[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1685 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 1685
To amend the Internal Revenue Code of 1986 to provide a credit for the
purchase of certain new electric bicycles.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 21, 2023
Mr. Panetta (for himself, Mr. Blumenauer, Mr. Thompson of California,
and Mr. Schiff) introduced the following bill; which was referred to
the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide a credit for the
purchase of certain new electric bicycles.
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 ``Electric Bicycle Incentive Kickstart
for the Environment Act'' or as the ``E-BIKE Act''.
SEC. 2. CREDIT FOR CERTAIN NEW ELECTRIC BICYCLES.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 36B the following new section:
``SEC. 36C. ELECTRIC BICYCLES.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 30 percent of the cost of each
qualified electric bicycle placed in service by the taxpayer during
such taxable year.
``(b) Limitations.--
``(1) Limitation on cost per bicycle taken into account.--
The amount taken into account under subsection (a) as the cost
of any qualified electric bicycle shall not exceed $5,000.
``(2) Limitation on number of bicycles.--In the case of any
taxpayer for any taxable year, the number of qualified electric
bicycles taken into account under subsection (a) shall not
exceed the excess (if any) of--
``(A) 1 (2 in the case of a joint return), reduced
by
``(B) the aggregate number of qualified electric
bicycles taken into account by the taxpayer under
subsection (a) for the 2 preceding taxable years.
``(3) Phaseout based on income.--
``(A) Phaseout based on modified adjusted gross
income.--The credit allowed under subsection (a) shall
be reduced by $100 for each $1,000 (or fraction
thereof) by which the taxpayer's modified adjusted
gross income exceeds--
``(i) $300,000 in the case of a joint
return or a surviving spouse (as defined in
section 2(a)),
``(ii) $225,000 in the case of a head of
household (as defined in section 2(b)), and
``(iii) $150,000 in the case of a taxpayer
not described in clause (i) or (ii).
``(B) Special rule for modified adjusted gross
income taken into account.--The modified adjusted gross
income of the taxpayer that is taken into account for
purposes of subparagraph (A) shall be the lesser of--
``(i) the modified adjusted gross income
for the taxable year with respect to which the
credit is claimed, or
``(ii) the modified adjusted gross income
for the immediately preceding taxable year.
``(C) Modified adjusted gross income.--For purposes
of subparagraph (A), the term `modified adjusted gross
income' means adjusted gross income increased by any
amount excluded from gross income under section 911,
931, or 933.
``(c) Qualified Electric Bicycle.--For purposes of this section--
``(1) In general.--The term `qualified electric bicycle'
means a bicycle or tricycle--
``(A) the original use of which commences with the
taxpayer,
``(B) which is acquired for use by the taxpayer and
not for resale,
``(C) which is not property of a character subject
to an allowance for depreciation or amortization in the
hands of the taxpayer,
``(D) which is made by a qualified manufacturer and
is labeled with the qualified vehicle identification
number assigned to such bicycle or tricycle by such
manufacturer,
``(E) with respect to which the aggregate amount
paid for such acquisition does not exceed $8,000,
``(F) which is a class 1 electric bicycle or
tricycle, a class 2 electric bicycle or tricycle, or a
class 3 electric bicycle or tricycle,
``(G) which is equipped with--
``(i) fully operable pedals,
``(ii) a saddle or seat for the rider, and
``(iii) an electric motor of less than 750
watts which is designed to provide assistance
in propelling the bicycle or tricycle and--
``(I) does not provide such
assistance if the bicycle or tricycle
is moving in excess of 20 miler per
hour, or
``(II) if such motor only provides
such assistance when the rider is
pedaling, does not provide such
assistance if the bicycle or tricycle
is moving in excess of 28 miles per
hour,
``(H) which is not equipped with any motor other
than the motor described in subparagraph (G)(iii),
``(I) which is not capable of exceeding the speed
limitation in paragraph (2) by means of any electronic
switch, setting or software modification provided or
made available by the manufacturer, and
``(J) which has a drive system that has been
certified by an accredited laboratory to Underwriters
Laboratory (UL) standard UL 2849, or a battery that has
been certified to any of the battery safety standards
listed in such standard UL 2849 or such other drive
system or battery safety standard as may be recognized
by the United States Consumer Product Safety
Commission.
``(2) Class 1 electric bicycle or tricycle.--The term
`class 1 electric bicycle or tricycle' means a two- or three-
wheeled vehicle equipped with an electric motor that provides
assistance only when the rider is pedaling, that is not capable
of providing assistance when the speed of the vehicle exceeds
20 miles per hour, and that is not a class 3 electric bicycle
or tricycle.
``(3) Class 2 electric bicycle or tricycle.--The term
`class 2 electric bicycle or tricycle' means a two- or three-
wheeled vehicle equipped with an electric motor that may be
used to propel the vehicle without the need of any additional
assistance, and that is not capable of providing assistance
when the speed of the vehicle exceeds 20 miles per hour.
``(4) Class 3 electric bicycle or tricycle.--The term
`class 3 electric bicycle or tricycle' means a two- or three-
wheeled vehicle equipped with an electric motor that provides
assistance only when the rider is pedaling, and that is not
capable of providing assistance when the speed of the vehicle
exceeds 28 miles per hour.
``(d) Special Rule for Bicycles Used by an Individual in a Trade or
Business.--In the case of any bicycle or tricycle with respect to which
the taxpayer elects (at such time and in such manner as the Secretary
may provide) the application of this subsection--
``(1) subsections (c)(1)(C) and (f)(2) shall not apply with
respect to such bicycle or tricycle, and
``(2) no deduction (including any deduction for
depreciation or amortization) or credit (other than the credit
allowed under this section) shall be allowed for the cost of
such bicycle or tricycle.
``(e) VIN Number Requirement.--
``(1) In general.--No credit shall be allowed under
subsection (a) with respect to any qualified electric bicycle
unless the taxpayer includes the qualified vehicle
identification number of such bicycle on the return of tax for
the taxable year.
``(2) Qualified vehicle identification number.--For
purposes of this section, the term `qualified vehicle
identification number' means, with respect to any qualified
electric bicycle, the vehicle identification number assigned to
such bicycle by a qualified manufacturer pursuant to the
methodology referred to in paragraph (3)(A).
``(3) Qualified manufacturer.--For purposes of this
section, the term `qualified manufacturer' means any
manufacturer of qualified electric bicycles which enters into
an agreement with the Secretary which provides that such
manufacturer will--
``(A) assign a vehicle identification number to
each qualified electric bicycle produced by such
manufacturer utilizing a methodology that will ensure
that such number (including any alphanumeric) is unique
to such bicycle (by utilizing numbers or letters which
are unique to such manufacturer or by such other method
as the Secretary may provide),
``(B) label such bicycle with such number in such
manner as the Secretary may provide, and
``(C) make periodic written reports to the
Secretary (at such times and in such manner as the
Secretary may provide) of the vehicle identification
numbers so assigned and including such information as
the Secretary may require with respect to the qualified
electric bicycle to which such number was so assigned.
``(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.
``(2) No double benefit.--The amount of any deduction or
other credit allowable under this chapter for a qualified
electric bicycle for which a credit is allowable under
subsection (a) shall be reduced by the amount of credit allowed
under such subsection for such bicycle.
``(3) 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).
``(4) Recapture.--The Secretary shall, by regulations or
other guidance, 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.
``(5) Election not to take credit.--No credit shall be
allowed under subsection (a) for any qualified electric bicycle
if the taxpayer elects to not have this section apply to such
bicycle.
``(g) Treatment of Certain Possessions.--
``(1) Payments to possessions with mirror code tax
systems.--The Secretary shall pay to each possession of the
United States which has a mirror code tax system amounts equal
to the loss (if any) to that possession by reason of the
application of the provisions of this section (determined
without regard to this subsection). Such amounts shall be
determined by the Secretary based on information provided by
the government of the respective possession.
``(2) Payments to other possessions.--The Secretary shall
pay to each possession of the United States which does not have
a mirror code tax system amounts estimated by the Secretary as
being equal to the aggregate benefits (if any) that would have
been provided to residents of such possession by reason of the
provisions of this section if a mirror code tax system had been
in effect in such possession. The preceding sentence shall not
apply unless the respective possession has a plan which has
been approved by the Secretary under which such possession will
promptly distribute such payments to its residents.
``(3) Mirror code tax system; treatment of payments.--Rules
similar to the rules of paragraphs (3), (4), and (5) of section
21(h) shall apply for purposes of this section.
``(h) Transfer of Credit.--
``(1) In general.--Subject to such regulations or other
guidance as the Secretary determines necessary or appropriate,
if the taxpayer who acquires a qualified electric bicycle is an
individual and elects the application of this subsection with
respect to such qualified electric bicycle, the credit which
would (but for this subsection) be allowed to such taxpayer
with respect to such qualified electric bicycle shall be
allowed to the eligible entity specified in such election (and
not to such taxpayer).
``(2) Eligible entity.--For purposes of this paragraph, the
term `eligible entity' means, with respect to the qualified
electric bicycle for which the credit is allowed under
subsection (a), the retailer which sold such qualified electric
bicycle to the taxpayer and has--
``(A) subject to paragraph (4), registered with the
Secretary for purposes of this paragraph, at such time,
and in such form and manner, as the Secretary may
prescribe,
``(B) prior to the election described in paragraph
(1) and no later than at the time of such sale,
disclosed to the taxpayer purchasing such qualified
electric bicycle--
``(i) the retail price,
``(ii) the value of the credit allowed or
other incentive available for the purchase of
such qualified electric bicycle,
``(iii) all fees associated with the
purchase of such qualified electric bicycle,
and
``(iv) the amount provided by the retailer
to such taxpayer as a condition of the election
described in paragraph (1),
``(C) made payment to such taxpayer (whether in
cash or in the form of a partial payment or down
payment for the purchase of such qualified electric
bicycle) in an amount equal to the credit otherwise
allowable to such taxpayer, and
``(D) with respect to any incentive otherwise
available for the purchase of a qualified electric
bicycle for which a credit is allowed under this
section, including any incentive in the form of a
rebate or discount provided by the retailer or
manufacturer, ensured that--
``(i) the availability or use of such
incentive shall not limit the ability of a
taxpayer to make an election described in
paragraph (1), and
``(ii) such election shall not limit the
value or use of such incentive.
``(3) Timing.--An election described in paragraph (1) shall
be made by the taxpayer not later than the date on which the
qualified electric bicycle for which the credit is allowed
under subsection (a) is purchased.
``(4) Revocation of registration.--Upon determination by
the Secretary that a retailer has failed to comply with the
requirements described in paragraph (2), the Secretary may
revoke the registration (as described in subparagraph (A) of
such paragraph) of such retailer.
``(5) Tax treatment of payments.--With respect to any
payment described in paragraph (2)(C), such payment--
``(A) shall not be includible in the gross income
of the taxpayer, and
``(B) with respect to the retailer, shall not be
deductible under this title.
``(6) Application of certain other requirements.--In the
case of any election under paragraph (1) with respect to any
qualified electric bicycle--
``(A) the amount of the reduction under subsection
(b) shall be determined with respect to the modified
adjusted gross income of the taxpayer for the taxable
year preceding the taxable year in which such qualified
electric bicycle was acquired (and not with respect to
such income for the taxable year in which such
qualified electric bicycle was acquired),
``(B) the requirements of paragraphs (1) and (2) of
subsection (f) shall apply to the taxpayer who acquired
the qualified electric bicycle in the same manner as if
the credit determined under this section with respect
to such qualified electric bicycle were allowed to such
taxpayer, and
``(C) subsection (f)(5) shall not apply.
``(7) Advance payment to registered retailers.--
``(A) In general.--The Secretary shall establish a
program to make advance payments to any eligible entity
in an amount equal to the cumulative amount of the
credits allowed under subsection (a) with respect to
any qualified electric bicycles sold by such entity for
which an election described in paragraph (1) has been
made.
``(B) Excessive payments.--Rules similar to the
rules of section 6417(c)(6) shall apply for purposes of
this paragraph.
``(8) Retailer.--For purposes of this subsection, the term
`retailer' means a person engaged in the trade or business of
selling qualified electric bicycles in a State, the District of
Columbia, the Commonwealth of Puerto Rico, or any other
territory or possession of the United States.''.
(b) Conforming Amendments.--
(1) Section 1016(a) of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of paragraph (37), by
striking the period at the end of paragraph (38) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(39) to the extent provided in section 36C(f)(1).''.
(2) Section 6211(b)(4)(A) of such Code is amended by
inserting ``36C,'' after ``36B,''.
(3) Section 6213(g)(2) of such Code is amended--
(A) in subparagraph (U), by striking ``and'' at the
end,
(B) in subparagraph (V), by striking the period at
the end and inserting ``, and'', and
(C) by adding at the end the following:
``(W) an omission of a correct vehicle
identification number required under section 36C(e)
(relating to electric bicycles credit) to be included
on a return.''.
(4) Section 6501(m) of such Code is amended by inserting
``36C(f)(5),'' after ``35(g)(11),''.
(5) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``36C,'' after ``36B,''.
(c) Clerical Amendment.--The table of sections for subpart C 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 item:
``Sec. 36C. Electric bicycles.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
(e) Treasury Report.--Not later than 3 years after the date of the
enactment of this Act, the Secretary of the Treasury (or the
Secretary's delegate) shall make publicly available a written report
specifying the number of taxpayers claiming the credit allowed under
section 36C of the Internal Revenue Code of 1986 (as added by this
section) and the aggregate dollar amount of such credits so allowed.
Such information shall be stated separately for taxable years beginning
in 2023 and 2024, and shall be stated separately with respect to each
such years with respect to taxpayers in each of the income brackets to
which section 1 of such Code applies.
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