not include any vehicle the final assembly 
of which did not occur within the United States. 
‘‘(E) OTHER DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this paragraph— 
‘‘(i) FINAL ASSEMBLY.—For purposes of subpara-
graph (D), the term ‘final assembly’ means the process 
by which a manufacturer produces a vehicle at, or 
through the use of, a plant, factory, or other place 
from which the vehicle is delivered to a dealer with 
all component parts necessary for the mechanical oper-
ation of the vehicle included with the vehicle, whether 
or not the component parts are permanently installed 
in or on the vehicle. 
‘‘(ii) TREATMENT
OF
REFINANCING.—Indebtedness 
described in subparagraph (B) shall include indebted-
ness that results from refinancing any indebtedness 
described in such subparagraph, and that is secured 
by a first lien on the applicable passenger vehicle with 
respect to which the refinanced indebtedness was 
incurred, but only to the extent the amount of such 
resulting indebtedness does not exceed the amount 
of such refinanced indebtedness. 
‘‘(iii) RELATED PARTIES.—Indebtedness described in 
subparagraph (B) shall not include any indebtedness 
owed to a person who is related (within the meaning 
of section 267(b) or 707(b)(1)) to the taxpayer.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Section 63(b), as 
amended by the preceding provisions of this Act, is amended by 
striking ‘‘and’’ at the end of paragraph (5), by striking the period 
at the end of paragraph (6) and inserting ‘‘and’’, and by adding 
at the end the following new paragraph: 
‘‘(7) so much of the deduction allowed by section 163(a) 
as is attributable to the exception under section 163(h)(4)(A).’’. 
(c) REPORTING.— 
(1) IN GENERAL.—Subpart B of part III of subchapter A 
of chapter 61 is amended by adding at the end the following 
new section:
H. R. 1—107 
‘‘SEC. 6050AA. RETURNS RELATING TO APPLICABLE PASSENGER 
VEHICLE LOAN INTEREST RECEIVED IN TRADE OR 
BUSINESS FROM INDIVIDUALS. 
‘‘(a) IN GENERAL.—Any person— 
‘‘(1) who is engaged in a trade or business, and 
‘‘(2) who, in the course of such trade or business, receives 
from any individual interest aggregating $600 or more for any 
calendar year on a specified passenger vehicle loan, 
shall make the return described in subsection (b) with respect 
to each individual from whom such interest was received at such 
time as the Secretary may provide. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return is described 
in this subsection if such return— 
‘‘(1) is in such form as the Secretary may prescribe, and 
‘‘(2) contains— 
‘‘(A) the name and address of the individual from whom 
the interest described in subsection (a)(2) was received, 
‘‘(B) the amount of such interest received for the cal-
endar year, 
‘‘(C) the amount of outstanding principal on the speci-
fied passenger vehicle loan as of the beginning of such 
calendar year, 
‘‘(D) the date of the origination of such loan, 
‘‘(E) the year, make, model, and vehicle identification 
number of the applicable passenger vehicle which secures 
such loan (or such other description of such vehicle as 
the Secretary may prescribe), and 
‘‘(F) such other information as the Secretary may pre-
scribe. 
‘‘(c) STATEMENTS
TO BE FURNISHED
TO INDIVIDUALS WITH 
RESPECT
TO WHOM INFORMATION IS REQUIRED.—Every person 
required to make a return under subsection (a) shall furnish to 
each individual whose name is required to be set forth in such 
return a written statement showing— 
‘‘(1) the name, address, and phone number of the informa-
tion contact of the person required to make such return, and 
‘‘(2) the information described in subparagraphs (B), (C), 
(D), and (E) of subsection (b)(2) with respect to such individual 
(and such information as is described in subsection (b)(2)(F) 
with respect to such individual as the Secretary may provide 
for purposes of this subsection). 
The written statement required under the preceding sentence shall 
be furnished on or before January 31 of the year following the 
calendar year for which the return under subsection (a) was 
required to be made. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Terms used in this section which are 
also used in paragraph (4) of section 163(h) shall have the 
same meaning as when used in such paragraph. 
‘‘(2) SPECIFIED PASSENGER VEHICLE LOAN.—The term ‘speci-
fied passenger vehicle loan’ means the indebtedness described 
in section 163(h)(4)(B) with respect to any applicable passenger 
vehicle. 
‘‘(e) REGULATIONS.—The Secretary shall issue such regulations 
or other guidance as may be necessary or appropriate to carry 
out the purposes of this section, including regulations or other
H. R. 1—108 
guidance to prevent the duplicate reporting of information under 
this section. 
‘‘(f) APPLICABILITY.—No return shall be required under this 
section for any period to which section 163(h)(4) does not apply.’’. 
(2) PENALTIES.—Section 6724(d) is amended— 
(A) in paragraph (1)(B), by striking ‘‘or’’ at the end 
of clause (xxvii), by striking ‘‘and’’ at the end of clause 
(xxviii) and inserting ‘‘or’’, and by adding at the end the 
following new clause: 
‘‘(xxix) section 6050AA(a) (relating to returns 
relating to applicable passenger vehicle loan interest 
received in trade or business from individuals),’’, and 
(B) in paragraph (2), by striking ‘‘or’’ at the end of 
subparagraph (KK), by striking the period at the end of 
subparagraph (LL) and inserting ‘‘, or’’, and by inserting 
after subparagraph (LL) the following new subparagraph: 
‘‘(MM) section 6050AA(c) (relating to statements 
relating to applicable passenger vehicle loan interest 
received in trade or business from individuals).’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 56(e)(1)(B) is amended by striking ‘‘section 
163(h)(4)’’ and inserting ‘‘section 163(h)(5)’’. 
(2) The table of sections for subpart B of part III of sub-
chapter A of chapter 61 is amended by adding at the end 
the following new item: 
‘‘Sec. 6050AA. Returns relating to applicable passenger vehicle loan interest re-
ceived in trade or business from individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to indebtedness incurred after December 31, 2024. 
SEC. 70204. TRUMP ACCOUNTS AND CONTRIBUTION PILOT PROGRAM. 
(a) TRUMP ACCOUNTS.— 
(1) IN GENERAL.—Subchapter F of chapter 1 is amended 
by adding at the end the following new part: 
‘‘PART IX—TRUMP ACCOUNTS 
‘‘Sec. 530A. Trump accounts. 
‘‘SEC. 530A. TRUMP ACCOUNTS. 
‘‘(a) GENERAL RULE.—Except as provided in this section or 
under regulations or guidance established by the Secretary, a 
Trump account shall be treated for purposes of this title in the 
same manner as an individual retirement account under section 
408(a). 
‘‘(b) TRUMP ACCOUNT.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘Trump account’ means an 
individual retirement account (as defined in section 408(a)) 
which is not designated as a Roth IRA and which meets the 
following requirements: 
‘‘(A) The account— 
‘‘(i) is created or organized by the Secretary for 
the exclusive benefit of an eligible individual or such 
eligible individual’s beneficiaries, or 
‘‘(ii) is— 
‘‘(I) created or organized in the United States 
for the exclusive benefit of an individual who has
H. R. 1—109 
not attained the age of 18 before the end of the 
calendar year, or such individual’s beneficiaries, 
and 
‘‘(II) funded by a qualified rollover contribu-
tion. 
‘‘(B) The account is designated (in such manner as 
the Secretary shall prescribe) at the time of the establish-
ment of the account as a Trump account. 
‘‘(C) The written governing instrument creating the 
account meets the following requirements: 
‘‘(i) No contribution will be accepted— 
‘‘(I) before the date that is 12 months after 
the date of the enactment of this section, or 
‘‘(II) in the case of a contribution made in 
any calendar year before the calendar year in 
which the account beneficiary attains age 18, if 
such contribution would result in aggregate con-
tributions (other than exempt contributions) for 
such calendar year in excess of the contribution 
limit specified in subsection (c)(2)(A). 
‘‘(ii) Except as provided in subsection (d), no dis-
tribution will be allowed before the first day of the 
calendar year in which the account beneficiary attains 
age 18. 
‘‘(iii) No part of the account funds will be invested 
in any asset other than an eligible investment during 
any period before the first day of the calendar year 
in which the account beneficiary attains age 18. 
‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible individual’ 
means any individual— 
‘‘(A) who has not attained the age of 18 before the 
close of the calendar year in which the election under 
subparagraph (C) is made, 
‘‘(B) for whom a social security number (within the 
meaning of section 24(h)(7)) has been issued before the 
date on which an election under subsection (C) is made, 
and 
‘‘(C) for whom— 
‘‘(i) an election is made under this subparagraph 
by the Secretary if the Secretary determines (based 
on information available to the Secretary from tax 
returns or otherwise) that such individual meets the 
requirements of subparagraphs (A) and (B) and no 
prior election has been made for such individual under 
clause (ii), or 
‘‘(ii) an election is made under this subparagraph 
by a person other than the Secretary (at such time 
and in such manner as the Secretary may prescribe) 
for the establishment of a Trump account if no prior 
election has been made for such individual under 
clause (i). 
‘‘(3) ELIGIBLE INVESTMENT.— 
‘‘(A) IN
GENERAL.—The term ‘eligible investment’ 
means any mutual fund or exchange traded fund which— 
‘‘(i) tracks the returns of a qualified index, 
‘‘(ii) does not use leverage,
H. R. 1—110 
‘‘(iii) does not have annual fees and expenses of 
more than 0.1 percent of the balance of the investment 
in the fund, and 
‘‘(iv) meets such other criteria as the Secretary 
determines appropriate for purposes of this section. 
‘‘(B) QUALIFIED
INDEX.—The term ‘qualified index’ 
means— 
‘‘(i) the Standard and Poor’s 500 stock market 
index, or 
‘‘(ii) any other index— 
‘‘(I) which is comprised of equity investments 
in primarily United States companies, and 
‘‘(II) for which regulated futures contracts (as 
defined in section 1256(g)(1)) are traded on a quali-
fied board or exchange (as defined in section 
1256(g)(7)). 
Such term shall not include any industry or sector- 
specific index, but may include an index based on 
market capitalization. 
‘‘(4) ACCOUNT BENEFICIARY.—The term ‘account beneficiary’ 
means the individual on whose behalf the Trump account was 
established. 
‘‘(c) TREATMENT OF CONTRIBUTIONS.— 
‘‘(1) NO
DEDUCTION
ALLOWED.—No deduction shall be 
allowed under section 219 for any contribution which is made 
before the first day of the calendar year in which the account 
beneficiary attains age 18. 
‘‘(2) CONTRIBUTION LIMIT.—In the case of any contribution 
made before the calendar year in which the account beneficiary 
attains age 18— 
‘‘(A) IN GENERAL.—The aggregate amount of contribu-
tions (other than exempt contributions) for such calendar 
year shall not exceed $5,000. 
‘‘(B) EXEMPT
CONTRIBUTION.—For purposes of this 
paragraph, the term ‘exempt contribution’ means— 
‘‘(i) a qualified rollover contribution, 
‘‘(ii) any qualified general contribution, or 
‘‘(iii) any contribution provided under section 6434. 
‘‘(C) COST-OF-LIVING ADJUSTMENT.— 
‘‘(i) IN GENERAL.—In the case of any taxable year 
after 2027, the $5,000 amount under subparagraph 
(A) shall be increased by an amount equal to— 
‘‘(I) such dollar amount, multiplied by 
‘‘(II) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by sub-
stituting ‘calendar year 2026’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(ii) ROUNDING.—If any increase under this 
subparagraph is not a multiple of $100, such amount 
shall be rounded to the next lowest multiple of $100. 
‘‘(3) TIMING OF CONTRIBUTIONS.—Section 219(f)(3) shall not 
apply to any contribution made to a Trump account for any 
taxable year ending before the calendar year in which the 
account beneficiary attains age 18. 
‘‘(d) DISTRIBUTIONS.—
H. R. 1—111 
‘‘(1) IN GENERAL.—Except as otherwise provided in this 
subsection, no distribution shall be allowed before the first 
day of the calendar year in which the account beneficiary 
attains age 18. 
‘‘(2) TAX TREATMENT OF ALLOWABLE DISTRIBUTIONS.—For 
purposes of applying section 72 to any amount distributed 
from a Trump account, the investment in the contract shall 
not include— 
‘‘(A) any qualified general contribution, 
‘‘(B) any contribution provided under section 6434, and 
‘‘(C) the amount of any contribution which is excluded 
from gross income under section 128. 
‘‘(3) QUALIFIED ROLLOVER CONTRIBUTIONS.—Paragraph (1) 
shall not apply to any distribution which is a qualified rollover 
contribution and the amount of such distribution shall not 
be included in the gross income of the beneficiary. 
‘‘(4) QUALIFIED ABLE ROLLOVER CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to 
any distribution which is a qualified ABLE rollover con-
tribution and the amount of such distribution shall not 
be included in the gross income of the beneficiary. 
‘‘(B) QUALIFIED
ABLE
ROLLOVER
CONTRIBUTION.—For 
purposes of this section, the term ‘qualified ABLE rollover 
contribution’ means an amount which is paid during the 
calendar year in which the account beneficiary attains age 
17 in a direct trustee-to-trustee transfer from a Trump 
account maintained for the benefit of the account bene-
ficiary to an ABLE account (as defined in section 
529A(e)(6)) for the benefit of the such account beneficiary, 
but only if the amount of such payment is equal to the 
entire balance of the Trump account from which the pay-
ment is made. 
‘‘(5) DISTRIBUTIONS OF EXCESS CONTRIBUTIONS.—In the case 
of any contribution which is made before the calendar year 
in which the account beneficiary attains age 18 and which 
is in excess of the limitation in effect under subsection (c)(2)(A) 
for the calendar year— 
‘‘(A) paragraph (1) shall not apply to the distribution 
of such excess, 
‘‘(B) the amount of such distribution shall not be 
included in gross income of the account beneficiary, and 
‘‘(C) the tax imposed by this chapter on the distributee 
for the taxable year in which the distribution is made 
shall be increased by 100 percent of the amount of net 
income attributable to such excess (determined without 
regard to subparagraph (B)). 
‘‘(6) TREATMENT OF DEATH OF ACCOUNT BENEFICIARY.—If, 
by reason of the death of the account beneficiary before the 
first day of the calendar year in which the account beneficiary 
attains age 18, any person acquires the account beneficiary’s 
interest in the Trump account— 
‘‘(A) paragraph (1) shall not apply, 
‘‘(B) such account shall cease to be a Trump account 
as of the date of death, and 
‘‘(C) an amount equal to the fair market value of the 
assets (reduced by the investment in the contract) in such 
account on such date shall—
H. R. 1—112 
‘‘(i) if such person is not the estate of such bene-
ficiary, be includible in such person’s gross income 
for the taxable year which includes such date, or 
‘‘(ii) if such person is the estate of such beneficiary, 
be includible in such beneficiary’s gross income for 
the last taxable year of such beneficiary. 
‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For purposes of this 
section, the term ‘qualified rollover contribution’ means an amount 
which is paid in a direct trustee-to-trustee transfer from a Trump 
account maintained for the benefit of the account beneficiary to 
a Trump account maintained for such beneficiary, but only if the 
amount of such payment is equal to the entire balance of the 
Trump account from which the payment is made. 
‘‘(f) QUALIFIED GENERAL CONTRIBUTION.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘qualified general contribution’ 
means any contribution which— 
‘‘(A) is made by the Secretary pursuant to a general 
funding contribution, 
‘‘(B) is made to the Trump account of an account bene-
ficiary in the qualified class of account beneficiaries speci-
fied in the general funding contribution, and 
‘‘(C) is in an amount which is equal to the ratio of— 
‘‘(i) the amount of such general funding contribu-
tion, to 
‘‘(ii) the number of account beneficiaries in such 
qualified class. 
‘‘(2) GENERAL FUNDING CONTRIBUTION.—The term ‘general 
funding contribution’ means a contribution which— 
‘‘(A) is made by— 
‘‘(i) an entity described in section 170(c)(1) (other 
than a possession of the United States or a political 
subdivision thereof) or an Indian tribal government, 
or 
‘‘(ii) an organization described in section 501(c)(3) 
and exempt from tax under section 501(a), and 
‘‘(B) which specifies a qualified class of account bene-
ficiaries to whom such contribution is to be distributed. 
‘‘(3) QUALIFIED CLASS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified class’ means 
any of the following: 
‘‘(i) All account beneficiaries who have not attained 
the age of 18 before the close of the calendar year 
in which the contribution is made. 
‘‘(ii) All account beneficiaries who have not 
attained the age of 18 before the close of the calendar 
year in which the contribution is made and who reside 
in one or more States or other qualified geographic 
areas specified by the terms of the general funding 
contribution. 
‘‘(iii) All account beneficiaries who have not 
attained the age of 18 before the close of the calendar 
year in which the contribution is made and who were 
born in one or more calendar years specified by the 
terms of the general funding contribution. 
‘‘(B) QUALIFIED GEOGRAPHIC AREA.—The term ‘qualified 
geographic area’ means any geographic area in which not
H. R. 1—113 
less than 5,000 account beneficiaries reside and which is 
designated by the Secretary as a qualified geographic area 
under this subparagraph. 
‘‘(g) TRUSTEE SELECTION.—In the case of any Trump account 
created or organized by the Secretary, the Secretary shall take 
into account the following criteria in selecting the trustee: 
‘‘(1) The history of reliability and regulatory compliance 
of the trustee. 
‘‘(2) The customer service experience of the trustee. 
‘‘(3) The costs imposed by the trustee on the account or 
the account beneficiary. 
‘‘(h) OTHER SPECIAL RULES
AND COORDINATION WITH INDI-
VIDUAL RETIREMENT ACCOUNT RULES.— 
‘‘(1) IN
GENERAL.—The rules of subsections (k) and (p) 
of section 408 shall not apply to a Trump account, and the 
rules of subsections (d) and (i) of section 408 shall not apply 
to a Trump account for any taxable year beginning before 
the calendar year in which the account beneficiary attains 
age 18. 
‘‘(2) CUSTODIAL ACCOUNTS.—In the case of a Trump account, 
section 408(h) shall be applied by substituting ‘a Trump account 
described in section 530A(b)(1)’ for ‘an individual retirement 
account described in subsection (a)’. 
‘‘(3) CONTRIBUTIONS.—In the case of any taxable year begin-
ning before the first day of the calendar year in which the 
account beneficiary attains age 18, a contribution to a Trump 
account shall not be taken into account in applying any con-
tribution limit to any individual retirement plan other than 
a Trump account. 
‘‘(4) DISTRIBUTIONS.—Section 408(d)(2) shall be applied 
separately with respect to Trump Accounts and other individual 
retirement plans. 
‘‘(5) EXCESS CONTRIBUTIONS.—For purposes of applying sec-
tion 4973(b) to a Trump account for any taxable year beginning 
before the first day of the calendar year in which the account 
beneficiary attains age 18, the term ‘excess contributions’ means 
the sum of— 
‘‘(A) the amount by which the amount contributed to 
the account for the calendar year in which taxable year 
begins exceeds the amount permitted to be contributed 
to the account under subsection (c)(2), and 
‘‘(B) the amount determined under this paragraph for 
the preceding taxable year. 
For purposes of this paragraph, the excess contributions for 
a taxable year are reduced by the distributions to which sub-
section (d)(5) applies that are made during the taxable year 
or by the date prescribed by law (including extensions of time) 
for filing the account beneficiary’s return for the taxable year. 
‘‘(i) REPORTS.— 
‘‘(1) IN GENERAL.—The trustee of a Trump account shall 
make such reports regarding such account to the Secretary 
and to the beneficiary of the account at such time and in 
such manner as may be required by the Secretary. Such reports 
shall include information with respect to— 
‘‘(A) contributions (including the amount and source 
of any contribution in excess of $25 made from a person
H. R. 1—114 
other than the Secretary, the account beneficiary, or the 
parent or legal guardian of the account beneficiary), 
‘‘(B) distributions (including distributions which are 
qualified rollover contributions), 
‘‘(C) the fair market value of the account, 
‘‘(D) the investment in the contract with respect to 
such account, and 
‘‘(E) such other matters as the Secretary may require. 
‘‘(2) QUALIFIED ROLLOVER CONTRIBUTIONS.—Not later than 
30 days after the date of any qualified rollover contribution, 
the trustee of the Trump account to which the contribution 
was made shall make a report to the Secretary. Such report 
shall include— 
‘‘(A) the name, address, and social security number 
of the account beneficiary, 
‘‘(B) the name and address of such trustee, 
‘‘(C) the account number, 
‘‘(D) the routing number of the trustee, and 
‘‘(E) such other information as the Secretary may 
require. 
‘‘(3) PERIOD OF REPORTING.—This subsection shall not apply 
to any period after the calendar year in which the beneficiary 
attains age 17.’’. 
(2) QUALIFIED
ABLE
ROLLOVER
CONTRIBUTIONS
EXEMPT 
FROM ABLE CONTRIBUTION LIMITATION.— 
(A) IN GENERAL.—Section 529A(b)(2)(B) is amended by 
inserting ‘‘or received in a qualified ABLE rollover contribu-
tion described in section 530A(d)(4)(B)’’ after ‘‘except as 
provided in the case of contributions under subsection 
(c)(1)(C)’’. 
(B) PROHIBITION
ON
EXCESS
CONTRIBUTIONS.—The 
second sentence of section 529A(b)(6) is amended by 
inserting ‘‘but do not include any contributions received 
in a qualified ABLE rollover contribution described in sec-
tion 530A(d)(4)(B)’’ before the period at the end. 
(C) CONFORMING AMENDMENT.—Section 4973(h)(1) is 
amended by inserting ‘‘or contributions received in a quali-
fied ABLE rollover contribution described in section 
530A(d)(4)(B)’’ after ‘‘other than contributions under section 
529A(c)(1)(C)’’. 
(3) FAILURE TO PROVIDE REPORTS ON TRUMP ACCOUNTS.— 
Section 6693(a)(2) is amended by striking ‘‘and’’ at the end 
of subparagraph (E), by striking the period at the end of 
subparagraph (F) and inserting ‘‘, and’’, and by inserting after 
subparagraph (F) the following new subparagraph: 
‘‘(G) section 530A(i) (relating to Trump accounts).’’. 
(4) CLERICAL AMENDMENT.— 
(A) The table of parts for subchapter F of chapter 
1 is amended by adding at the end the following new 
item: 
‘‘PART IX—TRUMP ACCOUNTS’’. 
(b) EMPLOYER CONTRIBUTIONS.— 
(1) IN GENERAL.—Part III of subchapter B of chapter 1 
is amended by inserting after section 127 the following new 
section:
H. R. 1—115 
‘‘SEC. 128. EMPLOYER CONTRIBUTIONS TO TRUMP ACCOUNTS. 
‘‘(a) IN GENERAL.—Gross income of an employee does not 
include amounts paid by the employer as a contribution to the 
Trump account of such employee or of any dependent of such 
employee if the amounts are paid or incurred pursuant to a program 
which is described in subsection (c). 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The amount which may be excluded 
under subsection (a) with respect to any employee shall not 
exceed $2,500. 
‘‘(2) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any taxable year 
beginning after 2027, the $2,500 amount in paragraph 
(1) shall be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins by substituting ‘calendar year 
2026’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(B) ROUNDING.—If any increase determined under 
subparagraph (A) is not a multiple of $100, such increase 
shall be rounded to the next lowest multiple of $100. 
‘‘(c) TRUMP ACCOUNT CONTRIBUTION PROGRAM.—For purposes 
of this section, a Trump account contribution program is a separate 
written plan of an employer for the exclusive benefit of his 
employees to provide contributions to the Trump accounts of such 
employees or dependents of such employees which meets require-
ments similar to the requirements of paragraphs (2), (3), (6), (7), 
and (8) of section 129(d).’’. 
(2) CLERICAL AMENDMENT.—The table of sections for part 
III of subchapter B of chapter 1 is amended by inserting after 
the item relating to section 127 the following new item: 
‘‘Sec. 128. Employer contributions to Trump accounts.’’. 
(c) CERTAIN CONTRIBUTIONS EXCLUDED FROM GROSS INCOME.— 
(1) IN GENERAL.—Part III of subchapter B of chapter 1 
is amended by inserting before section 140 the following new 
section: 
‘‘SEC. 139J. CERTAIN CONTRIBUTIONS TO TRUMP ACCOUNTS. 
‘‘(a) IN GENERAL.—Gross income of an account beneficiary shall 
not include any qualified general contribution to a Trump account 
of the account beneficiary. 
‘‘(b) DEFINITIONS.—Any term used in this section which is used 
in section 530A shall have the meaning given such term under 
section 530A.’’. 
(2) CLERICAL AMENDMENT.—The table of sections for part 
III of subchapter B is amended by inserting before the item 
relating to section 140 the following new item: 
‘‘Sec. 139J. Certain contributions to Trump accounts.’’. 
(d) TRUMP ACCOUNTS CONTRIBUTION PILOT PROGRAM.— 
(1) IN GENERAL.—Subchapter B of chapter 65 is amended 
by adding at the end the following new section:
H. R. 1—116 
‘‘SEC. 6434. TRUMP ACCOUNTS CONTRIBUTION PILOT PROGRAM. 
‘‘(a) IN GENERAL.—In the case of an individual who makes 
an election under this section with respect to an eligible child 
of the individual, such eligible child shall be treated as making 
a payment against the tax imposed by subtitle A (for the taxable 
year for which the election was made) in an amount equal to 
$1,000. 
‘‘(b) REFUND OF PAYMENT.—The amount treated as a payment 
under subsection (a) shall be paid by the Secretary to the Trump 
account with respect to which such eligible child is the account 
beneficiary. 
‘‘(c) ELIGIBLE CHILD.—For purposes of this section, the term 
‘eligible child’ means a qualifying child (as defined in section 
152(c))— 
‘‘(1) who is born after December 31, 2024, and before 
January 1, 2029, 
‘‘(2) with respect to whom no prior election has been made 
under this section by such individual or any other individual, 
and 
‘‘(3) who is a United States citizen. 
‘‘(d) ELECTION.—An election under this section shall be made 
at such time and in such manner as the Secretary shall provide. 
‘‘(e) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—This section shall not apply to any tax-
payer unless such individual includes with the election made 
under this section the social security number of the eligible 
child with respect to whom the election is made. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of 
paragraph (1), the term ‘social security number’ shall have 
the meaning given such term in section 24(h)(7), determined 
by substituting ‘before the date of the election made under 
section 6434’ for ‘before the due date of such return’ in subpara-
graph (B) thereof. 
‘‘(f) EXCEPTION FROM REDUCTION OR OFFSET.—Any payment 
made to any individual under this section shall not be— 
‘‘(1) subject to reduction or offset pursuant to subsection 
(c), (d), (e), or (f) of section 6402 or any similar authority 
permitting offset, or 
‘‘(2) reduced or offset by other assessed Federal taxes that 
would otherwise be subject to levy or collection. 
‘‘(g) SPECIAL RULE REGARDING INTEREST.—The period deter-
mined under section 6611(a) with respect to any payment under 
this section shall not begin before January 1, 2028. 
‘‘(h) MIRROR CODE POSSESSIONS.—In the case of any possession 
of the United States with a mirror code tax system (as defined 
in section 24(k)), this section shall not be treated as part of the 
income tax laws of the United States for purposes of determining 
the income tax law of such possession unless such possession elects 
to have this section be so treated. 
‘‘(i) DEFINITIONS.—For purposes of this section, the terms 
‘Trump account’ and ‘account beneficiary’ have the meaning given 
such terms in section 530A(b).’’. 
(2) PENALTY
FOR
NEGLIGENT
CLAIM
OR
FRAUDULENT 
CLAIM.—Part I of subchapter A of chapter 68 is amended by 
adding at the end the following new section:
H. R. 1—117 
‘‘SEC. 6659. IMPROPER CLAIM FOR TRUMP ACCOUNT CONTRIBUTION 
PILOT PROGRAM CREDIT. 
‘‘(a) IN GENERAL.—In the case of any individual who makes 
an election under section 6434 with respect to an individual who 
is not an eligible child of the taxpayer— 
‘‘(1) if such election was made due to negligence or dis-
regard of the rules or regulations, there shall be imposed a 
penalty of $500, or 
‘‘(2) if such election was made due to fraud, there shall 
be imposed a penalty of $1,000. 
‘‘(b) DEFINITIONS.— 
‘‘(1) ELIGIBLE
CHILD.—The term ‘eligible child’ has the 
meaning given such term under section 6434. 
‘‘(2) NEGLIGENCE; DISREGARD.—The terms ‘negligence’ and 
‘disregard’ have the same meaning as when such terms are 
used in section 6662.’’. 
(3) OMISSION
OF
CORRECT
SOCIAL
SECURITY
NUMBER 
TREATED
AS
MATHEMATICAL
OR
CLERICAL
ERROR.—Section 
6213(g)(2), as amended by the preceding provisions of this 
Act, is amended by striking ‘‘and’’ at the end of subparagraph 
(Y), by striking the period at the end of subparagraph (Z) 
and inserting ‘‘, and’’, and by inserting after subparagraph 
(Z) the following new subparagraph: 
‘‘(AA) an omission of a correct social security number 
required under section 6434(e)(1) (relating to the Trump 
accounts contribution pilot program).’’. 
(4) CONFORMING AMENDMENTS.— 
(A) The table of sections for subchapter B of chapter 
65 is amended by adding at the end the following new 
item: 
‘‘Sec. 6434. Trump accounts contribution pilot program.’’. 
(B) The table of sections for part I of subchapter A 
of chapter 68 is amended by inserting after the item 
relating to section 6658 the following new item: 
‘‘Sec. 6659. Improper claim for Trump account contribution pilot program credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
(f) FUNDING.—In addition to amounts otherwise available, there 
is appropriated to the Department of the Treasury, out of any 
money in the Treasury not otherwise appropriated, $410,000,000, 
to remain available until September 30, 2034, to carry out the 
amendments made by this section. 
CHAPTER 3—ESTABLISHING CERTAINTY AND 
COMPETITIVENESS FOR AMERICAN JOB CREATORS 
Subchapter A—Permanent U.S. Business Tax Reform and 
Boosting Domestic Investment 
SEC. 70301. FULL EXPENSING FOR CERTAIN BUSINESS PROPERTY. 
(a) MADE PERMANENT.— 
(1) IN GENERAL.—Section 168(k)(2)(A) is amended by adding 
‘‘and’’ at the end of clause (i), by striking ‘‘, and’’ at the end 
of clause (ii) and inserting a period, and by striking clause 
(iii).
H. R. 1—118 
(2) PROPERTY WITH LONGER PRODUCTION PERIODS.—Section 
168(k)(2)(B) is amended— 
(A) in clause (i), by striking subclauses (II) and (III) 
and redesignating subclauses (IV), (V), and (VI), as sub-
clauses (II), (III), and (IV), respectively, and 
(B) by striking clause (ii) and redesignating clauses 
(iii) and (iv) as clauses (ii) and (iii), respectively. 
(3) SELF-CONSTRUCTED PROPERTY.—Section 168(k)(2)(E) is 
amended by striking clause (i) and redesignating clauses (ii) 
and (iii) as clauses (i) and (ii), respectively. 
(4) CERTAIN PLANTS.—Section 168(k)(5)(A) is amended by 
striking ‘‘planted before January 1, 2027, or is grafted before 
such date to a plant that has already been planted,’’ in the 
matter preceding clause (i) and inserting ‘‘planted or grafted’’. 
(5) CONFORMING AMENDMENTS.— 
(A) Section 168(k)(2)(A)(ii) is amended by striking 
‘‘clause (ii) of subparagraph (E)’’ and inserting ‘‘clause (i) 
of subparagraph (E)’’. 
(B) Section 168(k)(2)(C)(i) is amended by striking ‘‘and 
subclauses (II) and (III) of subparagraph (B)(i)’’. 
(C) Section 168(k)(2)(C)(ii) is amended by striking 
‘‘subparagraph 
(B)(iii)’’ 
and 
inserting 
‘‘subparagraph 
(B)(ii)’’. 
(D) Section 460(c)(6)(B) is amended by striking ‘‘which’’ 
and all that follows through the period and inserting ‘‘which 
has a recovery period of 7 years or less.’’. 
(b) 100 PERCENT EXPENSING.— 
(1) IN GENERAL.—Section 168(k) is amended— 
(A) in paragraph (1)(A), by striking ‘‘the applicable 
percentage’’ and inserting ‘‘100 percent’’, and 
(B) by striking paragraphs (6) and (8). 
(2) CERTAIN PLANTS.—Section 168(k)(5)(A)(i) is amended 
by striking ‘‘the applicable percentage’’ and inserting ‘‘100 per-
cent’’. 
(3) TRANSITIONAL
ELECTION
OF
REDUCED
PERCENTAGE.— 
Section 168(k)(10) is amended by striking subparagraph (A), 
by redesignating subparagraph (B) as subparagraph (C), and 
by inserting before subparagraph (C) (as so redesignated) the 
following new subparagraphs: 
‘‘(A) IN GENERAL.—In the case of qualified property 
placed in service by the taxpayer during the first taxable 
year ending after January 19, 2025, if the taxpayer elects 
to have this paragraph apply for such taxable year, para-
graph (1)(A) shall be applied— 
‘‘(i) in the case of property which is not described 
in clause (ii), by substituting ‘40 percent’ for ‘100 per-
cent’, or 
‘‘(ii) in the case of property which is described 
in subparagraph (B) or (C) of paragraph (2), by sub-
stituting ‘60 percent’ for ‘100 percent’. 
‘‘(B) SPECIFIED PLANTS.—In the case of any specified 
plant planted or grafted by the taxpayer during the first 
taxable year ending after January 19, 2025, if the taxpayer 
elects to have this paragraph apply for such taxable year, 
paragraph (5)(A)(i) shall be applied by substituting ‘40 
percent’ for ‘100 percent’.’’. 
(c) EFFECTIVE DATE.—
H. R. 1—119 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to 
property acquired after January 19, 2025. 
(2) SPECIFIED PLANTS.—Except as provided in paragraph 
(3), in the case of any specified plant (as defined in section 
168(k)(5)(B) of the Internal Revenue Code of 1986, as amended 
by this section), the amendments made by this section shall 
apply to such plants which are planted or grafted after January 
19, 2025. 
(3) TRANSITIONAL
ELECTION
OF
REDUCED
PERCENTAGE.— 
The amendment made by subsection (b)(3) shall apply to taxable 
years ending after January 19, 2025. 
(4) ACQUISITION
DATE
DETERMINATION.—For purposes of 
paragraph (1), property shall not be treated as acquired after 
the date on which a written binding contract is entered into 
for such acquisition. 
SEC. 70302. FULL EXPENSING OF DOMESTIC RESEARCH AND EXPERI-
MENTAL EXPENDITURES. 
(a) IN GENERAL.—Part VI of subchapter B of chapter 1 is 
amended by inserting after section 174 the following new section: 
‘‘SEC. 174A. DOMESTIC RESEARCH OR EXPERIMENTAL EXPENDITURES. 
‘‘(a) TREATMENT AS EXPENSES.—Notwithstanding section 263, 
there shall be allowed as a deduction any domestic research or 
experimental expenditures which are paid or incurred by the tax-
payer during the taxable year. 
‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EXPENDITURES.— 
For purposes of this section, the term ‘domestic research or experi-
mental expenditures’ means research or experimental expenditures 
paid or incurred by the taxpayer in connection with the taxpayer’s 
trade or business other than such expenditures which are attrib-
utable to foreign research (within the meaning of section 
41(d)(4)(F)). 
‘‘(c) AMORTIZATION OF CERTAIN DOMESTIC RESEARCH OR EXPERI-
MENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the taxpayer, made 
in accordance with regulations or other guidance provided by 
the Secretary, in the case of domestic research or experimental 
expenditures which would (but for subsection (a)) be chargeable 
to capital account but not chargeable to property of a character 
which is subject to the allowance under section 167 (relating 
to allowance for depreciation, etc.) or section 611 (relating to 
allowance for depletion), subsection (a) shall not apply and 
the taxpayer shall— 
‘‘(A) charge such expenditures to capital account, and 
‘‘(B) be allowed an amortization deduction of such 
expenditures ratably over such period of not less than 
60 months as may be selected by the taxpayer (beginning 
with the month in which the taxpayer first realizes benefits 
from such expenditures). 
‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The election pro-
vided by paragraph (1) may be made for any taxable year, 
but only if made not later than the time prescribed by law 
for filing the return for such taxable year (including extensions 
thereof). The method so elected, and the period selected by 
the taxpayer, shall be adhered to in computing taxable income 
for the taxable year for which the election is made and for
H. R. 1—120 
all subsequent taxable years unless, with the approval of the 
Secretary, a change to a different method (or to a different 
period) is authorized with respect to part or all of such expendi-
tures. The election shall not apply to any expenditure paid 
or incurred during any taxable year before the taxable year 
for which the taxpayer makes the election. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) LAND AND OTHER PROPERTY.—This section shall not 
apply to any expenditure for the acquisition or improvement 
of land, or for the acquisition or improvement of property to 
be used in connection with the research or experimentation 
and of a character which is subject to the allowance under 
section 167 (relating to allowance for depreciation, etc.) or sec-
tion 611 (relating to allowance for depletion); but for purposes 
of this section allowances under section 167, and allowances 
under section 611, shall be considered as expenditures. 
‘‘(2) EXPLORATION EXPENDITURES.—This section shall not 
apply to any expenditure paid or incurred for the purpose 
of ascertaining the existence, location, extent, or quality of 
any deposit of ore or other mineral (including oil and gas). 
‘‘(3) SOFTWARE DEVELOPMENT.—For purposes of this sec-
tion, any amount paid or incurred in connection with the 
development of any software shall be treated as a research 
or experimental expenditure.’’. 
(b) COORDINATION WITH CERTAIN OTHER PROVISIONS.— 
(1) 
FOREIGN
RESEARCH
EXPENSES.—Section 
174 
is 
amended— 
(A) in subsection (a)— 
(i) by striking ‘‘a taxpayer’s specified research or 
experimental expenditures’’ and inserting ‘‘a taxpayer’s 
foreign research or experimental expenditures’’, and 
(ii) by striking ‘‘over the 5-year period (15-year 
period in the case of any specified research or experi-
mental expenditures which are attributable to foreign 
research (within the meaning of section 41(d)(4)(F)))’’ 
in paragraph (2)(B) and inserting ‘‘over the 15-year 
period’’, 
(B) in subsection (b)— 
(i) by striking ‘‘specified research’’ and inserting 
‘‘foreign research’’, 
(ii) by inserting ‘‘and which are attributable to 
foreign research (within the meaning of section 
41(d)(4)(F))’’ before the period at the end, and 
(iii) by striking ‘‘SPECIFIED’’ in the heading thereof 
and inserting ‘‘FOREIGN’’, and 
(C) in subsection (d)— 
(i) by striking ‘‘specified research or experimental 
expenditures’’ and inserting ‘‘foreign research or experi-
mental expenditures’’, and 
(ii) by inserting ‘‘or reduction to amount realized’’ 
after ‘‘no deduction’’. 
(2) RESEARCH CREDIT.— 
(A) Section 41(d)(1)(A) is amended to read as follows: 
‘‘(A) with respect to which expenditures are treated 
as domestic research or experimental expenditures under 
section 174A,’’. 
(B) Section 280C(c)(1) is amended to read as follows:
H. R. 1—121 
‘‘(1) IN GENERAL.—The domestic research or experimental 
expenditures (as defined in section 174A(b)) otherwise taken 
into account as a deduction or charged to capital account under 
this chapter shall be reduced by the amount of the credit 
allowed under section 41(a).’’. 
(3) AMT ADJUSTMENT.—Section 56(b)(2) is amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘or 174(a)’’ in the matter preceding 
clause (i) and inserting ‘‘, 174(a), or 174A(a)’’, and 
(ii) 
by 
striking 
‘‘research 
and 
experimental 
expenditures described in section 174(a)’’ in clause (ii) 
thereof and inserting ‘‘foreign research or experimental 
expenditures described in section 174(a) and domestic 
research or experimental expenditures in section 
174A(a)’’, and 
(B) in subparagraph (C), by inserting ‘‘or 174A(a)’’ after 
‘‘174(a)’’. 
(4) OPTIONAL
10-YEAR
WRITEOFF.—Section 59(e)(2)(B) is 
amended by striking ‘‘section 174(a) (relating to research and 
experimental expenditures)’’ and inserting ‘‘section 174A(a) 
(relating to domestic research or experimental expenditures)’’. 
(5) QUALIFIED SMALL ISSUE BONDS.—Section 144(a)(4)(C)(iv) 
is amended by striking ‘‘174(a)’’ and inserting ‘‘174A(a)’’. 
(6) START-UP EXPENDITURES.—Section 195(c)(1) is amended 
by striking ‘‘or 174’’ in the last sentence and inserting ‘‘174, 
or 174A’’. 
(7) CAPITAL EXPENDITURES.— 
(A) Section 263(a)(1)(B) is amended by inserting ‘‘or 
174A’’ after ‘‘174’’. 
(B) Section 263A(c)(2) is amended by inserting ‘‘or 
174A’’ after ‘‘174’’. 
(8) ACTIVE BUSINESS COMPUTER SOFTWARE ROYALTIES.—Sec-
tion 543(d)(4)(A)(i) is amended by inserting ‘‘174A,’’ after ‘‘174,’’. 
(9) SOURCE RULES.—Section 864(g)(2) is amended— 
(A) by striking ‘‘research and experimental expendi-
tures within the meaning of section 174’’ in the first sen-
tence and inserting ‘‘foreign research or experimental 
expenditures within the meaning of section 174 or domestic 
research or experimental expenditures within the meaning 
of section 174A’’, and 
(B) in the last sentence— 
(i) by striking ‘‘treated as deferred expenses under 
subsection (b) of section 174’’ and inserting ‘‘allowed 
as an amortization deduction under section 174(a) or 
section 174A(c),’’, and 
(ii) by striking ‘‘such subsection’’ and inserting 
‘‘such section (as the case may be)’’. 
(10) BASIS ADJUSTMENT.—Section 1016(a)(14) is amended 
by striking ‘‘deductions as deferred expenses under section 
174(b)(1) (relating to research and experimental expenditures)’’ 
and inserting ‘‘deductions under section 174 or 174A(c)’’. 
(11) SMALL
BUSINESS
STOCK.—Section 1202(e)(2)(B) is 
amended by striking ‘‘which may be treated as research and 
experimental expenditures under section 174’’ and inserting 
‘‘which are treated as foreign research or experimental expendi-
tures under section 174 or domestic research or experimental 
expenditures under section 174A’’.
H. R. 1—122 
(c) CHANGE IN METHOD OF ACCOUNTING.— 
(1) IN
GENERAL.—The amendments made by subsection 
(a) shall be treated as a change in method of accounting for 
purposes of section 481 of the Internal Revenue Code of 1986 
and— 
(A) such change shall be treated as initiated by the 
taxpayer, 
(B) such change shall be treated as made with the 
consent of the Secretary, and 
(C) such change shall be applied only on a cut-off 
basis for any domestic research or experimental expendi-
tures (as defined in section 174A(b) of such Code (as added 
by this section) and determined by applying the rules of 
section 174A(d) of such Code) paid or incurred in taxable 
years beginning after December 31, 2024, and no adjust-
ments under section 481(a) shall be made. 
(2) SPECIAL RULES.—In the case of a taxable year which 
begins after December 31, 2024, and ends before the date 
of the enactment of this Act— 
(A) paragraph (1)(C) shall not apply, and 
(B) the change in method of accounting under para-
graph (1) shall be applied on a modified cut-off basis, 
taking into account for purposes of section 481(a) of such 
Code only the domestic research or experimental expendi-
tures (as defined in section 174A(b) of such Code (as added 
by this section) and determined by applying the rules of 
section 174A(d) of such Code) paid or incurred in such 
taxable year but not allowed as a deduction in such taxable 
year. 
(d) CLERICAL AMENDMENT.—The table of sections for part VI 
of subchapter B of chapter 1 is amended by inserting after the 
item relating to section 174 the following new item: 
‘‘Sec. 174A. Domestic research or experimental expenditures.’’. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section or subsection (f)(1), the amendments made by this sec-
tion shall apply to amounts paid or incurred in taxable years 
beginning after December 31, 2024. 
(2) TREATMENT OF FOREIGN RESEARCH OR EXPERIMENTAL 
EXPENDITURES UPON DISPOSITION.— 
(A) IN
GENERAL.—The amendment by subsection 
(b)(1)(C)(ii) shall apply to property disposed, retired, or 
abandoned after May 12, 2025. 
(B) NO
INFERENCE.—The amendment made by sub-
section (b)(1)(C)(ii) shall not be construed to create any 
inference with respect to the proper application of section 
174(d) of the Internal Revenue Code of 1986 with respect 
to taxable years beginning before May 13, 2025. 
(3) COORDINATION WITH RESEARCH CREDIT.—The amend-
ment made by subsection (b)(2)(B) shall apply to taxable years 
beginning after December 31, 2024. 
(4) NO INFERENCE WITH RESPECT TO COORDINATION WITH 
RESEARCH CREDIT FOR PRIOR PERIODS.—The amendment made 
by subsection (b)(2)(B) shall not be construed to create any 
inference with respect to the proper application of section 
280C(c) of the Internal Revenue Code of 1986 with respect 
to taxable years beginning before January 1, 2025.
H. R. 1—123 
(f) TRANSITION RULES.— 
(1) ELECTION FOR RETROACTIVE APPLICATION BY CERTAIN 
SMALL BUSINESSES.— 
(A) IN GENERAL.—At the election of an eligible tax-
payer, paragraphs (1) and (3) of subsection (e) shall each 
be applied by substituting ‘‘December 31, 2021’’ for 
‘‘December 31, 2024’’. An election made under this subpara-
graph shall be made in such manner as the Secretary 
may provide and not later than the date that is 1 year 
after the date of the enactment of this Act. The taxpayer 
shall file an amended return for each taxable year affected 
by such election. 
(B) ELIGIBLE TAXPAYER.—For purposes of this para-
graph, the term ‘‘eligible taxpayer’’ means any taxpayer 
(other than a tax shelter prohibited from using the cash 
receipts and disbursements method of accounting under 
section 448(a)(3)) which meets the gross receipts test of 
section 448(c) for the first taxable year beginning after 
December 31, 2024. 
(C) ELECTION
TREATED
AS
CHANGE
IN
METHOD
OF 
ACCOUNTING.—In the case of any taxpayer which elects 
the application of subparagraph (A)— 
(i) such election may be treated as a change in 
method of accounting for purposes of section 481 of 
such Code for the taxpayer’s first taxable year affected 
by such election, 
(ii) such change shall be treated as initiated by 
the taxpayer for such taxable year, 
(iii) such change shall be treated as made with 
the consent of the Secretary, and 
(iv) subsection (c) shall not apply to such taxpayer. 
(D) 
ELECTION
REGARDING
COORDINATION
WITH 
RESEARCH CREDIT.—An election under section 280C(c)(2) 
of the Internal Revenue Code of 1986 (or revocation of 
such election) for any taxable year beginning after 
December 31, 2021, by an eligible taxpayer making an 
election under subparagraph (A) shall not fail to be treated 
as timely made (or as made on the return) if made during 
the 1-year period beginning on the date of the enactment 
of this Act on an amended return for such taxable year. 
(2) ELECTION TO DEDUCT CERTAIN UNAMORTIZED AMOUNTS 
PAID
OR
INCURRED
IN
TAXABLE
YEARS
BEGINNING
BEFORE 
JANUARY 1, 2025.— 
(A) IN GENERAL.—In the case of any domestic research 
or experimental expenditures (as defined in section 174A, 
as added by subsection (a)) which are paid or incurred 
in taxable years beginning after December 31, 2021, and 
before January 1, 2025, and which was charged to capital 
account, a taxpayer may elect— 
(i) to deduct any remaining unamortized amount 
with respect to such expenditures in the first taxable 
year beginning after December 31, 2024, or 
(ii) to deduct such remaining unamortized amount 
with respect to such expenditures ratably over the 
2-taxable year period beginning with the first taxable 
year beginning after December 31, 2024.
H. R. 1—124 
(B) CHANGE IN METHOD OF ACCOUNTING.—In the case 
of a taxpayer who makes an election under this para-
graph— 
(i) such taxpayer shall be treated as initiating 
a change in method of accounting for purposes of sec-
tion 481 of the Internal Revenue Code of 1986 with 
respect to the expenditures to which the election 
applies, 
(ii) such change shall be treated as made with 
the consent of the Secretary, and 
(iii) such change shall be applied only on a cut- 
off basis for such expenditures and no adjustments 
under section 481(a) shall be made. 
(C) REGULATIONS.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall publish such guidance or 
regulations as may be necessary to carry out the purposes 
of this paragraph, including regulations or guidance 
allowing for the deduction allowed under subparagraph 
(A) in the case of taxpayers with taxable years beginning 
after December 31, 2024, and ending before the date of 
the enactment of this Act. 
SEC. 70303. MODIFICATION OF LIMITATION ON BUSINESS INTEREST. 
(a) IN GENERAL.—Section 163(j)(8)(A)(v) is amended by striking 
‘‘in the case of taxable years beginning before January 1, 2022,’’. 
(b) FLOOR PLAN FINANCING APPLICABLE TO CERTAIN TRAILERS 
AND CAMPERS.—Section 163(j)(9)(C) is amended by adding at the 
end the following new flush sentence: 
‘‘Such term shall also include any trailer or camper which 
is designed to provide temporary living quarters for rec-
reational, camping, or seasonal use and is designed to 
be towed by, or affixed to, a motor vehicle.’’. 
(c) EFFECTIVE DATE AND SPECIAL RULE.— 
(1) IN GENERAL.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
(2) SPECIAL RULE FOR SHORT TAXABLE YEARS.—The Sec-
retary of the Treasury (or the Secretary’s delegate) may pre-
scribe such rules as are necessary or appropriate to provide 
for the application of the amendments made by this section 
in the case of any taxable year of less than 12 months that 
begins after December 31, 2024, and ends before the date 
of the enactment of this Act. 
SEC. 70304. EXTENSION AND ENHANCEMENT OF PAID FAMILY AND 
MEDICAL LEAVE CREDIT. 
(a) IN GENERAL.—Section 45S is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (1) and inserting the fol-
lowing: 
‘‘(1) IN GENERAL.—For purposes of section 38, in the case 
of an eligible employer, the paid family and medical leave 
credit is an amount equal to either of the following (as elected 
by such employer): 
‘‘(A) The applicable percentage of the amount of wages 
paid to qualifying employees with respect to any period 
in which such employees are on family and medical leave. 
‘‘(B) If such employer has an insurance policy with 
regards to the provision of paid family and medical leave
H. R. 1—125 
which is in force during the taxable year, the applicable 
percentage of the total amount of premiums paid or 
incurred by such employer during such taxable year with 
respect to such insurance policy.’’, and 
(B) by adding at the end the following: 
‘‘(3) RATE OF PAYMENT DETERMINED WITHOUT REGARD TO 
WHETHER LEAVE IS TAKEN.—For purposes of determining the 
applicable percentage with respect to paragraph (1)(B), the 
rate of payment under the insurance policy shall be determined 
without regard to whether any qualifying employees were on 
family and medical leave during the taxable year.’’, 
(2) in subsection (b)(1), by striking ‘‘credit allowed’’ and 
inserting ‘‘wages taken into account’’, 
(3) in subsection (c), by striking paragraphs (3) and (4) 
and inserting the following: 
‘‘(3) AGGREGATION RULE.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), all persons which are treated as a single employer 
under subsections (b) and (c) of section 414 shall be treated 
as a single employer. 
‘‘(B) EXCEPTION.— 
‘‘(i) IN
GENERAL.—Subparagraph (A) shall not 
apply to any person who establishes to the satisfaction 
of the Secretary that such person has a substantial 
and legitimate business reason for failing to provide 
a written policy described in paragraph (1) or (2). 
‘‘(ii) SUBSTANTIAL AND LEGITIMATE BUSINESS REA-
SON.—For purposes of clause (i), the term ‘substantial 
and legitimate business reason’ shall not include the 
operation of a separate line of business, the rate of 
wages or category of jobs for employees (or any similar 
basis), or the application of State or local laws relating 
to family and medical leave, but may include the 
grouping of employees of a common law employer. 
‘‘(4) TREATMENT OF BENEFITS MANDATED OR PAID FOR BY 
STATE OR LOCAL GOVERNMENTS.—For purposes of this section, 
any leave which is paid by a State or local government or 
required by State or local law— 
‘‘(A) except as provided in subparagraph (B), shall be 
taken into account in determining the amount of paid 
family and medical leave provided by the employer, and 
‘‘(B) shall not be taken into account in determining 
the amount of the paid family and medical leave credit 
under subsection (a).’’, 
(4) in subsection (d)— 
(A) in paragraph (1), by inserting ‘‘(or, at the election 
of the employer, for not less than 6 months)’’ after ‘‘1 
year or more’’, 
(B) in paragraph (2)— 
(i) by inserting ‘‘, as determined on an annualized 
basis (pro-rata for part-time employees),’’ after ‘‘com-
pensation’’, and 
(ii) by striking the period at the end and inserting 
‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(3) is customarily employed for not less than 20 hours 
per week.’’, and
H. R. 1—126 
(5) by striking subsection (i). 
(b) NO DOUBLE BENEFIT.—Section 280C(a) is amended— 
(1) by striking ‘‘45S(a)’’ and inserting ‘‘45S(a)(1)(A)’’, and 
(2) by inserting after the first sentence the following: ‘‘No 
deduction shall be allowed for that portion of the premiums 
paid or incurred for the taxable year which is equal to that 
portion of the paid family and medical leave credit which is 
determined for the taxable year under section 45S(a)(1)(B).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70305. EXCEPTIONS FROM LIMITATIONS ON DEDUCTION FOR 
BUSINESS MEALS. 
(a) EXCEPTION
TO
DENIAL
OF
DEDUCTION
FOR
BUSINESS 
MEALS.—Section 274(o), as added by section 13304 of Public Law 
115-97, is amended by striking ‘‘No deduction’’ and inserting ‘‘Except 
in the case of an expense described in subsection (e)(8) or (n)(2)(C), 
no deduction’’. 
(b) MEALS PROVIDED ON CERTAIN FISHING BOATS AND AT CER-
TAIN FISH PROCESSING FACILITIES NOT SUBJECT TO 50 PERCENT 
LIMITATION.—Section 274(n)(2)(C) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘or’’ at the end of clause (iii) 
and by adding at the end the following new clause: 
‘‘(v) provided— 
‘‘(I) on a fishing vessel, fish processing vessel, 
or fish tender vessel (as such terms are defined 
in section 2101 of title 46, United States Code), 
or 
‘‘(II) at a facility for the processing of fish 
for commercial use or consumption which— 
‘‘(aa) is located in the United States north 
of 50 degrees north latitude, and 
‘‘(bb) is not located in a metropolitan 
statistical area (within the meaning of section 
143(k)(2)(B)), or’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts paid or incurred after December 31, 2025. 
SEC. 70306. INCREASED DOLLAR LIMITATIONS FOR EXPENSING OF 
CERTAIN DEPRECIABLE BUSINESS ASSETS. 
(a) IN GENERAL.—Section 179(b) is amended— 
(1) in paragraph (1), by striking ‘‘$1,000,000’’ and inserting 
‘‘$2,500,000’’, and 
(2) in paragraph (2), by striking ‘‘$2,500,000’’ and inserting 
‘‘$4,000,000’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
179(b)(6)(A) 
is 
amended— 
(1) by inserting ‘‘(2025 in the case of the dollar amounts 
in paragraphs (1) and (2))’’ after ‘‘In the case of any taxable 
year beginning after 2018’’, and 
(2) in clause (ii), by striking ‘‘determined by substituting 
‘calendar year 2017’ for ‘calendar year 2016’ in subparagraph 
(A)(ii) thereof.’’ and inserting ″determined by substituting in 
subparagraph (A)(ii) thereof— ‘‘ 
‘‘(I) in the case of amounts in paragraphs (1) 
and (2), ‘calendar year 2024’ for ‘calendar year 
2016’, and
H. R. 1—127 
‘‘(II) in the case of the amount in paragraph 
(5)(A), ‘calendar year 2017’ for ‘calendar year 
2016’.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to property placed in service in taxable years beginning 
after December 31, 2024. 
SEC. 70307. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED 
PRODUCTION PROPERTY. 
(a) IN GENERAL.—Section 168 is amended by adding at the 
end the following new subsection: 
‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED PRODUCTION PROP-
ERTY.— 
‘‘(1) IN GENERAL.—In the case of any qualified production 
property of a taxpayer making an election under this sub-
section— 
‘‘(A) the depreciation deduction provided by section 
167(a) for the taxable year in which such property is placed 
in service shall include an allowance equal to 100 percent 
of the adjusted basis of the qualified production property, 
and 
‘‘(B) the adjusted basis of the qualified production prop-
erty shall be reduced by the amount of such deduction 
before computing the amount otherwise allowable as a 
depreciation deduction under this chapter for such taxable 
year and any subsequent taxable year. 
‘‘(2) QUALIFIED
PRODUCTION
PROPERTY.—For purposes of 
this subsection— 
‘‘(A) IN GENERAL.—The term ‘qualified production prop-
erty’ means that portion of any nonresidential real prop-
erty— 
‘‘(i) to which this section applies, 
‘‘(ii) which is used by the taxpayer as an integral 
part of a qualified production activity, 
‘‘(iii) which is placed in service in the United States 
or any possession of the United States, 
‘‘(iv) the original use of which commences with 
the taxpayer, 
‘‘(v) the construction of which begins after January 
19, 2025, and before January 1, 2029, 
‘‘(vi) which is designated by the taxpayer in the 
election made under this subsection, and 
‘‘(vii) which is placed in service before January 
1, 2031. 
For purposes of clause (ii), in the case of property with 
respect to which the taxpayer is a lessor, property used 
by a lessee shall not be considered to be used by the 
taxpayer as part of a qualified production activity. 
‘‘(B) SPECIAL RULE FOR CERTAIN PROPERTY NOT PRE-
VIOUSLY USED IN QUALIFIED PRODUCTION ACTIVITIES.— 
‘‘(i) IN GENERAL.—In the case of property acquired 
by the taxpayer during the period described in subpara-
graph (A)(v), the requirements of clauses (iv) and (v) 
of subparagraph (A) shall be treated as satisfied if— 
‘‘(I) such property was not used in a qualified 
production activity (determined without regard to 
the second sentence of subparagraph (D)) by any
H. R. 1—128 
person at any time during the period beginning 
on January 1, 2021, and ending on May 12, 2025, 
‘‘(II) such property was not used by the tax-
payer at any time prior to such acquisition, and 
‘‘(III) the acquisition of such property meets 
the requirements of paragraphs (2)(A), (2)(B), 
(2)(C), and (3) of section 179(d). 
‘‘(ii) WRITTEN BINDING CONTRACTS.—For purposes 
of determining under clause (i)— 
‘‘(I) whether such property is acquired before 
the period described in subparagraph (A)(v), such 
property shall be treated as acquired not later 
than the date on which the taxpayer enters into 
a written binding contract for such acquisition, 
and 
‘‘(II) whether such property is acquired after 
such period, such property shall be treated as 
acquired not earlier than such date. 
‘‘(C) EXCLUSION
OF
OFFICE
SPACE, ETC.—The term 
‘qualified production property’ shall not include that portion 
of any nonresidential real property which is used for offices, 
administrative services, lodging, parking, sales activities, 
research activities, software development or engineering 
activities, or other functions unrelated to the manufac-
turing, production, or refining of tangible personal property. 
‘‘(D) QUALIFIED
PRODUCTION
ACTIVITY.—The term 
‘qualified production activity’ means the manufacturing, 
production, or refining of a qualified product. The activities 
of any taxpayer do not constitute manufacturing, produc-
tion, or refining of a qualified product unless the activities 
of such taxpayer result in a substantial transformation 
of the property comprising the product. 
‘‘(E) PRODUCTION.—The term ‘production’ shall not 
include activities other than agricultural production and 
chemical production. 
‘‘(F) QUALIFIED PRODUCT.—The term ‘qualified product’ 
means any tangible personal property if such property is 
not a food or beverage prepared in the same building 
as a retail establishment in which such property is sold. 
‘‘(G) SYNDICATION.—For purposes of subparagraph 
(A)(iv), rules similar to the rules of subsection (k)(2)(E)(iii) 
shall apply. 
‘‘(H) EXTENSION OF PLACED IN SERVICE DATE UNDER 
CERTAIN CIRCUMSTANCES.—The Secretary may extend the 
date under subparagraph (A)(vii) with respect to any prop-
erty that meets the requirements of clauses (i) through 
(vi) of subparagraph (A) if the Secretary determines that 
an act of God (as defined in section 101(1) of the Com-
prehensive Environmental Response, Compensation, and 
Liability Act of 1980) prevents the taxpayer from placing 
such property in service before such date. 
‘‘(3) DEDUCTION ALLOWED IN COMPUTING MINIMUM TAX.— 
For purposes of determining alternative minimum taxable 
income under section 55, the deduction under section 167 for 
qualified production property shall be determined under this 
section without regard to any adjustment under section 56. 
‘‘(4) COORDINATION WITH CERTAIN OTHER PROVISIONS.—
H. R. 1—129 
‘‘(A) OTHER SPECIAL DEPRECIATION ALLOWANCES.—For 
purposes of subsections (k)(7), (l)(3)(D), and (m)(2)(B)(iii)— 
‘‘(i) qualified production property shall be treated 
as a separate class of property, and 
‘‘(ii) the taxpayer shall be treated as having made 
an election under such subsections with respect to 
such class. 
‘‘(B) ALTERNATIVE DEPRECIATION PROPERTY.—The term 
‘qualified production property’ shall not include any prop-
erty to which the alternative depreciation system under 
subsection (g) applies. For purposes of subsection (g)(7)(A), 
qualified production property to which this subsection 
applies shall be treated as separate nonresidential real 
property. 
‘‘(5) RECAPTURE.—If, at any time during the 10-year period 
beginning on the date that any qualified production property 
is placed in service by the taxpayer, such property ceases to 
be used as described in paragraph (2)(A)(ii) and is used by 
the taxpayer in a productive use not described in paragraph 
(2)(A)(ii)— 
‘‘(A) section 1245 shall be applied— 
‘‘(i) by treating such property as having been dis-
posed of by the taxpayer as of the first time such 
property is so used in a productive use not described 
in paragraph (2)(A)(ii), and 
‘‘(ii) by treating the amount described in subpara-
graph (B) of section 1245(a)(1) with respect to such 
disposition as being not less than the amount described 
in subparagraph (A) of such section, and 
‘‘(B) the basis of the taxpayer in such property, and 
the taxpayer’s allowance for depreciation with respect to 
such property, shall be appropriately adjusted to take into 
account amounts recognized by reason of subparagraph 
(A). 
‘‘(6) ELECTION.— 
‘‘(A) IN GENERAL.—An election under this subsection 
for any taxable year shall— 
‘‘(i) specify the nonresidential real property subject 
to the election and the portion of such property des-
ignated under paragraph (2)(A)(vi), and 
‘‘(ii) except as otherwise provided by the Secretary, 
be made on the taxpayer’s return of the tax imposed 
by this chapter for the taxable year. 
Such election shall be made in such manner as the Sec-
retary may prescribe by regulations or other guidance. 
‘‘(B) ELECTION.—Any election made under this sub-
section, and any specification contained in any such elec-
tion, may not be revoked except with the consent of the 
Secretary (and the Secretary shall provide such consent 
only in extraordinary circumstances). 
‘‘(7) REGULATIONS.—The Secretary shall issue such regula-
tions or other guidance as may be necessary or appropriate 
to carry out the purposes of this subsection, including regula-
tions or other guidance— 
‘‘(A) providing rules for regarding what constitutes 
substantial transformation of property which are consistent 
with guidance provided under section 954(d), and
H. R. 1—130 
‘‘(B) providing for the application of paragraph (5) with 
respect to a change in use described in such paragraph 
by a transferee following a fully or partially tax free 
transfer of qualified production property.’’. 
(b) TREATMENT OF QUALIFIED PRODUCTION PROPERTY AS SEC-
TION 1245 PROPERTY.—Section 1245(a)(3) is amended by striking 
‘‘or’’ at the end of subparagraph (E), by striking the period at 
the end of subparagraph (F) and inserting ‘‘, or’’, and by adding 
at the end the following new subparagraph: 
‘‘(G) any qualified production property (as defined in 
section 168(n)(2)).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to property placed in service after the date of the 
enactment of this Act. 
SEC. 70308. ENHANCEMENT OF ADVANCED MANUFACTURING INVEST-
MENT CREDIT. 
(a) IN GENERAL.—Section 48D(a) is amended by striking ‘‘25 
percent’’ and inserting ‘‘35 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to property placed in service after December 31, 2025. 
SEC. 70309. SPACEPORTS ARE TREATED LIKE AIRPORTS UNDER 
EXEMPT FACILITY BOND RULES. 
(a) IN GENERAL.—Section 142(a)(1) is amended to read as fol-
lows: 
‘‘(1) airports and spaceports,’’. 
(b) TREATMENT
OF
GROUND
LEASES.—Section 142(b)(1) is 
amended by adding at the end the following new subparagraph: 
‘‘(C) SPECIAL RULE FOR SPACEPORT GROUND LEASES.— 
For purposes of subparagraph (A), spaceport property 
located on land leased by a governmental unit from the 
United States shall not fail to be treated as owned by 
a governmental unit if the requirements of this paragraph 
are met by the lease and any subleases of the property.’’. 
(c) DEFINITION
OF SPACEPORT.—Section 142 is amended by 
adding at the end the following new subsection: 
‘‘(p) SPACEPORT.— 
‘‘(1) IN GENERAL.—For purposes of subsection (a)(1), the 
term ‘spaceport’ means any facility located at or in close prox-
imity to a launch site or reentry site used for— 
‘‘(A) manufacturing, assembling, or repairing space-
craft, space cargo, other facilities described in this para-
graph, or any component of the foregoing, 
‘‘(B) flight control operations, 
‘‘(C) providing launch services and reentry services, 
or 
‘‘(D) transferring crew, spaceflight participants, or 
space cargo to or from spacecraft. 
‘‘(2) ADDITIONAL TERMS.—For purposes of paragraph (1)— 
‘‘(A) SPACE CARGO.—The term ‘space cargo’ includes 
satellites, scientific experiments, other property trans-
ported into space, and any other type of payload, whether 
or not such property returns from space. 
‘‘(B) SPACECRAFT.—The term ‘spacecraft’ means a 
launch vehicle or a reentry vehicle. 
‘‘(C) OTHER
TERMS.—The terms ‘launch site’, ‘crew’, 
‘space flight participant’, ‘launch services’, ‘launch vehicle’,
H. R. 1—131 
‘payload’, ‘reentry services’, ‘reentry site’, a ‘reentry vehicle’ 
shall have the respective meanings given to such terms 
by section 50902 of title 51, United States Code (as in 
effect on the date of enactment of this subsection). 
‘‘(3) PUBLIC
USE
REQUIREMENT.—A facility shall not be 
required to be available for use by the general public to be 
treated as a spaceport for purposes of this section. 
‘‘(4) MANUFACTURING
FACILITIES
AND
INDUSTRIAL
PARKS 
ALLOWED.—With respect to spaceports, subsection (c)(2)(E) shall 
not apply to spaceport property described in paragraph (1)(A).’’. 
(d) EXCEPTION FROM FEDERALLY GUARANTEED BOND PROHIBI-
TION.—Section 149(b)(3) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(F) EXCEPTION FOR SPACEPORTS.—A bond shall not 
be treated as federally guaranteed merely because of the 
payment of rent, user fees, or other charges by the United 
States (or any agency or instrumentality thereof) in 
exchange for the use of the spaceport by the United States 
(or any agency or instrumentality thereof).’’. 
(e) CONFORMING AMENDMENT.—The heading for section 142(c) 
is amended by inserting ‘‘SPACEPORTS,’’ after ‘‘AIRPORTS,’’. 
(f) EFFECTIVE DATE.—The amendments made by this section 
shall apply to obligations issued after the date of the enactment 
of this Act. 
Subchapter B—Permanent America-first International Tax 
Reforms 
PART I—FOREIGN TAX CREDIT 
SEC. 70311. MODIFICATIONS RELATED TO FOREIGN TAX CREDIT 
LIMITATION. 
(a) RULES FOR ALLOCATION OF CERTAIN DEDUCTIONS TO FOR-
EIGN SOURCE NET CFC TESTED INCOME FOR PURPOSES OF FOREIGN 
TAX CREDIT LIMITATION.—Section 904(b) is amended by adding 
at the end the following new paragraph: 
‘‘(5) DEDUCTIONS
TREATED
AS
ALLOCABLE
TO
FOREIGN 
SOURCE NET CFC TESTED INCOME.—Solely for purposes of the 
application of subsection (a) with respect to amounts described 
in subsection (d)(1)(A), the taxpayer’s taxable income from 
sources without the United States shall be determined by allo-
cating and apportioning— 
‘‘(A) any deduction allowed under section 250(a)(1)(B) 
(and any deduction allowed under section 164(a)(3) for 
taxes imposed on amounts described in section 250(a)(1)(B)) 
to such income, 
‘‘(B) no amount of interest expense or research and 
experimental expenditures to such income, and 
‘‘(C) any other deduction to such income only if such 
deduction is directly allocable to such income. 
Any amount or deduction which would (but for subparagraphs 
(B) and (C)) have been allocated or apportioned to such income 
shall only be allocated or apportioned to income which is from 
sources within the United States.’’. 
(b) OTHER MODIFICATIONS.— 
(1) Section 904(d)(2)(H)(i) is amended by striking ‘‘para-
graph (1)(B)’’ and inserting ‘‘paragraph (1)(D)’’.
H. R. 1—132 
(2) Section 904(d)(4)(C)(ii) is amended by striking ‘‘para-
graph (1)(A)’’ and inserting ‘‘paragraph (1)(C)’’. 
(3) Section 951A(f)(1)(A) is amended by striking ‘‘904(h)(1)’’ 
and inserting ‘‘904(h)’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70312. MODIFICATIONS TO DETERMINATION OF DEEMED PAID 
CREDIT FOR TAXES PROPERLY ATTRIBUTABLE TO 
TESTED INCOME. 
(a) INCREASE IN DEEMED PAID CREDIT.— 
(1) IN GENERAL.—Section 960(d)(1) is amended by striking 
‘‘80 percent’’ and inserting ‘‘90 percent’’. 
(2) GROSS UP FOR DEEMED PAID FOREIGN TAX CREDIT.— 
Section 78 is amended— 
(A) by striking ‘‘subsections (a), (b), and (d)’’ and 
inserting ‘‘subsections (a) and (d)’’, and 
(B) by striking ‘‘80 percent’’ and inserting ‘‘90 percent’’. 
(b) DISALLOWANCE OF FOREIGN TAX CREDIT WITH RESPECT TO 
DISTRIBUTIONS OF PREVIOUSLY TAXED NET CFC TESTED INCOME.— 
Section 960(d) is amended by adding at the end the following 
new paragraph: 
‘‘(4) DISALLOWANCE OF FOREIGN TAX CREDIT WITH RESPECT 
TO
DISTRIBUTIONS
OF
PREVIOUSLY
TAXED
NET
CFC
TESTED 
INCOME.—No credit shall be allowed under section 901 for 
10 percent of any foreign income taxes paid or accrued (or 
deemed paid under subsection (b)(1)) with respect to any 
amount excluded from gross income under section 959(a) by 
reason of an inclusion in gross income under section 951A(a).’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendments made by subsection 
(a) shall apply to taxable years beginning after December 31, 
2025. 
(2) DISALLOWANCE.—The amendment made by subsection 
(b) shall apply to foreign income taxes paid or accrued (or 
deemed paid under section 960(b)(1) of the Internal Revenue 
Code of 1986) with respect to any amount excluded from gross 
income under section 959(a) of such Code by reason of an 
inclusion in gross income under section 951A(a) of such Code 
after June 28, 2025. 
SEC. 70313. SOURCING CERTAIN INCOME FROM THE SALE OF INVEN-
TORY PRODUCED IN THE UNITED STATES. 
(a) IN GENERAL.—Section 904(b), as amended by section 70311, 
is amended by adding at the end the following new paragraph: 
‘‘(6) SOURCE RULES FOR CERTAIN INVENTORY PRODUCED IN 
THE UNITED STATES AND SOLD THROUGH FOREIGN BRANCHES.— 
For purposes of this section, if a United States person maintains 
an office or other fixed place of business in a foreign country 
(determined under rules similar to the rules of section 
864(c)(5)), the portion of income which— 
‘‘(A) is from the sale or exchange outside the United 
States of inventory property (within the meaning of section 
865(i)(1))— 
‘‘(i) which is produced in the United States, 
‘‘(ii) which is for use outside the United States, 
and
H. R. 1—133 
‘‘(iii) to which the third sentence of section 863(b) 
applies, and 
‘‘(B) is attributable (determined under rules similar 
to the rules of section 864(c)(5)) to such office or other 
fixed place of business, 
shall be treated as from sources without the United States, 
except that the amount so treated shall not exceed 50 percent 
of the income from the sale or exchange of such inventory 
property.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
PART II—FOREIGN-DERIVED DEDUCTION ELI-
GIBLE INCOME AND NET CFC TESTED IN-
COME 
SEC. 70321. MODIFICATION OF DEDUCTION FOR FOREIGN-DERIVED 
DEDUCTION ELIGIBLE INCOME AND NET CFC TESTED 
INCOME. 
(a) IN GENERAL.—Section 250(a) is amended— 
(1) by striking ‘‘37.5 percent’’ in paragraph (1)(A) and 
inserting ‘‘33.34 percent’’, 
(2) by striking ‘‘50 percent’’ in paragraph (1)(B) and 
inserting ‘‘40 percent’’, and 
(3) by striking paragraph (3). 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70322. DETERMINATION OF DEDUCTION ELIGIBLE INCOME. 
(a) SALES OR OTHER DISPOSITIONS OF CERTAIN PROPERTY.— 
(1) IN GENERAL.—Section 250(b)(3)(A)(i) is amended— 
(A) by striking ‘‘and’’ at the end of subclause (V), 
(B) by striking ‘‘over’’ at the end of subclause (VI) 
and inserting ‘‘and’’, and 
(C) by adding at the end the following new subclause: 
‘‘(VII) except as otherwise provided by the Sec-
retary, any income and gain from the sale or other 
disposition (including pursuant to the deemed sale 
or other deemed disposition or a transaction sub-
ject to section 367(d)) of— 
‘‘(aa) intangible property (as defined in 
section 367(d)(4)), and 
‘‘(bb) any other property of a type that 
is subject to depreciation, amortization, or 
depletion by the seller, over’’. 
(2) CONFORMING
AMENDMENT.—Section 250(b)(5)(E) is 
amended by inserting ‘‘(other than paragraph (3)(A)(i)(VII))’’ 
after ‘‘For purposes of this subsection’’. 
(3) EFFECTIVE DATE.—The amendments made by this sub-
section shall apply to sales or other dispositions (including 
pursuant to deemed sales or other deemed dispositions or a 
transaction subject to section 367(d) of the Internal Revenue 
Code of 1986) occurring after June 16, 2025. 
(b) EXPENSE APPORTIONMENT LIMITED TO PROPERLY ALLOCABLE 
EXPENSES.—
H. R. 1—134 
(1) IN GENERAL.—Section 250(b)(3)(A)(ii) is amended to read 
as follows: 
‘‘(ii) expenses and deductions (including taxes), 
other than interest expense and research or experi-
mental expenditures, properly allocable to such gross 
income.’’. 
(2) EFFECTIVE DATE.—The amendment made by this sub-
section shall apply to taxable years beginning after December 
31, 2025. 
SEC. 70323. RULES RELATED TO DEEMED INTANGIBLE INCOME. 
(a) TAXATION OF NET CFC TESTED INCOME.— 
(1) IN GENERAL.—Section 951A(a) is amended by striking 
‘‘global intangible low-taxed income’’ and inserting ‘‘net CFC 
tested income’’. 
(2) REPEAL
OF
TAX-FREE
DEEMED
RETURN
ON
FOREIGN 
INVESTMENTS.—Section 951A, as amended by the preceding 
provisions of this Act, is amended by striking subsections (b) 
and (d) and by redesignating subsections (c), (e), and (f) as 
subsections (b), (c), and (d), respectively. 
(3) CONFORMING AMENDMENTS.— 
(A)(i) Section 250 is amended by striking ‘‘global intan-
gible low-taxed income’’ each place it appears in subsections 
(a)(1)(B)(i), (a)(2), and (b)(3)(A)(i)(II) and inserting ‘‘net CFC 
tested income’’. 
(ii) The heading for section 250 of such Code is 
amended by striking ‘‘GLOBAL
INTANGIBLE
LOW-TAXED 
INCOME’’ and inserting ‘‘NET CFC TESTED INCOME’’. 
(iii) The item relating to section 250 in the table of 
sections for part VII of subchapter B of chapter 1 of such 
Code is amended by striking ‘‘global intangible low-taxed 
income’’ and inserting ‘‘net CFC tested income’’. 
(B) Section 951A(c)(1), as redesignated by paragraph 
(2), is amended by striking ‘‘subsections (b), (c)(1)(A), and 
(c)(1)(B)’’ and inserting ‘‘subsections (b)(1)(A) and (b)(1)(B)’’. 
(C) Section 951A(d), as redesignated by paragraph (2), 
is amended— 
(i) by striking ‘‘global intangible low-taxed income’’ 
each place it appears and inserting ‘‘net CFC tested 
income’’, and 
(ii) by striking ‘‘subsection (c)(1)(A)’’ in paragraph 
(2)(B)(ii) and inserting ‘‘subsection (b)(1)(A)’’. 
(D) Section 960(d)(2) is amended— 
(i) by striking ‘‘global intangible low-taxed income’’ 
in subparagraph (A) and inserting ‘‘net CFC tested 
income’’, and 
(ii) by striking ‘‘section 951A(c)(1)(A)’’ in subpara-
graph (B) and inserting ‘‘section 951A(b)(1)(A)’’. 
(E)(i) The heading for section 951A is amended by 
striking ‘‘GLOBAL INTANGIBLE LOW-TAXED INCOME’’ and 
inserting ‘‘NET CFC TESTED INCOME’’. 
(ii) The item relating to section 951A in the table 
of sections for subpart F of part III of subchapter N of 
chapter 1 is amended by striking ‘‘Global intangible low- 
taxed income’’ and inserting ‘‘Net CFC tested income’’. 
(b) DEDUCTION
FOR FOREIGN-DERIVED DEDUCTION ELIGIBLE 
INCOME.—
H. R. 1—135 
(1) IN
GENERAL.—Section 250(a)(1)(A) is amended by 
striking ‘‘foreign-derived intangible income’’ and inserting ‘‘for-
eign-derived deduction eligible income’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 250(a)(2) is amended by striking ‘‘foreign- 
derived intangible income’’ each place it appears and 
inserting ‘‘foreign-derived deduction eligible income’’. 
(B) Section 250(b), as amended by subsection (a), is 
amended— 
(i) by striking paragraphs (1) and (2), 
(ii) by redesignating paragraphs (4) and (5) as 
paragraphs (1) and (2), respectively, and by moving 
such paragraphs before paragraph (3), 
(iii) in paragraph (2)(B)(ii), as so redesignated, by 
striking ‘‘paragraph (4)(B)’’ and inserting ‘‘paragraph 
(1)(B)’’, and 
(iv) by striking ‘‘INTANGIBLE’’ in the heading 
thereof and inserting ‘‘DEDUCTION ELIGIBLE’’. 
(C)(i) The heading for section 250 is amended by 
striking ‘‘INTANGIBLE’’ in the heading thereof and inserting 
‘‘DEDUCTION ELIGIBLE’’. 
(ii) The heading for section 172(d)(9) is amended by 
striking ‘‘INTANGIBLE’’ and inserting ‘‘DEDUCTION ELIGIBLE’’. 
(iii) The item relating to section 250 in the table of 
sections for part VIII of subchapter B of chapter 1 is 
amended by striking ‘‘intangible’’ and inserting ‘‘deduction 
eligible’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
PART III—BASE EROSION MINIMUM TAX 
SEC. 70331. EXTENSION AND MODIFICATION OF BASE EROSION MIN-
IMUM TAX AMOUNT. 
(a) IN GENERAL.—Section 59A(b) is amended— 
(1) by striking ‘‘10 percent’’ in paragraph (1) and inserting 
‘‘10.5 percent’’, and 
(2) by striking paragraph (2) and by redesignating para-
graphs (3) and (4) as paragraphs (2) and (3), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 59A(b)(1) is amended by striking ‘‘Except as 
provided in paragraphs (2) and (3)’’ and inserting ‘‘Except as 
provided in paragraph (2)’’. 
(2) Section 59A(b)(2), as redesignated by subsection (a)(2), 
is amended by striking ‘‘the percentage otherwise in effect 
under paragraphs (1)(A) and (2)(A) shall each be increased’’ 
and inserting ‘‘the percentages otherwise in effect under para-
graph (1)(A) shall be increased’’. 
(3) Section 59A(e)(1)(C) is amended by striking ‘‘in the 
case of a taxpayer described in subsection (b)(3)(B)’’ and 
inserting ‘‘in the case of a taxpayer described in subsection 
(b)(2)(B)’’. 
(c) OTHER MODIFICATIONS.— 
(1) Section 59A(b)(2)(B)(ii), as redesignated by subsection 
(a)(2), is amended by striking ‘‘registered securities dealer’’ 
and inserting ‘‘securities dealer registered’’.
H. R. 1—136 
(2) Section 59A(h)(2)(B) is amended by striking ‘‘section 
6038B(b)(2)’’ and inserting ‘‘section 6038A(b)(2)’’. 
(3) Section 59A(i)(2) is amended— 
(A) by striking ‘‘subsection (g)’’ and inserting ‘‘sub-
section (h)’’, and 
(B) by striking ‘‘subsection (g)(3)’’ and inserting ‘‘sub-
section (h)(3)’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
PART IV—BUSINESS INTEREST LIMITATION 
SEC. 70341. COORDINATION OF BUSINESS INTEREST LIMITATION WITH 
INTEREST CAPITALIZATION PROVISIONS. 
(a) IN GENERAL.—Section 163(j) is amended by redesignating 
paragraphs (10) and (11) as paragraphs (11) and (12) and by 
inserting after paragraph (9) the following: 
‘‘(10) COORDINATION WITH INTEREST CAPITALIZATION PROVI-
SIONS.— 
‘‘(A) IN GENERAL.—In applying this subsection— 
‘‘(i) the limitation under paragraph (1) shall apply 
to business interest without regard to whether the 
taxpayer would otherwise deduct such business 
interest or capitalize such business interest under an 
interest capitalization provision, and 
‘‘(ii) any reference in this subsection to a deduction 
for business interest shall be treated as including a 
reference to the capitalization of business interest. 
‘‘(B) AMOUNT ALLOWED APPLIED FIRST TO CAPITALIZED 
INTEREST.—The amount allowed after taking into account 
the limitation described in paragraph (1)— 
‘‘(i) shall be applied first to the aggregate amount 
of business interest which would otherwise be capital-
ized, and 
‘‘(ii) the remainder (if any) shall be applied to 
the aggregate amount of business interest which would 
be deducted. 
‘‘(C) TREATMENT
OF
DISALLOWED
INTEREST
CARRIED 
FORWARD.—No portion of any business interest carried for-
ward under paragraph (2) from any taxable year to any 
succeeding taxable year shall, for purposes of this title 
(including any interest capitalization provision which pre-
viously applied to such portion) be treated as interest to 
which an interest capitalization provision applies. 
‘‘(D) INTEREST
CAPITALIZATION
PROVISION.—For pur-
poses of this section, the term ‘interest capitalization provi-
sion’ means any provision of this subtitle under which 
interest— 
‘‘(i) is required to be charged to capital account, 
or 
‘‘(ii) may be deducted or charged to capital 
account.’’. 
(b) CERTAIN CAPITALIZED INTEREST NOT TREATED AS BUSINESS 
INTEREST.—Section 163(j)(5) is amended by adding at the end the 
following new sentence: ‘‘Such term shall not include any interest 
which is capitalized under section 263(g) or 263A(f).’’.
H. R. 1—137 
(c) REGULATORY AUTHORITY.—Section 163(j), as amended by 
subsection (a), is amended by redesignating paragraphs (11) and 
(12) as paragraphs (12) and (13) and by inserting after paragraph 
(10) the following: 
‘‘(11) REGULATORY AUTHORITY.—The Secretary shall issue 
such regulations or guidance as may be necessary or appro-
priate to carry out the purposes of this subsection, including 
regulations or guidance to determine which business interest 
is taken into account under this subsection and section 
59A(c)(3).’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70342. DEFINITION OF ADJUSTED TAXABLE INCOME FOR BUSI-
NESS INTEREST LIMITATION. 
(a) IN GENERAL.—Subparagraph (A) of section 163(j)(8) is 
amended— 
(1) by striking ‘‘and’’ at the end of clause (iv), and 
(2) by adding at the end the following new clause: 
‘‘(vi) the amounts included in gross income under 
sections 951(a), 951A(a), and 78 (and the portion of 
the deductions allowed under sections 245A(a) (by rea-
son of section 964(e)(4)) and 250(a)(1)(B) by reason 
of such inclusions), and’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
PART V—OTHER INTERNATIONAL TAX 
REFORMS 
SEC. 70351. PERMANENT EXTENSION OF LOOK-THRU RULE FOR 
RELATED CONTROLLED FOREIGN CORPORATIONS. 
(a) IN GENERAL.—Section 954(c)(6)(C) is amended by striking 
‘‘and before January 1, 2026,’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years of foreign corporations beginning after 
December 31, 2025. 
SEC. 70352. REPEAL OF ELECTION FOR 1-MONTH DEFERRAL IN DETER-
MINATION OF TAXABLE YEAR OF SPECIFIED FOREIGN 
CORPORATIONS. 
(a) IN GENERAL.—Section 898(c) is amended by striking para-
graph (2) and redesignating paragraph (3) as paragraph (2). 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years of specified foreign corporations begin-
ning after November 30, 2025. 
(c) TRANSITION RULE.— 
(1) IN GENERAL.—In the case of a corporation that is a 
specified foreign corporation as of November 30, 2025, such 
corporation’s first taxable year beginning after such date shall 
end at the same time as the first required year (within the 
meaning of section 898(c)(1) of the Internal Revenue Code of 
1986) ending after such date. If any specified foreign corporation 
is required by the amendments made by this section to change 
its taxable year for its first taxable year beginning after 
November 30, 2025—
H. R. 1—138 
(A) such change shall be treated as initiated by such 
corporation, 
(B) such change shall be treated as having been made 
with the consent of the Secretary, and 
(C) the Secretary shall issue regulations or other guid-
ance for allocating foreign taxes that are paid or accrued 
in such first taxable year and the succeeding taxable year 
among such taxable years in the manner the Secretary 
determines appropriate to carry out the purposes of this 
section. 
(2) SECRETARY.—For purposes of this subsection, the term 
‘‘Secretary’’ means the Secretary of the Treasury or the Sec-
retary’s delegate. 
SEC. 70353. RESTORATION OF LIMITATION ON DOWNWARD ATTRIBU-
TION OF STOCK OWNERSHIP IN APPLYING CONSTRUC-
TIVE OWNERSHIP RULES. 
(a) IN GENERAL.—Section 958(b) is amended— 
(1) by inserting after paragraph (3) the following: 
‘‘(4) Subparagraphs (A), (B), and (C) of section 318(a)(3) 
shall not be applied so as to consider a United States person 
as owning stock which is owned by a person who is not a 
United States person.’’, and 
(2) by striking ‘‘Paragraph (1)’’ in the last sentence and 
inserting ‘‘Paragraphs (1) and (4)’’. 
(b) FOREIGN CONTROLLED UNITED STATES SHAREHOLDERS.— 
Subpart F of part III of subchapter N of chapter 1 is amended 
by inserting after section 951A the following new section: 
‘‘SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF FOREIGN CON-
TROLLED UNITED STATES SHAREHOLDERS. 
‘‘(a) IN GENERAL.—In the case of any foreign controlled United 
States shareholder of a foreign controlled foreign corporation— 
‘‘(1) this subpart (other than sections 951A, 951(b), and 
957) shall be applied with respect to such shareholder (sepa-
rately from, and in addition to, the application of this subpart 
without regard to this section)— 
‘‘(A) by substituting ‘foreign controlled United States 
shareholder’ for ‘United States shareholder’ each place it 
appears therein, and 
‘‘(B) by substituting ‘foreign controlled foreign corpora-
tion’ for ‘controlled foreign corporation’ each place it 
appears therein, and 
‘‘(2) section 951A (and such other provisions of this subpart 
as provided by the Secretary) shall be applied with respect 
to such shareholder— 
‘‘(A) by treating each reference to ‘United States share-
holder’ in such section as including a reference to such 
shareholder, and 
‘‘(B) by treating each reference to ‘controlled foreign 
corporation’ in such section as including a reference to 
such foreign controlled foreign corporation. 
‘‘(b) FOREIGN CONTROLLED UNITED STATES SHAREHOLDER.—For 
purposes of this section, the term ‘foreign controlled United States 
shareholder’ means, with respect to any foreign corporation, any 
United States person which would be a United States shareholder 
with respect to such foreign corporation if—
H. R. 1—139 
‘‘(1) section 951(b) were applied by substituting ‘more than 
50 percent’ for ‘10 percent or more’, and 
‘‘(2) section 958(b) were applied without regard to para-
graph (4) thereof. 
‘‘(c) FOREIGN CONTROLLED FOREIGN CORPORATION.—For pur-
poses of this section, the term ‘foreign controlled foreign corporation’ 
means a foreign corporation, other than a controlled foreign corpora-
tion, which would be a controlled foreign corporation if section 
957(a) were applied— 
‘‘(1) by substituting ‘foreign controlled United States share-
holders’ for ‘United States shareholders’, and 
‘‘(2) by substituting ‘section 958(b) (other than paragraph 
(4) thereof)’ for ‘section 958(b)’. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe such regula-
tions or other guidance as may be necessary or appropriate to 
carry out the purposes of this section, including regulations or 
other guidance— 
‘‘(1) to treat a foreign controlled United States shareholder 
or a foreign controlled foreign corporation as a United States 
shareholder or as a controlled foreign corporation, respectively, 
for purposes of provisions of this title other than this subpart 
(including any reporting requirement), and 
‘‘(2) with respect to the treatment of foreign controlled 
foreign corporations that are passive foreign investment compa-
nies (as defined in section 1297).’’. 
(c) CLERICAL AMENDMENT.—The table of sections for subpart 
F of part III of subchapter N of chapter 1 is amended by inserting 
after the item relating to section 951A the following new item: 
‘‘Sec. 951B. Amounts included in gross income of foreign controlled United States 
shareholders.’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years of foreign corporations beginning after 
December 31, 2025. 
(e) SPECIAL RULE.— 
(1) IN
GENERAL.—Except to the extent provided by the 
Secretary of the Treasury (or the Secretary’s delegate), the 
effective date of any amendment to the Internal Revenue Code 
of 1986 shall be applied by treating references to United States 
shareholders as including references to foreign controlled 
United States shareholders, and by treating references to con-
trolled foreign corporations as including references to foreign 
controlled foreign corporations. 
(2) DEFINITIONS.—Any term used in paragraph (1) which 
is used in subpart F of part III of subchapter N of chapter 
1 of the Internal Revenue Code of 1986 (as amended by this 
section) shall have the meaning given such term in such sub-
part. 
(f) NO INFERENCE.—The amendments made by this section 
shall not be construed to create any inference with respect to 
the proper application of any provision of the Internal Revenue 
Code of 1986 with respect to taxable years beginning before the 
taxable years to which such amendments apply. 
SEC. 70354. MODIFICATIONS TO PRO RATA SHARE RULES. 
(a) IN GENERAL.—Subsection (a) of section 951 is amended 
to read as follows: 
‘‘(a) AMOUNTS INCLUDED.—
H. R. 1—140 
‘‘(1) IN GENERAL.—If a foreign corporation is a controlled 
foreign corporation at any time during a taxable year of the 
foreign corporation (in this subsection referred to as the ‘CFC 
year’)— 
‘‘(A) each United States shareholder which owns 
(within the meaning of section 958(a)) stock in such cor-
poration on any day during the CFC year shall include 
in gross income such shareholder’s pro rata share (deter-
mined under paragraph (2)) of the corporation’s subpart 
F income for the CFC year, and 
‘‘(B) each United States shareholder which owns 
(within the meaning of section 958(a)) stock in such cor-
poration on the last day, in the CFC year, on which such 
corporation is a controlled foreign corporation shall include 
in gross income the amount determined under section 956 
with respect to such shareholder for the CFC year (but 
only to the extent not excluded from gross income under 
section 959(a)(2)). 
‘‘(2) PRO RATA SHARE OF SUBPART F INCOME.—A United 
States shareholder’s pro rata share of a controlled foreign cor-
poration’s subpart F income for a CFC year shall be the portion 
of such income which is attributable to— 
‘‘(A) the stock of such corporation owned (within the 
meaning of section 958(a)) by such shareholder, and 
‘‘(B) any period of the CFC year during which— 
‘‘(i) such shareholder owned (within the meaning 
of section 958(a)) such stock, 
‘‘(ii) such shareholder was a United States share-
holder of such corporation, and 
‘‘(iii) such corporation was a controlled foreign cor-
poration. 
‘‘(3) TAXABLE YEAR OF INCLUSION.—Any amount required 
to be included in gross income by a United States shareholder 
under paragraph (1) with respect to a CFC year shall be 
included in gross income for the shareholder’s taxable year 
which includes the last day on which the shareholder owns 
(within the meaning of section 958(a)) stock in the controlled 
foreign corporation during such CFC year. 
‘‘(4) REGULATORY
AUTHORITY.—The Secretary shall pre-
scribe such regulations or other guidance as may be necessary 
or appropriate to carry out the purposes of this subsection, 
including regulations or other guidance allowing taxpayers to 
elect, or requiring taxpayers, to close the taxable year of a 
controlled foreign corporation upon a direct or indirect disposi-
tion of stock of such corporation.’’. 
(b) COORDINATION WITH SECTION 951A.— 
(1) TESTED INCOME.—Section 951A(b), as redesignated by 
section 70323(a)(2), is amended— 
(A) in paragraph (1)(A), by striking ‘‘(determined for 
each taxable year of such controlled foreign corporation 
which ends in or with such taxable year of such United 
States shareholder)’’, and 
(B) in paragraph (1)(B), by striking ‘‘(determined for 
each taxable year of such controlled foreign corporation 
which ends in or with such taxable year of such United 
States shareholder)’’.
H. R. 1—141 
(2) PRO RATA SHARE.—Section 951A(c), as redesignated by 
section 70323(a)(2), is amended— 
(A) in paragraph (1), by striking ‘‘in which or with 
which the taxable year of the controlled foreign corporation 
ends’’ and inserting ‘‘determined under section 951(a)(3)’’, 
and 
(B) in paragraph (2), by striking ‘‘the last day in the 
taxable year of such foreign corporation on which such 
foreign corporation is a controlled foreign corporation’’ and 
inserting ‘‘any day in such taxable year’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendments made by this section 
shall apply to taxable years of foreign corporations beginning 
after December 31, 2025. 
(2) TRANSITION RULE FOR DIVIDENDS.—Except to the extent 
provided by the Secretary of the Treasury (or the Secretary’s 
delegate), a dividend paid (or deemed paid) by a controlled 
foreign corporation shall not be treated as a dividend for pur-
poses of applying section 951(a)(2)(B) of the Internal Revenue 
Code of 1986 (as in effect before the amendments made by 
this section) if— 
(A) such dividend— 
(i) was paid (or deemed paid) on or before June 
28, 2025, during the taxable year of such controlled 
foreign corporation which includes such date and the 
United 
States 
shareholder 
described 
in 
section 
951(a)(1) of such Code (as so in effect) did not own 
(within the meaning of section 958(a) of such Code) 
the stock of such controlled foreign corporation during 
the portion of such taxable year on or before June 
28, 2025, or 
(ii) was paid (or deemed paid) after June 28, 2025, 
and before such controlled foreign corporation’s first 
taxable year beginning after December 31, 2025, and 
(B) such dividend does not increase the taxable income 
of a United States person that is subject to Federal income 
tax for the taxable year (including by reason of a dividends 
received deduction, an exclusion from gross income, or an 
exclusion from subpart F income). 
CHAPTER 4—INVESTING IN AMERICAN FAMILIES, 
COMMUNITIES, AND SMALL BUSINESSES 
Subchapter A—Permanent Investments in Families and 
Children 
SEC. 70401. ENHANCEMENT OF EMPLOYER-PROVIDED CHILD CARE 
CREDIT. 
(a) INCREASE OF AMOUNT OF QUALIFIED CHILD CARE EXPENDI-
TURES TAKEN INTO ACCOUNT.—Section 45F(a)(1) is amended by 
striking ‘‘25 percent’’ and inserting ‘‘40 percent (50 percent in the 
case of an eligible small business)’’. 
(b) INCREASE OF MAXIMUM CREDIT AMOUNT.—Subsection (b) 
of section 45F is amended to read as follows: 
‘‘(b) DOLLAR LIMITATION.—
H. R. 1—142 
‘‘(1) IN GENERAL.—The credit allowable under subsection 
(a) for any taxable year shall not exceed $500,000 ($600,000 
in the case of an eligible small business). 
‘‘(2) INFLATION ADJUSTMENT.—In the case of any taxable 
year beginning after 2026, the $500,000 and $600,000 amounts 
in paragraph (1) shall each be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable 
year begins, determined by substituting ‘calendar year 
2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof.’’. 
(c) ELIGIBLE SMALL BUSINESS.—Section 45F(c) is amended by 
adding at the end the following new paragraph: 
‘‘(4) ELIGIBLE SMALL BUSINESS.—The term ‘eligible small 
business’ means a business that meets the gross receipts test 
of section 448(c), determined— 
‘‘(A) by substituting ‘5-taxable-year’ for ‘3-taxable-year’ 
in paragraph (1) thereof, and 
‘‘(B) by substituting ‘5-year’ for ‘3-year’ in paragraph 
(3)(A) thereof.’’. 
(d) CREDIT ALLOWED FOR THIRD-PARTY INTERMEDIARIES.—Sec-
tion 45F(c)(1)(A)(iii) is amended by inserting ‘‘, or under a contract 
with an intermediate entity that contracts with one or more quali-
fied child care facilities to provide such child care services’’ before 
the period at the end. 
(e) TREATMENT OF JOINTLY OWNED OR OPERATED CHILD CARE 
FACILITY.—Section 45F(c)(2) is amended by adding at the end the 
following new subparagraph: 
‘‘(C) TREATMENT
OF
JOINTLY
OWNED
OR
OPERATED 
CHILD CARE FACILITY.—A facility shall not fail to be treated 
as a qualified child care facility of the taxpayer merely 
because such facility is jointly owned or operated by the 
taxpayer and other persons.’’. 
(f) REGULATIONS AND GUIDANCE.—Section 45F is amended by 
adding at the end the following new subsection: 
‘‘(g) REGULATIONS AND GUIDANCE.—The Secretary shall issue 
such regulations or other guidance as may be necessary to carry 
out the purposes of this section, including guidance to carry out 
the purposes of paragraphs (1)(A)(iii) and (2)(C) of subsection (c).’’. 
(g) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts paid or incurred after December 31, 2025. 
SEC. 70402. ENHANCEMENT OF ADOPTION CREDIT. 
(a) IN GENERAL.—Section 23(a) is amended by adding at the 
end the following new paragraph: 
‘‘(4) PORTION
OF
CREDIT
REFUNDABLE.—So much of the 
credit allowed under paragraph (1) as does not exceed $5,000 
shall be treated as a credit allowed under subpart C and 
not as a credit allowed under this subpart.’’. 
(b) ADJUSTMENTS FOR INFLATION.—Section 23(h) is amended 
to read as follows: 
‘‘(h) ADJUSTMENTS FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of a taxable year beginning 
after December 31, 2002, each of the dollar amounts in para-
graphs (3) and (4) of subsection (a) and paragraphs (1) and
H. R. 1—143 
(2)(A)(i) of subsection (b) shall be increased by an amount 
equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment determined under 
section 1(f)(3) for the calendar year in which the taxable 
year begins, determined by substituting ‘calendar year 
2001’ for ‘calendar year 2016’ in subparagraph (A)(ii) 
thereof. 
‘‘(2) ROUNDING.—If any amount as increased under para-
graph (1) is not a multiple of $10, such amount shall be rounded 
to the nearest multiple of $10. 
‘‘(3) SPECIAL RULE FOR REFUNDABLE PORTION.—In the case 
of the dollar amount in subsection (a)(4), paragraph (1) shall 
be applied— 
‘‘(A) by substituting ‘2025’ for ‘2002’ in the matter 
preceding subparagraph (A), and 
‘‘(B) by substituting ‘calendar year 2024’ for ‘calendar 
year 2001’ in subparagraph (B) thereof.’’. 
(c) EXCLUSION
OF REFUNDABLE PORTION
OF CREDIT FROM 
CARRYFORWARD.—Section 23(c)(1) is amended by striking ‘‘credit 
allowable under subsection (a)’’ and inserting ‘‘portion of the credit 
allowable under subsection (a) which is allowed under this subpart’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
SEC. 70403. RECOGNIZING INDIAN TRIBAL GOVERNMENTS FOR PUR-
POSES OF DETERMINING WHETHER A CHILD HAS SPE-
CIAL NEEDS FOR PURPOSES OF THE ADOPTION CREDIT. 
(a) IN GENERAL.—Section 23(d)(3) is amended— 
(1) in subparagraph (A), by inserting ‘‘or Indian tribal 
government’’ after ‘‘a State’’, and 
(2) in subparagraph (B), by inserting ‘‘or Indian tribal 
government’’ after ‘‘such State’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2024. 
SEC. 70404. ENHANCEMENT OF THE DEPENDENT CARE ASSISTANCE 
PROGRAM. 
(a) IN GENERAL.—Section 129(a)(2)(A) is amended by striking 
‘‘$5,000 ($2,500’’ and inserting ‘‘$7,500 ($3,750’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 70405. ENHANCEMENT OF CHILD AND DEPENDENT CARE TAX 
CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 21(a) is amended 
to read as follows: 
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For purposes of 
paragraph (1), the term ‘applicable percentage’ means 50 per-
cent— 
‘‘(A) reduced (but not below 35 percent) by 1 percentage 
point for each $2,000 or fraction thereof by which the 
taxpayer’s adjusted gross income for the taxable year 
exceeds $15,000, and 
‘‘(B) further reduced (but not below 20 percent) by 
1 percentage point for each $2,000 ($4,000 in the case 
of a joint return) or fraction thereof by which the taxpayer’s
H. R. 1—144 
adjusted gross income for the taxable year exceeds $75,000 
($150,000 in the case of a joint return).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2025. 
Subchapter B—Permanent Investments in Students and 
Reforms to Tax-exempt Institutions 
SEC. 70411. TAX CREDIT FOR CONTRIBUTIONS OF INDIVIDUALS TO 
SCHOLARSHIP GRANTING ORGANIZATIONS. 
(a) ALLOWANCE OF CREDIT FOR CONTRIBUTIONS OF INDIVIDUALS 
TO SCHOLARSHIP GRANTING ORGANIZATIONS.— 
(1) IN GENERAL.—Subpart A of part IV of subchapter A 
of chapter 1 is amended by inserting after section 25E the 
following new section: 
‘‘SEC. 25F. QUALIFIED ELEMENTARY AND SECONDARY EDUCATION 
SCHOLARSHIPS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual who 
is a citizen or resident of the United States (within the meaning 
of section 7701(a)(9)), there shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount 
equal to the aggregate amount of qualified contributions made 
by the taxpayer during the taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The credit allowed under subsection (a) 
to any taxpayer for any taxable year shall not exceed $1,700. 
‘‘(2) REDUCTION
BASED
ON
STATE
CREDIT.—The amount 
allowed as a credit under subsection (a) for a taxable year 
shall be reduced by the amount allowed as a credit on any 
State tax return of the taxpayer for qualified contributions 
made by the taxpayer during the taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) COVERED STATE.—The term ‘covered State’ means one 
of the States, or the District of Columbia, that, for a calendar 
year, voluntarily elects to participate under this section and 
to identify scholarship granting organizations in the State, 
in accordance with subsection (g). 
‘‘(2) ELIGIBLE STUDENT.—The term ‘eligible student’ means 
an individual who— 
‘‘(A) is a member of a household with an income which, 
for the calendar year prior to the date of the application 
for a scholarship, is not greater than 300 percent of the 
area median gross income (as such term is used in section 
42), and 
‘‘(B) is eligible to enroll in a public elementary or 
secondary school. 
‘‘(3) QUALIFIED
CONTRIBUTION.—The term ‘qualified con-
tribution’ means a charitable contribution of cash to a scholar-
ship granting organization that uses the contribution to fund 
scholarships for eligible students solely within the State in 
which the organization is listed pursuant to subsection (g). 
‘‘(4) QUALIFIED
ELEMENTARY
OR
SECONDARY
EDUCATION 
EXPENSE.—The term ‘qualified elementary or secondary edu-
cation expense’ means any expense of an eligible student which 
is described in section 530(b)(3)(A).
H. R. 1—145 
‘‘(5) SCHOLARSHIP
GRANTING
ORGANIZATION.—The term 
‘scholarship granting organization’ means any organization— 
‘‘(A) which— 
‘‘(i) is described in section 501(c)(3) and exempt 
from tax under section 501(a), and 
‘‘(ii) is not a private foundation, 
‘‘(B) which prevents the co-mingling of qualified con-
tributions with other amounts by maintaining one or more 
separate accounts exclusively for qualified contributions, 
‘‘(C) which satisfies the requirements of subsection (d), 
and 
‘‘(D) which is included on the list submitted for the 
applicable covered State under subsection (g) for the 
applicable year. 
‘‘(d) REQUIREMENTS
FOR SCHOLARSHIP GRANTING ORGANIZA-
TIONS.— 
‘‘(1) IN GENERAL.—An organization meets the requirements 
of this subsection if— 
‘‘(A) such organization provides scholarships to 10 or 
more students who do not all attend the same school, 
‘‘(B) such organization spends not less than 90 percent 
of the income of the organization on scholarships for eligible 
students, 
‘‘(C) such organization does not provide scholarships 
for any expenses other than qualified elementary or sec-
ondary education expenses, 
‘‘(D) such organization provides a scholarship to eligible 
students with a priority for— 
‘‘(i) students awarded a scholarship the previous 
school year, and 
‘‘(ii) after application of clause (i), any eligible stu-
dents who have a sibling who was awarded a scholar-
ship from such organization, 
‘‘(E) such organization does not earmark or set aside 
contributions for scholarships on behalf of any particular 
student, and 
‘‘(F) such organization— 
‘‘(i) verifies the annual household income and 
family size of eligible students who apply for scholar-
ships to ensure such students meet the requirement 
of subsection (c)(2)(A), and 
‘‘(ii) limits the awarding of scholarships to eligible 
students who are a member of a household for which 
the income does not exceed the amount established 
under subsection (c)(2)(A). 
‘‘(2) PROHIBITION ON SELF-DEALING.— 
‘‘(A) IN GENERAL.—A scholarship granting organization 
may not award a scholarship to any disqualified person. 
‘‘(B) DISQUALIFIED PERSON.—For purposes of this para-
graph, a disqualified person shall be determined pursuant 
to rules similar to the rules of section 4946. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—Any qualified contribution 
for which a credit is allowed under this section shall not be taken 
into account as a charitable contribution for purposes of section 
170. 
‘‘(f) CARRYFORWARD OF UNUSED CREDIT.—
H. R. 1—146 
‘‘(1) IN GENERAL.—If the credit allowable under subsection 
(a) for any taxable year exceeds the limitation imposed by 
section 26(a) for such taxable year reduced by the sum of 
the credits allowable under this subpart (other than this sec-
tion, section 23, and section 25D), such excess shall be carried 
to the succeeding taxable year and added to the credit allowable 
under subsection (a) for such taxable year. 
‘‘(2) LIMITATION.—No credit may be carried forward under 
this subsection to any taxable year following the fifth taxable 
year after the taxable year in which the credit arose. For 
purposes of the preceding sentence, credits shall be treated 
as used on a first-in first-out basis. 
‘‘(g) STATE LIST OF SCHOLARSHIP GRANTING ORGANIZATIONS.— 
‘‘(1) LIST.— 
‘‘(A) IN GENERAL.—Not later than January 1 of each 
calendar year (or, with respect to the first calendar year 
for which this section applies, as early as practicable), 
a State that voluntarily elects to participate under this 
section shall provide to the Secretary a list of the scholar-
ship granting organizations that meet the requirements 
described in subsection (c)(5) and are located in the State. 
‘‘(B) PROCESS.—The election under this paragraph shall 
be made by the Governor of the State or by such other 
individual, agency, or entity as is designated under State 
law to make such elections on behalf of the State with 
respect to Federal tax benefits. 
‘‘(2) CERTIFICATION.—Each list submitted under paragraph 
(1) shall include a certification that the individual, agency, 
or entity submitting such list on behalf of the State has the 
authority to perform this function. 
‘‘(h) REGULATIONS AND GUIDANCE.—The Secretary shall issue 
such regulations or other guidance as the Secretary determines 
necessary to carry out the purposes of this section, including regula-
tions or other guidance— 
‘‘(1) providing for enforcement of the requirements under 
subsections (d) and (g), and 
‘‘(2) with respect to recordkeeping or information reporting 
for purposes of administering the requirements of this section.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25(e)(1)(C) is amended by striking ‘‘and 
25D’’ and inserting ‘‘25D, and 25F’’. 
(B) The table of sections for subpart A of part IV 
of subchapter A of chapter 1 is amended by inserting 
after the item relating to section 25E the following new 
item: 
‘‘Sec. 25F. Qualified elementary and secondary education scholarships.’’. 
(b) EXCLUSION FROM GROSS INCOME FOR SCHOLARSHIPS FOR 
QUALIFIED ELEMENTARY OR SECONDARY EDUCATION EXPENSES OF 
ELIGIBLE STUDENTS.— 
(1) IN GENERAL.—Part III of subchapter B of chapter 1 
is amended by inserting before section 140 the following new 
section: 
‘‘SEC. 139K. SCHOLARSHIPS FOR QUALIFIED ELEMENTARY OR SEC-
ONDARY EDUCATION EXPENSES OF ELIGIBLE STUDENTS. 
‘‘(a) IN GENERAL.—In the case of an individual, gross income 
shall not include any amounts provided to such individual or any