[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