Vehicle Energy Performance Act of 2024
This bill creates a refundable tax credit for new qualified high energy performance motor vehicles. The bill also modifies the calculation of the excise tax on fuel-inefficient vehicles (gas guzzler tax).
The amount of the tax credit is based on a vehicle’s energy performance in the current and prior model year in comparison with the median and best vehicle energy performance overall in the prior model year. The maximum tax credit allowed is $5,000 beginning with model year 2026.
The bill defines a new qualified high energy performance vehicle as any passenger automobile or light truck with a greater than median energy performance as compared to the same passenger automobile or light truck for the prior model year. A vehicle’s energy performance is based on miles per gallon-gasoline equivalent (MPGe).
The bill requires the Department of the Treasury to publish the median and best vehicle energy performance for the model year by December 1, 2025, and for each year after, based on information reported by vehicle manufacturers.
Finally, the bill imposes an excise tax on vehicles with low energy performance (beginning with model year 2028), which is based on a vehicle’s energy performance in the current and prior model year in comparison with the median and best vehicle energy performance overall in the prior model year. Under current law, the gas guzzler tax is imposed on vehicles that do not meet a fuel efficiency standard of at least 22.5 miles per gallon (MPG).
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9780 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 9780
To amend the Internal Revenue Code of 1986 to provide tax incentives
and fees for increasing motor vehicle fuel economy, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 24, 2024
Mr. Casten (for himself and Ms. Matsui) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committee on Energy and Commerce, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such 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.
(a) Short Title.--This Act may be cited as the ``Vehicle Energy
Performance Act of 2024''.
(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 VEHICLE ENERGY PERFORMANCE.
(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. VEHICLE ENERGY PERFORMANCE REBATE.
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an
amount equal to the amount determined under paragraph (2) with
respect to any new qualified high energy performance motor
vehicle placed in service by the taxpayer during the taxable
year.
``(2) Credit amount.--With respect to each new qualified
high energy performance motor vehicle, the amount determined
under this paragraph shall be equal to the amount (not greater
than $5,000) that bears the same ratio to $5,000 as--
``(A) the excess of--
``(i) the vehicle energy performance of
such vehicle, over
``(ii) the median vehicle energy
performance for the model year immediately
preceding the model year of such vehicle, bears
to
``(B) the excess of--
``(i) the best vehicle energy performance
for the model year immediately preceding the
model year of such vehicle, over
``(ii) the median vehicle energy
performance for the model year immediately
preceding the model year of such vehicle.
``(b) New Qualified High Energy Performance Motor Vehicle.--For
purposes of this section, the term `new qualified high energy
performance motor vehicle' means a passenger automobile or light
truck--
``(1) which is treated as a motor vehicle for purposes of
title II of the Clean Air Act,
``(2) which achieves vehicle energy performance that is
greater than the median vehicle energy performance for the
model year immediately preceding the model year of such
vehicle,
``(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 2026.
``(c) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without regard
to this 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
high energy performance motor vehicle, transfer
any refundable credit described in subparagraph
(A) to any person who is in the trade or
business of selling new qualified high energy
performance motor vehicles and who sold such
vehicle to the taxpayer, but only if such
person clearly discloses to such taxpayer,
through the use of a window sticker attached to
the new qualified high energy performance
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 high energy
performance 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) Vehicle energy performance.--The term `vehicle energy
performance' means, with respect to any vehicle, the combined
fuel-economy rating determined for the model and model year of
such vehicle.
``(2) Median vehicle energy performance.--The term `median
vehicle energy performance' means, with respect to any model
year, the median combined fuel-economy rating for all new motor
vehicles of such model year sold in the United States.
``(3) Best vehicle energy performance.--The term `best
vehicle energy performance' means, with respect to any model
year, the highest combined fuel-economy rating of any model of
motor vehicle of such model year sold the United States.
``(4) Combined fuel-economy rating.--The term `combined
fuel-economy rating' means the combined fuel-economy rating
determined in accordance with section 32908 of title 49, United
States Code, and expressed in miles per gallon of gasoline
equivalent.
``(5) Model year.--The term `model year' has the meaning
given such term under section 32901(a) of such title 49.
``(6) Motor vehicle.--The term `motor 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.
``(7) 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) 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.
``(3) 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.
``(4) 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.
``(5) Election not to take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(6) Interaction with air quality and motor vehicle safety
standards.--A motor 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.
``(7) Inflation adjustment.--In the case of any model year
beginning in a calendar year after 2026, each dollar amount in
subsection (a)(2) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the model year begins, determined by substituting
`2025' for `2016' in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $100.
``(8) One credit per vehicle.--In the case of any vehicle,
the credit described in subsection (a) shall only be allowed
once with respect to such vehicle, as determined based upon the
vehicle identification number of such vehicle.
``(f) Reporting of Vehicle Energy Performance.--
``(1) Vehicle manufacturers.--Not later than November 1 of
each calendar year (beginning with calendar year 2025), each
vehicle manufacturer shall submit to the Secretary a report
that includes--
``(A) the vehicle energy performance for each model
of that model year which was manufactured by such
manufacturer and sold in the United States, and
``(B) with respect to each such model of such model
year, the number of vehicles of such model and model
year sold in the United States during the 1-year period
beginning on October 1 of the preceding year.
``(2) Publication by treasury.--Not later than December 1
of each calendar year (beginning with calendar year 2025), the
Secretary shall publish the median vehicle energy performance
and the best vehicle energy performance for that model year.
``(g) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section not later than 1 year
after the date of enactment.
``(2) Coordination in prescription of 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) of title 49, United States
Code, is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), and
(B) by inserting after subparagraph (D) the
following new subparagraph:
``(E) the amount of the vehicle energy performance 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).'', and
(2) in paragraph (2), by striking ``paragraph (1)(E)'' and
inserting ``paragraph (1)(F)''.
(d) Conforming Amendments.--
(1) Section 38(b) is amended by striking ``plus'' at the
end of paragraph (40), by striking the period at the end of
paragraph (41) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(42) the portion of the vehicle energy 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. Vehicle energy performance rebate.''.
SEC. 3. LOW VEHICLE ENERGY PERFORMANCE FEE.
(a) In General.--Section 4064 is amended to read as follows:
``SEC. 4064. LOW VEHICLE ENERGY PERFORMANCE FEE.
``(a) Imposition of Tax.--There is hereby imposed on the sale by
the manufacturer of each low energy performance vehicle a tax equal to
the product of $5,000, multiplied by the quotient of--
``(1) the excess of--
``(A) the median vehicle energy performance for the
model year immediately preceding the model year of such
vehicle, over
``(B) the vehicle energy performance of such
vehicle, divided by
``(2) the excess of--
``(A) the best vehicle energy performance for the
model year immediately preceding the model year of such
vehicle, over
``(B) the median vehicle energy performance for the
model year immediately preceding the model year of such
vehicle.
``(b) Low Energy Performance Vehicle.--For purposes of this
section--
``(1) In general.--The term `low energy performance
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 vehicle energy performance
that is lower than the median vehicle energy
performance, and
``(C) which is made by a manufacturer beginning
with model year 2028.
``(2) Exception for certain vehicles.--The term `low energy
performance vehicle' does not include any vehicle--
``(A) which--
``(i) has a gross vehicle weight rating of
more than 8,500 pounds, and
``(ii) is determined by the Secretary to be
a vehicle which is designed for commercial use,
or
``(B) sold for use and used--
``(i) as an ambulance or combination
ambulance-hearse,
``(ii) by the United States or by a State
or local government for police or other law
enforcement purposes, or
``(iii) for other emergency uses prescribed
by the Secretary by regulations.
``(c) Other Definitions.--For purposes of this section:
``(1) Vehicle energy performance.--The term `vehicle energy
performance' means, with respect to any vehicle, the combined
fuel-economy rating determined for the model and model year of
such vehicle.
``(2) Median vehicle energy performance.--The term `median
vehicle energy performance' means, with respect to any model
year, the median combined fuel-economy rating for all new motor
vehicles of such model year sold in the United States.
``(3) Best vehicle energy performance.--The term `best
vehicle energy performance' means, with respect to any model
year, the highest combined fuel-economy rating of any model of
motor vehicle of such model year sold the United States.
``(4) Combined fuel-economy rating.--The term `combined
fuel-economy rating' means the combined fuel-economy rating
determined in accordance with section 32908 of title 49, United
States Code, and expressed in miles per gallon of gasoline
equivalent.
``(5) Model year.--The term `model year' has the meaning
given such term under section 32901(a) of such title 49.
``(6) Motor vehicle.--The term `motor 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.
``(7) 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 2028, each dollar amount in
subsection (a)(2) shall be increased by an amount equal to--
``(1) such dollar amount, multiplied by
``(2) the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which the model year
begins, determined by substituting `2027' for `2016' in
subparagraph (A)(ii) thereof.
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 ``Low
Vehicle Energy Performance Fee''.
(5) The heading for subsection (e) of section 4217 is
amended by striking ``Gas Guzzler Tax'' and inserting ``Low
Vehicle Energy Performance Fee''.
(6) The heading for subparagraph (B) of section 4217(e)(3)
is amended by striking ``gas guzzler tax'' and inserting ``low
vehicle energy performance fee''.
(7) Section 4217(e) is amended by striking ``gas guzzler
tax'' each place it appears and inserting ``low vehicle energy
performance fee''.
SEC. 4. FUEL ECONOMY OF DUAL FUELED AUTOMOBILES.
(a) Measurement of Fuel Economy for Electric Dual Fueled
Automobiles.--Section 32905(e) of title 49, United States Code, is
amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A)--
(A) by striking ``At the request of the
manufacturer, the Administrator may'' and inserting
``The Administrator shall''; and
(B) by striking ``model year 2015'' and inserting
``model year 2025''; and
(2) by amending paragraph (2) to read as follows:
``(2) Review and updating of formula.--Not later than 3
years after the date of the enactment of this paragraph, and
every 3 years thereafter, the Administrator shall, using real-
world data if possible, review and update the formula for
determining under paragraph (1) percentage utilization on
gasoline or diesel fuel and percentage utilization on
electricity.''.
(b) Fuel Economy Information for Dual Fueled Automobiles.--
(1) Labeling requirements and contents.--Section
32908(b)(3) of title 49, United States Code, is amended--
(A) by redesignating subparagraphs (B), (C), and
(D) as subparagraphs (D), (E), and (F), respectively;
and
(B) by inserting after subparagraph (A) the
following:
``(B) indicate the fuel economy of the automobile when
operated primarily on alternative fuel;
``(C) indicate the multi-day average fuel economy of the
automobile when operated on a combination of alternative fuel
and gasoline or diesel fuel, with the percentage utilization of
alternative fuel and the percentage utilization of gasoline or
diesel fuel being determined by a formula based on real-world
data and updated not less frequently than every 3 years;''.
(2) Fuel economy information booklet.--Section
32908(c)(2)(B) of title 49, United States Code, is amended--
(A) in clause (i), by striking ``; and'' and
inserting a semicolon;
(B) by redesignating clause (ii) as clause (iii);
and
(C) by inserting after clause (i) the following:
``(ii) information on the multi-day average fuel economy of
the automobile when operated on a combination of alternative
fuel and gasoline or diesel fuel, as indicated under subsection
(b)(3)(C); and''.
(c) Applicability.--The amendments made by this section shall apply
with respect to automobiles of model year 2026 or later.
<all>
Introduced in House
Introduced in House
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.
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.
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