225 
period at the end of clause (iv) and inserting ‘‘, 
and’’, and by adding at the end the following clause: 
‘‘(v) in the case of a vehicle placed in 
service after December 31, 2026, 80 per-
cent.’’. 
(2) Section 30D(e)(2)(B) is amended by strik-
ing ‘‘and’’ at the end of clause (ii), by striking the 
period at the end of clause (iii), and by adding at 
the end the following clauses: 
‘‘(iv) in the case of a vehicle placed in 
service during calendar year 2027, 80 per-
cent, 
‘‘(v) in the case of a vehicle placed in 
service during calendar year 2028, 90 per-
cent, and 
‘‘(vi) in the case of a vehicle placed in 
service after December 31, 2028, 100 per-
cent.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section 
70502 of Public Law 119–21. 
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SEC. 23003. QUALIFIED COMMERCIAL CLEAN VEHICLES 
CREDIT. 
(a) REVERSION OF TERMINATION DATE.—Section 
45W(g) is amended by striking ‘‘September 30, 2025’’ and 
inserting ‘‘December 31, 2032’’. 
(b) CLARIFICATION
OF APPLICATION
TO MOBILE 
MACHINERY.— 
(1) IN GENERAL.—Section 45W(c)(2) is amend-
ed— 
(A) in subparagraph (A), by striking ‘‘pri-
marily’’, and 
(B) in subparagraph (B), by striking ‘‘mo-
bile machinery, as defined in section 4053(8)’’ 
and inserting ‘‘a vehicle that performs a con-
struction, manufacturing, processing, farming, 
mining, drilling, timbering, or similar oper-
ation’’. 
(2) QUALIFIED MANUFACTURER AND VIN RE-
QUIREMENTS NOT APPLICABLE.— 
(A) QUALIFIED MANUFACTURER REQUIRE-
MENTS.—Section 45W(c) is amended— 
(i) in paragraph (1), by striking 
‘‘meets 
the 
requirements 
of 
section 
30D(d)(1)(C) and’’, 
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(ii) in paragraph (2)(A), by striking 
‘‘subparagraph (D)’’ and inserting ‘‘sub-
paragraphs (C) and (D)’’, and 
(iii) in paragraph (3), by striking ‘‘ei-
ther—’’ and inserting ‘‘meets the require-
ments of section 30D(d)(1)(C) and ei-
ther—’’. 
(B) 
VIN 
REQUIREMENTS.—Section 
45W(e) is amended by inserting ‘‘(other than a 
vehicle described in subsection (c)(2)(B))’’ after 
‘‘any vehicle’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section 
70503 of Public Law 119–21. 
SEC. 23004. REVERSION OF TERMINATION DATE FOR AL-
TERNATIVE 
FUEL 
VEHICLE 
REFUELING 
PROPERTY CREDIT. 
(a) IN GENERAL.—Section 30C(i) is amended by 
striking ‘‘June 30, 2026’’ and inserting ‘‘December 31, 
2032’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in section 
70504 of Public Law 119–21. 
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SEC. 23005. CREDIT FOR CERTAIN NEW ELECTRIC BICY-
CLES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
vision of this Act, is amended by inserting after section 
36C the following new section: 
‘‘SEC. 36D. ELECTRIC BICYCLES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 30 percent of the cost of each qualified electric 
bicycle placed in service by the taxpayer during such tax-
able year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION ON COST PER BICYCLE TAKEN 
INTO
ACCOUNT.—The amount taken into account 
under subsection (a) as the cost of any qualified 
electric bicycle shall not exceed $5,000. 
‘‘(2) LIMITATION ON NUMBER OF BICYCLES.— 
In the case of any taxpayer for any taxable year, the 
number of qualified electric bicycles taken into ac-
count under subsection (a) shall not exceed the ex-
cess (if any) of— 
‘‘(A) 1 (2 in the case of a joint return), re-
duced by 
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‘‘(B) the aggregate number of qualified 
electric bicycles taken into account by the tax-
payer under subsection (a) for the 2 preceding 
taxable years. 
‘‘(3) PHASEOUT BASED ON INCOME.— 
‘‘(A) PHASEOUT BASED ON MODIFIED AD-
JUSTED
GROSS
INCOME.—The credit allowed 
under subsection (a) shall be reduced by $100 
for each $1,000 (or fraction thereof) by which 
the taxpayer’s modified adjusted gross income 
exceeds— 
‘‘(i) $300,000 in the case of a joint 
return or a surviving spouse (as defined in 
section 2(a)), 
‘‘(ii) $225,000 in the case of a head 
of household (as defined in section 2(b)), 
and 
‘‘(iii) $150,000 in the case of a tax-
payer not described in clause (i) or (ii). 
‘‘(B) SPECIAL RULE FOR MODIFIED AD-
JUSTED
GROSS
INCOME
TAKEN
INTO
AC-
COUNT.—The modified adjusted gross income 
of the taxpayer that is taken into account for 
purposes of subparagraph (A) shall be the less-
er of— 
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‘‘(i) the modified adjusted gross in-
come for the taxable year with respect to 
which the credit is claimed, or 
‘‘(ii) the modified adjusted gross in-
come for the immediately preceding taxable 
year. 
‘‘(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (A), the 
term ‘modified adjusted gross income’ means 
adjusted gross income increased by any amount 
excluded from gross income under section 911, 
931, or 933. 
‘‘(c) QUALIFIED ELECTRIC BICYCLE.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified electric 
bicycle’ means a bicycle or tricycle— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use by the tax-
payer and not for resale, 
‘‘(C) which is not property of a character 
subject to an allowance for depreciation or am-
ortization in the hands of the taxpayer, 
‘‘(D) which is made by a qualified manu-
facturer and is labeled with the qualified vehicle 
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‘‘(H) which is not equipped with any motor 
other than the motor described in subparagraph 
(G)(iii), 
‘‘(I) which is not capable of exceeding the 
speed limitation in paragraph (2) by means of 
any electronic switch, setting or software modi-
fication provided or made available by the man-
ufacturer, and 
‘‘(J) which has a drive system that has 
been certified by an accredited laboratory to 
Underwriters Laboratory (UL) standard UL 
2849, or a battery that has been certified to 
any of the battery safety standards listed in 
such standard UL 2849 or such other drive sys-
tem or battery safety standard as may be recog-
nized by the United States Consumer Product 
Safety Commission. 
‘‘(2) CLASS
ELECTRIC
BICYCLE
OR
TRI-
CYCLE.—The term ‘class 1 electric bicycle or tri-
cycle’ means a two- or three-wheeled vehicle 
equipped with an electric motor that provides assist-
ance only when the rider is pedaling, that is not ca-
pable of providing assistance when the speed of the 
vehicle exceeds 20 miles per hour, and that is not a 
class 3 electric bicycle or tricycle. 
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‘‘(3) CLASS
ELECTRIC
BICYCLE
OR
TRI-
CYCLE.—The term ‘class 2 electric bicycle or tri-
cycle’ means a two- or three-wheeled vehicle 
equipped with an electric motor that may be used to 
propel the vehicle without the need of any additional 
assistance, and that is not capable of providing as-
sistance when the speed of the vehicle exceeds 20 
miles per hour. 
‘‘(4) CLASS
ELECTRIC
BICYCLE
OR
TRI-
CYCLE.—The term ‘class 3 electric bicycle or tri-
cycle’ means a two- or three-wheeled vehicle 
equipped with an electric motor that provides assist-
ance only when the rider is pedaling, and that is not 
capable of providing assistance when the speed of 
the vehicle exceeds 28 miles per hour. 
‘‘(d) SPECIAL RULE FOR BICYCLES USED BY AN IN-
DIVIDUAL IN A TRADE OR BUSINESS.—In the case of any 
bicycle or tricycle with respect to which the taxpayer elects 
(at such time and in such manner as the Secretary may 
provide) the application of this subsection— 
‘‘(1) subsections (c)(1)(C) and (f)(2) shall not 
apply with respect to such bicycle or tricycle, and 
‘‘(2) no deduction (including any deduction for 
depreciation or amortization) or credit (other than 
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the credit allowed under this section) shall be al-
lowed for the cost of such bicycle or tricycle. 
‘‘(e) VIN NUMBER REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) with respect to any qualified 
electric bicycle unless the taxpayer includes the 
qualified vehicle identification number of such bicy-
cle on the return of tax for the taxable year. 
‘‘(2) 
QUALIFIED
VEHICLE
IDENTIFICATION 
NUMBER.—For purposes of this section, the term 
‘qualified vehicle identification number’ means, with 
respect to any qualified electric bicycle, the vehicle 
identification number assigned to such bicycle by a 
qualified manufacturer pursuant to the methodology 
referred to in paragraph (3)(A). 
‘‘(3) QUALIFIED
MANUFACTURER.—For pur-
poses of this section, the term ‘qualified manufac-
turer’ means any manufacturer of qualified electric 
bicycles which enters into an agreement with the 
Secretary which provides that such manufacturer 
will— 
‘‘(A) assign a vehicle identification number 
to each qualified electric bicycle produced by 
such manufacturer utilizing a methodology that 
will ensure that such number (including any al-
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phanumeric) is unique to such bicycle (by uti-
lizing numbers or letters which are unique to 
such manufacturer or by such other method as 
the Secretary may provide), 
‘‘(B) label such bicycle with such number 
in such manner as the Secretary may provide, 
and 
‘‘(C) make periodic written reports to the 
Secretary (at such times and in such manner as 
the Secretary may provide) of the vehicle identi-
fication numbers so assigned and including 
such information as the Secretary may require 
with respect to the qualified electric bicycle to 
which such number was so assigned. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(2) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or other credit allowable under this 
chapter for a qualified electric bicycle for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such bicycle. 
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‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowable under subsection 
(a) with respect to any property which ceases to be 
property eligible for such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
qualified electric bicycle if the taxpayer elects to not 
have this section apply to such bicycle. 
‘‘(g) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section (determined without 
regard to this subsection). Such amounts shall be 
determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
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‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(h) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
or other guidance as the Secretary determines nec-
essary or appropriate, if the taxpayer who acquires 
a qualified electric bicycle is an individual and elects 
the application of this subsection with respect to 
such qualified electric bicycle, the credit which would 
(but for this subsection) be allowed to such taxpayer 
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‘‘(iv) the amount provided by the re-
tailer to such taxpayer as a condition of 
the election described in paragraph (1), 
‘‘(C) made payment to such taxpayer 
(whether in cash or in the form of a partial 
payment or down payment for the purchase of 
such qualified electric bicycle) in an amount 
equal to the credit otherwise allowable to such 
taxpayer, and 
‘‘(D) with respect to any incentive other-
wise available for the purchase of a qualified 
electric bicycle for which a credit is allowed 
under this section, including any incentive in 
the form of a rebate or discount provided by the 
retailer or manufacturer, ensured that— 
‘‘(i) the availability or use of such in-
centive shall not limit the ability of a tax-
payer to make an election described in 
paragraph (1), and 
‘‘(ii) such election shall not limit the 
value or use of such incentive. 
‘‘(3) TIMING.—An election described in para-
graph (1) shall be made by the taxpayer not later 
than the date on which the qualified electric bicycle 
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for which the credit is allowed under subsection (a) 
is purchased. 
‘‘(4) REVOCATION
OF
REGISTRATION.—Upon 
determination by the Secretary that a retailer has 
failed to comply with the requirements described in 
paragraph (2), the Secretary may revoke the reg-
istration (as described in subparagraph (A) of such 
paragraph) of such retailer. 
‘‘(5) TAX
TREATMENT
OF
PAYMENTS.—With 
respect to any payment described in paragraph 
(2)(C), such payment— 
‘‘(A) shall not be includible in the gross in-
come of the taxpayer, and 
‘‘(B) with respect to the retailer, shall not 
be deductible under this title. 
‘‘(6) APPLICATION
OF
CERTAIN
OTHER
RE-
QUIREMENTS.—In the case of any election under 
paragraph (1) with respect to any qualified electric 
bicycle— 
‘‘(A) the amount of the reduction under 
subsection (b) shall be determined with respect 
to the modified adjusted gross income of the 
taxpayer for the taxable year preceding the tax-
able year in which such qualified electric bicycle 
was acquired (and not with respect to such in-
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come for the taxable year in which such quali-
fied electric bicycle was acquired), 
‘‘(B) the requirements of paragraphs (1) 
and (2) of subsection (f) shall apply to the tax-
payer who acquired the qualified electric bicycle 
in the same manner as if the credit determined 
under this section with respect to such qualified 
electric bicycle were allowed to such taxpayer, 
and 
‘‘(C) subsection (f)(5) shall not apply. 
‘‘(7) ADVANCE PAYMENT TO REGISTERED RE-
TAILERS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to make advance payments 
to any eligible entity in an amount equal to the 
cumulative amount of the credits allowed under 
subsection (a) with respect to any qualified elec-
tric bicycles sold by such entity for which an 
election described in paragraph (1) has been 
made. 
‘‘(B) EXCESSIVE PAYMENTS.—Rules simi-
lar to the rules of section 6417(c)(6) shall apply 
for purposes of this paragraph. 
‘‘(8) RETAILER.—For purposes of this sub-
section, the term ‘retailer’ means a person engaged 
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in the trade or business of selling qualified electric 
bicycles in a State, the District of Columbia, the 
Commonwealth of Puerto Rico, or any other terri-
tory or possession of the United States.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 1016(a), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘and’’ at the end of paragraph (38), by striking the 
period at the end of paragraph (39) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(40) to the extent provided in section 
36D(f)(1).’’. 
(2) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘36D,’’ after ‘‘36C,’’. 
(3) Section 6213(g)(2) is amended— 
(A) in subparagraph (Z), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (AA), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(BB) an omission of a correct vehicle 
identification number required under section 
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36D(e) (relating to electric bicycles credit) to be 
included on a return.’’. 
(4) Section 6501(m) is amended by inserting 
‘‘36D(f)(5),’’ after ‘‘35(g)(11),’’. 
(5) Section 1324(b)(2) of title 31, United 
States Code, as amended by the preceding provisions 
of this Act, is amended by inserting ‘‘36D,’’ after 
‘‘36C,’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by adding at the end the following new item: 
‘‘Sec. 36D. Electric bicycles.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
the date of the enactment of this Act, in taxable years 
ending after such date. 
(e) TREASURY REPORT.—Not later than 3 years 
after the date of the enactment of this Act, the Secretary 
of the Treasury (or the Secretary’s delegate) shall make 
publicly available a written report specifying the number 
of taxpayers claiming the credit allowed under section 36D 
of the Internal Revenue Code of 1986 (as added by this 
section) and the aggregate dollar amount of such credits 
so allowed. Such information shall be stated separately for 
taxable years beginning in 2026 and 2027, and shall be 
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stated separately with respect to each such years with re-
spect to taxpayers in each of the income brackets to which 
section 1 of such Code applies. 
Subtitle 
D—Lowering 
Costs 
of 
Clean Infrastructure and Resil-
iency 
SEC. 24001. QUALIFYING WATER REUSE PROJECT CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
48H the following new section: 
‘‘SEC. 48I. QUALIFYING WATER REUSE PROJECT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
qualifying water reuse project credit for any taxable year 
is an amount equal to 30 percent of the qualified invest-
ment for such taxable year with respect to any qualifying 
water reuse project of the taxpayer. 
‘‘(b) QUALIFIED INVESTMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment with respect to any 
qualifying water reuse project for any taxable year 
is the basis of qualified property placed in service by 
the taxpayer during such taxable year which is part 
of such qualifying water reuse project. 
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‘‘(2) QUALIFIED PROPERTY.—For purposes of 
this subsection, the term ‘qualified property’ means 
property— 
‘‘(A) which is tangible property, 
‘‘(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able, and 
‘‘(C) which is— 
‘‘(i) constructed, reconstructed, or 
erected by the taxpayer, or 
‘‘(ii) acquired by the taxpayer if the 
original use of such property commences 
with the taxpayer. 
‘‘(3) CERTAIN QUALIFIED PROGRESS EXPENDI-
TURES RULES MADE APPLICABLE.—Rules similar to 
the rules of subsections (c)(4) and (d) of section 46 
(as in effect on the day before the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for 
purposes of this section. 
‘‘(c) QUALIFYING WATER REUSE PROJECT.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualifying water 
reuse project’ means a project which— 
‘‘(A) installs, replaces, or modifies an on-
site water recycling system within an industrial, 
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manufacturing, data center, or food processing 
facility, 
‘‘(B) replaces the use of freshwater, such 
as groundwater, with recycled water from a mu-
nicipal water provider for the production of 
goods or provision of services, or 
‘‘(C) builds or expands a municipal water 
recycling system for the purpose of securing re-
cycled water for the production of goods or pro-
vision of services. 
‘‘(2) PREVAILING WAGE AND APPRENTICESHIP 
REQUIREMENTS.—Such term shall not include any 
project unless such project meets the requirements 
of paragraph (7) and (8) of section 45(b). 
‘‘(d) SPECIAL
RULE
FOR
CERTAIN
PROPERTY 
TRANSFERRED TO UTILITIES.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
transfer property transferred from a person to a 
utility— 
‘‘(A) such property shall be treated as 
qualified property with respect to such person, 
‘‘(B) such person shall be treated as hav-
ing placed such property in service at the time 
of such transfer, 
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‘‘(C) the basis of such person in such prop-
erty which is taken into account under sub-
section (b)(1) shall be the basis of such person 
in such property at the time of such transfer, 
and 
‘‘(D) such property shall not be taken into 
account for purposes of determining any credit 
allowed under this section to such utility. 
‘‘(2) QUALIFIED
TRANSFER
PROPERTY.—For 
purposes of this subsection, the term ‘qualified 
transfer property’ means property transferred from 
a person to a utility if— 
‘‘(A) such property is qualified property 
with respect to such utility, and 
‘‘(B) such person and such utility enter 
into a binding written agreement under which 
such person is treated as eligible for the credit 
allowed under this section with respect to such 
property in lieu of such utility. 
‘‘(e) TERMINATION.—This section shall not apply to 
any property the construction of which begins after De-
cember 31, 2032.’’. 
(b) PART OF INVESTMENT CREDIT.—Section 46, as 
amended by the preceding provisions of this Act, is amend-
ed by striking ‘‘and’’ at the end of paragraph (9), by strik-
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248 
ing the period at the end of paragraph (10) and inserting 
‘‘, and’’, and by adding at the end the following new para-
graph: 
‘‘(11) the qualifying water reuse project cred-
it.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by inserting after the item relating to section 
48H the following new item: 
‘‘Sec. 48I. Qualifying water reuse project credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after the date of the 
enactment of this section under rules similar to the rules 
of section 48(m) of the Internal Revenue Code of 1986 
(as in effect on the date of the enactment of the Revenue 
Reconciliation Act of 1990). 
SEC. 24002. RECYCLING PROPERTY INVESTMENT CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
48I the following new section: 
‘‘SEC. 48J. RECYCLING PROPERTY INVESTMENT CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 46, the 
recycling property investment credit for any taxable year 
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is an amount equal to 30 percent of the qualified invest-
ment for such taxable year. 
‘‘(b) QUALIFIED INVESTMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment for any taxable year is 
the basis of any eligible property placed in service by 
the taxpayer during such taxable year. 
‘‘(2) ELIGIBLE
PROPERTY.—For purposes of 
this section— 
‘‘(A) IN
GENERAL.—The term ‘eligible 
property’ means property— 
‘‘(i) which is qualified recycling prop-
erty, 
‘‘(ii) with respect to which deprecia-
tion (or amortization in lieu of deprecia-
tion) is allowable, and 
‘‘(iii)(I) the construction, reconstruc-
tion, addition, or erection of which is com-
pleted by the taxpayer, or 
‘‘(II) which is acquired by the tax-
payer if the original use of such property 
commences with the taxpayer, and 
‘‘(B) PREVAILING WAGE AND APPRENTICE-
SHIP REQUIREMENTS.—Such term shall not in-
clude any property unless such property meets 
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the requirements of paragraph (7) and (8) of 
section 45(b). 
‘‘(c) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES 
MADE APPLICABLE.—Rules similar to the rules of 
subsections (c)(4) and (d) of section 46 (as in effect 
on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990) shall apply. 
‘‘(2) SPECIAL RULE FOR CERTAIN SUBSIDIZED 
PROPERTY.—Rules similar to section 45(b)(3) shall 
apply. 
‘‘(3) DOMESTIC
CONTENT
BONUS
CREDIT 
AMOUNT.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified investment which satisfies the require-
ment under subparagraph (B), the amount of 
the credit determined under subsection (a) (de-
termined without regard to this paragraph be-
fore the application of subsection (d) and after 
the application of any other provision of this 
section) shall be increased by an amount equal 
to 10 percentage points of the amount so deter-
mined. 
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‘‘(B) REQUIREMENT.—Rules similar to the 
rules of section 45(b)(9)(B) shall apply. 
‘‘(4) PHASEOUT FOR ELECTIVE PAYMENT.—In 
the case of a taxpayer making an election under sec-
tion 6417 with respect to a credit under this section, 
rules similar to the rules of section 45(b)(10) shall 
apply. 
‘‘(d) CREDIT PHASE-OUT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under subsection (a) with respect to any 
qualified investment shall be equal to the product 
of— 
‘‘(A) the amount of the credit determined 
under subsection (a) without regard to this sub-
section, multiplied by 
‘‘(B) the phase-out percentage under para-
graph (2). 
‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 
percentage under this paragraph is equal to— 
‘‘(A) in the case of any eligible property 
with a determination date beginning on or after 
January 1, 2026, and before December 31, 
2032, 100 percent, 
‘‘(B) in the case of any eligible property 
with a determination date beginning on or after 
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January 1, 2033, and before December 31, 
2033, 80 percent, 
‘‘(C) in the case of any eligible property 
with a determination date beginning on or after 
January 1, 2034, and before December 31, 
2034, 60 percent, 
‘‘(D) in the case of any eligible property 
with a determination date beginning on or after 
January 1, 2035, and before December 31, 
2035, 40 percent, 
‘‘(E) in the case of any eligible property 
with a determination date beginning on or after 
January 1, 2036, and before December 31, 
2036, 20 percent, and 
‘‘(F) in the case of any eligible property 
with a determination date beginning on or after 
January 1, 2037, 0 percent. 
‘‘(3) DETERMINATION DATE.—For purposes of 
paragraph (2), the determination date of an eligible 
property is— 
‘‘(A) in the case such property is described 
in subsection (b)(2)(C)(i), the date on which 
the construction, reconstruction, addition, or 
erection of such property begins, and 
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253 
‘‘(B) in any other case, the date on which 
such property is placed in service. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—In the case of 
any eligible property with respect to which credit is al-
lowed under subsection (a)— 
‘‘(1) no other credit or deduction shall be al-
lowed for, or by reason of, such property to the ex-
tent of the amount of such credit, and 
‘‘(2) the basis of such property shall be reduced 
by the amount of such credit. 
‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such regulations or other guidance as the Sec-
retary determines necessary to carry out the purposes of 
this section, including regulations or other guidance which 
provides for requirements for recordkeeping or informa-
tion reporting for purposes of administering the require-
ments of this section. 
‘‘(g) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED RECYCLING PROPERTY.—The 
term ‘qualified recycling property’ has the meaning 
given the term ‘reuse and recycling property’ in sec-
tion 168(m)(3)(A). 
‘‘(2) QUALIFIED REUSE AND RECYCLABLE MA-
TERIALS.—The term ‘qualified reuse and recyclable 
materials’ has the meaning given such term in sec-
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254 
tion 168(m)(3)(B), except that for purposes of this 
section such term includes any video display device 
and any computer device (including computer pe-
ripherals, such as keyboards, mice, speakers, cables, 
printers, and scanners). 
‘‘(3) RECYCLE.—The term ‘recycle’ has the 
meaning given such term in section 168(m)(3)(C), 
except that for purposes of this section such term 
does not include— 
‘‘(A) any method of sorting, processing, 
and aggregating materials from solid waste 
that— 
‘‘(i) does not preserve the original 
quality of such materials, and 
‘‘(ii) results in the aggregated mate-
rial not being usable— 
‘‘(I) for the initial purpose (or a 
substantially similar purpose) of such 
materials, or 
‘‘(II) as feedstock in lieu of vir-
gin feedstock in the production of 
specification grade commodities, or 
‘‘(B) the primary use of waste or qualified 
reuse and recyclable materials— 
‘‘(i) as a fuel or fuel substitute; 
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‘‘(ii) for the production or generation 
of energy (including heat and electricity); 
‘‘(iii) for incineration; 
‘‘(iv) for alternate operating cover; or 
‘‘(v) within the footprint of a land-
fill.’’. 
(b) CREDIT MADE PART OF INVESTMENT CREDIT.— 
Section 46, as amended by the preceding provisions of this 
Act, is amended by striking ‘‘and’’ at the end of paragraph 
(10), by striking the period at the end of paragraph (11) 
and inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(12) the recycling property investment cred-
it.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart E of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by inserting after the item relating to section 48I 
the following new item: 
‘‘48J. Recycling property investment credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
(1) in the case of property described in section 
48J(b)(2)(C)(i) of the Internal Revenue Code of 
1986 (as added by subsection (a)), property which is 
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constructed, reconstructed, added, or erected after 
December 31, 2025, and 
(2) in any other case, property which is placed 
in service after December 31, 2025. 
SEC. 24003. EXCLUSION OF AMOUNTS RECEIVED FROM 
STATE-BASED CATASTROPHE LOSS MITIGA-
TION PROGRAMS. 
(a) IN GENERAL.—Section 139 is amended by redes-
ignating subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) STATE-BASED CATASTROPHE LOSS MITIGATION 
PROGRAMS.— 
‘‘(1) IN GENERAL.—Gross income shall not in-
clude any amount received by an individual as a 
qualified catastrophe loss mitigation payment under 
a program established or administered by a State, or 
a political subdivision or instrumentality thereof, for 
the purpose of making such payments. 
‘‘(2) QUALIFIED CATASTROPHE LOSS MITIGA-
TION PAYMENT.—For purposes of this section, the 
term ‘qualified catastrophe loss mitigation payment’ 
means any amount which is received by an indi-
vidual to make improvements to such individual’s 
residence for the sole purpose of hazard mitigation 
with respect to such residence. 
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‘‘(3) NO INCREASE IN BASIS.—Rules similar to 
the rules of subsection (g)(3) shall apply in the case 
of this subsection.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 139(d) is amended by striking ‘‘and 
qualified’’ and inserting ‘‘, qualified catastrophe 
mitigation payments, and qualified’’. 
(2) Section 139(i) (as redesignated by sub-
section (a)) is amended by striking ‘‘or qualified’’ 
and inserting ‘‘, qualified catastrophe mitigation 
payment, or qualified’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 24004. EXCLUSION FROM GROSS INCOME OF CERTAIN 
EMERGENCY AGRICULTURAL ASSISTANCE. 
(a) IN GENERAL.—Section 139, as amended by the 
preceding provisions of this Act, is amended by redesig-
nating subsection (i) as subsection (j) and by inserting 
after subsection (h) the following new subsection: 
‘‘(i) CERTAIN
AGRICULTURAL
ASSISTANCE.—For 
purposes of this section, the term ‘qualified disaster relief 
payment’ shall include any assistance received under any 
of the following: 
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‘‘(1) Assistance received under the Wildfires 
and Hurricanes Indemnity Program Plus under sub-
part O of part 760 of title 7, Code of Federal Regu-
lations. 
‘‘(2) Assistance received under section 1501 of 
the Agricultural Act of 2014 (7 U.S.C. 9081). 
‘‘(3) Noninsured crop assistance under section 
196 of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7333). 
‘‘(4) Assistance under a food assistance pro-
gram under part 9 of title 7, Code of Federal Regu-
lations. 
‘‘(5) Assistance under title IV of the Agricul-
tural Credit Act of 1978 (16 U.S.C. 2201 et seq.). 
‘‘(6) Assistance under the Quality Loss Assist-
ance Program.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 24005. CREDIT FOR DISASTER MITIGATION EXPENDI-
TURES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 27 the following new section: 
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‘‘SEC. 28. DISASTER MITIGATION EXPENDITURES. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to 30 percent of the expenditures 
paid for qualifying mitigation activities paid or incurred 
by the taxpayer during such taxable year with respect to 
real property owned or leased by the taxpayer. 
‘‘(b) QUALIFYING
MITIGATION
ACTIVITIES.—For 
purposes of this section, the term ‘qualifying mitigation 
activity’ means an activity relating to a housing unit— 
‘‘(1) for property to— 
‘‘(A) improve the strength of a roof deck 
attachment; 
‘‘(B) create a secondary water barrier to 
prevent water intrusion or mitigate against po-
tential water intrusion from wind-driven rain; 
‘‘(C) improve the durability, impact resist-
ance (not less than class 3 or 4 rating), or fire 
resistance (not less than class A rating) of a 
roof covering; 
‘‘(D) brace gable-end walls; 
‘‘(E) reinforce the connection between a 
roof and supporting wall; 
‘‘(F) protect openings from penetration by 
wind-borne debris; 
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‘‘(G) protect exterior doors and garages 
from natural hazards; 
‘‘(H) complete measures contained in the 
publication of the Federal Emergency Manage-
ment Agency entitled ‘Wind Retrofit Guide for 
Residential Buildings’ (P–804); 
‘‘(I) elevate the qualified dwelling unit, as 
well as utilities, machinery, or equipment, above 
the base flood elevation or other applicable min-
imum elevation requirement; 
‘‘(J) seal walls in the basement of the 
qualified dwelling unit using waterproofing com-
pounds; or 
‘‘(K) protect propane tanks or other exter-
nal fuel sources; 
‘‘(2) to install— 
‘‘(A) check valves to prevent flood water 
from backing up into drains; 
‘‘(B) flood vents, breakaway walls or open 
lattice for homes located in V zones; 
‘‘(C) a stormwater drainage system or im-
prove an existing system; 
‘‘(D) natural or nature-based features for 
flood control, including living shorelines; 
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‘‘(E) roof coverings, sheathing, flashing, 
roof and attic vents, eaves, or gutters that con-
form to ignition-resistant construction stand-
ards; 
‘‘(F) wall components for wall assemblies 
that conform to ignition-resistant construction 
standards; 
‘‘(G) a wall-to-foundation anchor or con-
nector, or a shear transfer anchor or connector; 
‘‘(H) wood structural panel sheathing for 
strengthening cripple walls; 
‘‘(I) anchorage of the masonry chimney to 
the framing; 
‘‘(J) prefabricated lateral resisting sys-
tems; 
‘‘(K) a standby generator system con-
sisting of a standby generator and an automatic 
transfer switch; 
‘‘(L) a storm shelter that meets the design 
and construction standards established by the 
International Code Council and the National 
Storm Shelter Association (ICC–500), or a safe 
room that satisfies the criteria contained in— 
‘‘(i) the publication of the Federal 
Emergency Management Agency entitled 
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‘Safe Rooms for Tornadoes and Hurri-
canes’ (P–361); or 
‘‘(ii) the publication of the Federal 
Emergency Management Agency entitled 
‘Taking Shelter from the Storm’ (P–320); 
‘‘(M) a lightning protection system; 
‘‘(N) exterior walls, doors, windows, or 
other exterior dwelling unit elements that con-
form to ignition-resistant construction stand-
ards; 
‘‘(O) exterior deck or fence components 
that conform to ignition-resistant construction 
standards; 
‘‘(P) structure-specific water hydration 
systems, including fire mitigation systems such 
as interior sprinkler systems; 
‘‘(Q) flood openings for fully enclosed 
areas below the lowest floor of the dwelling 
unit; 
‘‘(R) lateral bracing for wall elements, 
foundation elements, and garage doors or other 
large openings to resist seismic loads; or 
‘‘(S) automatic shutoff valves for water 
and gas lines; 
‘‘(3) for services or equipment to— 
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‘‘(A) create buffers around the qualified 
dwelling unit through the removal or reduction 
of flammable vegetation, including vertical 
clearance of tree branches; 
‘‘(B) create buffers around the dwelling 
unit through— 
‘‘(i) the removal of exterior deck or 
fence components or ignition-prone land-
scape features; or 
‘‘(ii) replacement of the components 
or features described in clause (i) with 
components or features that conform to ig-
nition-resistant construction standards; 
‘‘(C) perform fire maintenance procedures 
identified by the Federal Emergency Manage-
ment Agency or the United States Forest Serv-
ice, including fuel management techniques such 
as creating fuel and fire breaks; or 
‘‘(D) replace flammable vegetation with 
less flammable species; 
‘‘(4) for property relating to satisfying the 
standards required for receipt of a FORTIFIED 
designation from the Insurance Institute for Busi-
ness and Home Safety, provided that the qualified 
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264 
dwelling unit receives such designation following in-
stallation of such property; 
‘‘(5) for property relating to satisfying the 
standards required for receipt of a Wildfire Prepared 
Homes designation from the Insurance Institute for 
Business and Home Safety, provided that the quali-
fied dwelling unit receives such designation following 
installation of such property; or 
‘‘(6) for any other hazard mitigation activity 
identified by the President, in consultation with the 
Administrator of the Federal Emergency Manage-
ment Agency, for mitigation of a natural hazard. 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to expenditures made in 
the ordinary course of the taxpayer’s trade or busi-
ness (or, in the case of expenditures made by a 
State, would have been expenditures made in the or-
dinary course of the taxpayer’s trade or business if 
made by the taxpayer) shall be treated as a credit 
listed in section 38(b) for taxable year (and not al-
lowed under subsection (a)). 
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265 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year. 
‘‘(d) REDUCTION OF CREDIT PERCENTAGE WHERE 
TAXPAYER EXPENDITURES LESS THAN 30 PERCENT.— 
‘‘(1) IN GENERAL.—If the expenditure percent-
age with respect to any item of expenditure de-
scribed under subsection (a) is less than 30 percent, 
subsection (a) shall be applied by substituting ‘the 
expenditure percentage’ for ‘30 percent’ with respect 
to such item of expenditure. 
‘‘(2) EXPENDITURE
PERCENTAGE.—For pur-
poses of this section, the term ‘expenditure percent-
age’ means, with respect to any item of expenditure 
described under subsection (a) any portion of which 
is paid or incurred by a State, the ratio (expressed 
as a percentage) of— 
‘‘(A) the taxpayer’s expenditure for such 
item, divided by 
‘‘(B) the sum of the taxpayer’s and such 
State’s expenditures for such item. 
‘‘(e) SPECIAL RULES.— 
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266 
‘‘(1) TREATMENT OF EXPENDITURES RELATED 
TO MARKETABLE TIMBER.—An expenditure shall not 
be taken into account for purposes of this section 
(whether made by the taxpayer or a State) if such 
expenditure is properly allocable to timber which is 
sold or exchanged by the taxpayer. The preceding 
sentence shall not apply to the extent that such 
amount exceeds the gain on such sale or exchange. 
‘‘(2) TREATMENT OF REIMBURSEMENTS.—Any 
amount originally paid or incurred by the taxpayer 
which is reimbursed by a State under a qualified 
State disaster mitigation program shall be treated as 
paid by such State (and not by such taxpayer). 
‘‘(3) BASIS REDUCTION.—For purposes of this 
subtitle, if the basis of any property would (but for 
this paragraph) be determined by taking into ac-
count any expenditure described under subsection 
(a), the basis of such property shall be reduced by 
the amount of the credit allowed under subsection 
(a) with respect to such expenditure (determined 
without regard to subsection (c)). 
‘‘(4) DENIAL
OF
DOUBLE
BENEFIT.—The 
amount of any deduction or other credit allowable 
under this chapter for any expenditure for which a 
credit is allowable under subsection (a) shall be re-
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267 
duced by the amount of credit allowed under such 
subsection for such expenditure (determined without 
regard to subsection (c)).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b), as amended by the preceding 
provisions of this Act, is amended by striking ‘‘plus’’ 
at the end of paragraph (42), by striking the period 
at the end of paragraph (43) and inserting ‘‘, plus’’, 
and by adding at the end the following new para-
graph: 
‘‘(44) the portion of the disaster mitigation ex-
penditures credit to which section 28(c)(1) applies.’’. 
(2) Section 1016(a), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘and’’ at the end of paragraph (39), by striking the 
period at the end of paragraph (40) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(41) to the extent provided in section 
28(e)(2).’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 27 the fol-
lowing new item: 
‘‘Sec. 28. Qualified disaster mitigation expenditures.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after the date of the enactment of this Act, in taxable 
years ending after such date. 
SEC. 24006. ESTABLISHMENT OF ELECTRIC POWER TRANS-
MISSION LINE CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
48F the following new section: 
‘‘SEC. 48G. QUALIFYING ELECTRIC POWER TRANSMISSION 
LINE CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 46, the qualifying electric power transmission line 
credit for any taxable year is an amount equal to 30 per-
cent of the qualified investment for such taxable year with 
respect to any qualifying electric power transmission line 
property of the taxpayer. 
‘‘(b) QUALIFYING INVESTMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the qualified investment for any taxable year is 
the basis of any qualifying electric power trans-
mission line property placed in service by the tax-
payer during such taxable year. 
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‘‘(2) CERTAIN QUALIFIED PROGRESS EXPENDI-
TURES RULES MADE APPLICABLE.—Rules similar to 
the rules of subsections (c)(4) and (d) of section 46 
(as in effect on the day before the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for 
purposes of this section. 
‘‘(c) QUALIFYING ELECTRIC POWER TRANSMISSION 
LINE PROPERTY.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualifying elec-
tric power transmission line property’ means any 
overhead, submarine, or underground property— 
‘‘(A) which is a qualifying electric power 
transmission line that transmits electricity— 
‘‘(i) across not less than 2 States or 
not less than 150 continuous miles, or 
‘‘(ii) across the Outer Continental 
Shelf (as defined in section 2 of the Outer 
Continental Lands Act (43 U.S.C. 1331)), 
or 
‘‘(B) which is related transmission prop-
erty. 
‘‘(2) PREVAILING WAGE AND APPRENTICESHIP 
REQUIREMENTS.—Such term shall not include any 
property unless such property meets the require-
ments of paragraph (7) and (8) of section 45(b). 
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shall have 1 year from the date of acceptance 
by the Secretary of the application during 
which to provide to the Secretary evidence that 
the requirements of the certification have been 
met. 
‘‘(C) PERIOD OF ISSUANCE.—An applicant 
which receives a certification shall have 3 years 
from the date of issuance of the certification in 
order to place the project in service and if such 
project is not placed in service by that time pe-
riod, then the certification shall no longer be 
valid. 
‘‘(3) SELECTION
CRITERIA.—Rules similar to 
the rules of section 48C(d)(3) shall apply. 
‘‘(4) REVIEW AND REDISTRIBUTION.— 
‘‘(A) REVIEW.—Not later than 4 years 
after the date of enactment of this section, the 
Secretary shall review the credits allocated 
under this section as of such date. 
‘‘(B) 
REDISTRIBUTION.—The 
Secretary 
may reallocate credits awarded under this sec-
tion if the Secretary determines that— 
‘‘(i) there is an insufficient quantity 
of qualifying applications for certification 
pending at the time of the review, or 
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