Title: Efficient Vehicle Leadership Act of 2019
Policy area: Taxation

Summary:
Efficient Vehicle Leadership Act of 2019
This bill allows a new tax credit for certain fuel-efficient motor vehicles. It also imposes a fee on manufacturers of fuel guzzler motor vehicles with less efficient fuel economy ratings.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7862 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 7862

 To amend the Internal Revenue Code of 1986 to provide tax incentives 
   and fees for increasing motor vehicle fuel economy, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 30, 2020

    Mr. Casten of Illinois introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
   Committee on Energy and Commerce, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide tax incentives 
   and fees for increasing motor vehicle fuel economy, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Efficient Vehicle 
Leadership Act of 2019''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act 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.

SEC. 2. TAX CREDIT FOR FUEL-EFFICIENT MOTOR VEHICLES.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to other credits) is amended by inserting after section 30D 
the following new section:

``SEC. 30E. FUEL PERFORMANCE REBATE.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to the amount determined under paragraph (2) with 
        respect to any new qualified fuel-efficient motor vehicle 
        placed in service by the taxpayer during the taxable year.
            ``(2) Credit amount.--With respect to each new qualified 
        fuel-efficient motor vehicle, the amount determined under this 
        paragraph shall be equal to the product of--
                    ``(A) the absolute value of the difference between 
                the fuel-economy rating and the reference fuel-economy 
                rating for such motor vehicle for the model year,
                    ``(B) 100, and
                    ``(C) the applicable amount.
            ``(3) Applicable amount.--For purposes of paragraph (2)(C), 
        the applicable amount is equal to--
                    ``(A) in the case of model year 2021--
                            ``(i) $1,000, or
                            ``(ii) $2,000, if the fuel-economy rating 
                        for such motor vehicle is at least 50 percent 
                        more efficient than the reference fuel-economy 
                        rating for such motor vehicle as determined 
                        under paragraph (2)(A), and
                    ``(B) in the case of any succeeding model year--
                            ``(i) $1,500,
                            ``(ii) $2,500, if the fuel-economy rating 
                        for such motor vehicle is at least 50 percent 
                        more efficient than the reference fuel-economy 
                        rating for such motor vehicle as determined 
                        under paragraph (2)(A), or
                            ``(iii) $3,500, if the fuel-economy rating 
                        for such motor vehicle is at least 75 percent 
                        more efficient than the reference fuel-economy 
                        rating for such motor vehicle as determined 
                        under paragraph (2)(A).
    ``(b) New Qualified Fuel-Efficient Motor Vehicle.--For purposes of 
this section, the term `new qualified fuel-efficient motor vehicle' 
means a passenger automobile or light truck--
            ``(1) which is treated as a motor vehicle for purposes of 
        title II of the Clean Air Act,
            ``(2) which achieves a fuel-economy rating that is more 
        efficient than the reference fuel-economy rating for such motor 
        vehicle for the model year,
            ``(3) for which standards are prescribed pursuant to 
        section 32902 of title 49, United States Code,
            ``(4) the original use of which commences with the 
        taxpayer,
            ``(5) which is acquired for use or lease by the taxpayer 
        and not for resale, and
            ``(6) which is made by a manufacturer beginning with model 
        year 2021.
    ``(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 subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Refundable personal credit.--
                    ``(A) In general.--For purposes of this title, the 
                credit allowed under subsection (a) for any taxable 
                year (determined after application of paragraph (1)) 
                shall be treated as a credit allowable under subpart C 
                for such taxable year (and not allowed under subsection 
                (a)).
                    ``(B) Refundable credit may be transferred.--
                            ``(i) In general.--A taxpayer may, in 
                        connection with the purchase of a new qualified 
                        fuel-efficient motor vehicle, transfer any 
                        refundable credit described in subparagraph (A) 
                        to any person who is in the trade or business 
                        of selling new qualified fuel-efficient motor 
                        vehicles and who sold such vehicle to the 
                        taxpayer, but only if such person clearly 
                        discloses to such taxpayer, through the use of 
                        a window sticker attached to the new qualified 
                        fuel-efficient vehicle--
                                    ``(I) the amount of the refundable 
                                credit described in subparagraph (A) 
                                with respect to such vehicle, and
                                    ``(II) a notification that the 
                                taxpayer will not be eligible for any 
                                credit under section 30D with respect 
                                to such vehicle unless the taxpayer 
                                elects not to have this section apply 
                                with respect to such vehicle.
                            ``(ii) Certification.--A transferee of a 
                        refundable credit described in subparagraph (A) 
                        may not claim such credit unless such claim is 
                        accompanied by a certification to the Secretary 
                        that the transferee reduced the price the 
                        taxpayer paid for the new qualified fuel-
                        efficient motor vehicle by the entire amount of 
                        such refundable credit.
                            ``(iii) Consent required for revocation.--
                        Any transfer under clause (i) may be revoked 
                        only with the consent of the Secretary.
                            ``(iv) Regulations.--The Secretary may 
                        prescribe such regulations as necessary to 
                        ensure that any refundable credit described in 
                        clause (i) is claimed once and not 
                        retransferred by a transferee.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Fuel-economy rating.--The term `fuel-economy rating' 
        means, with respect to any motor vehicle, the combined fuel-
        economy rating for such motor vehicle, expressed in gallons per 
        mile, determined in accordance with section 32904 of title 49, 
        United States Code.
            ``(2) Model year.--The term `model year' has the meaning 
        given such term under section 32901(a) of such title 49.
            ``(3) Motor vehicle.--The term `motor vehicle' means any 
        vehicle which is manufactured primarily for use on public 
        streets, roads, and highways (not including a vehicle operated 
        exclusively on a rail or rails) and which has at least 4 
        wheels.
            ``(4) Reference fuel-economy rating.--The term `reference 
        fuel-economy rating' means, with respect to any motor vehicle, 
        the fuel economy standard for such motor vehicle, expressed in 
        gallons per mile, calculated by applying the relevant vehicle 
        attributes to the mathematical function published pursuant to 
        section 32902(b)(3)(A) of title 49, United States Code.
            ``(5) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
    ``(e) Special Rules.--
            ``(1) Basis reduction.--For purposes of this subtitle, the 
        basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (c)).
            ``(2) No double benefit.--No other credit shall be 
        allowable under this chapter for a new qualified fuel-efficient 
        motor vehicle with respect to which a credit is allowed under 
        this section.
            ``(3) Property used by tax-exempt entity.--In the case of a 
        vehicle whose use is described in paragraph (3) or (4) of 
        section 50(b) and which is not subject to a lease, the person 
        who sold such vehicle to the person or entity using such 
        vehicle shall be treated as the taxpayer that placed such 
        vehicle in service, but only if such person clearly discloses 
        to such person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such vehicle 
        (determined without regard to subsection (c)). For purposes of 
        subsection (c), property to which this paragraph applies shall 
        be treated as of a character subject to an allowance for 
        depreciation.
            ``(4) Property used outside united states, etc., not 
        qualified.--No credit shall be allowable under subsection (a) 
        with respect to any property referred to in section 50(b)(1) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(5) Recapture.--The Secretary shall, by regulations, 
        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 (including recapture in 
        the case of a lease period of less than the economic life of a 
        vehicle).
            ``(6) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(7) Interaction with air quality and motor vehicle safety 
        standards.--A motor vehicle shall not be considered eligible 
        for a credit under this section unless such vehicle is in 
        compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provisions under a waiver under section 209(b) of the 
                Clean Air Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.
            ``(8) Inflation adjustment.--In the case of any model year 
        beginning in a calendar year after 2021, each dollar amount in 
        subsection (a)(3)(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 model year begins, determined by substituting 
                `2020' for `2016' in subparagraph (A)(ii) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $100.
    ``(f) Regulations.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall promulgate such regulations as necessary to 
        carry out the provisions of this section.
            ``(2) Coordination in prescription of certain 
        regulations.--The Secretary of the Treasury, in coordination 
        with the Secretary of Transportation and the Administrator of 
        the Environmental Protection Agency, shall prescribe such 
        regulations as necessary to determine whether a motor vehicle 
        meets the requirements to be eligible for a credit under this 
        section.''.
    (b) Credit Allowed Against Alternative Minimum Tax.--Section 
38(c)(4)(B) is amended by redesignating clauses (i) through (xii) as 
clauses (ii) through (xiii), respectively, and by inserting before 
clause (ii) (as so redesignated) the following new clause:
                            ``(i) the credit determined under section 
                        30E,''.
    (c) Display of Credit.--Section 32908(b)(1) of title 49, United 
States Code, is amended--
            (1) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), and
            (2) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) the amount of the fuel-efficient motor 
                vehicle credit allowable with respect to the sale of 
                the automobile under section 30E of the Internal 
                Revenue Code of 1986 (26 U.S.C. 30E).''.
    (d) Conforming Amendments.--
            (1) Section 38(b) is amended by striking ``plus'' at the 
        end of paragraph (34), by striking the period at the end of 
        paragraph (35) and inserting ``, plus'', and by adding at the 
        end the following new paragraph:
            ``(36) the portion of the fuel performance rebate to which 
        section 30E(c)(1) applies.''.
            (2) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (37), by striking the period at the end of 
        paragraph (38) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(39) to the extent provided in section 30E(e)(1).''.
            (3) Section 6501(m) is amended by inserting ``30E(e)(6),'' 
        after ``30D(e)(4),''.
            (4) The table of section for subpart C of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30D the following new item:

``Sec. 30E. Fuel performance rebate.''.

SEC. 3. FUEL PERFORMANCE FEE.

    (a) In General.--Section 4064 is amended to read as follows:

``SEC. 4064. FUEL PERFORMANCE FEE.

    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed on the sale by 
        the manufacturer of each fuel guzzler motor vehicle a tax equal 
        to the product of--
                    ``(A) the absolute value of the difference between 
                the fuel-economy rating and the reference fuel-economy 
                rating for such motor vehicle for the model year,
                    ``(B) 100, and
                    ``(C) the applicable amount.
            ``(2) Applicable amount.--For purposes of paragraph (1)(C), 
        the applicable amount is equal to--
                    ``(A) $1,500,
                    ``(B) $2,500, if the fuel-economy rating for such 
                motor vehicle is more than 50 percent less efficient 
                than the reference fuel-economy rating for such motor 
                vehicle as determined under paragraph (1)(A), or
                    ``(C) $3,500, if the fuel-economy rating for such 
                motor vehicle is more than 75 percent less efficient 
                than the reference fuel-economy rating for such motor 
                vehicle as determined under paragraph (1)(A).
    ``(b) Fuel Guzzler Motor Vehicle.--For purposes of this section--
            ``(1) In general.--The term `fuel guzzler motor vehicle' 
        means a passenger automobile or light truck--
                    ``(A) which is treated as a motor vehicle for 
                purposes of title II of the Clean Air Act,
                    ``(B) which achieves a fuel-economy rating that is 
                less efficient than the reference fuel-economy rating 
                for such motor vehicle for the model year,
                    ``(C) which has a gross vehicle weight rating of 
                not more than 8,500 pounds, and
                    ``(D) which is made by a manufacturer beginning 
                with model year 2023.
            ``(2) Exception for emergency vehicles.--The term `fuel 
        guzzler motor vehicle' does not include any vehicle sold for 
        use and used--
                    ``(A) as an ambulance or combination ambulance-
                hearse,
                    ``(B) by the United States or by a State or local 
                government for police or other law enforcement 
                purposes, or
                    ``(C) for other emergency uses prescribed by the 
                Secretary by regulations.
    ``(c) Other Definitions.--For purposes of this section--
            ``(1) Fuel-economy rating.--The term `fuel-economy rating' 
        means, with respect to any motor vehicle, the combined fuel-
        economy rating for such motor vehicle, expressed in gallons per 
        mile, determined in accordance with section 32904 of title 49, 
        United States Code.
            ``(2) Model year.--The term `model year' has the meaning 
        given such term under section 32901(a) of such title 49.
            ``(3) Motor vehicle.--The term `motor vehicle' means any 
        vehicle which is manufactured primarily for use on public 
        streets, roads, and highways (not including a vehicle operated 
        exclusively on a rail or rails) and which has at least 4 
        wheels.
            ``(4) Reference fuel-economy rating.--The term `reference 
        fuel-economy rating' means, with respect to any motor vehicle, 
        the fuel economy standard for such motor vehicle, expressed in 
        gallons per mile, calculated by applying the relevant vehicle 
        attributes to the mathematical function published pursuant to 
        section 32902(b)(3)(A) of title 49, United States Code.
            ``(5) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
    ``(d) Inflation Adjustment.--In the case of any model year 
beginning in a calendar year after 2023, each dollar amount in 
subsection (a)(2) shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the model year 
        begins, determined by substituting `2022' for `2016' in 
        subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence shall be rounded 
to the nearest multiple of $100.''.
    (b) Conforming Amendments.--
            (1) The heading for part I of subchapter A of chapter 32 is 
        amended by striking ``gas'' and inserting ``fuel''.
            (2) The table of parts for subchapter A of chapter 32 is 
        amended by striking ``Gas'' in the item relating to part I and 
        inserting ``Fuel''.
            (3) The table of sections for part I of subchapter A of 
        chapter 32 is amended by striking ``Gas'' in the item relating 
        to section 4064 and inserting ``Fuel''.
            (4) The heading for subsection (d) of section 1016 is 
        amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel 
        Performance Fee''.
            (5) The heading for subsection (e) of section 4217 is 
        amended by striking ``Gas Guzzler Tax'' and inserting ``Fuel 
        Performance Fee''.
            (6) The heading for subparagraph (B) of section 4217(e)(3) 
        is amended by striking ``gas guzzler tax'' and inserting ``fuel 
        performance fee''.
            (7) Section 4217(e) is amended by striking ``gas guzzler 
        tax'' each place it appears and inserting ``fuel performance 
        fee''.
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