Section 1 Short title
This Act may be cited as the “Clean Fuels Vehicle Act of 2021”.
Clean Fuels Vehicle Act of 2021
A BILL
To amend the Internal Revenue Code of 1986 to provide a tax credit for the production of flexible fuel vehicles, and to amend title 49, United States Code, to restore certain flexible fuel vehicle credits.
Sec. 2 Flexible fuel vehicle production tax credit
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45U. Flexible fuel vehicle production credit
“(a) In general—For purposes of section 38, in the case of a manufacturer, the flexible fuel vehicle production credit for any taxable year shall be an amount equal to the product of—
“(1) $200, and
“(2) the number of qualified flexible fuel vehicles—
“(A) produced by the taxpayer, and
“(B) sold by the taxpayer to an unrelated person in the United States during the taxable year.
“(b) Limitation—The number of qualified flexible fuel vehicles taken into account for any taxable year shall not exceed 25 percent of the sum of—
“(1) the total number of light duty vehicles produced for model years ending in such taxable year, plus
“(2) the total number of light duty trucks produced for model years ending in such taxable year.
“(c) Qualified flexible fuel vehicle—For purposes of this section—
“(1) In general—The term qualified flexible fuel vehicle means a motor vehicle—
“(A) which is engineered and designed to be operated—
“(i) on a petroleum fuel and on a methanol or ethanol fuel, or
“(ii) on any mixture of the petroleum fuel and methanol or ethanol, and
“(B) which meets the requirements for a flexible fuel vehicle as are prescribed by the Administrator of the Environmental Protection Agency for purposes of title of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).
“(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.
“(d) Other definitions and rules
“(1) Manufacturer; other terms—The terms manufacturer, light duty vehicle, light duty truck, and model year have the meanings given such terms 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.).
“(2) Related persons—Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling a vehicle to an unrelated person if such vehicle is sold to such a person by another member of such group.
“(e) Termination—This section shall not apply to any flexible fuel vehicle produced for any model year ending after 2031.”
Part of general business credit— Section 38(b) of such Code is amended by striking “plus” at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting “, plus”, and by adding at the end the following new paragraph:
“(34) the flexible fuel vehicle production credit determined under section 45U(a).”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:
Effective date— The amendments made by this section shall apply to vehicles produced and sold after the date of the enactment of this Act, in taxable years ending after such date.
Sec. 3 Restoration of certain flexible fuel vehicle credits
Restoration of manufacturing incentives for dual fueled automobiles— Section 32905(b) of title 49, United States Code, is amended, in the matter preceding paragraph (1), by striking “in model years 1993 through 2019”.
Repeal of maximum fuel economy increase for alternative fuel automobiles—
In general— Section 32906 of title 49, United States Code, is repealed.
Clerical amendment— The analysis for chapter 329 of part C of subtitle VI of title 49, United States Code, is amended by striking the item relating to section 32906.
Testing procedures under the Clean Air Act— Section 206 of the Clean Air Act (42 U.S.C. 7525) is amended—
in subsection (h), by striking “subsection (a) and (b) of this section” and inserting “subsections (a) and (b)”; and
by adding at the end the following:
“(i) Not later than 180 days after the date of enactment of this subsection, the Administrator shall review the regulations under subsections (a) and (b) relating to the testing of motor vehicles and motor vehicle engines to ensure such testing is in accordance with section 32905(b) of title 49, United States Code.”
Conforming amendments—
Section 32901(c)(1) of title 49, United States Code, is amended, in the first sentence, by striking “under sections 32905 and 32906 of this title” and inserting “under section 32905”.
Section 32905 of title 49, United States Code, is amended by striking subsection (g).
Section 32908(g)(3) of title 49, United States Code, is amended by striking the second sentence.