Transportation Freedom Act
This bill reduces taxes on auto companies and repeals specified environmental regulations on cars and trucks.
The bill establishes a new tax deduction equal to 200% of eligible wages paid or incurred by domestic producers of automobiles or automobile components, subject to limitations. It also allows an entity to reduce (and adjust) its financial statement income (for purposes of calculating liability for the alternative minimum tax) by the amount of eligible wages it elects to deduct.
The bill nullifies the 2024 rules of the Environmental Protection Agency (EPA) regarding (1) the finalization of specified greenhouse gas (GHG) programs and the reduction of emissions from certain light-duty and medium-duty vehicles (e.g., cars and trucks that are under a certain weight) starting with model year 2027, and (2) phase three of GHG emission standards for heavy-duty vehicles (e.g., school buses and tractor-trailer trucks).
It also repeals the 2024 rules of the National Highway Traffic Safety Administration (NHTSA) regarding corporate average fuel economy (CAFE) standards for certain cars, trucks, and vans.
Additionally, the bill eliminates (1) the option given to California to set standards for car emissions that are more stringent than those set under the Clean Air Act, and (2) the option for other states to adopt California's standards.
NHTSA and the EPA must establish new CAFE and GHG standards, respectively, for vehicles that are economically practicable and technologically feasible. The GHG standards may not require the production or sale of electric vehicles.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 711 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 711
To amend the Internal Revenue Code of 1986 to establish an enhanced
deduction for wages paid to automobile manufacturing workers, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 25, 2025
Mr. Moreno (for himself, Mr. Sheehy, Mr. Banks, and Mr. Justice)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish an enhanced
deduction for wages paid to automobile manufacturing workers, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Transportation
Freedom Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--SUPPORT FOR AMERICAN AUTOMOBILE MANUFACTURING
Sec. 101. Enhanced deduction for wages paid to automobile manufacturing
workers.
TITLE II--MULTIPOLLUTANT EMISSIONS STANDARDS
Sec. 201. Repeal of multipollutant emissions standards for light-duty
and medium-duty vehicles.
Sec. 202. Repeal of phase 3 heavy-duty vehicle greenhouse gas emissions
standards.
Sec. 203. Repeal of CAFE standards rules.
TITLE III--EMISSIONS WAIVERS
Sec. 301. Elimination of vehicle emissions waivers.
TITLE IV--FEDERAL GREENHOUSE GAS EMISSIONS STANDARDS AND CAFE STANDARDS
Subtitle A--Establishment of New Passenger Automobile Standards
Sec. 401. Definitions.
Sec. 402. Establishment of CAFE standards and greenhouse gas emissions
standards.
Sec. 403. Compliance with fleet average carbon dioxide emissions
standards.
Sec. 404. Authorization of appropriations.
Subtitle B--Establishment of New Heavy-Duty Vehicle Standards
Sec. 411. Establishment of heavy-duty vehicle greenhouse gas emissions
standards.
TITLE I--SUPPORT FOR AMERICAN AUTOMOBILE MANUFACTURING
SEC. 101. ENHANCED DEDUCTION FOR WAGES PAID TO AUTOMOBILE MANUFACTURING
WORKERS.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 199B. WAGES PAID TO AUTOMOBILE MANUFACTURING WORKERS.
``(a) In General.--In the case of any taxable year for which an
election is made under subsection (g) by a qualifying taxpayer, there
shall be allowed a deduction equal to 200 percent of an amount equal to
the total amount of eligible wages paid or incurred by such taxpayer
during such taxable year.
``(b) Qualifying Taxpayer.--For purposes of this section, the term
`qualifying taxpayer' means an entity which, with respect to any
taxable year--
``(1) is engaged in the production of automobiles or
automotive components in the United States,
``(2) with respect to any automobiles, light-duty trucks,
and heavy-duty trucks sold by the entity for use in the United
States during the preceding taxable year, the final assembly
(as defined in section 30D(d)(5)) of not less than 75 percent
of such vehicles occurred in the United States,
``(3) with respect to the manufacturing of finished
engines, transmissions, or advanced battery cells (including
manufacturing pursuant to joint ventures or other collaborative
manufacturing agreements) during the preceding taxable year,
not less than 75 percent of such finished engines,
transmissions, or advanced battery cells which were
incorporated into new automobiles, light-duty trucks, or heavy-
duty trucks for sale by the entity were produced in the United
States,
``(4) during the preceding taxable year, did not transfer
production outside of the United States of any automobile or
automobile component manufactured in the United States,
``(5) during the preceding taxable year, with respect to
all applicable individuals, offered--
``(A) coverage for the applicable individual under
a group health plan in the platinum level of coverage
(as described in section 1302(d)(1)(D) of the Patient
Protection and Affordable Care Act (42 U.S.C.
18022(d)(1)(D))) or a higher level of coverage, and
``(B) participation in a defined benefit plan or
defined contribution plan that meets the applicable
requirement of subsection (e),
``(6) during the preceding taxable year, with respect to
all retired individuals who, prior to retirement, were
applicable individuals, offered coverage for the retired
individual under a group health plan in the platinum level of
coverage (as described in section 1302(d)(1)(D) of the Patient
Protection and Affordable Care Act (42 U.S.C. 18022(d)(1)(D)))
or a higher level of coverage,
``(7) with respect to every $1,000,000,000 distributed as
non-recurring dividends, or in stock which was redeemed (within
the meaning of section 317(b)), by such entity during such
taxable year, provided not less than $2,000 to each applicable
individual through a profit-sharing plan, with such amount to
be in addition to any prior commitment made by the entity
pursuant to an existing profit-sharing plan, as determined as
of the date of such distribution or redemption, and
``(8) maintained a neutral position during the preceding
taxable year--
``(A) in any labor organization organizing effort,
and
``(B) with respect to the exercise of employees and
labor organizations of their rights under the National
Labor Relations Act (29 U.S.C. 151 et seq.).
``(c) Eligible Wages.--
``(1) In general.--For purposes of this section, the term
`eligible wages' means any wages paid or incurred by a
qualifying taxpayer during the taxable year to any applicable
individual, provided that the wages paid to such individual
during such taxable year are not less than the 75th percentile
of wages paid for the occupation of the individual (as
designated in accordance with the Standard Occupational
Classification System) with respect to the applicable 4-digit
industry group code of the North American Industry
Classification System.
``(2) Limitation.--The amount of wages which may be taken
into account under subsection (a)(1) with respect to any
applicable individual shall not exceed $150,000 per taxable
year.
``(d) Applicable Individual.--For purposes of this section, the
term `applicable individual' means an individual directly engaged in
the manufacturing of automobiles or automotive components in the United
States.
``(e) Pension Requirements.--
``(1) Defined benefit pension plans.--The requirement
described in this subsection with respect to a defined benefit
plan is that such plan is projected to provide an applicable
individual with not less than 50 percent wage replacement upon
retirement, for the entire length of the individual's
retirement, provided the applicable individual is employed by
the qualifying taxpayer and a participant in the plan for a
minimum of 30 years.
``(2) Defined contribution pension plans.--The requirement
described in this subsection with respect to a defined
contribution plan is that such plan is a qualified cash or
deferred arrangement as defined in section 401(k) under the
terms of which the employer contribution is not less than 10
percent of the participating employee's wages during the
preceding tax year.
``(f) Denial of Deduction for Trade or Business Expenses.--No
deduction shall be allowed under section 162(a) with respect to any
wages or contributions taken into account in determining the deduction
under subsection (a).
``(g) Election.--Subsection (a) shall apply only with respect to
such portion of the eligible wages paid or incurred by the qualifying
taxpayer, or contributions made by such taxpayer, during the taxable
year as are elected by such taxpayer.
``(h) Certification.--No deduction shall be allowed under
subsection (a) unless the taxpayer submits to the Secretary (at such
times and in such manner as the Secretary provides) a certification
that the applicable requirements under this section have been
satisfied.''.
(b) Adjusted Financial Statement Income.--Section 56A(c) of the
Internal Revenue Code of 1986 is amended--
(1) by redesignating paragraph (15) as paragraph (16), and
(2) by inserting after paragraph (14) the following new
paragraph:
``(15) Wages paid to automobile manufacturing workers.--
Adjusted financial statement income shall be--
``(A) reduced by the deduction for eligible wages
allowed under section 199B to the extent of the amount
allowed as deductions in computing taxable income for
the taxable year, and
``(B) appropriately adjusted--
``(i) to disregard any wages taken into
account on the taxpayer's applicable financial
statement that were also taken into account in
determining the amount of the deduction allowed
under section 199B, and
``(ii) to take into account any other item
specified by the Secretary in order to provide
that such wages are accounted for in the same
manner as accounted for under this chapter.''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of such Code is amended by adding at the end
the following new item:
``Sec. 199B. Wages paid to automobile manufacturing workers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of enactment of this
Act.
TITLE II--MULTIPOLLUTANT EMISSIONS STANDARDS
SEC. 201. REPEAL OF MULTIPOLLUTANT EMISSIONS STANDARDS FOR LIGHT-DUTY
AND MEDIUM-DUTY VEHICLES.
The final rule of the Administrator of the Environmental Protection
Agency entitled ``Multi-Pollutant Emissions Standards for Model Years
2027 and Later Light-Duty and Medium-Duty Vehicles'' (89 Fed. Reg.
27842 (April 18, 2024)) shall have no force or effect.
SEC. 202. REPEAL OF PHASE 3 HEAVY-DUTY VEHICLE GREENHOUSE GAS EMISSIONS
STANDARDS.
The final rule of the Administrator of the Environmental Protection
Agency entitled ``Greenhouse Gas Emissions Standards for Heavy-Duty
Vehicles--Phase 3'' (89 Fed. Reg. 29440 (April 22, 2024)) shall have no
force or effect.
SEC. 203. REPEAL OF CAFE STANDARDS RULES.
The final rules of the National Highway Traffic Safety
Administration entitled ``Corporate Average Fuel Economy Standards for
Passenger Cars and Light Trucks for Model Years 2027 and Beyond and
Fuel Efficiency Standards for Heavy-Duty Pickup Trucks and Vans for
Model Years 2030 and Beyond'' (89 Fed. Reg. 52540 (June 24, 2024)) and
``Corporate Average Fuel Economy Standards for Passenger Cars and Light
Trucks for Model Years 2027-2032 and Fuel Efficiency Standards for
Heavy-Duty Pickup Trucks and Vans for Model Years 2030-2035;
Correction'' (89 Fed. Reg. 60832 (July 29, 2024)) shall have no force
or effect.
TITLE III--EMISSIONS WAIVERS
SEC. 301. ELIMINATION OF VEHICLE EMISSIONS WAIVERS.
(a) Amendment.--Section 209(b) of the Clean Air Act (42 U.S.C.
7543(b)) is amended by adding at the end the following:
``(4) No further waivers.--Notwithstanding any other
provision of this section, beginning on the date of enactment
of this paragraph, the Administrator shall not grant a waiver
under paragraph (1) to enforce a standard for the control of
emissions from new motor vehicles or new motor vehicle engines
that differs from a standard established under this Act by the
Administrator.''.
(b) Revocation of Existing Standards.--Each waiver issued under
section 209(b) of the Clean Air Act (42 U.S.C. 7543(b)) before the date
of enactment of this Act, including any waiver issued under that
section to the State of California for zero-emission vehicle mandates,
is revoked.
(c) Repeal.--
(1) In general.--Section 177 of the Clean Air Act (42
U.S.C. 7507) is repealed.
(2) Conforming amendment.--Section 249(e)(3) of the Clean
Air Act (42 U.S.C. 7589(e)(3)) is amended by striking the
second sentence.
TITLE IV--FEDERAL GREENHOUSE GAS EMISSIONS STANDARDS AND CAFE STANDARDS
Subtitle A--Establishment of New Passenger Automobile Standards
SEC. 401. DEFINITIONS.
In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) CAFE standards.--The term ``CAFE standards'' means the
Corporate Average Fuel Economy standards required under section
32902(a) of title 49, United States Code.
(3) Greenhouse gas emissions.--The term ``greenhouse gas
emissions'' means emissions of carbon dioxide, methane, nitrous
oxide, and other gases that contribute to climate change.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
SEC. 402. ESTABLISHMENT OF CAFE STANDARDS AND GREENHOUSE GAS EMISSIONS
STANDARDS.
(a) New Standards.--
(1) CAFE standards.--Not later than 180 days after the date
of enactment of this Act, the Secretary, in consultation with
the Secretary of Energy and the Administrator, shall establish
CAFE standards for passenger automobiles (as defined in section
32901(a) of title 49, United States Code) and light-duty trucks
(as defined in section 86.1803-01 of title 40, Code of Federal
Regulations (or a successor regulation)) for model years 2027
through 2035 in accordance with this section.
(2) EPA emissions standards.--Not later than 180 days after
the date of enactment of this Act, and notwithstanding any
other provision of law, the Administrator, in coordination with
the Secretary, shall establish standards for greenhouse gas
emissions from new motor vehicles and new motor vehicle engines
(as those terms are defined in section 216 of the Clean Air Act
(42 U.S.C. 7550)) under section 202 of the Clean Air Act (42
U.S.C. 7521) for model years 2027 through 2035 in accordance
with this section.
(b) Requirements.--
(1) Bases.--The CAFE standards and greenhouse gas emissions
standards established under paragraphs (1) and (2),
respectively, of subsection (a) shall--
(A) be based on economic practicability and reflect
achievable technological advancements based on market
readiness and affordability; and
(B) be based on evidence from industry capacity,
historical data, and independent expert assessments to
determine feasibility and economic impact, including on
motor vehicle manufacturing job quality and stability.
(2) CAFE standards.--Notwithstanding any other provision of
law, in establishing the CAFE standards under subsection
(a)(1), the Secretary may not consider the fuel economy of
dedicated automobiles in any baseline fleet or scenario.
(3) Greenhouse gas standards.--Notwithstanding any other
provision of law, the greenhouse gas emissions standards
established under subsection (a)(2)--
(A) shall be technologically feasible and
economically practicable for vehicles of any weight
class or category when operated on reformulated
gasoline that complies with section 211(o) of the Clean
Air Act (42 U.S.C. 7545(o)); and
(B) shall not require, directly or indirectly, the
production or sale of vehicles operated on electricity.
(c) Consultation.--
(1) In general.--In establishing the CAFE standards and
greenhouse gas emissions standards required under paragraphs
(1) and (2), respectively, of subsection (a), the Secretary and
the Administrator shall, after providing adequate notice,
consult with manufacturers (as defined in section 32901(a) of
title 49, United States Code), energy producers, consumer
groups, and other relevant stakeholders.
(2) Use of feedback.--Any feedback received from an entity
described in paragraph (1) during a consultation described in
that paragraph shall be considered by the Secretary and the
Administrator to ensure the CAFE standards and greenhouse gas
emissions standards required under paragraphs (1) and (2),
respectively, of subsection (a) are technologically and
economically achievable.
(d) Reports; Adjustment of Standards.--
(1) Reports.--The Secretary and the Administrator shall
each submit to Congress a biennial report detailing progress
toward achieving the applicable standards established under
subsection (a) for 2035.
(2) Adjustment of standards.--Based on findings in a report
submitted under paragraph (1), including market conditions,
technological advancements, and economic impact assessments,
the Secretary and the Administrator, as applicable, may adjust
the CAFE standards and greenhouse gas emissions standards
required under paragraphs (1) and (2), respectively, of
subsection (a).
(e) Continuation of Current Standards.--If the Secretary and the
Administrator do not establish the CAFE standards and greenhouse gas
emissions standards required under paragraphs (1) and (2),
respectively, of subsection (a) by the deadlines described in those
paragraphs, the CAFE standards and greenhouse gas emissions standards
for model year 2025 shall continue in effect through model year 2035.
SEC. 403. COMPLIANCE WITH FLEET AVERAGE CARBON DIOXIDE EMISSIONS
STANDARDS.
(a) Greenhouse Gas Emissions Standards.--Section 206 of the Clean
Air Act (42 U.S.C. 7525) is amended by adding at the end the following:
``(i) Deemed Compliance.--If a manufacturer complies with the
applicable Corporate Average Fuel Economy standards required under
section 32902(a) of title 49, United States Code, in a model year with
respect to the passenger automobiles, non-passenger automobiles, and
work trucks (as those terms are defined in section 32901(a) of that
title) manufactured by the manufacturer, including through payment of
civil penalties pursuant to section 32919 of that title or through the
purchase of credits available to the manufacturer under section 32903
of that title, the manufacturer shall be considered to be in compliance
with fleet-average greenhouse gas emissions standards under section
202, including fleet-average carbon dioxide emissions standards, that
are applicable to those vehicles in that model year.''.
(b) CAFE Standards.--Section 32902 of title 49, United States Code,
is amended by adding at the end the following:
``(l) Deemed Compliance.--If a manufacturer complies with the
fleet-average greenhouse gas emissions standards under section 202 of
the Clean Air Act (42 U.S.C. 7521), including fleet-average carbon
dioxide emissions standards, for light-duty vehicles and medium-duty
vehicles (as those terms are defined in section 86.1803-01 of title 40,
Code of Federal Regulations (or a successor regulation) for a model
year, including through purchased credits, the manufacturer shall be
considered to be in compliance with the average fuel economy standard
prescribed under this section applicable to those vehicles in that
model year.''.
SEC. 404. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are necessary
to carry out this subtitle and the amendments made by this subtitle.
Subtitle B--Establishment of New Heavy-Duty Vehicle Standards
SEC. 411. ESTABLISHMENT OF HEAVY-DUTY VEHICLE GREENHOUSE GAS EMISSIONS
STANDARDS.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Greenhouse gas emissions.--The term ``greenhouse gas
emissions'' means emissions of carbon dioxide, methane, nitrous
oxide, and other gases that contribute to climate change.
(b) New Standards.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Administrator, in consultation with
the Secretary of Transportation, shall publish in the Federal
Register new greenhouse gas emissions standards for heavy-duty
trucks beginning no earlier than model year 2027.
(2) Interim standards.--During the period beginning on the
date of enactment of this Act and ending on the date on which
the new greenhouse gas emissions standards established under
paragraph (1) is finalized, the greenhouse gas emissions
standards for heavy-duty trucks shall be the standards for
model year 2024 as described in the final rule of the
Administrator and the Administrator of the National Highway
Traffic Safety Administration entitled ``Greenhouse Gas
Emissions and Fuel Efficiency Standards for Medium- and Heavy-
Duty Engines and Vehicles--Phase 2'' (81 Fed. Reg. 73478
(October 25, 2016)).
(c) Requirements.--The greenhouse gas emissions standards
established under subsection (b)(1) shall--
(1) reflect achievable technological advancements based on
market readiness and affordability; and
(2) be based on evidence from industry capacity, historical
market adoption data, technological advancements, and
independent expert assessments to determine feasibility and
economic impact, including on motor vehicle manufacturing job
quality and stability.
(d) Consultation.--In establishing the greenhouse gas emissions
standards under subsection (b)(1), the Administrator shall, after
providing adequate notice, consult with manufacturers, automotive
dealers, end users, energy producers, consumer groups, and other
relevant stakeholders.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line