[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 113 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 113

   To amend the Internal Revenue Code of 1986 to allow individuals a 
    temporary refundable credit for the purchase of a new domestic 
                           passenger vehicle.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 5, 1993

Mr. Burton of Indiana introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to allow individuals a 
    temporary refundable credit for the purchase of a new domestic 
                           passenger vehicle.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Buy American Motor Vehicles Act of 
1993''.

SEC. 2. STATEMENT OF PURPOSE.

    It is the purpose of this Act to stimulate economic growth by 
encouraging the purchase of new domestic passenger vehicles through the 
provision of a temporary tax credit, which a purchaser may assign in 
exchange for an equal reduction in the purchase price of the vehicle 
from the amount such price would have been if this Act had not been 
enacted.

SEC. 3. TEMPORARY REFUNDABLE CREDIT FOR PURCHASE OF NEW DOMESTIC 
              PASSENGER VEHICLES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. PURCHASE OF NEW DOMESTIC PASSENGER VEHICLE.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an individual who 
        purchases a new domestic passenger vehicle, there shall be 
        allowed as a credit against the tax imposed by this chapter for 
        the taxable year in which the purchase is made an amount equal 
        to the applicable percentage of the purchase price of the 
        vehicle.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 15 percent, in the case of a vehicle 
                purchased in calendar year 1993, and
                  ``(B) 7.5 percent, in the case of a vehicle purchased 
                in calendar year 1994.
            ``(3) Limitation.--The credit allowed by paragraph (1) for 
        any taxpayer shall not exceed--
                    ``(A) $2,000, in the case of taxable years ending 
                on or before December 31, 1993, and
                    ``(B) $1,000, in the case of taxable years ending 
                after such date.
    ``(b) Assignment of Credit.--Under regulations prescribed by the 
Secretary--
            ``(1) an individual qualifying for a credit under 
        subsection (a) may, at the time of purchase of the vehicle, 
        assign the right to the credit to the retail dealer from whom 
        the vehicle is purchased in exchange for a purchase price 
        reduction of equal value,
            ``(2) such retail dealer may assign such right to the 
        manufacturer of the vehicle, and
            ``(3) such manufacturer shall be allowed to use such credit 
        against the tax imposed by this chapter on such manufacturer.
    ``(c) New Domestic Passenger Vehicle.--For purposes of this 
section--
            ``(1) In general.--The term `new domestic passenger 
        vehicle' means any domestic vehicle which--
                    ``(A) is a passenger vehicle (within the meaning of 
                section 4001(b)), and
                    ``(B) is purchased by the taxpayer in the 1st 
                retail sale of the vehicle (within the meaning of 
                section 4001(a)).
            ``(2) Domestic vehicle.--The term `domestic vehicle' means 
        any vehicle if--
                    ``(A) the vehicle is produced by a domestic vehicle 
                manufacturer at a manufacturing facility located within 
                the United States or Canada, and
                    ``(B) such manufacturer includes on the label 
                required by section 3 of the Automobile Information 
                Disclosure Act (15 U.S.C. 1232) information 
                concerning--
                            ``(i) whether the vehicle is a domestic 
                        vehicle eligible for the credit allowed by this 
                        section, and
                            ``(ii) the percentage of the value of all 
                        parts used in the production of the vehicle 
                        which is attributable to parts produced by 
                        domestic parts manufacturers.
            ``(3) Domestic manufacturers.--
                    ``(A) Domestic vehicle manufacturer.--The term 
                `domestic vehicle manufacturer' means a manufacturer 
                (whether or not a related source) of motor vehicles 
                which--
                            ``(i) has 1 or more motor vehicle 
                        manufacturing facilities located within the 
                        United States which produce motor vehicles for 
                        interstate sale or export, or both, and
                            (ii) with respect to its production of 
                        motor vehicles in the facilities referred to in 
                        clause (i) during the most recently completed 
                        calendar year, utilized motor vehicle parts 
                        produced by domestic manufacturers which 
                        constituted 60 percent or more of the total 
                        value of all motor vehicle parts used in such 
                        production.
                    ``(B) Domestic parts manufacturer.--The term 
                `domestic parts manufacturer' means a manufacturer of 
                motor vehicle parts which--
                            ``(i) has 1 or more motor vehicle parts 
                        manufacturing facilities located within the 
                        United States or Canada, and
                            ``(ii) either--
                                    ``(I) is not a related source,
                                    ``(II) is not affiliated with a 
                                related source, or
                                    ``(III) is affiliated with a 
                                related source, but with respect to its 
                                production of motor vehicle parts in 
                                the facilities referred to in clause 
                                (i) during the most recent full 
                                calendar year, utilized materials and 
                                components produced by, or purchased or 
                                otherwise obtained (directly or 
                                indirectly) from, related sources to an 
                                extent not exceeding 25 percent of the 
                                total value of such production.
            ``(4) Related sources, ownership, and affiliation.--
                    ``(A) Related source.--The term `related source' 
                means--
                            ``(i) a natural person who is a citizen of 
                        Japan, and
                            ``(ii) a corporation or other legal entity, 
                        wherever located, if owned or controlled by--
                                    ``(I) natural persons who are 
                                citizens of Japan, or
                                    ``(II) another corporation or other 
                                legal entity which is owned or 
                                controlled by natural persons who are 
                                citizens of Japan, unless such 
                                corporation or other legal entity would 
                                qualify as a domestic parts 
                                manufacturer under paragraph (3)(B).
                    ``(B) Own or control.--The term `own or control' 
                means--
                            ``(i) in the case of a corporation, the 
                        holding of at least 50 percent (by vote or 
                        value) of the capital structure of the 
                        corporation, and
                            ``(ii) in the case of any other kind of 
                        legal entity, the holding of interests 
                        representing at least 50 percent of the capital 
                        structure of the entity.
                    ``(C) Affiliated.--A domestic parts manufacturer 
                shall be considered to be affiliated with a related 
                source if--
                            ``(i) in the case of a domestic parts 
                        manufacturer which is a corporation, a related 
                        source holds at least 2.5 percent but less than 
                        50 percent (by vote or value) of the capital 
                        structure of the corporation, and
                            ``(ii) in the case of a domestic parts 
                        manufacturer which is any other kind of legal 
                        entity, a related source holds interests 
                        representing at least 2.5 percent, but less 
                        than 50 percent, of the capital structure of 
                        the entity.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Purchase price.--Purchase price shall be determined 
        under rules similar to the rules of section 4011(d)(1).
            ``(2) Value.--The term `value' when applied to--
                    ``(A) materials and components used in production 
                of motor vehicles parts, or
                    ``(B) motor vehicle parts used in the production of 
                motor vehicles,
        refers to the cost of such materials, components, or parts to 
        the manufacturer of such parts or vehicles as determined for 
        purposes of applying this title (including, in the case of 
        purchases of materials, components, and parts involving related 
        sources, entities owned or controlled by related sources, or 
        entities affiliated with related sources, determinations based 
        on the application of the transfer price rules).
            ``(3) United states.--The term `United States' includes the 
        Commonwealth of Puerto Rico and the possessions of the United 
        States.
    ``(e) Regulations.--Not later than 60 days after the date of the 
enactment of this section, the Secretary shall prescribe any 
regulations appropriate to carry out the purposes of this section, 
including regulations to prevent the avoidance of any limitation or 
requirement of this section.
    ``(f) Termination.--This section shall not apply to any vehicle 
purchased after December 31, 1994.''
    (b) Clerical Amendment.--The table of sections for such subpart C 
is amended by striking the item relating to section 35 and inserting 
the following new items:

                              ``Sec. 35. Purchase of new domestic 
                                        passenger vehicle.
                              ``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles purchased after December 31, 1992.

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