[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3938 Reported in House (RH)]

<DOC>





                                                  Union Calendar No. 99
118th CONGRESS
  1st Session
                                H. R. 3938

                          [Report No. 118-127]

   To amend the Internal Revenue Code of 1986 to encourage economic 
                                growth.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 9, 2023

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

                             June 30, 2023

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on June 9, 
                                 2023]


_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to encourage economic 
                                growth.


 


    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, ETC.

    (a) Short Title.--This Act may be cited as the ``Build It in 
America Act''.
    (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.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents, etc.

                     TITLE I--INVESTMENT IN AMERICA

Sec. 101. Deduction for research and experimental expenditures.
Sec. 102. Extension of allowance for depreciation, amortization, or 
                            depletion in determining the limitation on 
                            business interest.
Sec. 103. Extension of 100 percent bonus depreciation.

                    TITLE II--SUPPLY CHAIN SECURITY

Sec. 201. Termination of Hazardous Substance Superfund financing rate.
Sec. 202. Election to determine foreign income taxes paid or accrued to 
                            certain Western Hemisphere countries 
                            without regard to certain regulations.
Sec. 203. Imposition of tax on the acquisition of United States 
                            agricultural interests by disqualified 
                            persons.

          TITLE III--REPEAL OF SPECIAL INTEREST TAX PROVISIONS

Sec. 301. Repeal of clean electricity production credit.
Sec. 302. Repeal of clean electricity investment credit.
Sec. 303. Modification of clean vehicle credit.
Sec. 304. Repeal of credit for previously-owned clean vehicles.
Sec. 305. Repeal of credit for qualified commercial clean vehicles.

                     TITLE I--INVESTMENT IN AMERICA

SEC. 101. DEDUCTION FOR RESEARCH AND EXPERIMENTAL EXPENDITURES.

    (a) Delay of Amortization of Research and Experimental 
Expenditures.--Section 174 is amended by adding at the end the 
following new subsection:
    ``(e) Suspension of Application.--This section shall apply to 
amounts paid or incurred in taxable years beginning after December 31, 
2025 (and shall not apply to amounts paid or incurred in taxable years 
beginning on or before such date).''.
    (b) Reinstatement of Expensing for Research and Experimental 
Expenditures.--Part VI of subchapter B of chapter 1 is amended by 
inserting after section 174 the following new section:

``SEC. 174A. TEMPORARY RULES FOR RESEARCH AND EXPERIMENTAL 
              EXPENDITURES.

    ``(a) Treatment as Expenses.--Notwithstanding section 263, there 
shall be allowed as a deduction any research or experimental 
expenditures which are paid or incurred by the taxpayer during the 
taxable year in connection with the taxpayer's trade or business.
    ``(b) Amortization of Certain Research and Experimental 
Expenditures.--
            ``(1) In general.--At the election of the taxpayer, made in 
        accordance with regulations or other guidance provided by the 
        Secretary, research or experimental expenditures which--
                    ``(A) are paid or incurred by the taxpayer in 
                connection with his trade or business, and
                    ``(B) would (but for subsection (a)) be chargeable 
                to capital account but not chargeable to property of a 
                character which is subject to the allowance under 
                section 167 (relating to allowance for depreciation, 
                etc.) or section 611 (relating to allowance for 
                depletion),
        may be treated as deferred expenses to which subsection (a) 
        does not apply. In computing taxable income, such deferred 
        expenses shall be allowed as a deduction ratably over such 
        period of not less than 60 months as may be selected by the 
        taxpayer (beginning with the month in which the taxpayer first 
        realizes benefits from such expenditures). Such deferred 
        expenses are expenditures properly chargeable to capital 
        account for purposes of section 1016(a)(1) (relating to 
        adjustments to basis of property).
            ``(2) Time for and scope of election.--The election 
        provided by paragraph (1) may be made for any taxable year, but 
        only if made not later than the time prescribed by law for 
        filing the return for such taxable year (including extensions 
        thereof). The method so elected, and the period selected by the 
        taxpayer, shall be adhered to in computing taxable income for 
        the taxable year for which the election is made and for all 
        subsequent taxable years unless, with the approval of the 
        Secretary, a change to a different method (or to a different 
        period) is authorized with respect to part or all of such 
        expenditures. The election shall not apply to any expenditure 
        paid or incurred during any taxable year before the taxable 
        year for which the taxpayer makes the election.
    ``(c) Election to Capitalize Expenses.--In the case of a taxpayer 
which elects (at such time and in such manner as the Secretary may 
provide) the application of this subsection, subsections (a) and (b) 
shall not apply. Such election shall not apply to any expenditure paid 
or incurred during any taxable year before the taxable year for which 
the taxpayer makes the election and may be made with respect to part of 
the expenditures paid or incurred during any taxable year only with the 
approval of the Secretary.
    ``(d) Land and Other Property.--This section shall not apply to any 
expenditure for the acquisition or improvement of land, or for the 
acquisition or improvement of property to be used in connection with 
the research or experimentation and of a character which is subject to 
the allowance under section 167 (relating to allowance for 
depreciation, etc.) or section 611 (relating to allowance for 
depletion); but for purposes of this section allowances under section 
167, and allowances under section 611, shall be considered as 
expenditures.
    ``(e) Exploration Expenditures.--This section shall not apply to 
any expenditure paid or incurred for the purpose of ascertaining the 
existence, location, extent, or quality of any deposit of ore or other 
mineral (including oil and gas).
    ``(f) Software Development.--For purposes of this section, any 
amount paid or incurred in connection with the development of any 
software shall be treated as a research or experimental expenditure.
    ``(g) Only Reasonable Research Expenditures Eligible.--This section 
shall apply to a research or experimental expenditure only to the 
extent that the amount thereof is reasonable under the circumstances.
    ``(h) Coordination With Research Credit.--
            ``(1) In general.--Section 41(d)(1)(A) shall be applied by 
        substituting `expenses under section 174A' for `specified 
        research or experimental expenditures under section 174'.
            ``(2) Denial of double benefit.--
                    ``(A) In general.--Section 280C(c) shall not apply 
                and the amount taken into account under this section as 
                research or experimental expenditures shall be reduced 
                by the amount of the credit allowable under section 
                41(a).
                    ``(B) Election of reduced credit.--
                            ``(i) In general.--In the case of any 
                        taxable year for which an election is made 
                        under this subparagraph--
                                    ``(I) subparagraph (A) shall not 
                                apply, and
                                    ``(II) the amount of the credit 
                                under section 41(a) shall be the amount 
                                determined under clause (ii).
                            ``(ii) Amount of reduced credit.--The 
                        amount of credit determined under this clause 
                        for any taxable year shall be the amount equal 
                        to the excess of--
                                    ``(I) the amount of credit 
                                determined under section 41(a) without 
                                regard to this subparagraph, over
                                    ``(II) the product of the amount 
                                described in subclause (I), multiplied 
                                by the rate of tax under section 11(b).
                            ``(iii) Election.--An election under this 
                        subparagraph for any taxable year shall be made 
                        not later than the time for filing the return 
                        of tax for such year (including extensions), 
                        shall be made on such return, and shall be made 
                        in such manner as the Secretary may prescribe. 
                        Such an election, once made, shall be 
                        irrevocable.
                    ``(C) Controlled groups.--Paragraph (3) of section 
                280C(b) shall apply for purposes of this paragraph.
    ``(i) Coordination With Long-term Contract Rules.--For purposes of 
determining percentage of completion under section 460(b)(1)(A), any 
research or experimental expenditures paid or incurred by the taxpayer 
in connection with the taxpayer's trade or business shall be taken into 
account as a cost allocated to the contract for the taxable year in 
which so paid or incurred.
    ``(j) Coordination With Certain Other Provisions.--A reference to 
the corresponding provision of this section shall be treated as 
included in any reference to section 174 in section 56(b), 59(e), 
144(a), 168(i), 170(e), 195(c), 263(a), 263A(c), 469(c), 543(d), 
864(g), 993(d), 1016(a)(14), 1202(a), or 1298(e).
    ``(k) Termination.--
            ``(1) In general.--This section shall not apply to amounts 
        paid or incurred in taxable years beginning after December 31, 
        2025.
            ``(2) Change in method of accounting.--Paragraph (1) (and 
        the corresponding application of section 174) shall be treated 
        as a change in method of accounting for purposes of section 481 
        and--
                    ``(A) such change shall be treated as initiated by 
                the taxpayer,
                    ``(B) such change shall be treated as made with the 
                consent of the Secretary, and
                    ``(C) such change shall be applied only on a cut-
                off basis for any research or experimental expenditures 
                paid or incurred in taxable years beginning after 
                December 31, 2025, and no adjustment under section 
                481(a) shall be made.''.
    (c) Coordination of Amortization With Certain Other Provisions.--
Section 174, as amended by subsection (a), is amended by redesignating 
subsection (e) as subsection (f) and by inserting after subsection (d) 
the following new subsection:
    ``(e) Coordination With Certain Other Provisions.--
            ``(1) Coordination with alternative minimum tax.--Sections 
        56(b)(2) and 59(e)(2)(B) shall not apply to specified research 
        or experimental expenditures to which this section applies.
            ``(2) Coordination with basis adjustment rules.--Section 
        1016(a)(14) shall be applied by substituting `an amortization 
        deduction under section 174(a)' for `deductions as deferred 
        expenses under section 174(b)(1)'.
            ``(3) Coordination with long-term contract rules.--For 
        purposes of determining percentage of completion under section 
        460(b)(1)(A), the amortization deduction under subsection (a) 
        shall be taken into account as a cost allocated to the 
        contract.''.
    (d) Conforming Amendments.--
            (1) Section 13206 of Public Law 115-97 is amended by 
        striking subsection (b) (relating to change in method of 
        accounting).
            (2) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by inserting after the item relating to 
        section 174 the following new item:

``Sec. 174A. Temporary rules for research and experimental 
                            expenditures.''.
    (e) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        amounts paid or incurred in taxable years beginning after 
        December 31, 2021.
            (2) Repeal of superceded change in method of accounting 
        rules.--The amendment made by subsection (d)(1) shall take 
        effect as if included in Public Law 115-97.
    (f) Transition Rules.--
            (1) Election regarding treatment as change in method of 
        accounting.--In the case of any taxpayer which (as of the date 
        of the enactment of this Act) had adopted a method of 
        accounting provided by section 174 of the Internal Revenue Code 
        of 1986 (as in effect prior to the amendments made by this 
        section) for the taxpayer's first taxable year beginning after 
        December 31, 2021, and elects the application of this 
        paragraph--
                    (A) the amendments made by this section shall be 
                treated as a change in method of accounting for 
                purposes of section 481 of such Code,
                    (B) such change shall be treated as initiated by 
                the taxpayer for the taxpayer's immediately succeeding 
                taxable year,
                    (C) such change shall be treated as made with the 
                consent of the Secretary, and
                    (D) such change shall be applied on a modified cut-
                off basis, taking into account for purposes of section 
                481(a) of such Code only the capitalized expenditures 
                which were not allowed as an amortization deduction by 
                reason of section 174 prior to amendment by this Act 
                for the taxpayer's first taxable year beginning after 
                December 31, 2021.
            (2) Election regarding 10-year writeoff.--
                    (A) In general.--An eligible taxpayer which files, 
                during the 1-year period beginning on the date of the 
                enactment of this Act, an amended income tax return for 
                the taxable year described in subparagraph (B)(ii) may 
                elect the application of section 59(e) of the Internal 
                Revenue Code of 1986 with respect to qualified 
                expenditures described in section 59(e)(2)(B) of such 
                Code with respect to such taxable year. Such election 
                shall be filed with such amended income tax return and 
                shall be effective only to the extent that such 
                election would have been effective if filed with the 
                original income tax return for such taxable year.
                    (B) Eligible taxpayer.--For purposes of 
                subparagraph (A), the term ``eligible taxpayer'' means 
                any taxpayer which--
                            (i) does not elect the application of 
                        paragraph (1), and
                            (ii) filed an income tax return for such 
                        taxpayer's first taxable year beginning after 
                        December 31, 2021, before the earlier of--
                                    (I) the due date for such return, 
                                and
                                    (II) the date of the enactment of 
                                this Act.

SEC. 102. EXTENSION OF ALLOWANCE FOR DEPRECIATION, AMORTIZATION, OR 
              DEPLETION IN DETERMINING THE LIMITATION ON BUSINESS 
              INTEREST.

    (a) In General.--Section 163(j)(8)(A)(v) is amended by striking 
``January 1, 2022'' and inserting ``January 1, 2026''.
    (b) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendment made by this section shall apply to 
        taxable years beginning after December 31, 2022.
            (2) Election to apply extension retroactively.--In the case 
        of a taxpayer which elects (at such time and in such manner as 
        the Secretary may provide) the application of this paragraph, 
        paragraph (1) shall be applied by substituting ``December 31, 
        2021'' for ``December 31, 2022''.

SEC. 103. EXTENSION OF 100 PERCENT BONUS DEPRECIATION.

    (a) In General.--Section 168(k)(6)(A) is amended--
            (1) in clause (i)--
                    (A) by striking ``2023'' and inserting ``2026'', 
                and
                    (B) by adding ``and'' at the end, and
            (2) by striking clauses (ii), (iii), and (iv), and 
        redesignating clause (v) as clause (ii).
    (b) Property With Longer Production Periods.--Section 168(k)(6)(B) 
is amended--
            (1) in clause (i)--
                    (A) by striking ``2024'' and inserting ``2027'', 
                and
                    (B) by adding ``and'' at the end, and
            (2) by striking clauses (ii), (iii), and (iv), and 
        redesignating clause (v) as clause (ii).
    (c) Plants Bearing Fruits and Nuts.--Section 168(k)(6)(C) is 
amended--
            (1) in clause (i)--
                    (A) by striking ``2023'' and inserting ``2026'', 
                and
                    (B) by adding ``and'' at the end, and
            (2) by striking clauses (ii), (iii), and (iv), and 
        redesignating clause (v) as clause (ii).
    (d) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        property placed in service after December 31, 2022.
            (2) Plants bearing fruits and nuts.--The amendments made by 
        subsection (c) shall apply to specified plants planted or 
        grafted after December 31, 2022.

                    TITLE II--SUPPLY CHAIN SECURITY

SEC. 201. TERMINATION OF HAZARDOUS SUBSTANCE SUPERFUND FINANCING RATE.

    (a) In General.--Section 4611 (as amended by section 13601 of 
Public Law 117-169) is amended by inserting after subsection (d) the 
following new subsection:
    ``(e) Application of Hazardous Substance Superfund Financing 
Rate.--The Hazardous Substance Superfund financing rate under this 
section shall not apply after December 31, 2022.''.
    (b) Termination of Authority for Advances.--Section 9507(d)(3)(B) 
(as so amended) is amended--
            (1) by striking ``December 31, 2032'' and inserting ``the 
        date of the enactment of the Build It in America Act'', and
            (2) by striking ``on or before such date'' and inserting 
        ``as soon as practicable thereafter''.
    (c) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        take effect on January 1, 2023.
            (2) Termination of authority for advances.--The amendments 
        made by subsection (b) shall take effect on the date of the 
        enactment of this Act.

SEC. 202. ELECTION TO DETERMINE FOREIGN INCOME TAXES PAID OR ACCRUED TO 
              CERTAIN WESTERN HEMISPHERE COUNTRIES WITHOUT REGARD TO 
              CERTAIN REGULATIONS.

    (a) Election With Respect to Determining Certain Foreign Income 
Taxes.--In the case of any taxpayer which elects (at such time and in 
such manner as the Secretary may provide) the application of this 
subsection, the determination of whether any Western Hemisphere tax 
paid or accrued by such taxpayer is an income, war profits, or excess 
profits tax for purposes of any provision of the Internal Revenue Code 
of 1986 shall be made without regard to any specified regulation.
    (b) Separate Election With Respect to Allocation and Apportionment 
of Foreign Income Taxes Relating to Disregarded Payments From Certain 
Disregarded Entities.--
            (1) In general.--If the owner of any specified disregarded 
        entity elects (at such time and in such manner as the Secretary 
        may provide) the application of this subsection with respect to 
        such entity, then for purposes of allocating and apportioning 
        any foreign income taxes (as defined in section 986(a)(4) of 
        the Internal Revenue Code of 1986 and determined after the 
        application of subsection (a) of this section) paid or accrued 
        by reason of any remittance made by such entity to such owner 
        during the applicable period, any items of foreign gross income 
        included by reason of the receipt of such remittance shall be 
        assigned to a category based on current and accumulated 
        earnings and profits of such entity (in lieu of being assigned 
        on the basis of the tax book value method described in a 
        specified regulation).
            (2) Specified disregarded entity.--For purposes of this 
        subsection, the term ``specified disregarded entity'' means any 
        entity (including any trade or business) if--
                    (A) such entity is disregarded as an entity 
                separate from its owner for purposes of applying 
                chapter 1 of the Internal Revenue Code of 1986,
                    (B) such entity is created or organized in a 
                possession of the United States or a foreign country 
                described in subsection (d)(1)(B),
                    (C) at all times after December 31, 2019 (or, if 
                later, the date on which such entity is created or 
                organized) substantially all of the income of such 
                entity is derived from trades or businesses conducted 
                in the possession or country referred to in 
                subparagraph (B), and
                    (D) at all times after the date on which such 
                entity is created or organized, such entity maintains 
                separate books and records.
    (c) Application to Deemed Paid Credit.--In the case of any tax paid 
or accrued by a controlled foreign corporation and deemed to have been 
paid by a United States shareholder under section 960 of the Internal 
Revenue Code of 1986--
            (1) any election under subsection (a) or (b) shall be made 
        by such controlled foreign corporation and shall be binding on 
        all United States shareholders of such controlled foreign 
        corporation, and
            (2) the applicable period under subsection (d) shall be 
        determined with respect to the taxable years of such controlled 
        foreign corporation.
    (d) Western Hemisphere Tax.--For purposes of this section--
            (1) In general.--The term ``Western Hemisphere tax'' means 
        any tax which is paid or accrued for a taxable year which is in 
        the applicable period to--
                    (A) any possession of the United States, or
                    (B) any foreign country (other than Cuba and 
                Venezuela) which is located in North, Central, or South 
                America (including the West Indies).
            (2) Applicable period.--The term ``applicable period'' 
        means--
                    (A) in the case of any election made under 
                subsection (a), all taxable years beginning after 
                December 31, 2021, and before January 1, 2027, and
                    (B) in the case of any election made under 
                subsection (b), all taxable years beginning after 
                December 31, 2019, and before January 1, 2027.
            (3) Determination based on taxable year for which tax 
        actually paid or accrued.--The determination of the taxable 
        year for which any tax is paid or accrued for purposes of 
        determining whether a foreign tax is paid or accrued for a 
        taxable year which is in the applicable period shall be made 
        without regard to any taxable year with respect to which such 
        tax is deemed to have been paid under section 904(c) or 960 of 
        the Internal Revenue Code of 1986.
    (e) Specified Regulation.--For purposes of this section, the term 
``specified regulation'' means--
            (1) Treasury Regulations relating to ``Guidance Related to 
        the Foreign Tax Credit; Clarification of Foreign-Derived 
        Intangible Income'' (87 Fed. Reg. 276; published on January 4, 
        2022),
            (2) proposed Treasury Regulations relating to ``Guidance 
        Related to the Foreign Tax Credit'' (87 Fed. Reg. 71271; 
        published on November 22, 2022), and
            (3) any regulation or other guidance published after 
        January 4, 2022, to the extent that such regulation or other 
        guidance is substantially similar to, or predicated upon, any 
        portion of the regulations referred to in paragraph (1) or (2).
In the case of any regulation or other guidance which is published 
after the date of the enactment of this Act and any portion of which is 
described in paragraph (3), the Secretary shall identify such 
regulation or guidance (or portion thereof) as not applying with 
respect to taxpayers which have elected the application of subsection 
(a) or (b), as the case may be.
    (f) Secretary.--For purposes of this section, the term 
``Secretary'' means the Secretary of the Treasury or the Secretary's 
delegate.

SEC. 203. IMPOSITION OF TAX ON THE ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    (a) In General.--Subtitle D is amended by inserting after chapter 
50A the following new chapter:

 ``CHAPTER 50B--ACQUISITION OF UNITED STATES AGRICULTURAL INTERESTS BY 
                          DISQUALIFIED PERSONS

``Sec. 5000E. Imposition of tax on acquisition of United States 
                            agricultural interests by disqualified 
                            persons.

``SEC. 5000E. IMPOSITION OF TAX ON ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    ``(a) In General.--In the case of any acquisition of any United 
States agricultural interest by any disqualified person, there is 
hereby imposed on such person a tax equal to 60 percent of the amount 
paid for such interest.
    ``(b) Disqualified Person.--For purposes of this section--
            ``(1) In general.--The term `disqualified person' means--
                    ``(A) any citizen of a country of concern (other 
                than a citizen, or lawful permanent resident, of the 
                United States and other than an individual domiciled in 
                Taiwan possessing a valid identification card or number 
                issued by the government of Taiwan),
                    ``(B) any entity domiciled in a country of concern 
                (other than an entity domiciled in Taiwan),
                    ``(C) any country of concern and any political 
                subdivision, agency, or instrumentality thereof, and
                    ``(D) except as provided in paragraph (3), any 
                entity if persons described in subparagraph (A), (B), 
                or (C) (in the aggregate) 10-percent control such 
                entity.
            ``(2) Country of concern.--The term `country of concern' 
        means any country the government of which is engaged in a long-
        term pattern or serious instances of conduct significantly 
        adverse to the national security of the United States or the 
        security and safety of United States persons, including the 
        People's Republic of China, the Russian Federation, Iran, North 
        Korea, Cuba, and the regime of Nicolas Maduro in Venezuela.
            ``(3) Exception for certain publicly traded corporations.--
                    ``(A) In general.--An entity shall not be treated 
                as described in paragraph (1)(D) if--
                            ``(i) such entity is a specified publicly 
                        traded corporation, or
                            ``(ii) specified publicly traded 
                        corporations (in the aggregate) control such 
                        entity.
                    ``(B) Specified publicly traded corporation.--
                            ``(i) In general.--The term `specified 
                        publicly traded corporation' means any 
                        corporation if--
                                    ``(I) the stock of such corporation 
                                is regularly traded on an established 
                                securities market located in the United 
                                States, and
                                    ``(II) specified disqualified 
                                persons do not (in the aggregate) 
                                control such corporation.
                            ``(ii) Specified disqualified persons.--The 
                        term `specified disqualified persons' means, 
                        with respect to any corporation referred to in 
                        clause (i), any person which--
                                    ``(I) is described in subparagraph 
                                (A), (B), or (C) of paragraph (1), and
                                    ``(II) 10-percent controls such 
                                corporation.
    ``(c) Prorated Tax on Acquisitions by Entities Not More Than 50 
Percent Controlled by Disqualified Persons.--
            ``(1) In general.--In the case of any disqualified person 
        described in subsection (b)(1)(D) with respect to which persons 
        described in subparagraphs (A), (B), or (C) of subsection 
        (b)(1) do not (in the aggregate) control such disqualified 
        person, subsection (a) shall be applied by substituting `the 
        applicable percentage of the amount' for `the amount'.
            ``(2) Applicable percentage.--For purposes of this section, 
        the term `applicable percentage' means, with respect to any 
        disqualified person to which paragraph (1) applies, the highest 
        percentage which could be substituted for `50 percent' both 
        places it appears in section 954(d)(3) without causing persons 
        described in subparagraph (A), (B), or (C) of subsection (b)(1) 
        (in the aggregate) to control (determined by taking into 
        account such substitution) such disqualified person.
    ``(d) Control.--For purposes of this section--
            ``(1) In general.--The term `control' has the meaning given 
        such term under section 954(d)(3), determined by treating the 
        rules of section 958(a)(2) as applying to both foreign and 
        domestic corporations, partnerships, trusts, and estates.
            ``(2) 10-percent control.--The term `10-percent control' 
        means control (as defined in paragraph (1)), determined by 
        substituting `10 percent' for `50 percent' both places it 
        appears in section 954(d)(3).
    ``(e) United States Agricultural Interest.--For purposes of this 
section--
            ``(1) In general.--The term `United States agricultural 
        interest' has the meaning which would be given the term `United 
        States real property interest' by section 897(c) if--
                    ``(A) paragraph (1)(A)(i) were applied by 
                substituting `an interest in agricultural land' for `an 
                interest in real property' and all that follows,
                    ``(B) paragraph (1)(A)(ii) were applied by 
                substituting `such corporation was not a United States 
                real property holding corporation at the time of 
                acquisition' for `such corporation' and all that 
                follows,
                    ``(C) paragraph (1)(B) did not apply, and
                    ``(D) paragraph (3) were applied by substituting 
                `at the time of acquisition' for `at some time during 
                the shorter of the periods described in paragraph 
                (1)(A)(ii)'.
            ``(2) Agricultural land.--For purposes of paragraph (1), 
        the term `agricultural land' means--
                    ``(A) agricultural land as defined in section 9 of 
                the Agricultural Foreign Investment Disclosure Act of 
                1978 (7 U.S.C. 3508), and
                    ``(B) land located in one or more States and used 
                for livestock production purposes (determined under 
                rules similar to the rules that apply under such 
                section 9).''.
    (b) Reporting Requirements.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 is amended by adding at the end the following new 
        section:

``SEC. 6050AA. RETURNS RELATING TO ACQUISITION OF UNITED STATES 
              AGRICULTURAL INTERESTS BY DISQUALIFIED PERSONS.

    ``(a) In General.--The required reporting person, with respect to 
any acquisition of any United States agricultural interest by a 
presumptively disqualified person to which section 5000E(a) applies, 
shall make a return at such time as the Secretary may provide setting 
forth--
            ``(1) the name, address, and TIN of such presumptively 
        disqualified person,
            ``(2) a description of such United States agricultural 
        interest (including the street address, if applicable), and
            ``(3) the amount paid for such United States agricultural 
        interest.
    ``(b) Statement to Be Furnished to Presumptively Disqualified 
Person.--Every person required to make a return under subsection (a) 
shall furnish, at such time as the Secretary may provide, to each 
presumptively disqualified person whose name is required to be set 
forth in such return a written statement showing--
            ``(1) the name and address of the information contact of 
        the required reporting person, and
            ``(2) the information described in paragraphs (1), (2), and 
        (3) of subsection (a) which relates to such disqualified 
        person.
    ``(c) Required Reporting Person.--For purposes of this section, the 
term `required reporting person' means, with respect to any acquisition 
of any United States agricultural interest--
            ``(1) the person (including any attorney or title company) 
        responsible for closing the transaction in which such United 
        States agricultural interest is acquired, or
            ``(2) if no one is responsible for closing such transaction 
        (or in such other cases as the Secretary may provide), the 
        transferor of such United States agricultural interest.
    ``(d) Presumptively Disqualified Person.--For purposes of this 
section, the term `presumptively disqualified person' means any person 
unless such person furnishes to the required reporting person an 
affidavit by the such person stating, under penalty of perjury, that 
such person is not a disqualified person (as defined in section 
5000E(b)).
    ``(e) Requirement to Request Affidavit.--If the required reporting 
person, with respect to any acquisition of any United States 
agricultural interest, has not, as of the time of such acquisition, 
been furnished the affidavit described in subsection (d) by the 
acquirer of such interest, such required reporting person shall furnish 
to such acquirer, at such time, a written statement informing such 
acquirer of the required reporting person's obligation to make the 
return described in subsection (a) with respect to such acquisition and 
including such other information as the Secretary may require.
    ``(f) United States Agricultural Interest.--For purposes of this 
section, the term `United States agricultural interest' has the meaning 
given such term in section 5000E.''.
            (2) Penalties.--Section 6724(d) is amended--
                    (A) in paragraph (1)(B), by striking ``or'' at the 
                end of clause (xxvii), by striking ``and'' at the end 
                of clause (xxviii) and inserting ``or'', and by adding 
                at the end the following new clause:
                            ``(xxix) section 6050AA(a) (relating to 
                        returns relating to acquisition of United 
                        States agricultural interests by disqualified 
                        persons), and'', and
                    (B) in paragraph (2), by striking ``or'' at the end 
                of subparagraph (KK), by striking the period at the end 
                of subparagraph (LL) and inserting ``, or'', and by 
                inserting after subparagraph (LL) the following new 
                subparagraph:
                    ``(MM) subsection (b) or (e) of section 6055AA 
                (relating to statements relating to acquisition of 
                United States agricultural interests by disqualified 
                persons).''.
    (c) Clerical Amendments.--
            (1) The table of chapters for subtitle D is amended by 
        inserting after the item relating to chapter 50A the following 
        new item:

 ``Chapter 50B. Acquisition of United States Agricultural Interests by 
                        Disqualified Persons.''.

            (2) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 is amended by adding at the end the 
        following new item:

``Sec. 6050AA. Returns relating to acquisition of United States 
                            agricultural interests by disqualified 
                            persons.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to acquisitions after the date of the enactment of this Act.

          TITLE III--REPEAL OF SPECIAL INTEREST TAX PROVISIONS

SEC. 301. REPEAL OF CLEAN ELECTRICITY PRODUCTION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
is amended by striking section 45Y (and by striking the item relating 
to such section in the table of sections for such subpart).
    (b) Conforming Amendments.--
            (1) Section 38(b) is amended by striking paragraph (39) and 
        redesignating paragraphs (40) and (41) as paragraphs (39) and 
        (40), respectively.
            (2) Section 6417(b) is amended by striking paragraph (8) 
        and redesignating paragraphs (9) through (12) as paragraphs (8) 
        through (11), respectively.
            (3) Section 6418(f)(1) is amended--
                    (A) in subparagraph (A), by striking clause (vii) 
                and by redesignating clauses (viii) through (xi) as 
                clauses (vii) through (x), respectively, and
                    (B) in subparagraph (B), by striking ``(v), or 
                (vii)'' and inserting ``or (v)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in section 13701 of Public Law 117-169.

SEC. 302. REPEAL OF CLEAN ELECTRICITY INVESTMENT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
is amended by striking section 48E (and by striking the item relating 
to such section in the table of sections for such subpart).
    (b) Conforming Amendments.--
            (1) Section 46, as amended by Public Law 117-169, is 
        amended--
                    (A) in paragraph (5), by adding ``and'' at the end,
                    (B) in paragraph (6), by striking ``, and'' and 
                inserting a period, and
                    (C) by striking paragraph (7).
            (2) Section 48(e)(4)(D) is amended by striking ``except as 
        provided in section 48E(h)(4)(D)(ii)''.
            (3) Section 48C(f) is amended by striking ``48E,''.
            (4) Section 49(a)(1)(C), as amended by Public Law 117-169, 
        is amended--
                    (A) by adding ``and'' at the end of clause (v),
                    (B) by striking the comma at the end of clause (vi) 
                and inserting a period, and
                    (C) by striking clauses (vii) and (viii).
            (5) Section 50(a)(2)(E), as amended by Public Law 117-169, 
        is amended by striking ``48D(b)(5), or 48E(e)'' and inserting 
        ``or 48D(b)(5)''.
            (6) Section 50(c)(3), as amended by Public Law 117-169, is 
        amended by striking ``or clean electricity investment credit''.
            (7) Section 168(e)(3)(B), as amended by Public Law 117-169, 
        is amended--
                    (A) in clause (vi)(III), by inserting ``and'' at 
                the end,
                    (B) in clause (vii), by striking ``, and'' and 
                inserting a period, and
                    (C) by striking clause (viii).
            (8) Section 6417(b), as amended by the preceding provisions 
        of this Act, is amended by striking paragraph (11).
            (9) Section 6418(f)(1)(A), as amended by the preceding 
        provisions of this Act, is amended by striking clause (x).
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in section 13702 of Public Law 117-169.

SEC. 303. MODIFICATION OF CLEAN VEHICLE CREDIT.

    (a) Per Vehicle Dollar Limitation.--Section 30D(b) is amended by 
striking paragraphs (2) and (3) and inserting the following:
            ``(2) Base amount.--The amount determined under this 
        paragraph is $2,500.
            ``(3) Battery capacity.--In the case of a vehicle which 
        draws propulsion energy from a battery with not less than 5 
        kilowatt hours of capacity, the amount determined under this 
        paragraph is $417, plus $417 for each kilowatt hour of capacity 
        in excess of 5 kilowatt hours. The amount determined under this 
        paragraph shall not exceed $5,000.''.
    (b) Final Assembly.--Section 30D(d) is amended--
            (1) in paragraph (1), by striking subparagraph (G), and
            (2) by striking paragraph (5).
    (c) Additional Modifications to Vehicle Definition.--
            (1) In general.--Section 30D(d), as amended by subsection 
        (b), is amended--
                    (A) in the heading, by striking ``Clean'' and 
                inserting ``Qualified Plug-in Electric Drive Motor'',
                    (B) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``clean'' and inserting 
                        ``qualified plug-in electric drive motor'',
                            (ii) in subparagraph (C), by striking 
                        ``qualified'' before ``manufacturer'',
                            (iii) in subparagraph (E), by adding 
                        ``and'' at the end,
                            (iv) in subparagraph (F)--
                                    (I) in clause (i), by striking 
                                ``7'' and inserting ``4'', and
                                    (II) in clause (ii), by striking 
                                the comma at the end and inserting a 
                                period, and
                            (v) by striking subparagraph (H),
                    (C) in paragraph (3)--
                            (i) in the heading, by striking ``qualified 
                        manufacturer'' and inserting ``Manufacturer'', 
                        and
                            (ii) by striking ``The term `qualified 
                        manufacturer' means'' and all that follows 
                        through the period and inserting ``The term 
                        `manufacturer' has the meaning given such term 
                        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.).'', 
                        and
                    (D) by striking paragraph (6).
            (2) Conforming amendments.--Section 30D is amended--
                    (A) in subsection (a), by striking ``new clean 
                vehicle'' and inserting ``new qualified plug-in 
                electric drive motor vehicle'', and
                    (B) in subsection (b)(1), by striking ``new clean 
                vehicle'' and inserting ``new qualified plug-in 
                electric drive motor vehicle''.
    (d) Critical Mineral and Battery Component Requirement 
Modifications.--
            (1) In general.--Section 30D(e), as added by Public Law 
        117-169, is amended by striking paragraphs (1) and (2), by 
        redesignating paragraph (3) as paragraph (4), and by inserting 
        before paragraph (4) (as so redesignated) the following new 
        paragraphs:
            ``(1) Critical minerals requirement.--No credit shall be 
        allowed under this section with respect to any vehicle unless, 
        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--
                    ``(A) 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
                    ``(B) recycled in North America,
        is equal to or greater than 80 percent (as certified by the 
        manufacturer, in such form or manner as prescribed by the 
        Secretary). For purposes of subparagraph (A)(ii), the term 
        `free trade agreement' means an international agreement 
        approved by Congress that eliminates duties and other 
        restrictive regulations of commerce on substantially all the 
        trade between the United States and one or more other 
        countries.
            ``(2) Battery components.--No credit shall be allowed under 
        this section with respect to any vehicle unless, with respect 
        to the battery from which the electric motor of such vehicle 
        draws electricity, all of the components contained in such 
        battery were manufactured or assembled in North America (as 
        certified by the manufacturer, in such form or manner as 
        prescribed by the Secretary).
            ``(3) Restriction on foreign entities of concern.--No 
        credit shall be allowed under this section which respect to any 
        vehicle placed in service after December 31, 2024, if any of 
        the applicable critical minerals contained in the battery of 
        such vehicle (as described in paragraph (1)) 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))).''.
            (2) Conforming amendment.--Section 30D(d) is amended by 
        striking paragraph (7).
    (e) Transfer of Credit Repealed.--
            (1) In general.--Section 30D is amended by striking 
        subsection (g).
            (2) Conforming amendments reversed.--Section 30D(f) is 
        amended--
                    (A) by inserting after paragraph (2) the following:
    ``(3) Property Used by Tax-exempt Entity.--In the case of a vehicle 
the use of which 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.'', 
and
                    (B) in paragraph (8), by striking ``, including any 
                vehicle with respect to which the taxpayer elects the 
                application of subsection (g)''.
    (f) Reinstatement of Limitation on Number of Vehicles Eligible for 
Credit.--Section 30D is amended by inserting after subsection (f) the 
following:
    ``(g) Limitation on Number of New Qualified Plug-in Electric Drive 
Motor Vehicles Eligible for Credit.--
            ``(1) In general.--In the case of a new qualified plug-in 
        electric drive motor vehicle sold during the phaseout period, 
        only the applicable percentage of the credit otherwise 
        allowable under subsection (a) shall be allowed.
            ``(2) Phaseout period.--For purposes of this subsection, 
        the phaseout period is the period beginning with the second 
        calendar quarter following the calendar quarter which includes 
        the first date on which the number of new qualified plug-in 
        electric drive motor vehicles manufactured by the manufacturer 
        of the vehicle referred to in paragraph (1) sold for use in the 
        United States after December 31, 2009, is at least 200,000.
            ``(3) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 50 percent for the first 2 calendar quarters 
                of the phaseout period,
                    ``(B) 25 percent for the 3rd and 4th calendar 
                quarters of the phaseout period, and
                    ``(C) 0 percent for each calendar quarter 
                thereafter.
            ``(4) Controlled groups.--Rules similar to the rules of 
        section 30B(f)(4) shall apply for purposes of this 
        subsection.''.
    (g) Termination Repealed.--Section 30D is amended by striking 
subsection (h).
    (h) Additional Conforming Amendments.--
            (1) The heading of section 30D is amended by striking 
        ``clean vehicle credit'' and inserting ``new qualified plug-in 
        electric drive motor vehicles''.
            (2) Section 30B(h)(8) is amended by inserting ``, 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'', before the 
        period at the end.
            (3) Section 38(b)(30) is amended by striking ``clean'' and 
        inserting ``qualified plug-in electric drive motor''.
            (4) 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. New qualified plug-in electric drive motor vehicles.''
    (i) Gross up Repealed.--Section 13401 of Public Law 117-169 is 
amended by striking subsection (j).
    (j) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection or subsection (k), the amendments made by this 
        section shall apply to vehicles placed in service after June 9, 
        2023.
            (2) Final assembly and manufacturer limitation.--The 
        amendments made by subsections (b) and (f) shall apply to 
        vehicles sold after June 9, 2023. Notwithstanding the preceding 
        sentence, the phaseout period (as defined in section 30D(g) of 
        the Internal Revenue Code of 1986, as amended by this section) 
        shall be determined by taking into account all vehicles 
        described in section 30D(g) of such Code (as so amended).
    (k) Transition Rule.--Notwithstanding subsection (j) (other than 
the last sentence of subsection (j)(2)), the amendments made by this 
section shall not apply with respect to any vehicle which is--
            (1) acquired by the taxpayer pursuant to a written binding 
        contract that was in effect on June 9, 2023, and
            (2) placed in service before June 9, 2024.
    (l) Coordination With Provisions Which Have Not Taken Effect.--
            (1) Transfer of credit.--Notwithstanding subsection (k)(4) 
        of section 13401 of Public Law 117-169, the amendments made by 
        subsection (g) of such section shall not apply.
            (2) Per vehicle dollar limits and related requirements.--
        Notwithstanding subsection (k)(3) of section 13401 of Public 
        Law 117-169, the amendments made by subsection (a) of such 
        section shall not apply unless the guidance referred to in such 
        subsection (k)(3) is issued on or before June 9, 2023.

SEC. 304. REPEAL OF CREDIT FOR PREVIOUSLY-OWNED CLEAN VEHICLES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
is amended by striking section 25E (and by striking the item relating 
to such section in the table of sections for such subpart).
    (b) Conforming Amendment.--Section 6213(g)(2) is amended--
            (1) in subparagraph (T), by adding ``and'' at the end,
            (2) by striking subparagraph (U), and
            (3) by redesignating subparagraph (V) as subparagraph (U).
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles acquired after June 9, 2023.
    (d) Transition Rule.--Notwithstanding subsection (c), the 
amendments made by this section shall not apply with respect to any 
vehicle which is--
            (1) acquired by the taxpayer pursuant to a written binding 
        contract that was in effect on June 9, 2023, and
            (2) placed in service before June 9, 2024.
    (e) Coordination With Provisions Which Have Not Taken Effect.--
Notwithstanding subsection (c)(2) of section 13402 of Public Law 117-
169, the amendments made by subsection (b) of such section shall not 
apply.

SEC. 305. REPEAL OF CREDIT FOR QUALIFIED COMMERCIAL CLEAN VEHICLES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
is amended by striking section 45W (and by striking the item relating 
to such section in the table of sections for such subpart).
    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by the preceding provisions 
        of this section, is amended by striking paragraph (37) and 
        redesignating paragraphs (38) through (40) as paragraphs (37) 
        through (39), respectively.
            (2) Section 6213(g)(2), as amended by the preceding 
        provisions of this Act, is amended--
                    (A) in subparagraph (S), by adding ``and'' at the 
                end,
                    (B) in subparagraph (T), by striking ``, and'' and 
                inserting a period, and
                    (C) by striking subparagraph (U).
            (3) Section 6417(b), as amended by the preceding provisions 
        of this Act, is amended by striking paragraph (6) and 
        redesignating paragraphs (7) through (10) as paragraphs (6) 
        through (9), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles acquired after June 9, 2023.
    (d) Transition Rule.--Notwithstanding subsection (c), the 
amendments made by this section shall not apply with respect to any 
vehicle which is--
            (1) acquired by the taxpayer pursuant to a written binding 
        contract that was in effect on June 9, 2023, and
            (2) placed in service before June 9, 2024.
                                                  Union Calendar No. 99

118th CONGRESS

  1st Session

                               H. R. 3938

                          [Report No. 118-127]

_______________________________________________________________________

                                 A BILL

   To amend the Internal Revenue Code of 1986 to encourage economic 
                                growth.

_______________________________________________________________________

                             June 30, 2023

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed