What Does the New Inflation Reduction Act (HR5376) Say About Electric Vehicles?

Here’s some of the verbiage concerning electric vehicles as the US moves forward to address climate change

PART 4—CLEAN VEHICLES

SEC. 13401. CLEAN VEHICLE CREDIT.

(a) PER VEHICLE DOLLAR LIMITATION.—Section 30D(b) is amended by striking paragraphs (2) and (3) and inserting the following:
‘‘(2) CRITICAL MINERALS.—In the case of a vehicle with respect to which the requirement described in subsection (e)(1)(A) is satisfied, the amount determined under this paragraph is $3,750.
‘‘(3) BATTERY COMPONENTS.—In the case of a vehicle with respect to which the requirement described in subsection (e)(2)(A) is satisfied, the amount determined under this paragraph is $3,750.’’. (b) FINAL ASSEMBLY.—Section 30D(d) is amended—
(1) in paragraph (1)—
(A) in subparagraph (E), by striking ‘‘and’’ at the end,
(B) in subparagraph (F)(ii), by striking the period at the end and inserting ‘‘, and’’, and
(C) by adding at the end the following:
‘‘(G) the final assembly of which occurs within North America.’’,
(2) by adding at the end the following:
‘‘(5) FINAL ASSEMBLY.—For purposes of paragraph (1)(G), the term ‘final assembly’ means the process by which a manufacturer produces a new clean vehicle at, or through the use of, a plant, factory, or other place from which the vehicle is delivered to a dealer or importer with all component parts necessary for the mechanical operation of the vehicle included with the vehicle, whether or not the component parts are permanently installed in or on the vehicle.’’
(c) DEFINITION OF NEW CLEAN VEHICLE.—
(1) IN GENERAL.—Section 30D(d), as amended by the preceding provisions of this section, is amended—
(A) in the heading, by striking ‘‘QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR’’ and inserting ‘‘CLEAN’’,
(B) in paragraph (1)—
(i) in the matter preceding subparagraph (A), by striking ‘‘qualified plug-in electric drive motor’’ and inserting ‘‘clean’’,
(ii) in subparagraph (C), by inserting ‘‘qualified’’ before ‘‘manufacturer’’,
(iii) in subparagraph (F)—
(I) in clause (i), by striking ‘‘4’’ and inserting ‘‘7’’, and
(II) in clause (ii), by striking ‘‘and’’ at the end,
(iv) in subparagraph (G), by striking the period at the end and inserting ‘‘, and’’, and
(v) by adding at the end the following:
‘‘(H) for which the person who sells any vehicle to the taxpayer furnishes a report to the taxpayer and to the Secretary, at such time and in such manner as the Secretary shall provide, containing—
‘‘(i) the name and taxpayer identification number of the taxpayer,
‘‘(ii) the vehicle identification number of the vehicle, unless, in accordance with any applicable rules promulgated by the Secretary of Transportation, the vehicle is not assigned such a number,
‘‘(iii) the battery capacity of the vehicle,
‘‘(iv) verification that original use of the vehicle commences with the taxpayer, and
‘‘(v) the maximum credit under this section allowable to the taxpayer with respect to the vehicle.’’, (C) in paragraph (3)—
(i) in the heading, by striking ‘‘MANUFACTURER’’ and inserting ‘‘QUALIFIED MANUFACTURER’’,
(ii) by striking ‘‘The term ‘manufacturer’ has the meaning given such term in’’ and inserting ‘‘The term ‘qualified manufacturer’ means any manufacturer (within the meaning of the’’, and
(iii) by inserting ‘‘) which enters into a written agreement with the Secretary under which such manufacturer agrees to make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) providing vehicle identification numbers and such other information related to each vehicle manufactured by such manufacturer as the Secretary may require’’ before the period at the end, and
(D) by adding at the end the following:
‘‘(6) NEW QUALIFIED FUEL CELL MOTOR VEHICLE.—For purposes of this section, the term ‘new clean vehicle’ shall include any new qualified fuel cell motor vehicle (as defined in section 30B(b)(3)) which meets the requirements under subparagraphs (G) and (H) of paragraph (1).’’.
(2) CONFORMING AMENDMENTS.—Section 30D is amended— H. R. 5376—139
(A) in subsection (a), by striking ‘‘new qualified plugin electric drive motor vehicle’’ and inserting ‘‘new clean vehicle’’, and
(B) in subsection (b)(1), by striking ‘‘new qualified plugin electric drive motor vehicle’’ and inserting ‘‘new clean vehicle’’.
(d) ELIMINATION OF LIMITATION ON NUMBER OF VEHICLES ELIGIBLE FOR CREDIT.—Section 30D is amended by striking subsection (e).
(e) CRITICAL MINERAL AND BATTERY COMPONENT REQUIREMENTS.—
(1) IN GENERAL.—Section 30D, as amended by the preceding provisions of this section, is amended by inserting after subsection (d) the following: ‘‘(e) CRITICAL MINERAL AND BATTERY COMPONENT REQUIREMENTS.— ‘‘(1) CRITICAL MINERALS REQUIREMENT.— ‘‘(A) IN GENERAL.—The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the applicable critical minerals (as defined in section 45X(c)(6)) contained in such battery that were—
‘‘(i) extracted or processed—
‘‘(I) in the United States, or
‘‘(II) in any country with which the United States has a free trade agreement in effect, or
‘‘(ii) recycled in North America, is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
‘‘(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the applicable percentage shall be—
‘‘(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 40 percent,
‘‘(ii) in the case of a vehicle placed in service during calendar year 2024, 50 percent,
‘‘(iii) in the case of a vehicle placed in service during calendar year 2025, 60 percent,
‘‘(iv) in the case of a vehicle placed in service during calendar year 2026, 70 percent, and
‘‘(v) in the case of a vehicle placed in service after December 31, 2026, 80 percent.
‘‘(2) BATTERY COMPONENTS.—
‘‘(A) IN GENERAL.—The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the components contained in such battery that were manufactured or assembled in North America is equal to or greater than the applicable percentage (as certified by the qualified manufacturer, in such form or manner as prescribed by the Secretary).
‘‘(B) APPLICABLE PERCENTAGE.—For purposes of subparagraph (A), the applicable percentage shall be—
‘‘(i) in the case of a vehicle placed in service after the date on which the proposed guidance described in paragraph (3)(B) is issued by the Secretary and before January 1, 2024, 50 percent,
‘‘(ii) in the case of a vehicle placed in service during calendar year 2024 or 2025, 60 percent,
‘‘(iii) in the case of a vehicle placed in service during calendar year 2026, 70 percent,
‘‘(iv) in the case of a vehicle placed in service during calendar year 2027, 80 percent,
‘‘(v) in the case of a vehicle placed in service during calendar year 2028, 90 percent,
‘‘(vi) in the case of a vehicle placed in service after December 31, 2028, 100 percent.
‘‘(3) REGULATIONS AND GUIDANCE.—
‘‘(A) IN GENERAL.—The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.
‘‘(B) DEADLINE FOR PROPOSED GUIDANCE.—Not later than December 31, 2022, the Secretary shall issue proposed guidance with respect to the requirements under this subsection.’’.
(2) EXCLUDED ENTITIES.—Section 30D(d), as amended by the preceding provisions of this section, is amended by adding at the end the following:
‘‘(7) EXCLUDED ENTITIES.—For purposes of this section, the term ‘new clean vehicle’ shall not include—
‘‘(A) any vehicle placed in service after December 31, 2024, with respect to which any of the applicable critical minerals contained in the battery of such vehicle (as described in subsection (e)(1)(A)) were extracted, processed, or recycled by a foreign entity of concern (as defined in section 40207(a)(5) of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741(a)(5))), or
‘‘(B) any vehicle placed in service after December 31, 2023, with respect to which any of the components contained in the battery of such vehicle (as described in subsection (e)(2)(A)) were manufactured or assembled by a foreign entity of concern (as so defined).’’.
(f) SPECIAL RULES.—Section 30D(f) is amended by adding at the end the following:
‘‘(8) ONE CREDIT PER VEHICLE.—In the case of any vehicle, the credit described in subsection (a) shall only be allowed once with respect to such vehicle, as determined based upon the vehicle identification number of such vehicle.
‘‘(9) VIN REQUIREMENT.—No credit shall be allowed under this section with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.
‘‘(10) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—
‘‘(A) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if—
‘‘(i) the lesser of—
‘‘(I) the modified adjusted gross income of the taxpayer for such taxable year, or
‘‘(II) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds
‘‘(ii) the threshold amount.
‘‘(B) THRESHOLD AMOUNT.—For purposes of subparagraph (A)(ii), the threshold amount shall be—
‘‘(i) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $300,000,
‘‘(ii) in the case of a head of household (as defined in section 2(b)), $225,000, and
‘‘(iii) in the case of a taxpayer not described in clause (i) or (ii), $150,000.
‘‘(C) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this paragraph, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.
‘‘(11) MANUFACTURER’S SUGGESTED RETAIL PRICE LIMITATION.—
‘‘(A) IN GENERAL.—No credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation.
‘‘(B) APPLICABLE LIMITATION.—For purposes of subparagraph (A), the applicable limitation for each vehicle classification is as follows:
‘‘(i) VANS.—In the case of a van, $80,000.
‘‘(ii) SPORT UTILITY VEHICLES.—In the case of a sport utility vehicle, $80,000.
‘‘(iii) PICKUP TRUCKS.—In the case of a pickup truck, $80,000.
‘‘(iv) OTHER.—In the case of any other vehicle, $55,000.
‘‘(C) REGULATIONS AND GUIDANCE.—For purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.’’.
(g) TRANSFER OF CREDIT.—
(1) IN GENERAL.—Section 30D is amended by striking subsection (g) and inserting the following: ‘‘(g) TRANSFER OF CREDIT.— ‘‘(1) IN GENERAL.—Subject to such regulations or other guidance as the Secretary determines necessary, if the taxpayer who acquires a new clean vehicle elects the application of this subsection with respect to such vehicle, the credit which would (but for this subsection) be allowed to such taxpayer with respect to such vehicle shall be allowed to the eligible entity specified in such election (and not to such taxpayer).
‘‘(2) ELIGIBLE ENTITY.—For purposes of this subsection, the term ‘eligible entity’ means, with respect to the vehicle for which the credit is allowed under subsection (a), the dealer which sold such vehicle to the taxpayer and has—
‘‘(A) subject to paragraph (4), registered with the Secretary for purposes of this paragraph, at such time, and in such form and manner, as the Secretary may prescribe,
‘‘(B) prior to the election described in paragraph (1) and not later than at the time of such sale, disclosed to the taxpayer purchasing such vehicle—
‘‘(i) the manufacturer’s suggested retail price,
‘‘(ii) the value of the credit allowed and any other incentive available for the purchase of such vehicle, and
‘‘(iii) the amount provided by the dealer to such taxpayer as a condition of the election described in paragraph (1),
‘‘(C) not later than at the time of such sale, made payment to such taxpayer (whether in cash or in the form of a partial payment or down payment for the purchase of such vehicle) in an amount equal to the credit otherwise allowable to such taxpayer, and
‘‘(D) with respect to any incentive otherwise available for the purchase of a vehicle for which a credit is allowed under this section, including any incentive in the form of a rebate or discount provided by the dealer or manufacturer, ensured that—
‘‘(i) the availability or use of such incentive shall not limit the ability of a taxpayer 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 paragraph (1) shall be made by the taxpayer not later than the date on which the vehicle for which the credit is allowed under subsection (a) is purchased.
‘‘(4) REVOCATION OF REGISTRATION.—Upon determination by the Secretary that a dealer has failed to comply with the requirements described in paragraph (2), the Secretary may revoke the registration (as described in subparagraph (A) of such paragraph) of such dealer.
‘‘(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 income of the taxpayer, and
‘‘(B) with respect to the dealer, shall not be deductible under this title.
‘‘(6) APPLICATION OF CERTAIN OTHER REQUIREMENTS.—In the case of any election under paragraph (1) with respect to any vehicle—
‘‘(A) the requirements of paragraphs (1) and (2) of subsection (f) shall apply to the taxpayer who acquired the vehicle in the same manner as if the credit determined under this section with respect to such vehicle were allowed to such taxpayer,
‘‘(B) paragraph (6) of such subsection shall not apply, and
‘‘(C) the requirement of paragraph (9) of such subsection (f) shall be treated as satisfied if the eligible entity provides the vehicle identification number of such vehicle to the Secretary in such manner as the Secretary may provide.
‘‘(7) ADVANCE PAYMENT TO REGISTERED DEALERS.—
‘‘(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 vehicles sold by such entity for which an election described in paragraph (1) has been made.
‘‘(B) EXCESSIVE PAYMENTS.—Rules similar to the rules of section 6417(d)(6) shall apply for purposes of this paragraph.
‘‘(C) TREATMENT OF ADVANCE PAYMENTS.—For purposes of section 1324 of title 31, United States Code, the payments under subparagraph (A) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
‘‘(8) DEALER.—For purposes of this subsection, the term ‘dealer’ means a person licensed by a State, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, an Indian tribal government, or any Alaska Native Corporation (as defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(m)) to engage in the sale of vehicles.
‘‘(9) INDIAN TRIBAL GOVERNMENT.—For purposes of this subsection, the term ‘Indian tribal government’ means the recognized governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation, individually identified (including parenthetically) in the list published most recently as of the date of enactment of this subsection pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131).
‘‘(10) RECAPTURE.—In the case of any taxpayer who has made an election described in paragraph (1) with respect to a new clean vehicle and received a payment described in paragraph (2)(C) from an eligible entity, if the credit under subsection (a) would otherwise (but for this subsection) not be allowable to such taxpayer pursuant to the application of subsection (f)(10), the tax imposed on such taxpayer under this chapter for the taxable year in which such vehicle was placed in service shall be increased by the amount of the payment received by such taxpayer.’’.
(2) CONFORMING AMENDMENTS.—Section 30D, as amended by the preceding provisions of this section, is amended—
(A) in subsection (d)(1)(H) of such section—
(i) in clause (iv), by striking ‘‘and’’ at the end,
(ii) in clause (v), by striking the period at the end and inserting ‘‘, and’’, and
(iii) by adding at the end the following:
‘‘(vi) in the case of a taxpayer who makes an election under subsection (g)(1), any amount described in subsection (g)(2)(C) which has been provided to such taxpayer.’’, and
(B) in subsection (f)—
(i) by striking paragraph (3), and
(ii) in paragraph (8), by inserting ‘‘, including any vehicle with respect to which the taxpayer elects the application of subsection (g)’’ before the period at the end.
(h) TERMINATION.—Section 30D is amended by adding at the end the following:
‘‘(h) TERMINATION.—No credit shall be allowed under this section with respect to any vehicle placed in service after December 31, 2032.’’.
(i) ADDITIONAL CONFORMING AMENDMENTS.—
(1) The heading of section 30D is amended by striking ‘‘NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES’’ and inserting ‘‘CLEAN VEHICLE CREDIT’’.
(2) Section 30B is amended—
(A) in subsection (h)(8), by striking ‘‘, except that no benefit shall be recaptured if such property ceases to be eligible for such credit by reason of conversion to a qualified plug-in electric drive motor vehicle’’, and
(B) by striking subsection (i).
(3) Section 38(b)(30) is amended by striking ‘‘qualified plugin electric drive motor’’ and inserting ‘‘clean’’.
(4) Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended—
(A) in subparagraph (R), by striking ‘‘and’’ at the end,
(B) in subparagraph (S), by striking the period at the end and inserting ‘‘, and’’, and
(C) by inserting after subparagraph (S) the following:
‘‘(T) an omission of a correct vehicle identification number required under section 30D(f)(9) (relating to credit for new clean vehicles) to be included on a return.’’.
(5) Section 6501(m) is amended by striking ‘‘30D(e)(4)’’ and inserting ‘‘30D(f)(6)’’.
(6) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 30D and inserting after the item relating to section 30C the following item:
‘‘Sec. 30D. Clean vehicle credit.’’.
(j) GROSS-UP OF DIRECT SPENDING.—Beginning in fiscal year 2023 and each fiscal year thereafter, the portion of any credit allowed to an eligible entity (as defined in section 30D(g)(2) of the Internal Revenue Code of 1986) pursuant to an election made under section 30D(g) of the Internal Revenue Code of 1986 that is direct spending shall be increased by 6.0445 percent.
(k) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section shall apply to vehicles placed in service after December 31, 2022.
(2) FINAL ASSEMBLY.—The amendments made by subsection (b) shall apply to vehicles sold after the date of enactment of this Act.
(3) PER VEHICLE DOLLAR LIMITATION AND RELATED REQUIRE- MENTS.—The amendments made by subsections (a) and (e) shall apply to vehicles placed in service after the date on which the proposed guidance described in paragraph (3)(B) of section 30D(e) of the Internal Revenue Code of 1986 (as added by subsection (e)) is issued by the Secretary of the Treasury (or the Secretary’s delegate).
(4) TRANSFER OF CREDIT.—The amendments made by subsection (g) shall apply to vehicles placed in service after December 31, 2023.
(5) ELIMINATION OF MANUFACTURER LIMITATION.—The amendment made by subsection (d) shall apply to vehicles sold after December 31, 2022. (l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and
(2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

SEC. 13402. CREDIT FOR PREVIOUSLY-OWNED CLEAN VEHICLES.
(a) IN GENERAL.—Subpart A of part IV of subchapter A of chapter 1 is amended by inserting after section 25D the following new section:

‘‘SEC. 25E. PREVIOUSLY-OWNED CLEAN VEHICLES.

‘‘(a) ALLOWANCE OF CREDIT.—In the case of a qualified buyer who during a taxable year places in service a previously-owned clean vehicle, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of—
‘‘(1) $4,000, or
‘‘(2) the amount equal to 30 percent of the sale price with respect to such vehicle.
‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—
‘‘(1) IN GENERAL.—No credit shall be allowed under subsection (a) for any taxable year if—
‘‘(A) the lesser of—
‘‘(i) the modified adjusted gross income of the taxpayer for such taxable year, or
‘‘(ii) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds
‘‘(B) the threshold amount.
‘‘(2) THRESHOLD AMOUNT.—For purposes of paragraph (1)(B), the threshold amount shall be—
‘‘(A) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $150,000,
‘‘(B) in the case of a head of household (as defined in section 2(b)), $112,500, and
‘‘(C) in the case of a taxpayer not described in subparagraph (A) or (B), $75,000.
‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this subsection, 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) DEFINITIONS.—For purposes of this section—
‘‘(1) PREVIOUSLY-OWNED CLEAN VEHICLE.—The term ‘previously-owned clean vehicle’ means, with respect to a taxpayer, a motor vehicle—
‘‘(A) the model year of which is at least 2 years earlier than the calendar year in which the taxpayer acquires such vehicle,
‘‘(B) the original use of which commences with a person other than the taxpayer,
‘‘(C) which is acquired by the taxpayer in a qualified sale, and
‘‘(D) which—
‘‘(i) meets the requirements of subparagraphs (C), (D), (E), (F), and (H) (except for clause (iv) thereof) of section 30D(d)(1), or
‘‘(ii) is a motor vehicle which—
‘‘(I) satisfies the requirements under subparagraphs (A) and (B) of section 30B(b)(3), and
‘‘(II) has a gross vehicle weight rating of less than 14,000 pounds.
‘‘(2) QUALIFIED SALE.—The term ‘qualified sale’ means a sale of a motor vehicle—
‘‘(A) by a dealer (as defined in section 30D(g)(8)),
‘‘(B) for a sale price which does not exceed $25,000, and
‘‘(C) which is the first transfer since the date of the enactment of this section to a qualified buyer other than the person with whom the original use of such vehicle commenced.
‘‘(3) QUALIFIED BUYER.—The term ‘qualified buyer’ means, with respect to a sale of a motor vehicle, a taxpayer—
‘‘(A) who is an individual,
‘‘(B) who purchases such vehicle for use and not for resale,
‘‘(C) with respect to whom no deduction is allowable with respect to another taxpayer under section 151, and
‘‘(D) who has not been allowed a credit under this section for any sale during the 3-year period ending on the date of the sale of such vehicle.
‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms ‘motor vehicle’ and ‘capacity’ have the meaning given such terms in paragraphs (2) and (4) of section 30D(d), respectively.
‘‘(d) VIN NUMBER REQUIREMENT.—No credit shall be allowed under subsection (a) with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.
‘‘(e) APPLICATION OF CERTAIN RULES.—For purposes of this section, rules similar to the rules of section 30D(f) (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section.
‘‘(f) TERMINATION.—No credit shall be allowed under this section with respect to any vehicle acquired after December 31, 2032.’’.
(b) TRANSFER OF CREDIT.—Section 25E, as added by subsection (a), is amended—
(1) by redesignating subsection (f) as subsection (g), and
(2) by inserting after subsection (e) the following:
‘‘(f) TRANSFER OF CREDIT.—Rules similar to the rules of section 30D(g) shall apply.’’.
(c) CONFORMING AMENDMENTS.—Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended—
(1) in subparagraph (S), by striking ‘‘and’’ at the end,
(2) in subparagraph (T), by striking the period at the end and inserting ‘‘, and’’, and
(3) by inserting after subparagraph (T) the following:
‘‘(U) an omission of a correct vehicle identification number required under section 25E(d) (relating to credit for previously-owned clean vehicles) to be included on a return.’’.
(d) CLERICAL AMENDMENT.—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 25D the following new item:
‘‘Sec. 25E. Previously-owned clean vehicles.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to vehicles acquired after December 31, 2022.
(2) TRANSFER OF CREDIT.—The amendments made by subsection (b) shall apply to vehicles acquired after December 31, 2023.

SEC. 13403. QUALIFIED COMMERCIAL CLEAN VEHICLES.

(a) IN GENERAL.—Subpart D 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 section:

‘‘SEC. 45W. CREDIT FOR QUALIFIED COMMERCIAL CLEAN VEHICLES.
‘‘(a) IN GENERAL.—For purposes of section 38, the qualified commercial clean vehicle credit for any taxable year is an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified commercial clean vehicle placed in service by the taxpayer during the taxable year.
‘‘(b) PER VEHICLE AMOUNT.—
‘‘(1) IN GENERAL.—Subject to paragraph (4), the amount determined under this subsection with respect to any qualified commercial clean vehicle shall be equal to the lesser of—
‘‘(A) 15 percent of the basis of such vehicle (30 percent in the case of a vehicle not powered by a gasoline or diesel internal combustion engine), or
‘‘(B) the incremental cost of such vehicle.
‘‘(2) INCREMENTAL COST.—For purposes of paragraph (1)(B), the incremental cost of any qualified commercial clean vehicle is an amount equal to the excess of the purchase price for such vehicle over such price of a comparable vehicle.
‘‘(3) COMPARABLE VEHICLE.—For purposes of this subsection, the term ‘comparable vehicle’ means, with respect to any qualified commercial clean vehicle, any vehicle which is powered solely by a gasoline or diesel internal combustion engine and which is comparable in size and use to such vehicle.
‘‘(4) LIMITATION.—The amount determined under this subsection with respect to any qualified commercial clean vehicle shall not exceed—
‘‘(A) in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, $7,500, and
‘‘(B) in the case of a vehicle not described in subparagraph (A), $40,000.
‘‘(c) QUALIFIED COMMERCIAL CLEAN VEHICLE.—For purposes of this section, the term ‘qualified commercial clean vehicle’ means any vehicle which—
‘‘(1) meets the requirements of section 30D(d)(1)(C) and is acquired for use or lease by the taxpayer and not for resale,
‘‘(2) either—
‘‘(A) meets the requirements of subparagraph (D) of section 30D(d)(1) and is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails), or
‘‘(B) is mobile machinery, as defined in section 4053(8) (including vehicles that are not designed to perform a function of transporting a load over the public highways), ‘‘(3) either—
‘‘(A) is propelled to a significant extent by an electric motor which draws electricity from a battery which has a capacity of not less than 15 kilowatt hours (or, in the case of a vehicle which has a gross vehicle weight rating of less than 14,000 pounds, 7 kilowatt hours) and is capable of being recharged from an external source of electricity, or
‘‘(B) is a motor vehicle which satisfies the requirements under subparagraphs (A) and (B) of section 30B(b)(3), and ‘‘(4) is of a character subject to the allowance for depreciation.
‘‘(d) SPECIAL RULES.—
‘‘(1) IN GENERAL.—Rules similar to the rules under subsection (f) of section 30D (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section.
‘‘(2) VEHICLES PLACED IN SERVICE BY TAX-EXEMPT ENTITIES.—Subsection (c)(4) shall not apply to any vehicle which is not subject to a lease and which is placed in service by a tax-exempt entity described in clause (i), (ii), or (iv) of section 168(h)(2)(A).
‘‘(3) NO DOUBLE BENEFIT.—No credit shall be allowed under this section with respect to any vehicle for which a credit was allowed under section 30D.
‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall be determined under subsection (a) with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year.
‘‘(f) 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 regulations or other guidance relating to determination of the incremental cost of any qualified commercial clean vehicle.
‘‘(g) TERMINATION.—No credit shall be determined under this section with respect to any vehicle acquired after December 31, 2032.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 38(b), as amended by the preceding provisions of this Act, is amended—
(A) in paragraph (35), by striking ‘‘plus’’ at the end,
(B) in paragraph (36), by striking the period at the end and inserting ‘‘, plus’’, and
(C) by adding at the end the following new paragraph: ‘‘(37) the qualified commercial clean vehicle credit determined under section 45W.’’.
(2) Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended—
(A) in subparagraph (T), by striking ‘‘and’’ at the end,
(B) in subparagraph (U), by striking the period at the end and inserting ‘‘, and’’, and
(C) by inserting after subparagraph (U) the following:
‘‘(V) an omission of a correct vehicle identification number required under section 45W(e) (relating to commercial clean vehicle credit) to be included on a return.’’.
(3) 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 adding at the end the following new item:
‘‘Sec. 45W. Qualified commercial clean vehicle credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to vehicles acquired after December 31, 2022.

SEC. 13404. ALTERNATIVE FUEL REFUELING PROPERTY CREDIT.

(a) IN GENERAL.—Section 30C(g) is amended by striking ‘‘December 31, 2021’’ and inserting ‘‘December 31, 2032’’.
(b) CREDIT FOR PROPERTY OF A CHARACTER SUBJECT TO DEPRE- CIATION.—
(1) IN GENERAL.—Section 30C(a) is amended by inserting ‘‘(6 percent in the case of property of a character subject to depreciation)’’ after ‘‘30 percent’’.
(2) MODIFICATION OF CREDIT LIMITATION.—Subsection (b) of section 30C is amended—
(A) in the matter preceding paragraph (1)—
(i) by striking ‘‘with respect to all’’ and inserting ‘‘with respect to any single item of’’, and
(ii) by striking ‘‘at a location’’, and
(B) in paragraph (1), by striking ‘‘$30,000 in the case of a property’’ and inserting ‘‘$100,000 in the case of any such item of property’’.
(3) BIDIRECTIONAL CHARGING EQUIPMENT INCLUDED AS QUALIFIED ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.— Section 30C(c) is amended to read as follows:
‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified alternative fuel vehicle refueling property’ has the same meaning as the term ‘qualified clean-fuel vehicle refueling property’ would have under section 179A if—
‘‘(A) paragraph (1) of section 179A(d) did not apply to property installed on property which is used as the principal residence (within the meaning of section 121) of the taxpayer, and
‘‘(B) only the following were treated as clean-burning fuels for purposes of section 179A(d):
‘‘(i) Any fuel at least 85 percent of the volume of which consists of one or more of the following: ethanol, natural gas, compressed natural gas, liquified natural gas, liquefied petroleum gas, or hydrogen.
‘‘(ii) Any mixture—
‘‘(I) which consists of two or more of the following: biodiesel (as defined in section 40A(d)(1)), diesel fuel (as defined in section 4083(a)(3)), or kerosene, and
‘‘(II) at least 20 percent of the volume of which consists of biodiesel (as so defined) determined without regard to any kerosene in such mixture.
‘‘(iii) Electricity. ‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.—Property shall not fail to be treated as qualified alternative fuel vehicle refueling property solely because such property—
‘‘(A) is capable of charging the battery of a motor vehicle propelled by electricity, and
‘‘(B) allows discharging electricity from such battery to an electric load external to such motor vehicle.’’.
(c) CERTAIN ELECTRIC CHARGING STATIONS INCLUDED AS QUALIFIED ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY.—Section 30C is amended by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, and by inserting after subsection (e) the following:
‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING STATIONS FOR CERTAIN VEHICLES WITH 2 OR 3 WHEELS.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified alternative fuel vehicle refueling property’ includes any property described in subsection (c) for the recharging of a motor vehicle described in paragraph (2), but only if such property—
‘‘(A) meets the requirements of subsection (a)(2), and
‘‘(B) is of a character subject to depreciation.
‘‘(2) MOTOR VEHICLE.—A motor vehicle is described in this paragraph if the motor vehicle—
‘‘(A) is manufactured primarily for use on public streets, roads, or highways (not including a vehicle operated exclusively on a rail or rails),
‘‘(B) has 2 or 3 wheels, and
‘‘(C) is propelled by electricity.’’.
(d) WAGE AND APPRENTICESHIP REQUIREMENTS.—Section 30C, as amended by this section, is further amended by redesignating subsections (g) and (h) as subsections (h) and (i) and by inserting after subsection (f) the following new subsection:
‘‘(g) WAGE AND APPRENTICESHIP REQUIREMENTS.—
‘‘(1) INCREASED CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—In the case of any qualified alternative fuel vehicle refueling project which satisfies the requirements of subparagraph (C), the amount of the credit determined under subsection (a) for any qualified alternative fuel vehicle refueling property of a character subject to an allowance for depreciation which is part of such project shall be equal to such amount (determined without regard to this sentence) multiplied by 5.
‘‘(B) QUALIFIED ALTERNATIVE FUEL VEHICLE REFUELING PROJECT.—For purposes of this subsection, the term ‘qualified alternative fuel vehicle refueling project’ means a project consisting of one or more properties that are part of a single project.
‘‘(C) PROJECT REQUIREMENTS.—A project meets the requirements of this subparagraph if it is one of the following:
‘‘(i) A project the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (2)(A) and (3).
‘‘(ii) A project which satisfies the requirements of paragraphs (2)(A) and (3).
‘‘(2) PREVAILING WAGE REQUIREMENTS.—
‘‘(A) IN GENERAL.—The requirements described in this subparagraph with respect to any qualified alternative fuel vehicle refueling project are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of any qualified alternative fuel vehicle refueling property which is part of such project shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such project is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.
‘‘(B) CORRECTION AND PENALTY RELATED TO FAILURE TO SATISFY WAGE REQUIREMENTS.—Rules similar to the rules of section 45(b)(7)(B) shall apply.
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules similar to the rules of section 45(b)(8) shall apply.
‘‘(4) REGULATIONS AND GUIDANCE.—The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.’’. (e) ELIGIBLE CENSUS TRACTS.—Subsection (c) of section 30C, as amended by subsection (b)(3), is amended by adding at the end the following:
‘‘(3) PROPERTY REQUIRED TO BE LOCATED IN ELIGIBLE CENSUS TRACTS.—
‘‘(A) IN GENERAL.—Property shall not be treated as qualified alternative fuel vehicle refueling property unless such property is placed in service in an eligible census tract.
‘‘(B) ELIGIBLE CENSUS TRACT.—
‘‘(i) IN GENERAL.—For purposes of this paragraph, the term ‘eligible census tract’ means any population census tract which—
‘‘(I) is described in section 45D(e), or
‘‘(II) is not an urban area.
‘‘(ii) URBAN AREA.—For purposes of clause (i)(II), the term ‘urban area’ means a census tract (as defined by the Bureau of the Census) which, according to the most recent decennial census, has been designated as an urban area by the Secretary of Commerce.’’.
(f) EFFECTIVE DATE.— (1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after December 31, 2022.
(2) EXTENSION.—The amendments made by subsection (a) shall apply to property placed in service after December 31, 2021.

TITLE VI—COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

Subtitle A—Air Pollution

SEC. 60101. CLEAN HEAVY-DUTY VEHICLES.
The Clean Air Act is amended by inserting after section 131 of such Act (42 U.S.C. 7431) the following:

‘‘SEC. 132. CLEAN HEAVY-DUTY VEHICLES.

‘‘(a) APPROPRIATIONS.—
‘‘(1) IN GENERAL.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $600,000,000, to remain available until September 30, 2031, to carry out this section.
‘‘(2) NONATTAINMENT AREAS.—In addition to amounts otherwise available, there is appropriated to the Administrator for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $400,000,000, to remain available until September 30, 2031, to make awards under this section to eligible recipients and to eligible contractors that propose to replace eligible vehicles to serve 1 or more communities located in an air quality area designated pursuant to section 107 as nonattainment for any air pollutant.
‘‘(3) RESERVATION.—Of the funds appropriated by paragraph (1), the Administrator shall reserve 3 percent for administrative costs necessary to carry out this section.
‘‘(b) PROGRAM.—Beginning not later than 180 days after the date of enactment of this section, the Administrator shall implement a program to make awards of grants and rebates to eligible recipients, and to make awards of contracts to eligible contractors for providing rebates, for up to 100 percent of costs for—
‘‘(1) the incremental costs of replacing an eligible vehicle that is not a zero-emission vehicle with a zero-emission vehicle, as determined by the Administrator based on the market value of the vehicles;
‘‘(2) purchasing, installing, operating, and maintaining infrastructure needed to charge, fuel, or maintain zero-emission vehicles;
‘‘(3) workforce development and training to support the maintenance, charging, fueling, and operation of zero-emission vehicles; and
‘‘(4) planning and technical activities to support the adoption and deployment of zero-emission vehicles.
‘‘(c) APPLICATIONS.—To seek an award under this section, an eligible recipient or eligible contractor shall submit to the Administrator an application at such time, in such manner, and containing such information as the Administrator shall prescribe.
‘‘(d) DEFINITIONS.—For purposes of this section:
‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligible contractor’ means a contractor that has the capacity—
‘‘(A) to sell, lease, license, or contract for service zeroemission vehicles, or charging or other equipment needed to charge, fuel, or maintain zero-emission vehicles, to individuals or entities that own, lease, license, or contract for service an eligible vehicle; or
‘‘(B) to arrange financing for such a sale, lease, license, or contract for service.
‘‘(2) ELIGIBLE RECIPIENT.—The term ‘eligible recipient’ means—
‘‘(A) a State;
‘‘(B) a municipality;
‘‘(C) an Indian tribe; or ‘‘(D) a nonprofit school transportation association.
‘‘(3) ELIGIBLE VEHICLE.—The term ‘eligible vehicle’ means a Class 6 or Class 7 heavy-duty vehicle as defined in section 1037.801 of title 40, Code of Federal Regulations (as in effect on the date of enactment of this section).
‘‘(4) GREENHOUSE GAS.—The term ‘greenhouse gas’ means the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.
‘‘(5) ZERO-EMISSION VEHICLE.—The term ‘zero-emission vehicle’ means a vehicle that has a drivetrain that produces, under any possible operational mode or condition, zero exhaust emissions of—
‘‘(A) any air pollutant that is listed pursuant to section 108(a) (or any precursor to such an air pollutant); and
‘‘(B) any greenhouse gas.’’.

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