HR5686-119

1. Short title This Act may be cited as the Battery Fire Prevention Act.

2. Tax credit for battery detectors 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: For purposes of section 38, the battery detector credit determined under this section for any taxable year is the amount equal to 30 percent of the qualified battery detector expenses paid or incurred by the taxpayer during the taxable year. The term qualified battery detector expenses means, with respect to any taxpayer, amounts paid or incurred for the purchase of any device— which uses X-ray technology, artificial intelligence, radio-frequency identification, or other proven technology to detect batteries, the original use of which begins with such taxpayer, and which is used by such taxpayer in the trade or business of recycling. In the case of any qualified battery detector expenses with respect to which credit is allowed under subsection (a)— no other credit or deduction shall be allowed for, or by reason of, any such expense to the extent of the amount of such credit, and the basis of any property shall be reduced by the amount of such credit to the extent that such expenses were taken into account in determining such basis. The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Section 38(b) of such Code is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph: the battery detector credit determined under section 45BB. The amendments made by this section shall apply to taxable years beginning after December 31, 2025. 45BB.Credit for battery detectors(a)In generalFor purposes of section 38, the battery detector credit determined under this section for any taxable year is the amount equal to 30 percent of the qualified battery detector expenses paid or incurred by the taxpayer during the taxable year.(b)Qualified battery detector expensesThe term qualified battery detector expenses means, with respect to any taxpayer, amounts paid or incurred for the purchase of any device—(1)which uses X-ray technology, artificial intelligence, radio-frequency identification, or other proven technology to detect batteries,(2)the original use of which begins with such taxpayer, and(3)which is used by such taxpayer in the trade or business of recycling.(c)Denial of double benefitIn the case of any qualified battery detector expenses with respect to which credit is allowed under subsection (a)—(1)no other credit or deduction shall be allowed for, or by reason of, any such expense to the extent of the amount of such credit, and(2)the basis of any property shall be reduced by the amount of such credit to the extent that such expenses were taken into account in determining such basis.. 45BB. Credit for battery detectors.. (42)the battery detector credit determined under section 45BB..

45BB. Credit for battery detectors For purposes of section 38, the battery detector credit determined under this section for any taxable year is the amount equal to 30 percent of the qualified battery detector expenses paid or incurred by the taxpayer during the taxable year. The term qualified battery detector expenses means, with respect to any taxpayer, amounts paid or incurred for the purchase of any device— which uses X-ray technology, artificial intelligence, radio-frequency identification, or other proven technology to detect batteries, the original use of which begins with such taxpayer, and which is used by such taxpayer in the trade or business of recycling. In the case of any qualified battery detector expenses with respect to which credit is allowed under subsection (a)— no other credit or deduction shall be allowed for, or by reason of, any such expense to the extent of the amount of such credit, and the basis of any property shall be reduced by the amount of such credit to the extent that such expenses were taken into account in determining such basis.

3. Imposition of tax on sales of batteries Chapter 32 of the Internal Revenue Code of 1986 is amended by inserting after subchapter D the following new subchapter: There is hereby imposed on the sale of any battery by the manufacturer, producer, or importer a tax equal to 5 percent of the price for which so sold. The table of subchapters for chapter 32 of such Code is amended by inserting after the item relating to subchapter D the following new item: The amendments made by this section shall apply to sales made after December 31, 2025. EOther ItemsSec. 4191. Battery tax.4191.Battery taxThere is hereby imposed on the sale of any battery by the manufacturer, producer, or importer a tax equal to 5 percent of the price for which so sold.. Subchapter E—Other Items.

4191. Battery tax There is hereby imposed on the sale of any battery by the manufacturer, producer, or importer a tax equal to 5 percent of the price for which so sold.

4. Lithium Battery Buy-back Trust Fund Subchapter A of Chapter 98 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: There is hereby established in the Treasury of the United States a trust fund to be known as the Lithium Battery Buy-Back Trust Fund, consisting of such amounts as may be appropriated to such Trust Fund as provided in this section. There are hereby appropriated to the Lithium Battery Buy-Back Trust Fund amounts equivalent to the taxes received in the Treasury under section 4191. Amounts in the Lithium Battery Buy-Back Trust Fund shall be available, without further appropriation, to the Secretary of Energy to carry out the National Battery Recycling Program described in section 5 of the Battery Fire Prevention Act. The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item: The amendments made by this section shall apply to taxes received after December 31, 2025. 9512.Lithium Battery Buy-back Trust Fund(a)Creation of Trust FundThere is hereby established in the Treasury of the United States a trust fund to be known as the Lithium Battery Buy-Back Trust Fund, consisting of such amounts as may be appropriated to such Trust Fund as provided in this section.(b)Transfer to Trust Fund of amounts equivalent to certain taxesThere are hereby appropriated to the Lithium Battery Buy-Back Trust Fund amounts equivalent to the taxes received in the Treasury under section 4191.(c)Expenditures from Trust FundAmounts in the Lithium Battery Buy-Back Trust Fund shall be available, without further appropriation, to the Secretary of Energy to carry out the National Battery Recycling Program described in section 5 of the Battery Fire Prevention Act.. 9512. Lithium Battery Buy-Back Trust Fund..

9512. Lithium Battery Buy-back Trust Fund There is hereby established in the Treasury of the United States a trust fund to be known as the Lithium Battery Buy-Back Trust Fund, consisting of such amounts as may be appropriated to such Trust Fund as provided in this section. There are hereby appropriated to the Lithium Battery Buy-Back Trust Fund amounts equivalent to the taxes received in the Treasury under section 4191. Amounts in the Lithium Battery Buy-Back Trust Fund shall be available, without further appropriation, to the Secretary of Energy to carry out the National Battery Recycling Program described in section 5 of the Battery Fire Prevention Act.

5. National Battery Recycling Program Not later than 5 years after the date of enactment of this Act, the Secretary of Energy and the Administrator of the Environmental Protection Agency shall jointly issue a rule to establish a program to recover and recycle used lithium batteries, to be known as the National Battery Recycling Program, under which— the Secretary shall identify and approve facilities that recycle lithium batteries and make publicly available a list of such approved facilities, which shall include each facility that is a recipient of a grant to recycle lithium batteries under section 40207 of the Infrastructure Investment and Jobs Act (42 U.S.C. 18741); and the Secretary and Administrator shall award grants, on a competitive basis, to such approved facilities to establish and implement a system for the acceptance and collection of used lithium batteries, under which system such a facility may offer a financial incentive to any individual who turns in a used lithium battery to the facility. In carrying out the National Battery Recycling Program, the Secretary of Energy may only use amounts from the Lithium Battery Buy-Back Trust Fund established under section 9512 of the Internal Revenue Code of 1986, as added by section 4. Each head of a Federal agency who purchases a lithium battery shall, to the maximum extent possible, prioritize purchasing such lithium battery from a facility approved pursuant to subsection (a)(1). In this section, the term lithium battery means a lithium metal battery or a lithium-ion battery.