Us Congress 2025-2026 Regular Session

Us Congress House Bill HB1496 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 1496
5	5	To amend the Internal Revenue Code of 1986 to establish a credit for
6	6	the domestic production of high-performance rare earth magnets, and
7	7	for other purposes.
8	8	IN THE HOUSE OF REPRESENTATIVES
9	9	FEBRUARY21, 2025
10	10	Mr. R
11	11	ESCHENTHALER (for himself, Mr. SWALWELL, Mr. HUDSON, Ms. LEE
12	12	of Nevada, Mr. C
13	13	ALVERT, Ms. CASTORof Florida, Mr. OBERNOLTE, Mr.
14	14	T
15	15	ONKO, Mr. MOOLENAAR, Mr. DELUZIO, Mr. MEUSER, Mr. PANETTA,
16	16	Mr. M
17	17	ILLS, and Ms. HOULAHAN) introduced the following bill; which was
18	18	referred to the Committee on Ways and Means
19	19	A BILL
20	20	To amend the Internal Revenue Code of 1986 to establish
21	21	a credit for the domestic production of high-performance
22	22	rare earth magnets, and for other purposes.
23	23	Be it enacted by the Senate and House of Representa-1
24	24	tives of the United States of America in Congress assembled, 2
25	25	SECTION 1. SHORT TITLE. 3
26	26	This Act may be cited as the ‘‘Rare Earth Magnet 4
27	27	Security Act of 2025’’. 5
28	28	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
29	29	ssavage on LAPJG3WLY3PROD with BILLS 2
30	30	•HR 1496 IH
31	31	SEC. 2. CREDIT FOR PRODUCTION OF RARE EARTH 1
32	32	MAGNETS. 2
33	33	(a) I
34	34	NGENERAL.—The Internal Revenue Code of 3
35	35	1986 is amended by inserting the following new section 4
36	36	after section 45AA: 5
37	37	‘‘SEC. 45BB. CREDIT FOR PRODUCTION OF RARE EARTH 6
38	38	MAGNETS. 7
39	39	‘‘(a) I
40	40	NGENERAL.— 8
41	41	‘‘(1) A
42	42	LLOWANCE OF CREDIT .—For purposes of 9
43	43	section 38, the credit for production of rare earth 10
44	44	magnets determined under this section for any tax-11
45	45	able year is an amount equal to the sum of the cred-12
46	46	it amounts determined under subsection (b) with re-13
47	47	spect to rare earth magnets which are— 14
48	48	‘‘(A) manufactured or produced by the tax-15
49	49	payer, and 16
50	50	‘‘(B) sold by such taxpayer to an unrelated 17
51	51	person during the taxable year. 18
52	52	‘‘(2) U
53	53	NRELATED PERSON .— 19
54	54	‘‘(A) I
55	55	N GENERAL.—For purposes of this 20
56	56	subsection, a taxpayer shall be treated as selling 21
57	57	rare earth magnets to an unrelated person if 22
58	58	such magnet is sold to such person by a person 23
59	59	related to the taxpayer. 24
60	60	‘‘(B) E
61	61	LECTION.— 25
62	62	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
63	63	ssavage on LAPJG3WLY3PROD with BILLS 3
64	64	•HR 1496 IH
65	65	‘‘(i) IN GENERAL.—At the election of 1
66	66	the taxpayer (in such form and manner as 2
67	67	the Secretary may prescribe), a sale of rare 3
68	68	earth magnets by such taxpayer to a re-4
69	69	lated person shall be deemed to have been 5
70	70	made to an unrelated person. 6
71	71	‘‘(ii) R
72	72	EQUIREMENT.—As a condition 7
73	73	of, and prior to, any election described in 8
74	74	clause (i), the Secretary may require such 9
75	75	information or registration as the Sec-10
76	76	retary deems necessary for purposes of 11
77	77	preventing duplication, fraud, or any im-12
78	78	proper or excessive amount determined 13
79	79	under paragraph (1). 14
80	80	‘‘(b) C
81	81	REDITAMOUNT.— 15
82	82	‘‘(1) I
83	83	N GENERAL.—The amount determined 16
84	84	under this subsection is— 17
85	85	‘‘(A) $20 per kilogram of rare earth 18
86	86	magnets manufactured or produced in the 19
87	87	United States by the taxpayer during the tax-20
88	88	able year which are not described in subpara-21
89	89	graph (B), and 22
90	90	‘‘(B) $30 per kilogram of rare earth 23
91	91	magnets manufactured or produced in the 24
92	92	United States by the taxpayer during the tax-25
93	93	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
94	94	ssavage on LAPJG3WLY3PROD with BILLS 4
95	95	•HR 1496 IH
96	96	able year if not less than 90 percent by weight 1
97	97	of the component rare earth materials of such 2
98	98	magnets are produced within the United States. 3
99	99	‘‘(2) P
100	100	HASE-OUT.— 4
101	101	‘‘(A) I
102	102	N GENERAL.—In the case of any 5
103	103	rare earth magnet manufactured or produced 6
104	104	after December 31, 2034, the amount deter-7
105	105	mined under this section with respect to such 8
106	106	rare earth magnet shall be equal to the product 9
107	107	of— 10
108	108	‘‘(i) the amount determined under 11
109	109	paragraph (1) with respect to such rare 12
110	110	earth magnet, as determined without re-13
111	111	gard to this subsection, multiplied by 14
112	112	‘‘(ii) the phase-out percentage de-15
113	113	scribed in subparagraph (B). 16
114	114	‘‘(B) P
115	115	HASE-OUT PERCENTAGE .—The 17
116	116	phase-out percentage described in this para-18
117	117	graph is— 19
118	118	‘‘(i) in the case of any rare earth 20
119	119	magnet manufactured or produced in cal-21
120	120	endar year 2035, 70 percent, 22
121	121	‘‘(ii) in the case of any rare earth 23
122	122	magnet manufactured or produced in cal-24
123	123	endar year 2036 or 2037, 35 percent, or 25
124	124	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
125	125	ssavage on LAPJG3WLY3PROD with BILLS 5
126	126	•HR 1496 IH
127	127	‘‘(iii) in the case of any rare earth 1
128	128	magnet manufactured or produced after 2
129	129	December 31, 2037, 0 percent. 3
130	130	‘‘(c) D
131	131	EFINITIONS.—For the purposes of this sec-4
132	132	tion— 5
133	133	‘‘(1) R
134	134	ARE EARTH MAGNET .—The term ‘rare 6
135	135	earth magnet’ means a permanent magnet— 7
136	136	‘‘(A) with an intrinsic coercivity (HCj) of 8
137	137	10 kOe or higher at 68°F (20°C), and 9
138	138	‘‘(B) comprised of— 10
139	139	‘‘(i) an alloy of neodymium, iron, and 11
140	140	boron, which may also include praseo-12
141	141	dymium, terbium, or dysprosium, or 13
142	142	‘‘(ii) an alloy of samarium and cobalt, 14
143	143	which may also include gadolinium or any 15
144	144	associated host mineral of a component 16
145	145	rare earth material. 17
146	146	‘‘(2) C
147	147	OMPONENT RARE EARTH MATERIAL .— 18
148	148	The term ‘component rare earth material’ means ne-19
149	149	odymium, praseodymium, dysprosium, terbium, sa-20
150	150	marium, gadolinium, and cobalt. 21
151	151	‘‘(3) M
152	152	ANUFACTURED.—The term ‘manufac-22
153	153	tured’ means the manufacturing of a rare earth 23
154	154	magnet, including the milling, pressing, sintering, 24
155	155	and recycling of component rare earth material. 25
156	156	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
157	157	ssavage on LAPJG3WLY3PROD with BILLS 6
158	158	•HR 1496 IH
159	159	‘‘(4) NON-ALLIED FOREIGN NATION .—The term 1
160	160	‘non-allied foreign nation’ has the meaning given to 2
161	161	the term ‘covered nation’ in section 4872(d) of title 3
162	162	10, United States Code. 4
163	163	‘‘(5) U
164	164	NITED STATES AND POSSESSION OF THE 5
165	165	UNITED STATES.—The terms ‘United States’ and 6
166	166	‘possession of the United States’ have the meaning 7
167	167	given such terms in section 638. 8
168	168	‘‘(d) S
169	169	PECIALRULES.— 9
170	170	‘‘(1) R
171	171	ESTRICTION ON COMPONENT 10
172	172	SOURCING.— 11
173	173	‘‘(A) I
174	174	N GENERAL.—Except as provided in 12
175	175	subparagraph (B), no credit shall be allowed 13
176	176	under this section with respect to a rare earth 14
177	177	magnet if any component rare earth material 15
178	178	used to manufacture or produce such magnet is 16
179	179	produced in a non-allied foreign nation. 17
180	180	‘‘(B) D
181	181	ELAYED RESTRICTION FOR CERTAIN 18
182	182	COMPONENT RARE EARTH MATERIALS .—In the 19
183	183	case of the rare earth materials dysprosium, 20
184	184	terbium, samarium, and gadolinium, the restric-21
185	185	tion under subparagraph (A) shall not apply to 22
186	186	magnets manufactured or produced using such 23
187	187	materials before January 1, 2027. 24
188	188	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
189	189	ssavage on LAPJG3WLY3PROD with BILLS 7
190	190	•HR 1496 IH
191	191	‘‘(2) TRADE OR BUSINESS REQUIREMENT .—No 1
192	192	credit shall be allowed under this section with re-2
193	193	spect to a rare earth magnet unless such magnet is 3
194	194	manufactured or produced in the ordinary course of 4
195	195	a trade or business of the taxpayer. 5
196	196	‘‘(3) C
197	197	OERCIVITY REQUIREMENT EXCEPTION 6
198	198	FOR ELIGIBLE MANUFACTURERS .— 7
199	199	‘‘(A) I
200	200	N GENERAL.—The Secretary may 8
201	201	elect to treat a magnet which does not meet the 9
202	202	coercivity requirements of subsection (c)(1)(A) 10
203	203	as a rare earth magnet if such magnet is manu-11
204	204	factured by an eligible manufacturer. 12
205	205	‘‘(B) E
206	206	LIGIBLE MANUFACTURER .—For 13
207	207	purposes of subparagraph (A), the term ‘eligible 14
208	208	manufacturer’ means a manufacturer that— 15
209	209	‘‘(i) receives a grant from, or is con-16
210	210	tracted by, the Department of Energy or 17
211	211	the Department of Defense to produce a 18
212	212	magnet, and 19
213	213	‘‘(ii) commits to place in service a do-20
214	214	mestic manufacturing facility that pro-21
215	215	duces magnets that the Secretary deter-22
216	216	mines demonstrate technological, supply 23
217	217	chain, or national security merit. 24
218	218	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1496.IH H1496
219	219	ssavage on LAPJG3WLY3PROD with BILLS 8
220	220	•HR 1496 IH
221	221	‘‘(e) ELECTIVEPAYMENT FOR PRODUCTION OF 1
222	222	R
223	223	AREEARTHMAGNETS.— 2
224	224	‘‘(1) I
225	225	N GENERAL.—In the case of a taxpayer 3
226	226	making an election (at such time and in such man-4
227	227	ner as the Secretary may provide) under this section 5
228	228	with respect to any portion of the credit allowed 6
229	229	under subsection (a), such taxpayer shall be treated 7
230	230	as making a payment against the tax imposed by 8
231	231	this subtitle for the taxable year equal to the amount 9
232	232	of such portion. 10
233	233	‘‘(2) T
234	234	IMING.—The payment described in para-11
235	235	graph (1) shall be treated as made on the later of 12
236	236	the due date of the return of tax for such taxable 13
237	237	year or the date on which such return is filed.’’. 14
238	238	(b) C
239	239	REDITTOBEPART OFGENERALBUSINESS 15
240	240	C
241	241	REDIT.—Section 38(b) of such Code is amended by strik-16
242	242	ing ‘‘plus’’ at the end of paragraph (40), by striking the 17
243	243	period at the end of paragraph (41) and inserting ‘‘, plus’’, 18
244	244	and by adding at the end the following new paragraph: 19
245	245	‘‘(42) the credit for production of rare earth 20
246	246	magnets determined under section 45BB(a).’’. 21
247	247	(c) C
248	248	ONFORMINGAMENDMENT.—The table of sec-22
249	249	tions for subpart D of part IV of subchapter A of chapter 23
250	250	1 of such Code is amended by inserting after the item 24
251	251	relating to section 45AA the following new item: 25
252	252	‘‘Sec. 45BB. Credit for production of rare earth magnets.’’.
253	253	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6211 E:\BILLS\H1496.IH H1496
254	254	ssavage on LAPJG3WLY3PROD with BILLS 9
255	255	•HR 1496 IH
256	256	(d) EFFECTIVEDATE.—The amendments made by 1
257	257	this Act shall apply to taxable years beginning after De-2
258	258	cember 31, 2024. 3
259	259	Æ
260	260	VerDate Sep 11 2014 00:25 Mar 13, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H1496.IH H1496
261	261	ssavage on LAPJG3WLY3PROD with BILLS