[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2962 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 2962

    To repeal tax incentives relating to electric vehicles, and to 
   establish a tax credit to promote automobile manufacturing in the 
                             United States.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           September 28 (legislative day, September 22), 2023

   Mr. Vance introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To repeal tax incentives relating to electric vehicles, and to 
   establish a tax credit to promote automobile manufacturing in the 
                             United States.

    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 ``Drive American Act''.

SEC. 2. 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.

             TITLE I--REPEAL OF ELECTRIC VEHICLE INCENTIVES

SEC. 101. REPEAL OF CLEAN VEHICLE CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
is amended by striking section 30D (and by striking the item relating 
to such section in the table of sections for such subpart).
    (b) Conforming Amendments.--
            (1) Section 30B(d)(3) is amended by striking subparagraph 
        (D).
            (2) Section 38(b) is amended by striking paragraph (30).
            (3) Section 179D(d)(3)(B)(ii) is amended by inserting ``, 
        as in effect on the day before the date of the enactment of the 
        Drive American Act'' after ``section 30D(g)(9)''.
            (4) Section 1016(a) is amended--
                    (A) in paragraph (36), by adding ``and'' at the 
                end,
                    (B) by striking paragraph (37), and
                    (C) by redesignating paragraph (38) as paragraph 
                (37).
            (5) Section 6213(g)(2) is amended by striking subparagraph 
        (T).
            (6) Section 6417(d)(1)(A)(iv) is amended by inserting ``, 
        as in effect on the day before the date of the enactment of the 
        Drive American Act'' after ``section 30D(g)(9)''.
            (7) Section 6501(m) is amended by striking ``30D(f)(6),''.
            (8) Section 166(b)(5)(A)(ii) of title 23, United States 
        Code, is amended by inserting ``, as in effect on the day 
        before the date of the enactment of the Drive American Act'' 
        after ``section 30D(d)(1) of the Internal Revenue Code of 
        1986''.
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicle placed in service after December 31, 2022.

SEC. 102. 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 by 
striking subparagraph (U).
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles acquired after December 31, 2022.

SEC. 103. 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) is amended by striking paragraph (37).
            (2) Section 6213(g)(2) is amended by striking subparagraph 
        (V).
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles acquired after December 31, 2022.

SEC. 104. ALTERNATIVE FUEL REFUELING PROPERTY CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
is amended by striking section 30C (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 (25).
            (2) Section 55(c)(3) is amended by striking ``sections 
        30C(d)(2) and 38(c)'' and inserting ``section 38(c)''.
            (3) Section 1016(a), as amended by section 101, is 
        amended--
                    (A) in paragraph (35), by adding ``and'' at the 
                end,
                    (B) by striking paragraph (36), and
                    (C) by redesignating paragraph (37) as paragraph 
                (36).
            (4) Section 6417(b) is amended by striking paragraph (1).
            (5) Section 6418(f)(1)(A) is amended by striking clause 
        (i).
            (6) Section 6501(m) is amended by striking ``30C(e)(4),''.
            (7) Section 244(b) of the Energy Independence and Security 
        Act of 2007 (42 U.S.C. 17052(b)) is amended by striking 
        paragraph (6).
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2021.

       TITLE II--CREDIT FOR AUTOMOBILES MADE IN THE UNITED STATES

SEC. 201. ESTABLISHMENT OF AMERICA FIRST VEHICLE CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new section:

``SEC. 30E. AMERICA FIRST VEHICLE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of the credit amounts determined under subsection (b) 
with respect to each new vehicle placed in service by the taxpayer 
during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--
            ``(1) In general.--The amount determined under this 
        subsection with respect to any new vehicle is the sum of the 
        amounts determined under paragraphs (2) and (3) with respect to 
        such vehicle.
            ``(2) Base amount.--The amount determined under this 
        paragraph is $2,500.
            ``(3) Vehicle capacity.--
                    ``(A) In general.--The amount determined under this 
                paragraph is the greater of--
                            ``(i) the payload capacity adjustment, or
                            ``(ii) the seating capacity adjustment.
                    ``(B) Payload capacity adjustment.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(i), the payload capacity 
                        adjustment is $500 for every 250 pounds of 
                        payload capacity in excess of 1,000 pounds.
                            ``(ii) Payload capacity.--For purposes of 
                        clause (i), the payload capacity of any new 
                        vehicle shall be an amount equal to the 
                        difference between--
                                    ``(I) the vehicle curb weight (as 
                                such term is defined in section 216 of 
                                the Clean Air Act (42 U.S.C. 7550)) of 
                                such vehicle, and
                                    ``(II) the gross vehicle weight 
                                rating of such vehicle.
                    ``(C) Seating capacity adjustment.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(ii), the seating capacity 
                        adjustment is $1,000 for each passenger by 
                        which the seating capacity of the new vehicle 
                        is in excess of 4 passengers.
                            ``(ii) Seating capacity.--For purposes of 
                        clause (i), the seating capacity of any new 
                        vehicle shall be the maximum number of 
                        passengers (including the driver) which such 
                        vehicle can safely transport (as determined 
                        pursuant to applicable Federal laws and 
                        regulations).
                    ``(D) Limitation.--The amount determined under this 
                paragraph shall not exceed $5,000.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to property of a 
        character subject to an allowance for depreciation shall be 
        treated as a credit listed in section 38(b) for such taxable 
        year (and not allowed under subsection (a)).
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.
    ``(d) New Vehicle.--
            ``(1) In general.--The term `new vehicle' means a motor 
        vehicle--
                    ``(A) the original use of which commences with the 
                taxpayer,
                    ``(B) which is acquired for use or lease by the 
                taxpayer and not for resale,
                    ``(C) which is made by a qualified manufacturer,
                    ``(D) which satisfies each of the requirements 
                under paragraphs (1) and (2) of subsection (e),
                    ``(E) which has a gross vehicle weight rating of 
                less than 14,000 pounds,
                    ``(F) which is propelled to a significant extent by 
                a gasoline or diesel internal combustion engine,
                    ``(G) the final assembly of which occurs within the 
                United States, and
                    ``(H) for which the person who sells any vehicle to 
                the taxpayer furnishes a report to the taxpayer and to 
                the Secretary, at such time and in such manner as the 
                Secretary shall provide, containing--
                            ``(i) the name and taxpayer identification 
                        number of the taxpayer,
                            ``(ii) the vehicle identification number of 
                        the vehicle, unless, in accordance with any 
                        applicable rules promulgated by the Secretary 
                        of Transportation, the vehicle is not assigned 
                        such a number,
                            ``(iii) verification that original use of 
                        the vehicle commences with the taxpayer, and
                            ``(iv) the maximum credit under this 
                        section allowable to the taxpayer with respect 
                        to the vehicle.
            ``(2) Motor vehicle.--The term `motor vehicle' means any 
        vehicle which is manufactured primarily for use on public 
        streets, roads, and highways (not including a vehicle operated 
        exclusively on a rail or rails) and which has at least 4 
        wheels.
            ``(3) Qualified manufacturer.--The term `qualified 
        manufacturer' means any manufacturer (as defined in section 
        30102(a)(6) of title 49, United States Code, but not including 
        any importer described in subparagraph (B) of that section) 
        which enters into a written agreement with the Secretary under 
        which such manufacturer agrees to make periodic written reports 
        to the Secretary (at such times and in such manner as the 
        Secretary may provide) providing vehicle identification numbers 
        and such other information related to each vehicle manufactured 
        by such manufacturer as the Secretary may require.
            ``(4) Final assembly.--For purposes of paragraph (1)(G), 
        the term `final assembly' means the process by which a 
        manufacturer produces a new vehicle at, or through the use of, 
        a plant, factory, or other place from which the vehicle is 
        delivered to a dealer or importer with all component parts 
        necessary for the mechanical operation of the vehicle included 
        with the vehicle, whether or not the component parts are 
        permanently installed in or on the vehicle.
    ``(e) Content Requirements.--
            ``(1) Regional value content.--
                    ``(A) In general.--The requirement described in 
                this paragraph with respect to a vehicle is that the 
                regional value content is not less than 60 percent (as 
                certified by the qualified manufacturer, in such form 
                or manner as prescribed by the Secretary).
                    ``(B) Regional value content.--The regional value 
                content is the amount (expressed as a percentage) equal 
                to the quotient of--
                            ``(i) the net cost of the vehicle minus the 
                        value of any non-originating materials used in 
                        the production of the vehicle, divided by
                            ``(ii) the net cost of the vehicle.
                    ``(C) Value of non-originating materials.--
                            ``(i) In general.--For purposes of 
                        subparagraph (B)(i), the value of any non-
                        originating materials shall include any 
                        materials of indeterminate origin which are 
                        used by the producer in the production of the 
                        vehicle.
                            ``(ii) Exclusion.--For purposes of 
                        subparagraph (B)(i), the value of any non-
                        originating materials used in the production of 
                        the vehicle shall not include the value of any 
                        non-originating materials used or consumed to 
                        produce originating materials which are 
                        subsequently used or consumed in the production 
                        of the vehicle.
            ``(2) Labor value content.--
                    ``(A) In general.--The requirement described in 
                this paragraph with respect to a vehicle is that the 
                labor value content is not less than 25 percent (as 
                certified by the qualified manufacturer, in such form 
                or manner as prescribed by the Secretary).
                    ``(B) Labor value content.--The labor value content 
                is the amount (expressed as a percentage) equal to the 
                quotient of--
                            ``(i) the sum of--
                                    ``(I) the value of high-wage 
                                material contained in the vehicle, plus
                                    ``(II) the value of high-wage labor 
                                costs associated with production of the 
                                vehicle, divided by
                            ``(ii) the net cost of the vehicle.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) High-wage labor costs.--The term `high-wage 
                labor costs' means an amount equal to the sum of wage 
                expenditures (not including benefits) incurred in the 
                assembly of the vehicle for workers who perform direct 
                production work at a qualifying wage-rate assembly 
                plant.
                    ``(B) High-wage material.--The term `high-wage 
                material' means the net cost of material that undergoes 
                production in a qualifying wage-rate production plant 
                and that is used in the production of the vehicle.
                    ``(C) Net cost.--The term `net cost' means total 
                cost minus sales promotion, marketing, and after-sales 
                service costs, royalties, shipping and packing costs, 
                and nonallowable interest costs that are included in 
                the total cost.
                    ``(D) Non-originating material.--The term `non-
                originating material' means a material which is not an 
                originating material.
                    ``(E) Originating material.--The term `originating 
                material' means a material which is--
                            ``(i) wholly obtained or produced entirely 
                        in the United States or Canada, or
                            ``(ii) substantially transformed in the 
                        United States or Canada from a material which 
                        is not wholly grown, produced, or manufactured 
                        in the United States or Canada.
                    ``(F) Qualifying wage-rate assembly plant.--The 
                term `qualifying wage-rate production plant' means a 
                facility which--
                            ``(i) assembles passenger vehicles, light 
                        trucks, or heavy trucks,
                            ``(ii) is located in the United States, and
                            ``(iii) has an average hourly production 
                        wage rate for employees working in such 
                        facility which is not less than $44 per hour.
                    ``(G) Qualifying wage-rate production plant.--The 
                term `qualifying wage-rate production plant' means a 
                facility which--
                            ``(i) produces materials for passenger 
                        vehicles, light trucks, or heavy trucks,
                            ``(ii) is located in the United States, and
                            ``(iii) has an average hourly production 
                        wage rate for employees working in such 
                        facility which is not less than $35 per hour.
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any calendar year 
                beginning after 2025, the dollar amounts in 
                subparagraphs (F)(iii) and (G)(iii) of paragraph (3) 
                shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting in subparagraph 
                        (A)(ii) thereof `calendar year 2024' for 
                        `calendar year 2016'.
                    ``(B) Rounding.--If any amount as adjusted under 
                subparagraph (A) is not a multiple of $1, such dollar 
                amount shall be rounded to the next lowest multiple of 
                $1.
            ``(5) Regulations and guidance.--
                    ``(A) In general.--The Secretary shall, in 
                consultation with the Secretary of Commerce and the 
                Secretary of Labor, issue such regulations or other 
                guidance as the Secretary determines necessary to carry 
                out the purposes of this subsection, including 
                regulations or other guidance which provides for 
                requirements for recordkeeping or information reporting 
                for purposes of administering the requirements of this 
                subsection.
                    ``(B) Deadline for proposed guidance.--Not later 
                than December 31, 2024, the Secretary shall issue 
                proposed guidance with respect to the requirements 
                under this subsection.
    ``(f) Special Rules.--
            ``(1) Basis reduction.--For purposes of this subtitle, the 
        basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (c)).
            ``(2) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter for a vehicle for 
        which a credit is allowable under subsection (a) shall be 
        reduced by the amount of credit allowed under such subsection 
        for such vehicle (determined without regard to subsection (c)).
            ``(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.
            ``(4) Property used outside united states not qualified.--
        No credit shall be allowable under subsection (a) with respect 
        to any property referred to in section 50(b)(1).
            ``(5) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit.
            ``(6) Election not to take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(7) Interaction with motor vehicle safety standards.--A 
        vehicle shall not be considered eligible for a credit under 
        this section unless such vehicle is in compliance with the 
        motor vehicle safety provisions of sections 30101 through 30169 
        of title 49, United States Code.
            ``(8) One credit per vehicle.--In the case of any vehicle, 
        the credit described in subsection (a) shall only be allowed 
        once with respect to such vehicle, as determined based upon the 
        vehicle identification number of such vehicle.
            ``(9) VIN requirement.--No credit shall be allowed under 
        this section with respect to any vehicle unless the taxpayer 
        includes the vehicle identification number of such vehicle on 
        the return of tax for the taxable year.
            ``(10) Limitation based on modified adjusted gross 
        income.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for any taxable year if--
                            ``(i) the lesser of--
                                    ``(I) the modified adjusted gross 
                                income of the taxpayer for such taxable 
                                year, or
                                    ``(II) the modified adjusted gross 
                                income of the taxpayer for the 
                                preceding taxable year, exceeds
                            ``(ii) the threshold amount.
                    ``(B) Threshold amount.--For purposes of 
                subparagraph (A)(ii), the threshold amount shall be--
                            ``(i) in the case of a joint return or a 
                        surviving spouse (as defined in section 2(a)), 
                        $300,000,
                            ``(ii) in the case of a head of household 
                        (as defined in section 2(b)), $225,000, and
                            ``(iii) in the case of a taxpayer not 
                        described in clause (i) or (ii), $150,000.
                    ``(C) Modified adjusted gross income.--For purposes 
                of this paragraph, the term `modified adjusted gross 
                income' means adjusted gross income increased by any 
                amount excluded from gross income under section 911, 
                931, or 933.
            ``(11) Manufacturer's suggested retail price limitation.--
                    ``(A) In general.--No credit shall be allowed under 
                subsection (a) for a vehicle with a manufacturer's 
                suggested retail price in excess of the applicable 
                limitation.
                    ``(B) Applicable limitation.--For purposes of 
                subparagraph (A), the applicable limitation for each 
                vehicle classification is as follows:
                            ``(i) Vans.--In the case of a van, $80,000.
                            ``(ii) Sport utility vehicles.--In the case 
                        of a sport utility vehicle, $80,000.
                            ``(iii) Pickup trucks.--In the case of a 
                        pickup truck, $80,000.
                            ``(iv) Other.--In the case of any other 
                        vehicle, $55,000.
                    ``(C) Regulations and guidance.--For purposes of 
                this paragraph, the Secretary shall prescribe such 
                regulations or other guidance as the Secretary 
                determines necessary for determining vehicle 
                classifications using criteria similar to the criteria 
                described in part 523 of title 49, Code of Federal 
                Regulations (as in effect on the date of enactment of 
                the Drive American Act).
    ``(g) Termination.--No credit shall be allowed under this section 
with respect to any vehicle placed in service after December 31, 
2033.''.
    (b) Conforming Amendments.--
            (1) Section 38(b), as amended by section 103, is amended by 
        inserting after paragraph (36) the following:
            ``(37) the portion of the America First vehicle credit to 
        which section 30E(c)(1) applies,''.
            (2) Section 1016(a) is amended--
                    (A) in paragraph (37), by striking ``and'' at the 
                end,
                    (B) by redesignating paragraph (38) as paragraph 
                (39), and
                    (C) by inserting after paragraph (37) the 
                following:
            ``(38) to the extent provided in section 30E(f)(1), and''.
            (3) Section 6213(g)(2), as amended by sections 101, 102, 
        and 103, is amended by inserting after subparagraph (S) the 
        following:
                    ``(T) an omission of a correct vehicle 
                identification number required under section 30E(f)(9) 
                (relating to credit for new vehicles) to be included on 
                a return.''.
            (4) Section 6501(m), as amended by section 101, is amended 
        by inserting ``30E(f)(6),'' after ``30D(e)(4),''.
            (5) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 30E. America First Vehicle Credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to vehicles placed in service after December 31, 2024.
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